- Market participants await the outcome of the FOMC meeting.
- US dollar losses momentum remains mostly sideways.
- EUR/USD holds in consolidation range between 1.1715 and 1.1750.
The EUR/USD made a run to 1.1744, reaching a fresh daily high and quickly pulled back to 1.1730, holding in the two-day range between 1.1715 and 1.1750 ahead of the FOMC statement. The move higher took place amid an improvement in risk appetite.
Equity prices on Wall Street are in green. The Dow Jones rises by 1.20% and the Nasdaq 0.80%. Recently prices spiked, triggering a move lower of the US dollar across the board.
Despite hitting fresh highs, EUR/USD continues to move within the 1.1715-1.1750 range. The key support stands at 1.1700, and below comes the August low at 1.1662. On the upside, the immediate strong barrier is the 1.1750/55 band; followed by 1.1780 and 1.1805.
Awaiting the Fed
Market participants await Fed’s statement to be released at 18:00 GMT. No change in rates is expected and the key will likely be the clues about the purchase program. Jerome Powell will hold a press conference at 18:30 GMT. New economic and interest rate projections will also be released.
“It’s all about the Fed as markets gear up for this key meeting. While we do not expect a taper announcement or a shift in the median dot-plots, we think the risk leans towards a more hawkish outcome. The pre-Fed USD rally since last week suggests a hawkish risk may have been priced, but we reckon that it will be difficult to leave a dovish impression, with Powell likely to shed more light on tapering, and the low bar to shift the median dots higher”, explained analysts at TD Securities.