The EUR/USD pair continues trading in a tight range around the 1.1050 level this Wednesday, as investors are waiting for the latest FED's economic policy decision to be unveil later today, in the American afternoon. Exception made by the Aussie that sunk on the release of poor local inflation figures, the financial world has remained on hold during the Asian session.
In Germany, the index of import prices decreased by 4.0% in September, compared to a year before, whilst consumer optimism declined for a third month in-a-row, down to 9.4 from a previous 9.6%, in line with the latest setback in local data.
As for the US Federal Reserve, a change in the ongoing on-hold stance is hardly expected. There is no press conference scheduled for after the release of the decision and a written statement, and this last will be the key, given that the market will be looking for clues there on the date of a rate hike.
View the Live chart of the EUR/USD
The pair has been consolidating its latest losses this week, which left the short term technical picture pretty much neutral ahead of the news. There 4 hours chart shows that the price is above a still bearish 20 SMA, whilst the Momentum indicator has turned lower around its 100 level, and the RSI indicator hovers around 37, after correcting the extreme oversold readings reached last week. Additionally, the pair is trading below the daily ascendant trend line broken last week, and even completed a pullback to it on Tuesday.
The critical support is clearly, the 1.1000 psychological level, with a hawkish statement leading to a break below it and seeing the pair accelerating towards 1.0960 first and 1.0920 then. Should the FED came with a dovish tone, which suggests the rate hike won't take place until 2016, the pair can challenge the immediate resistance level at 1.1080, and run up to the 1.1150/60 region, where selling interest is expected to contain the pair.
Latest updates on the EUR/USD Forecast
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