EUR/USD flirts with highs near 1.0640, FOMC in focus

The EUR/USD pair is seen extending its steady recovery path into the early European morning, now advancing further to test the mid-point of 1.06 handle.

EUR/USD awaits Fed verdict

Currently, EUR/USD trades +0.17% higher at fresh session highs of 1.0644, having taken-out 10-DMA barrier at 1.0643.  The main currency pair is making headways on the bids to retest key resistances lined up around 1.0665/70 region, as the greenback run through fresh offers against its main competitors in early European trading.

The common currency is seen benefiting from a risk-averse market environment, reflecting a typical cautious trading heading into the FOMC decision. While the US dollar retreats across the board amid a fresh bout of profit-taking, as investors resort to repositioning ahead of the key market moving event for this month.

The recovery in EUR/USD is likely to remain brief as the USD bulls are expected to jump back into the bids on a 25bps rate hike (as broadly expected) announced by the Fed later today.

Next of note for the major remains the US retail sales, PPI and industrial production data lined up for release later in the NA session, as the EUR calendar lacks relevant fundamental news.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.0663/68 (daily S1/ Dec 13 high). A break beyond the last, doors will open for a test of 1.0700 (round figure) and from there to 1.0730 (daily S3). On the flip side, the immediate support is placed at 1.0628 (20-DMA) below which 1.0600 (zero figure/ 5-DMA) and 1.0567 (Nov 18 low) could be tested.

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