EUR/USD Forecast: FOMC failed to impress, dollar still the strongest

EUR/USD Current Price: 1.1803

• European macroeconomic figures continue to miss the markets expectations.

• FOMC Meeting Minutes spurred optimism, to the detriment of the greenback.

• EUR/USD maintains the bearish tone after achieving a lower low for the week.

The dollar resumed its advance on Wednesday, sending EUR/USD to a fresh three-month low of 1.1781. The pair fell with Wall Streets opening, recovering some ground afterwards to finally settle at around 1.1800. The FOMC published the Minutes of its latest meeting, which showed that policymakers are still committed to achieving substantial progress towards their goals before modifying the current monetary policy. However, several members judged that the risks to their inflation projections were tilted to the upside.

Earlier in the day, Germany published May Industrial Production, which fell 0.3% MoM, missing expectations. Yearly basis, production was up 17.3%, well below the 34.5% expected. Also, the EU commission revised up estimates of growth and inflation for this year and the next one due to the reopening of national economies.

On Thursday, the ECB is having a so-called Special Strategy Meeting, which is likely to amend the central banks inflation target and address climate change and housing costs. If a deal is reached, the outcome would be presented by President Christine Lagarde. The US will publish the usual weekly unemployment claims figures.

The risk for the EUR/USD pair remains skewed to the downside. The 4-hour chart shows that the pair keeps developing below all of its moving averages, which head lower with uneven degrees of bearish strength. Technical indicators, in the meantime, remain near daily lows without clear directional strength. An approach to the 1.1700 level is on the cards, mainly on a break below the daily low.

Support levels: 1.1780 1.1740 1.1710

Resistance levels: 1.1835 1.1870 1.1920