EUR/USD: Reversal is coming despite rate fears? Euro vs. US DollarFX:EURUSDXBTFXLast week was the debut FOMC meeting for a new Fed Chair Warsh. Markets have very closely watched the Fed decision and also what the new Chair had to stress. There has not been change in current levels of interest rates, but during the press conference, Warsh repeatedly emphasized that the Fed's primary responsibility is restoring and maintaining price stability. He stated that the Fed would deliver price stability and signaled a willingness to keep policy restrictive if inflation remains elevated. Markets were a bit concerned regarding some FOMC members noting the possibility of even increasing interest rates if necessary. Industrial Production in the U.S. in May was higher by 0,1% m/m and 1,7% y/y, although markets were geared to see a bit higher figures of 0,3% m/m and 1,9% y/y. Building Permits preliminary for May dropped by -0,7% for the month, in line with market estimates. At the same time Housing Starts in May dropped by -15,4% m/m, significantly above estimated -2% m/m. Retail Sales in May were higher by 0,9% compared to the previous month and 6,9% y/y. Figures were above forecasts of 0,6% m/m and 4% y/y. Industrial Production in the Euro Zone in April was higher by 0,1% for the month and 0,3% y/y. Monthly data was below market estimates of 0,3% m/m. Inflation rate in the Euro Zone final for May is 0,1% m/m and 3,2% y/y, and was in line with market expectations. As expected, the FOMC meeting imposed a strong reaction on financial markets. The EUR/USD currency pair was strongly pushed toward the 1,1416 level, although it finished the week at 1,1469. The RSI reached the lowest level at 33, however, the clear oversold side has not been reached. Moving averages of 50 and 200 days are trying hard to finally form the cross, however, it might take some more time until this formation is finally reached. With Friday's move toward the 1,1416 level, the market reached exactly the level of EUR/USD from 13th of March this year. That was perfect alignment and perfect following of technical analysis. It also shows that now there is a potential for a short term reversal of the currency pair. In addition, it should be mentioned that RSI has almost touched the oversold market side, also implying that the reversal might come next. As per current charts, 1,15 resistance could be tested in the week ahead. Levels above this resistance are questionable considering that PCE data are scheduled to be released in a week ahead. Increased market sensitivity and volatility should be expected. On the opposite side, there is some smaller probability that the 1,14 support line might be tested, but it could be only a short term test, before the reversal to the upside. Important news to watch during the week ahead are: EUR: S&P Global Composite PMI for June, USD: New Home Sales in May, Durable Goods Orders in May, PCE Price Index in May, Personal Income and Personal Spending in May, GDP Growth Rate q/q final for q1, Michigan Consumer Sentiment final for June.