Most currencies try to erase part of yesterday's strengthening of the dollar, although the moves are not among the strongest. Risky currencies like AUD, NOK, CAD and SEK predominate as EUR/USD is struggling to recover the level of 1.20, GBP/USD fluctuates slightly at 1.36 and USD/JPY were around 109.85. Among precious metals, we also see a slight rebound of yesterdays slide. Silver is growing 0.8%, an ounce of gold costs 1308 USD (+ 0.35%). Palladium and platinum grow slightly above 0.35%. WTI oil invariably moves in consolidation between USD 67 and USD 69.50.
On Wednesday 2nd of May, the event of the day is the FOMC interest rate decision and the rate statement. Besides, there are some other important data to be released from the US, like ADP Non-Farm Employment Change and Construction PMI.
EUR/USD analysis for 02/05/2018:
The market participants expect the FED to leave the interest rate at the level of 1.75% this month, but the most of the interest is focused on the rate statement. The main question is whether the FED will mention or give a clue regarding a possible four interest rate hikes this year instead of three. This would be a very hawkish statement and would have made the US Dollar to appreciate more across the board.
Other important data to be released are ADP Non-Farm Employment Change (which is expected to decrease from 241k to 191k) and Construction PMI ( which, in turn, is expected to increase from 47.0 to 50.9 points).
Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market has hit the 161% Fibo Extension at the level of 1.1989 and currently is trying to bounce higher towards the nearest technical resistance at the level of 1.2054. The market conditions are extremely oversold at the current timeframe, so in a case of a disappointment from FED decision (or a statement), the short squeeze rally higher might get severe. The key technical resistance is seen at the level of 1.2163 and only a clear and sustained breakout above this level would change the bias from bearish to bullish.
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