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EUR / USD is holding below the 1.21 level

The EUR / USD pair is trading lower on Tuesday amid a recovery in the dollar. The dollar index has grown by 0.15% since the beginning of the day.

The demand for the American currency is growing thanks to the positive dynamics of the movement of the American Treasuries. Additional support for the dollar is provided by the situation on the stock markets. Investors are showing weak interest in risky assets, which puts pressure on the euro and other major currencies.

Volatility remains low in the foreign exchange market as investors await the results of the two-day FOMC meeting, which will be announced on Wednesday. Investors are betting that the regulator will keep the main parameters of monetary policy unchanged. The main attention will be focused on the comments of FRS Chairman Jerome Powell regarding possible changes in monetary policy in the future, if the situation on the labor market improves and inflation increases. Many investors believe Powell will once again reject all speculation on this topic, which could potentially put downward pressure on Treasury yields and the dollar.

Since the end of March, the dollar has already fallen in price by 3% after verbal interventions by the Fed and a decline in the yield of long-term US Treasuries.

The central event of the economic calendar today will be the publication of data on the consumer confidence index from CB.

On the chart, the price is holding below 1.2100. As a priority, we still consider the scenario with the development of a downward movement to the level of 1.2050.

  • Resistance levels: 1.2105, 1.2190, 1.2235.

  • Support levels: 1.2050, 1.2000, 1.1930.

The main scenario is a decline to 1.2050.

Alternative scenario - a breakdown of the resistance at 1.2100 and growth in the direction of the level of 1.2190.

The current fundamental background is neutral. We consider shorts near the 1.2100 level.

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