Technical Analysis

The pair trades around the 1.1800 figure level

And is up by about 0.1% on the day currently. The FOMC decision yesterday saw the dollar bid at the initial reaction to the shift to four rate hikes and a slightly more upbeat Fed – but the greenback surrendered gains soon after, with EUR/USD testing a move below the 200-hour MA (blue line) but failing a close below it on the hourly candle.

Buyers then kept the pair bid and maintained the bullish bias by holding above the 100-hour MA (red line) and the pair has been relatively steady in making its way up the the figure level @ 1.1800 now – near highs of 1.1805 on the day.

I expect the euro to maintain bid ahead of the ECB but a lot of the optimism surrounding a possible announcement to end QE this meeting has already been factored in. From the last two days of trading, it’s clear that the 200-hour MA is a definitive line in the sand and a level buyers are holding firm to defend.

That said, the pair should range between there and the 1.1800 figure level ahead of the ECB. But should the dollar weaken a little or euro bulls become a bit more upbeat with their expectations, further resistance is seen at 1.1840 – from last week’s high.

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