Euro Gains Strength As Fed Unlikely To Increase Interest Rate
The American dollar began weakening right after the US opening, and the EUR/USD pair advanced up to 1.1313 before retracing some by the end of the day.
The pair is still trading lower in the week, struggling around the 1.1300 level by the end of the day. The 1 hour chart shows that the price is now around its 100 SMA, whilst the technical indicators lost upward potential, and turned lower, approaching now their mid-lines.
In the 4 hours chart, a neutral stance prevails, with the price unable to establish above a flat 20 SMA, and the technical indicators stuck around their mid-lines. The upcoming direction depends solely on FED’s decision now, with the dollar seen appreciating should the Central Bank pull the trigger.
Tepid inflation figures both, in the EU and the US, hit the wires this Wednesday, with the second gathering most of the market’s attention in the wake of the upcoming FED’s decision.
European CPI resulted at 0.0% in August, compared to a month before, and down yearly basis to 0.1%, which resulted in a weaker EUR during the first half of the day. But the dollar entered in sell-off mode after the US released its CPI for August, which decreased 0.1% in the month, whilst the annual reading remained unchanged at 0.2%. The CPI ex food and energy yearly basis, resulted at 1.8%, against expectations of 1.9%.