The EUR/USD is under pressure today as investors start focusing on the upcoming Fed interest rate decision. The EURUSD is trading at 1.1943, which is slightly below yesterday’s high of 1.1967.
What happened: Last week, the EUR to USD price reacted to the signing of the new $1.9 trillion stimulus package and the latest US inflation numbers. The consumer price index (CPI) and producer price index (PPI) data showed that inflation was not rising as fast as what analysts were expecting.
In an interview during the weekend, Janet Yellen, the former Fed chair and current Treasury Secretary said that fears of high inflation were a bit overblown.
This week, the EUR/USD price will react to the latest Fed interest rate decision. The bank’s FOMC will start the meeting tomorrow and deliver the decision on Wednesday. While the bank will not change its policies, traders will pay a close attention to any change of language by Jerome Powell.
EUR/USD technical forecast
On the two-hour chart, we see that the EUR/USD price bounced back from last week’s low of 1.1830 and moved to 1.1990, which is along the 61.8% Fibonacci retracement level. The pair has since then retraced some of these gains and moved below the ascending black channel. It is also along the 25-period and 15-period exponential moving averages.
Therefore, in my view, the pair will continue declining as bears target the next key support level at 1.1908, which is the lowest level on March 12. However, a move back to the ascending channel will invalidate this trend.
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EURUSD technical chart
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