After an initial bullish reaction against the the US CPI and following a peak at; 1.0823, EUR/USD weakened on Tuesday, settling at 1.0823. 1.0790 on Wednesday morning.
Still, the weaker-than-expected US inflation data has bolstered inflation. expectations of a pause in rate hikes for tonight’s FOMC meeting. 4% against 4.1% anticipated; and 4.9% previously. As a result, the markets for interest rate term now show a probability of 89% of a Fed’s monetary status quo tonight, versus 81% the day before.
However, expectations for the following meetings in July and September have not budged, with investors still expecting a change in performance. that the central bank resumes the rate hike following a the break that should be decided today.
This, in addition to the risk of tonight's Fed meeting (and tomorrow's ECB meeting) has prompted an upsurge forex traders to restraint, hence; incapacity from EUR/USD to post a sustainable and sustainable increase; to hold above 1.08.
As for Wednesday, besides the Fed meeting, Euro Dollar traders will need to watch the data from the industrial production in the euro area to 11 a.m., then the price index at the US production to; 2:30 p.m.
Technical thresholds at monitor on EUR/USD
From a graphical point of view, the Euro Dollar is facing a an immediate resistance zone formed by the psychological threshold of 1.08, from the 100-day MA to 1.0803, and from yesterday’s high to 1.0823.
Higher up, the next potential resistance will be the area from 1.09/1.0920, before 1.10, then this year's high near 1.11.
If EUR/USD falls again, the 1.07 zone will be the first support to be reached. consider, before the low of May 31 to 1.0635, then 1.06. Then, the 200-day moving average at 1.0531, the key threshold. 1.05 and this year's low at 1.05. 1.0480 will come into play.
EUR/USD: Caution dominates forex ahead of the Fed despite upbeat US CPI surprise
