EUR/USD depressed near 1.1060 ahead of FOMC

The bearish tone remains intact around the common currency during the first half of the week, with EUR/USD meandering around the 1.1065/60 band, daily troughs.

EUR/USD closer to 1.1050, Fed on sight

Spot has eroded yesterday’s modest gains and remains poised for a test of the critical area around 1.1050/40, where is located the 200-day sma, in case the FOMC delivers a hawkish statement, in line with market expectations.

In addition, a rate raise has been almost ruled out this time, although the Committee could hint at further rate hikes at the next meetings in April or June (or both). All in all, opinions amongst traders seem to favour a USD-supportive tone today, adding to further downside in spot.

EUR/USD levels to watch

The pair is now down 0.40% at 1.1064 facing the next support at 1.1042 (200-day sma) ahead of 1.1025 (55-day sma) and finally 1.0820 (post-ECB low Mar.10). On the other hand, a breakout of 1.1218 (post-ECB high Mar.10) would target 1.1339 (high Fe.9) en route to 1.1379 (2016 high Feb.11).

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