EUR/USD: The profile becomes more bullish, but it will all depend on the Fed meeting this evening


© O Financista. EUR/USD retains a profile uptrend in the short term before the Fed

Investing.com – The profile chart of the pair EUR/USD advances more and more towards an increase, but caution will remain the watchword this Wednesday, on the one hand because of blockages techniques could at this point limit the upside potential, and on the other hand, because the Fed meeting for the month of December will take place this evening, and is a risk skewed for the EUR/USD.

Recall that since the beginning of the week, the Euro-Dollar pair is increasing significantly, primarily due to a decline in the Dollar, hit by expectations rather dovish for the Fed meeting this evening, as well as by a decline in yields of US.

Focus on the Fed this Wednesday

The evolution of the EUR/USD should once again largely depend on the Fed meeting this Wednesday. In this regard, it should be noted that it is almost guaranteed that the Federal Reserve will move its key rate for the 4th time of the year, but the economic forecast will be published at the same time and the tone of the statement from the Fed and the speech of Powell are elements of uncertainty.

Given the fact that the Dollar has already fallen sharply in anticipation of a Fed’s dovish tone, the greenback is expected to shortly react if the Fed is content to appear as “slightly dovish” in his comments, while returning the rates. The absence of a rate increase would be a big surprise, and would without doubt plunge the Dollar.

Conversely, if the Fed is showing confidence, with no signal dovish tone sent to the market, the Dollar could recover, and lead the pair EUR/USD in a correction.

Technical update EUR/USD

From a graphical point of view, it will be recalled that several of the bullish signals important were confirmed yesterday, with the break above the moving average 100 hours above the resistance 1.1350 and above the moving average 200 hours.

In the short term, the psychological threshold of 1.14 which was just tested yesterday with a brief peak at 1.1402, should be regarded as an important obstacle, which should limit the bouncing potential of the pair, at least in the expectation of the Fed meeting.

In the case of breakage confirmed above 1.14, the next upside potential is located at 1.1420-25, 1.1450, 1.1475 and 1.15. For the reduction, the area of 1.1345-60 is a medium that is immediate, before 1.13, 1.1265-70, and then 1.1215 the hollow annual 2018.

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