EURUSD, just like the rest of the major currency pairs, has benefitted from the general dollar weakness. Yesterday, the currency pair rose to its highest level in 21 months at 1.1780. Today, EURUSD is virtually unchanged from its opening price as it trades around 1.1752, just 2 pips higher from where it opened.
The spotlight has been on the US dollar these past couple of trading days as the FOMC is scheduled to announce its interest rate decision on Wednesday. It is widely expected that the central bank would keep its interest rates and Quantitative Easing program steady. However, there are speculations that the FOMC could discuss negative rates as an option in the future. These concerns have been brought about by the rising coronavirus cases in the US which could push the country to the brink of another set of lockdowns.
On the 1-hour chart, it can be seen that EURUSD has not been able to trade past yesterday’s highs. The currency pair stopped short of trading above 1.1780 where it peaked in yesterday’s trading. This could suggest that EURUSD could be headed lower. Near-term support for the currency pair is at 1.1703. This price coincides with the rising trendline (from connecting the lows of July 21, July 23, and July 24). When drawing the Fibonacci retracement tool from the low of July 24 to the high of July 27, we can also see that this price coincides with the 38.2% Fib level.
On the other hand, a strong bullish close above yesterday’s high at 1.1780 could mean that EURUSD would soon test its September 2018 highs at 1.1814.