InstaForex

September 22, 2021

This is the Expected Movement of EUR/USD After the FOMC Meeting!

 The Asian session on Wednesday morning saw an interesting movement of the US dollar which exhibited a slight decline after hovering weakly around a 1 -month high earlier in the week.


Investors ’focus on the issue of the Evergrande financial crisis in China is now beginning to shift to the FOMC meeting early Thursday morning.


Investors are waiting for a decision by the Federal Reserve (Fed) on whether to implement policy tightening through reduced asset purchases (tapering) or maintain a loose policy.




On the price chart of the EUR/USD pair, a horizontal movement of the price until today has been expected by analysts as investors are cautious ahead of the FOMC meeting with the expectation of a drastic price movement to take place.


The US dollar, which lost its strengthening momentum, failed to be taken advantage of by the Euro while investors were also waiting for important economic data on the manufacturing and services sectors in Europe to be published on Thursday.


The price on the EUR/USD chart is still supported by the 1.17000 support zone after the price decline at the beginning of the week before the price movement continued to flatten.



In which direction will prices go after the FOMC meeting?


If the outcome of the meeting accompanies the Fed’s hawkish statement to tighten policy, prices are expected to plunge below the 1.17000 support zone under pressure by the strengthening US dollar.


The price decline will lead to the support zone 1.16000 or can go even lower if the price momentum is stronger.


However, if the Fed's dovish statement invites the depreciation of the US dollar, the price will rebound to the level of 1.18000 for the price to go to the SBR zone (support become resistance).


Even prices could fly higher if investors continue to let go of US dollar holdings en masse.