FX.co ★ EUR/USD Temporary Decline Ahead Of FOMC!

EUR/USD drops as the Dollar Index increases at the time of writing. Still, the current drop could be only a temporary one. Technically, the pair has escaped from a Falling Wedge pattern signaling an upside reversal in the short term.

You should be careful today as the FOMC meeting could shake the markets. The sentiment could change after the FOMC Statement and after the FOMC Press Conference. The FED is expected to keep its monetary policy unchanged. Nevertheless, traders are anticipating some clues from the FED today. Any hint that the Federal Reserve could hike rates could bring high volatility.

EUR/USD Needs A Bullish Spark!

EUR/USD is trading at 1.1806 level and it seems determined to come back to test and retest the immediate support levels. It could retest the 50% Fibonacci line before turning to the upside.

Technically, a new higher high, jumping and closing above 1.1841 yesterday's high could validate the bullish movement, an upside reversal. It is still moving somehow sideways in the short term, so we really need a valid upside breakout to activate a leg higher.

The 88.6% (1.1767) retracement level is seen as a major support level. Only a valid breakdown through this level could really invalidate the upside scenario.

Forecast!

Buy EUR/USD after jumping and closing above 1.1841 high. The first upside target could be at the 1.1900 psychological level, while the upper median line (UML) is seen as a major upside target.