EUR/USD Current Price: 0.9965
- The US Federal Reserve will announce its monetary policy decision and share fresh economic projections.
- Unimpressive European data undermined the demand for the shared currency.
- EUR/USD is technically bearish and could reach fresh multi-year lows in the next sessions.
The EUR/USD pair fell on Tuesday, bottoming at 0.9954, and is now heading into the Asian opening trading in the 0.9960 price zone. As the week goes by, major pairs remain confined to familiar ranges, as the focus is on central banks. The US Federal Reserve will unveil its decision on Wednesday, and market players anticipate at least a 75 bps rate hike, although now suspecting FOMC officials may become even more hawkish as inflation remains stubbornly high in the country.
Nevertheless, the dollar benefited from higher government bond yields, while the shared currency suffered from discouraging EU data. According to the official releases, the German Producer Price Index rose by 45.8% YoY in August from 37.2% in the previous month, while the EU seasonally adjusted Current Account posted a deficit of €19.86 billion in July. The US calendar was light as the country published August Building Permits, which fell by 10% in the month, and Housing Starts for the same period, up 12.2%.
The European Central Bank will have a non-monetary policy meeting on Wednesday, usually a non-event. As for the US, and beyond the Fed’s decision, the country will release August Existing Home Sales. It is worth adding that the US central bank will release fresh Economic Projections.
EUR/USD short-term technical outlook
The EUR/USD pair is trading near the base of its latest range, poised to extend its slide according to the daily chart. The pair has fallen below a flat 20 SMA, while the longer ones maintain their bearish slopes well above the current level. Meanwhile, technical indicators head south within negative levels, in line with the ongoing downward movement.
The 4-hour chart shows that the pair is trading below all of its moving averages, with the 20 and 100 SMAs directionless and converging around parity. The 200 SMA offers a modest bearish slope above the shorter ones, while technical indicators turned south, the Momentum stuck within neutral levels, but the RSI is accelerating lower at around 41, favoring a new leg south, particularly if the pair falls below 0.9950, the immediate support level.
Support levels: 0.9950 0.9910 0.9860
Resistance levels: 1.0005 1.0045 1.0090
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