The Fed meeting is due later today, and the EUR/USD, like other markets as well, is looking for direction. The most popular pair from the FX dashboard is not able to break below 1.1840, which proved to be strong support, or above 1.20, tough resistance after the ECB meeting from last Thursday.
As such, the pair is stuck in a tight range, and the best way to deal with such instances is to ignore the price action, focus on the bigger picture and higher timeframes, and wait for the Fed. Speaking of the Fed, many things are on the table at today’s meeting, and the market can go either way.
First, the Fed will release its economic projections for the period ahead. These are important because market participants will focus on inflation and check if the Fed gives us an idea about a threshold on how to measure average inflation.
Second, the dots plot for the next three years may indicate an ultra-accommodative Fed or a slightly hawkish one. In both cases, the USD is poised to move, and the EUR/USD pair with it.
EUR/USD Technical Analysis
The EUR/USD remains bearish overall, especially after it got rejected from the 1.21 dynamic resistance. At this point, both bulls and bears have a case, with the downside being favored if the market breaks and holds below 1.1840 or the upside if we see a move and daily close above 1.1950. In both cases, traders should place a stop at the opposite level and target twice the risk.
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EUR/USD Price Forecast
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