The Euro starts the week on a positive note as investors continue to digest Friday’s dovish remarks from the Federal Reserve’s Vice Chairman, Richard Clarida. The US Dollar’s weakness strengthened all the other major currencies as Clarida pointed out that interest rates are nearing a neutral state and he believes that a neutral interest rate state is what makes sense. This comment signaled that there is a possibility that the Federal Reserve will alter their hawkish stance in regards to gradually and constantly increase interest rates every three months.
For today, the focus will remain on the US Dollar as some important US housing figures will be released later during the day. However, investors need to also keep an eye for any material news related to the disagreement between the EU and the Italian government in regards to Italy’s proposed budget plan for 2019.
The Euro breaks the 200-period moving average and pushes higher towards the 1.1470 resistance level. For now, the pair's momentum is clearly bullish as prices are trading above all three major moving averages. As presented by the chart below, the 13-period moving average is attempting to cross above the 200-period moving average. If such scenario occurred then bullish momentum will strengthen even further and the pair will break above the 1.1502 resistance exposing the 1.1550 level.
Support: 1.1430 / 1.1400
Resistance: 1.1502 / 1.1550