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EUR/USD nears multi-year lows near 0.9850 ahead of FOMC decision

  • A new leg down in EUR/USD brings the price closer to multi-year lows.
  • The euro remains under pressure pending the Fed’s decision.
  • The FOMC meeting will trigger volatility in the financial markets.

The EUR/USD It continued to fall during the American session and bottomed out at 0.9865, the lowest level in two weeks, and just one point above the yearly low. The pair remains near lows as traders await the FOMC decision.

First Russia, then the dollar… now the Fed?

The euro has already been affected by rising geopolitical tensions. Russian President Vladimir Putin announced early Wednesday a partial mobilization to support the war in Ukraine.

Despite the cautious tone among investors, yields in Europe and the US continued to rise. The 10-year yield in the US stands at 3.56%, while the 2-year yield exceeded 4.00% for the first time since 2007. In Germany, the 5-year and 30-year yield curve inverted for the first time time since 2008.

Economic data released on Wednesday showed a decline in US existing home sales in August for the seventh consecutive month. The 0.4% drop put the annual rate at 4.7 million, above expectations for a 4.8 million reading.

Despite the data from Putin and the United States, attention is focused on the FOMC, which in a few minutes, at 18:00 GMT, will announce its decision on monetary policy. The Fed will also release new macroeconomic projections from the FOMC staff and Chairman Powell will hold a press conference.

Powell’s decision, tone, dot plot and words are expected to have a significant impact on financial markets, including the US dollar. DXY enters the meeting trading at the strongest level since June 2002, above 111.00.

Technical levels

EUR/USD

Panorama
Last Price Today 0.9874
Today’s Daily Change -0.0097
Today’s Daily Change % -0.97
Today’s Daily Opening 0.9971
Trends
20 Daily SMA 0.9992
50 Daily SMA 1.0096
100 Daily SMA 1.0307
200 Daily SMA 1.0718
levels
Previous Daily High 1.0051
Previous Daily Minimum 0.9955
Previous Maximum Weekly 1.0198
Previous Weekly Minimum 0.9945
Monthly Prior Maximum 1.0369
Previous Monthly Minimum 0.9901
Daily Fibonacci 38.2% 0.9992
Daily Fibonacci 61.8% 1.0014
Daily Pivot Point S1 0.9934
Daily Pivot Point S2 0.9897
Daily Pivot Point S3 0.9839
Daily Pivot Point R1 1,003
Daily Pivot Point R2 1.0088
Daily Pivot Point R3 1.0125

Source: Fx Street

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