EUR/USD hits highs above 1.0550 and loses strength, market eyes on the Fed

• The dollar remains in ranges before the Fed.
• Rebound in yields avoid fall of the green ticket.
• Volatility expected, would lead to a test of the limits of the 1.0450/1.0600 range.

EUR/USD is rising modestly on Wednesday ahead of the Fed’s decision and against a backdrop of some dollar weakness. The pair climbed to 1.0555, but then pulled back towards 1.0530.

Forex trading remains limited with traders focused on what the FX decision will be in hours. Federal Reserve. The central bank is expected to raise the interest rate by 35 basis points and announce the start of the quantitative adjustment program. Also then will come Jerome’s conference Powellthe president of the central bank.

What the Fed leaves behind will be key for the market and could create volatility, leading EUR/USD to break out of the 1.0600-1.0450 range.

The dollar arrives at the meeting with an upward trend, although without the strength of other sessions on Wednesday, given a stabilization in Treasury bond yields. The 10-year rate is picking up in the last hour and is close to 3%, coinciding with a better tone for the dollar in the very short term, after the opening of Wall Street.

With regard to economic data, an increase in US private employment measured by ADP in April of 247,000 was known, below the 395,000 market consensus and below the 479,000 in March. It was the lowest reading since January 2021. The S&P Global PMI for April services was revised higher from 54.7 to 55.6. For its part, the non-manufacturing ISM registered a fall from 58.3 to 57.1, and a rise to 58.5 was expected.

Technical levels