- The shared currency edges low, amid a risk-on market mood ahead of the Fed.
- EUR/USD is downward biased though upside risks remain if the Fed fails to deliver a hawkish statement and could expose resistance levels at 1.1314 and 1.1398.
- A hawkish Fed statement could expose support levels at 1.1263 and 1.1186.
The shared currency remains slightly down, subdued ahead of the Federal Reserve unveiling of its first monetary policy statement of 2022. At the time of writing is trading at 1.1292, losing 0.11%.
A risk-on market mood prevails ahead of the FOMC, as shown by US equities rising between 0.90% and 2.56%. It appears that investors put the eastern Europe crisis on the side as they get ready for the Fed.
In the meantime, the US Dollar Index, which measures the greenback’s value against a basket of its rivals, advances some 0.12%, clings to 96.06, as the Fed looms. Furthermore, the US 10-year Treasury yield is flat, around 1.77%.
EUR/USD Price Forecast: Technical outlook
In the early stages of Wednesday’s Asian session, the EUR/USD was subdued in a 5-pip narrow range, within t.1300-05. When European traders got to their desks, the 1.1300 figure gave way for USD bulls ahead of the Fed, sending the pair tumbling to 1.1271.
That said, the EUR/USD daily chart depicts the pair as downward biased. The 50-day moving average (DMA) at 1.1314 is the first resistance level and would be under pressure when the Fed releases its monetary policy statement. IF that level is breached, the next resistance would be January 14 daily low previous support-turned-resistance at 1.1398, followed by a downslope trendline drawn from November 2021 cycle highs that pass around the 1.1435-50 area.
On the flip side, the pair’s first support would be January 25 daily low at 1.1263. A break of that level would expose December’s 15, 2021, low at 1.1261, followed by 2021 yearly low at 1.1186, and then 1.0870.
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