Ahead of the FOMC Meeting, What Are the Expectations for the EUR/USD Movement?

thecekodok

 Previously risky market sentiment was slightly eased back with positive developments by Russia-Ukraine peace talks that are expected to be the trigger for an end to the week-long war crisis.


The US dollar however is seen to maintain its strength over the weekend and is likely to continue this week.


Investors ’focus for the US dollar will begin to shift to the FOMC meeting where it is highly likely that the Federal Reserve (Fed) will raise interest rates after several indicators were given earlier.


Thus, trading earlier in the week is expected to be more in favor of the US dollar to put pressure on other major currencies in the market especially the anti-USD namely the Euro.




On the price chart of the EUR/USD pair, the price expectation to move in a bullish trend last week again faded as the price re -displayed a signal for a bearish move over the weekend.


Last Friday, the price resumed its decline after Thursday’s plunge, where the price slipped below the 1.1000 level and was blocked by the Moving Average 50 (MA50) resistance level on the 1 -hour time frame of the price movement on the EUR/USD chart.



Hitting the level around 1.0900 at the decline made at the close of trading last week, the price hovered slowly around that level in the opening Asian session trading of the market this week.


The lower decline is expected to return to the support level around 1.08000 which was tried to hit the price at the beginning of last week.


With the expectation for the Fed to raise interest rates, the price could fall lower past the 1.08000 level next heading to the latest support zone expected around 1.07000.


But beware if the failing market expectations see the US dollar weaken again, the price will make a rise to retest the initial resistance at 1.1000.


A higher rise will lead to the SBR (support become resistance) zone at 1.11200 which was a resistance for the price in last week's trading.