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EUR/USD remains capped by hourly 200-SMA in early Europe

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 27, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - EUR/USD continues to consolidate in the upper band of today’s trading range, having faced stiff resistance near the hourly 200-SMA placed at 1.0873.

    EUR/USD awaits FOMC decision

    Currently, the EUR/USD pair trades -0.8% lower at 1.0863, failing several attempts to take out 1.0871 daily highs, where the hourly 200-SMA intersects. The main currency pair trades largely subdued, despite a broadly lower US dollar, as the solid recovery in oil prices lifts the sentiment and diminishes the bids for the safe-haven EUR.

    Moreover, markets prefer to remain on the side-lines and refrain from placing bets on the major ahead of the Fed decision due later this session. However, its widely expected that the Fed may come out more dovish this time, which would recede hopes for a March rate hike and provide fresh impetus to the EUR/USD pair.

    Analysts at Westpac noted, “The FOMC statement is due 2pm NY. The Fed's assessment of international developments and the implications for the US economy and financial markets should be focus for discussion. With only a short statement, we expect the Fed to repeat that normalization will proceed as data allows in 2016, though markets will be watching for any shift to a more dovish stance.”

    EUR/USD Technical Levels

    In terms of technicals, the pair finds the immediate resistance is seen at 1.0886/ 1.0900 (50-DMA/ round number). A break beyond the last, doors will open for a test of 1.0922/27 (Jan 21 High/ 100-DMA). On the flip side, the immediate support is placed at 1.0803 (Jan 13 Low), below which 1.0786/77 (Jan 25 & 21 Low) could be tested.
    For more information, read our latest forex news.
     

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