EUR/USD remains on track to finish the day with modest gains above 1.14

The EUR/USD pair started the week on a positive note and rose to a fresh 13-day high of 1.1443 before going into a consolidation phase in the NA session. As of writing, the pair was up 0.15% on the day at 1.1430.

With investors staying away from the greenback ahead of this week's FOMC meeting, the pair was able to build on Friday's rally. Following last Friday's report about the Fed possibly ending its balance sheet reduction scheme earlier than initially planned, USD bulls take a back seat amid the possibility of a dovish shift in the FOMC's language.

Previewing this event, "We think the 2019 set of voting members will have a more dovish tilt than that of 2018, particularly against the backdrop of a softening growth outlook. This supports our view that the rate hike cycle has come to an end," argued ABN Amro economist Bill Diviney. The US Dollar Index, which fell to a daily low of 95.64, was last down 0.07% on the day at 95.75.

On the other hand, while testifying before the European Parliament, ECB President Mario Draghi echoed his comments about the policy outlook from last week and didn't receive a meaningful reaction from the market. "The Governing Council stands ready to adjust all of its instruments, as appropriate, to ensure that inflation continues to move towards the Governing Council’s inflation aim in a sustained manner," Draghi said. The only data from the euro area showed that private loans grew by 3.3% on a yearly basis in December to match November's reading.

Tuesday's macroeconomic calendar won't be featuring any significant data and the market's USD valuation is likely to remain as the sole driver of the pair's price action.

Technical outlook via FXStreet Chief Analyst Valeria Bednarik

The EUR/USD pair trades around 1.1430 ahead of the Asian opening, offering a bullish stance in its 4 hours chart, as it not only advanced above the 50% retracement of its  January decline between 1.1569 and 1.1288 at 1.1428 but also above all of its moving averages in the mentioned chart, as technical indicators maintain firm upward slopes near overbought territory. The pair has a strong static resistance at 1.1460, while the 61.8% retracement of the mentioned decline comes at 1.1462, reinforcing the relevance of the resistance. Gains beyond it could trip stops and see the pair extending its gains up to the mentioned monthly high. The downside will remain limited as long as the price holds above 1.1380.

Support levels: 1.1380 1.1340 1.1300

Resistance levels: 1.1460 1.1490 1.1520