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EURUSD rebound appears overdue ahead of Fed’s showdown EURUSD holds onto the one-week-old sideways grind ahead of the key Federal Open Market Committee (FOMC). As a 0.50% rate hike is well-known, as well as priced-in, the Fed will have to supersede market expectations to stay ahead of the curve and keep US dollar on the throne. In that case, the 100% Fibonacci Expansion (FE) of February-March, around 1.0485, holds the key to the south-run targeting the 2017’s yearly bottom surrounding 1.0340. However, the 1.0400 threshold will act as an intermediate halt while portraying the Fed’s superpower action. In a case where the US central banker chose to disappoint markets, by either meeting expectations of a 0.50% rate lift or resisting faster consolidation of policy, the EURUSD pair could witness the much-awaited rebound, as signalled by the oversold RSI line. The following recovery could quickly bounce back beyond the previous support line, around 1.0580, before challenging the 78.6% FE level surrounding 1.0630-35. During the quote’s run-up beyond 1.0635, the 1.0760 level comprising the 61.8% FE acts as the last defence for the buyers. Overall, EURUSD prices have witnessed notable downside in anticipation of the Fed’s larger-than-life move but an actual outcome will be crucial for the next moves.

Gold buyers struggle inside rising wedge on Fed day While a year-long resistance line has been testing gold buyers for one week, a six-week-old rising wedge bearish chart pattern teases sellers as markets brace for the Fed’s verdict. Given the sluggish RSI and receding bullish bias of the MACD, bears await a downside break of the $1,828 mark, comprising 50-SMA and 61.8% Fibonacci retracement of November-December downside. Following that, the lower line of the stated wedge near $1,816 becomes crucial as it holds the key to a slump towards September’s low near $1,721. During the fall, the 200-SMA level of $1,806 and $1,760 may offer intermediate halts. Alternatively, an upside break of $1,848 will lure buyers but an upper line of the wedge, around $1,851, may test the run-up towards the $1,900 threshold. Also acting as upside filters are the tops marked in November and March months of 2021, respectively around $1,877 and $1,916. On a fundamental side, the Fed is widely anticipated to hint for March rate hikes and balance-sheet normalization amid inflation fears. That said, a slight disappointment is enough for gold to rally towards $1,900 but the bears are so far trying to battle bulls amid hawkish hopes. Hence, it’s better to wait for the actual outcome.

EURUSD bears eye 1.1260 key support ahead of US ADP, FOMC Minute Having reversed from 50-DMA, EURUSD dropped beneath the 20-DMA and made seller’s way clear for a battle with a six-week-old support line, around 1.1260. However, cautious sentiment ahead of the key data/events tests the pair’s further downside. Even so, bearish MACD signals and a steady RSI line keep sellers hopeful to revisit the 2021 bottom surrounding 1.1185. Following that, March 2020 swing lows surrounding 1.1150 and 61.8% FE of November’s low near 1.1120 will be in focus. Meanwhile, the corrective pullback will aim for the 20-DMA level near 1.1310, a break of which will direct EURUSD buyers towards the 50-DMA level close to 1.1370. Also acting as the resistance is the recent peak of 1.1388 and a four-month-old resistance line around 1.1420. It’s worth noting, however, that a clear break of 1.1420 will open doors for the pair’s run-up towards September’s low surrounding 1.1525, which in turn will dash the bearish trend.

New Zealand dollar jumps after FOMC meet The New Zealand dollar has steadied on Thursday after posting strong gains a day earlier. Currently, NZD/USD is trading at 0.7260, up 0.07% on the day. The pair has climbed 0.85% so far this week. The New Zealand dollar continues to gain ground against the struggling US dollar. The kiwi has flexed its muscles in April, with sizzling gains of 3.97% this month, erasing the losses sustained in March. The FOMC meeting, which was passed without incident, saw the US dollar retreat broadly against the major currencies. The FOMC meeting did not contain any surprises, as the Fed remained in dovish mode. However, a close look at the language of the rate statement and Fed Chair Powell's follow-up remarks revealed a few subtle changes from previous meetings. The Fed acknowledged progress in the battle to control Covid-19 and the strengthening of the US labour market, stating: Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened". When Powell was asked specifically about tapering, he replied that it was too early to have a conversation about that. This sent US yields lower, dragging down the US dollar. With the FOMC meeting out of the way, the markets can now focus on key economic releases. The US releases first-estimate GDP for Q1 on Thursday (12:30 GMT), and the consensus is for a strong gain of 6.8%, after a 4.3% gain for Q4, which was revised upwards from 4.0%. A print of 6.8% or higher could shake up the US bond market and send yields higher, which would likely give the US dollar a much-needed boost. In New Zealand, business confidence improved to -2, up from the preliminary reading of -8.4 points. With the global demand growing for New Zealand commodities and stable domestic activity, I would expect business confidence to continue to improve in the coming months. NZD/USD is testing resistance at 0.7243. This is followed by resistance at 0.7291. There is support at 0.7135 and 0.7075

Gold eyes further downside below $1,800 Although oversold RSI conditions placate gold bears around $1,790, a sustained trading below the $1,800 threshold joins expected further recovery in the US dollar to challenge the upside momentum. However, the quote’s further declines will have to break a descending trend line from mid-January, at $1,772 now, to revisit the November 2020 low near $1,765. On a fundamental side, anticipated recovery in the US Retail Sales during January and the FOMC minutes may also exert downside pressure on the bullion. Though, any disappointment will not be taken lightly ahead of the US covid relief stimulus and hence can recall the $1,800 round-figure to the chart. Following that, the $1,830 and the monthly resistance line, around $1,844, can entertain gold buyers before pushing them to the 200-bar SMA near $1,853. During the bullion’s sustained run-up beyond $1,853, the monthly horizontal resistance near $1,875 becomes the key hurdle to watch.

Gold prints falling wedge on FOMC day Despite battling with 200-HMA, gold stays inside a bullish chart formation on a key day. Also favoring the metal buyers is a one-week-old rising trend line and likely US dollar weakness due to the expected dovish comments from the US Federal Reserve. However, sustained trading beyond $1,855 becomes necessary for the bulls to target $1,875 and then head towards the monthly peak surrounding $1,960. During the run, the $1,900 round-figure can play its role to test the upside momentum. Meanwhile, the stated support line near $1,843 and the lower end of the wedge, at $1,842 now, can restrict the yellow metal’s short-term downside before $1,830. Should the gold bears remain dominant past-$1,830, coupled with a surprise US dollar strength, the monthly low near $1,803 holds the key to heavy fall targeting November bottom close to $1,764. It should be noted that market consensus favors no rate action from the US central bank but downbeat statements and weak economic forecasts can’t be ruled out. As a result, a surprise move, like cautious optimism due to covid vaccination in the Fed’s tone can propel the US dollar and back the gold sellers.