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Forex: EUR/USD quiet during Asia session, resistance at 1.3200 remains in focus

FXstreet.com (Barcelona) - The EUR/USD finished the day sharply higher, up 73 pips at 1.3166. However, the pair was once again unable to take out major resistance at 1.3200, a level which also capped advances back in mid April. The next US Session will be extremely busy with economic data, starting with ISM Manufacturing PMI at 14:00GMT. Later in the day, we will see the Federal Reserve Monetary Policy Statement at 18:00 GMT. Currently, the EUR/USD is slightly lower during Asia trade, down 6 pips at 1.3162.

According to Mike Jones, Currency Strategist at BNZ, “Admittedly, the approach of tomorrow morning’s FOMC meeting and sliding US bond yields are adding to the downward pressure on the greenback. 10-year yields touched a 4-month low of 1.64% overnight as falling inflation (the core PCE fell to 1.1% on Monday) and deteriorating economic data has raised speculation the Fed could be a little more dovish this time around. We doubt the Statement (released tomorrow morning at 6am NZT) will discuss additional asset purchases. Rather, it will simply toe a similar line to last time, and maintain the pace of asset purchases at US$85b/month.”

From a technical perspective, the 1.3200 is a key resistance pivot to monitor on the upside. Should it be taken out, it could open the doors up to 1.3260 (previous support, now resistance on daily chart), followed by 1.3300 (also previous support, now resistance on daily chart). First support sits at 1.3110 (consolidation break out on 1 hour chart), followed by 1.3064 (the 9dma).

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