Extended consolidation ahead of Fed but the downside remains at risk
The Euro eases on Wednesday but so far remains within the range of past two days, as traders await the outcome of Fed’s policy meeting.
Wide expectations are for unchanged policy as the central bank reiterated its stance that no changes in its ultra-loose policy will occur until inflation rises to 2% target and the situation in the labor market improves, investors still seek for hints of policy change from Fed Chair Jerome Powell.
Daily studies warn of deeper pullback despite the dips in past two days found firm ground at 100DMA (1.2052) as indicators (RSI / Momentum) turned south and bull-trap above 1.2102 Fibo barrier weighs on near-term action.
Break of 1.2052/40 zone (converging 100/10DMA’s) would generate initial negative signal and expose psychological 1.20 support, loss of which would increase downside pressure and bring in focus pivotal Fibo support at 1.1952 (38.2% of 1.1704/1.2116 rally).
Conversely, further limited dips would signal prolonged consolidation but will keep near-term bias with bulls for renewed attack at key obstacles at 1.2102/10 (Fibo 61.8% of 1.2349/1.1704/ trendline resistance).
Res: 1.2092; 1.2102; 1.2110; 1.2157
Sup: 1.2052; 1.2040; 1.2000; 1.1968