EUR/USD flirts with 1.1000 in early Europe, Fed in focus

Dhwani Mehta FXStreet

The EUR/USD pair is building on the gains seen in early Asian trades, although struggles hard to extend beyond 1.10 handle amid a broadly higher greenback.

EUR/USD: Will it surpass 20-DMA at 1.1040

Currently, EUR/USD trades +0.15% higher at 1.1001, extending a minor-recovery mode from below 5-DMA now located at 1.0985. The main currency pair remains well bid as mixed sentiment on the Asian markets and lower oil prices, as cautious sets in as we move closer towards the Fed verdict, scheduled for release in the NA session.

Moreover, the major keeps gains, despite a better tone seen around the greenback, led by a sharp rally in USD/JPY on re-emergence of the Japanese stimulus talks, with the stimulus size expected to be 27 trillion yen.

All eyes remain on the Fed interest rates decision due later today for fresh direction on the EUR/USD pair. Analysts at BNZ noted, "We would be surprised if the inherently dovish Fed were to cause the market to notably ramp up its expectations for imminent rate hikes."

Calendar-wise, we have a data-light European session, while the US docket offers durable goods and pending home sales data, which will be published in the American session.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.1040 (20-DMA). A break beyond the last, doors will open for a test of 1.1094 (200-DMA). On the flip side, the immediate support is placed at 1.0950 (multi-week lows/ psychological levels) below which 1.0909 (June lows) could be tested.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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