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The Greenback is on the move after the latest statement from the Federal Reserve, and with potential economic catalysts coming from Europe, EUR/USD‘s uptrend is one to watch for a short-term setup.

Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a potential setup on AUD/JPY after a disappointing CPI read from Australia, so be sure to check that out to see if there is still a potential play!

Intermarket Update:

Equity Markets Bond Yields Commodities & Crypto
DAX: 15296.34 +0.11%
FTSE: 6963.12 +0.35%
S&P 500: 4187.62 +0.18%
NASDAQ: 14138.78 +0.87%
US 10-YR: 1.567% 0.00
Bund 10-YR: -0.253% +0.003
UK 10-YR: 0.759% +0.001
JPN 10-YR: 0.075% +0.004
Oil: 61.92 -0.35%
Gold: 1,781.00 +0.18%
Bitcoin: $53,869.10 +9.00%
Ethereum: $2,483.55 +9.34%

Fresh Market Headlines & Economic Data:

Fed holds interest rates near zero, sees faster growth and higher inflation

S&P 500 closes flat after Fed keeps rates near zero, Dow falls 160 points

February home prices see the biggest gain in 15 years, S&P Case-Shiller says

Richmond Fed Manufacturing Index held steady at 17 in April

The U.S. international trade deficit in goods & services increased to $71.1B in Feb. from $67.8B in Jan. (revised), as exports decreased more than imports.

The Conference Board U.S. Consumer Confidence Survey index rose to 121.7 in Apr. vs. 109.0 in Mar.

ECB officials expect heated June decision on crisis program

OPEC+ keeps oil demand forecast, but worried by COVID surge

South Korea Q1 GDP beats expectations as investment, exports bounce

ANZ-Roy Morgan Australian Weekly Consumer Confidence: 112.4 vs. 114.0 prev.

Upcoming Potential Catalysts on the Economic Calendar

New Zealand Trade Balance at 10:45 pm GMT
New Zealand Business Confidence at 1:00 am GMT (Apr. 29)
U.S. President Biden speech at 1:00 am GMT (Apr. 29)
Australia Import Prices at 1:30 am am GMT (Apr. 29)
German Import Prices, Unemployment Rate at 6:00 am GMT (Apr. 29)
Spain Inflation Rate at 7:00 am GMT (Apr. 29)
Euro Area M3 Money Supply, Loans to Households at 8:00 am GMT (Apr. 29)
Euro area Consumer Sentiment, Business Sentiment at 9:00 am GMT (Apr. 29)
Germany Inflation Rate at 12:00 pm GMT (Apr. 29)

What to Watch: EUR/USD

EUR/USD 1-Hour Forex Chart
EUR/USD 1-Hour Forex Chart

With the pandemic recovery “uneven and far from complete” it looks like traders continued to price in Fed Chair Powell’s promise that tapering stimulus measures is still far, far away. This means that the Greenback took a hit across the board, a sentiment that will likely continue to get priced in through the Asia and London trading sessions.

So, we think bearish Dollar scenarios look probable in the short-term and with European data ahead, we’re checking out the uptrend in EUR/USD for a potential trading opportunity.

On the one hour chart above, we can see the pair has been in a slow uptrend, one that actually goes back to the beginning of April when the pair bottomed just above the 1.1700 handle.

So, the price action favors the bulls at the moment, and if we see better-than-expected economic updates from Europe on Thursday, the pop higher from the strong area of interest around the 1.2065 area may have the strength to continue.

And it’s likely that even if we don’t see strong number from Europe, the trend will likely continue higher in EUR/USD, barring any negative global risk sentiment surprises to potentially spark risk aversion sentiment into the dollar.

The upcoming speech from U.S. President Joe Bidden may be an issue there, but it’s more likely that he will push more stimulus plans, which will likely draw more sellers than buyers to the U.S. dollar short-term.

So, it makes sense to long the pair from current levels around 1.2122 down to 1.2100, but if you’re a more conservative trader, wait to see if European data disappoints and if that takes EUR/USD down a notch to potentially long at better prices.

With a daily ATR of around 70 pips, a dip to the broken resistance area / falling ‘highs’ pattern around 1.2065 is not out of the question if the market turns bearish on the euro.

And if that scenario plays out, watch out for bullish reversal patterns to form before considering a short-to-medium-term long position to play the overall trend higher and current theme of extreme stimulus policies in the U.S.