- EUR/USD remains below 12-week long falling trend-line on the FOMC-day.
- Recent risk recovery fails to please buyers awaiting key details from the US Federal Reserve meeting.
Despite shooting up during the previous day, the EUR/USD pair fails to hold on to recovery gains as it trades near 1.1070 ahead of the European session on Wednesday.
Upbeat prints of the US Industrial Production and Capacity Utilization failed to please the US Dollar (USD) buyers as better than forecast prints of the ZEW Economic Sentiment for Germany and the Eurozone gained major attention. Also adding to the pair’s strength was the market’s risk recovery after Saudi Arabian diplomats showed readiness to overcome the recent damages due to drone attack within few weeks. Furthermore, news of the New York Fed injecting funds through repo market and trade-positive headlines concerning the US, China and Japan also tamed the earlier risk-off momentum.
Traders have been cautious since the start of Wednesday with eyes on the US Federal Reserve’s monetary policy meeting announcements up from 18:00 GMT. However, fresh trade/political headlines help extend the latest risk-on. As a result, Asian stocks report gains and the US 10-year Treasury yield remain around 1.80% by the press time.
Qualitative details in the spotlight as Fed rate-cut is almost given
Considering the high probability of the US Federal Reserve’s 0.25% Fed rate, investors will be less surprised unless the US central bank offers less/more or no rate change. As a result, details of the quarterly economic forecast, press conference by the Fed Chairman Jerome Powell and Fed’s Monetary Policy Statement will be the key to predict near-term market moves. The European Central Bank (ECB) has recently shown its dovish bias and hence any hawkish statement from the Federal Open Market Committee (FOMC) could be harmful to the pair’s latest recovery.
On the economic calendar, final reading of August month Consumer Price Index (CPI) from the Eurozone and the US housing market numbers could offer intermediate moves ahead of the Fed decision.
Technical Analysis
Not only a falling trend-line since late-June, at 1.1090, but the 100-day exponential moving average (EMA) level of 1.1167 also could restrict pair’s near-term upside, which in-turn highlights 1.1100 and recent low surrounding 1.0925 as key supports.
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