The EUR/USD price is in a tight range as traders refocus on the Fed interest rate decision and the upcoming flash manufacturing and services PMI data. The pair is trading at 1.2150, which is slightly below the year-to-date high of 1.2185.
What to expect: There are no major economic events that will move the EUR/USD today. Instead, focus will shift to the Federal Reserve, which will deliver its interest rate decision tomorrow. Economists believe that this meeting will be uneventful since the bank has already signalled what it expects to do in the next few years.
It will leave interest rates unchanged and commit to support the economy through its open-ended quantitative easing policies.
What about PMIs? This being a Christmas month, Markit will publish its flash manufacturing and services PMIs early. In general, analysts believe that the manufacturing PMI will hold steady while the services PMI will continue to lag. For example, they expect that the Eurozone’s manufacturing PMI dropped from 53.8 to 53.0 while the service PMI improved from 41.7 to 41.9.
EUR/USD technical forecast
What next for EUR/USD? On the daily chart, we see that the EUR/USD has been in consolidation mode recently. It has oscillated slightly below the YTD high of 1.2185. It remains above the 25-day and 50-day exponential moving averages and the important support at 1.2000. Therefore, for today, we expect the pair to remain at the current range. It will then break-out higher in the near term.
EUR/USD technical chart