Euro trades in extended directionless mode ahead of Fed

The Euro extends consolidation above five-year low into fourth straight day, with sideways trading reflecting quiet mode ahead of Fed’s policy decision, due on Wednesday.
Bears are taking a breather after nearly 5% drop in April, with the single currency being strongly deflated by risk aversion and robust dollar on safe-haven buying and expectations for more aggressive Fed.
Repeatedly capped recovery in past four days, suggest that overall structure remains firmly bearish and the larger downtrend is likely to resume after a brief pause.
Near-term picture was further hurt by strong rise in European producer prices (Apr PPI 36.8% y/y from 31.5% in Mar and above forecast for 36.3% rise) that signals persisting price pressures and warns that inflation could rise further after hitting new record high last month.
The US central bank is widely expected to hike interest rate by 50 basis points to 1% at the end of two-day policy meeting on Wednesday, with increased hawkish stance signaling a number of hikes in coming months that makes the dollar more attractive to investors.
Continuation of larger EURUSD’s downtrend from Feb 2021 peak would look for test of key longer-term support at 1.0340 (Jan 2017 low), the last obstacle on the way towards targets at 1.0069 (Fibo 76.4% of 0.8225/1.2039, 2000/2008 ascend) and 1.0000 (parity).
Firmly bearish technical studies on all larger timeframes, support scenario, as 4-hr techs lose bullish momentum and add to warnings.
However, some analysts suggest that strongly elevated US dollar may provide very good levels for fresh shorts, on buy the rumors – sell the facts scenario.

Res: 1.0580; 1.0648; 1.0700; 1.0746
Sup: 1.0490; 1.0471; 1.0400; 1.0340