EUR/USD fades a bullish spike, back at 1.10 handle

The EUR/USD pair is seen fading its bullish spike to 1.1030 and has now dropped back to 1.1000 psychological mark to currently trade with only marginal gains from yesterday's closing level.

A broadly weaker US Dollar assisted the shared currency to build on to its Monday's tepid gains. The pair, however, lost its upside momentum as increasing prospects of an imminent Fed rate-hike helped the US Dollar, as measured by the overall US Dollar index, to recover some of its lost ground.

Next on tap would be CB consumer confidence index and new home sales data from the US, which if again surprises on the upside would provide additional boost to the greenback and drag the EUR/USD major lower. 

However, the key determinant for the pair's near-term direction would be the FOMC monetary policy decision announcement on Wednesday. A hawkish Fed statement would be highly US Dollar supportive in the near-term.

Trade July 27 Federal Reserve interest rate decision - Live Coverage

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "The pair presents a modest bullish tone early Europe, as in the 4 hours chart, the price has recovered, and later bounce from its 20 SMA, now around 1.0990, while the RSI indicator heads slightly higher around 53, indicating the pair may advance further, but limited. The 1.1050/60 region is the immediate resistance, and selling interest may likely surge around it. A batch of negative US data, however, can see the pair approaching 1.1100 later today."

"Below the mentioned 1.0990 on the other hand, the pair can fall down to 1.0950, en route to 1.0910, the post-Brexit low."