Uncertainty continues to plague the currency market as the time draws near to find out the results of the FOMC meeting after so long investors have been waiting for.
The expected increase in interest rates is as much as 25 basis points for this meeting, but the indication for further policy setting will be the compass of the market's direction of travel.
The US dollar traded somewhat mixed on Tuesday yesterday, but looked more likely to weaken as the JOLTS job offers data showed a lower reading than forecast.
In addition to the risky market sentiment, investors will also watch the release of the US ADP employment data which measures the private sector in the New York session tonight, before the main focus will be on the FOMC meeting early Thursday morning.
If you look at the price chart of the EUR/USD currency pair, it is difficult for investors to determine a clear direction with the surge that was displayed again in the New York session yesterday following the initial plunge in the previous session.
In the European session, the price was seen to make a decline after touching the 1.10000 level, reaching the lowest level for this 2-week period around 1.09400.
However, the gloomy US dollar has pushed the price up again to pass the 1.1000 level in the trade connected to the beginning of the Asian session this morning (Wednesday).
The increase is also seen to break through the Moving Average 50 (MA50) barrier on the 1-hour time frame on the EUR/USD chart, which gives an early signal of a more bullish trend.
If the US dollar continues its decline heading into the FOMC meeting, price increases can be expected to reach last week's highs around 1.10900.
And if the results of the meeting continue to make the US dollar significantly weaker, the price could potentially jump up to the target of 1.12000.
On the other hand, if the price plunges again below the 1.10000 level, the support zone at 1.09000 is seen to be the focus to be tested.
Further decline if continued could reach up to around 1.08000 for the price to record the latest 4 week low.
Not forgetting that the market will focus on the European Central Bank (ECB) policy meeting on Thursday which will also influence the direction of price movements, especially for the Euro currency.
