EURUSD – bears probe below 55SMA again; all eyes on Fed

The Euro stands at the back foot at the beginning of the week, with FOMC meeting being in focus.
Fresh probes below 55SMA (1.2282) and 1.2265 (Fibo 61.8% of 1.2154/1.2445 upleg) which were cracked last Friday, keep near-tern negative tone in play.
Firm break here would signal extension of bear-leg from 1.2412 (14 Mar lower top) towards key supports at 1.2154 / 27 (month’s low / base of thick daily cloud).
Bearish setup of daily MA’s is conflicted by rising 14-d momentum moving into positive territory and oversold slow stochastic, which could delay bears.
Broken daily cloud top marks initial barrier at 1.2295 and so far caps today’s action, with stronger upticks expected to hold below 1.2355 (converged daily Tenkan / Kijun-sen).
The first FOMC policy meeting under command of new Fed chief Powell is closely watched. Markets are widely expecting 0.25% hike this week, as expectations were supported by recent positive US data which signaled strong US economy’s growth.
With rate hike already priced in, the focus turns towards Fed’s post-meeting comments, as traders looks for signals for increasing pace of tightening which would include four rate hikes, rather than three, projected at Fed’s meeting last December.
More hawkish Fed would boost the dollar and sent Euro below pivotal supports at 1.2172/27 zone (Fibo 38.2% of 1.1553/1.2555 rally / daily cloud base) which would generate reversal signal.

Res: 1.2295; 1.2336; 1.2355; 1.2383
Sup: 1.2260; 1.2223; 1.2205; 1.2154