Today is an FOMC day but Powell’s press conference will be held in the shadow of Biden’s tax and social plan. The markets don’t expect any policy changes from the Fed Board Members or change of tone about inflation or the asset purchases. According to a survey done by Bloomberg, most of the economists expect Fed to change of tone in the third quarter and formal announcement of tapering in the fourth quarter. But as inflation keeps rising, the employment market recovering at a faster rate, and commodity prices keep rising, inflation surge may not be as temporary as Fed expects. If it will be the case, tapering will be much more aggressive, tapering without tantrum probability will be very low. Anyway, here is the short-term technical outlook for EURSUD and XAUUSD ahead of the FOMC.
EURUSD is testing the uptrend which was in effect all of April just like the 200-hour moving average. 200-hour MA can be followed as major support for the short-term and below this moving average will be a dangerous zone for EURUSD bulls. For upward moves, 1.2083 and 1.2112 can be follow as resistances. If another surge to happen EURUSD must have multiple hourly closes above 1.2112.
Gold is looking much weaker relative to EURUSD. 1765 is a key support level and not just only for the short-term. Gold formed a head and shoulders formation using 1765 support as a neckline. If it breaks, gold may fall to formation target 1730. But to be certain of a break 1755-1765 zone can be followed as a support rather than 1765 alone. For up moves, 1800 will be the key resistance will be a must-pass for XAUUSD.