EUR/USD holds above key support near 1.1625 ahead of Fed

The EUR/USD pair remains better offered as we head into early Europe, and now looks to extend the renewed slide towards the key support zone located near 1.1625 levels

EUR/USD: Fed in focus

The spot is trading directionless in a 15-pips narrow range amid a typical pre-Fed caution trading, with markets turning away from creating fresh position in the major. The FOMC is expected to make no changes to its monetary policy program, when it concludes its two-day meeting later on Wednesday.

However, markets are widely expecting the Fed to point towards an announcement on the start time of the balance sheet normalization process. Any hawkish disappointment could end the broad USD recovery from multi-month lows, boosting EUR/USD back beyond Aug 2015 highs of 1.1713.

Ahead of Fed event, EUR/USD could extend its latest corrective move from fresh 2-year tops of 1.1712, with the selling pressure likely to intensify on a break below 1.1625 region, paving the way for a test of 1.1600-1.1590 levels.

EUR/USD Technical Set-up  

According to Karen Jones, Analyst at Commerzbank, “EUR/USD is cautious: The new high has not been confirmed by the daily RSI and the market has reached major medium term resistance at 1.1713/36 the August 2015 high and long term Fibo, here we would look for signs of profit taking. The 200 week ma is also found in this vicinity at 1.1797.”