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On Tuesday, trading on the euro closed in negative territory. The price corrected by around 61.8% after a rally from 1.0525 to 1.0714. During the US session, the euro weakened against the dollar to 1.0600. The EUR/USD broke the support at 1.0628 as the euro index slid (euro sales on the crosses) and US 10Y bond yields rose slightly.
Market expectations:
Yesterday, the two-day meeting of the FOMC began. Their decision regarding interest rates will be announced at 21:00 EET. It’s widely expected that the US Federal Reserve will raise rates by 0.25%. Given that the market is already prepared for this, participants will be looking to Janet Yellen’s press conference and the central bank’s economic forecasts, including any indication about future rate hikes. When such events are taking place, I don’t make predictions about the currency market.
Day’s news (GMT+3):
EURUSD rate on the hourly. Source: TradingView
Intraday forecast: low: n/a, high: n/a, close: n/a.
The EUR/USD closed down on Tuesday. Trading on the instrument closed at around the 90th degree. This is not a significant support level for the single currency, so the formation of a V-model from the minimum to the 112th degree is still likely as we await the results of the FOMC’s meeting. There is no bullish divergence between the price and the AO indicator.
I tend not to make forecasts in anticipation of such major news from the central banks. Here, we can only construct various scenarios as to how the market will react to the decision, and we can gather our thoughts from there.
