- The dollar corrects moderately lower at the start of the FOMC meeting.
- A 50 basis point hike is expected from the Fed on Wednesday.
- The euro marks maximum also against the pound.
The EUR/USD broke higher and climbed to 1.0578, reaching the highest level in two days. The pair remains above 1.0550, with a bullish intraday tone amid a broad dollar correction.
The dollar is falling on almost all fronts on Tuesday, pulling away from year-to-year highs it hit against several of its rivals. The Dollar Index (DXY) falls 0.43%, and trades at 103.15, affected in part by a decline in US Treasury bond yields.
US stocks rebound from multi-year lows ahead of Wednesday’s decision in the Federal Reserve. A rise in the reference rate of 50 basis points is expected. If it proceeds as expected, the impact on the market will come from what Powell says and from the announcements related to the Fed’s balance sheet and portfolio.
Correction, only that for now
The dominant trend in EUR/USD remains bearish despite the rebound. The euro is having the best day in almost a month against the dollar.
Valeria Bednarik, Chief Analyst at FXStreet states that the EUR/USD 4-hour chart sees price “above a 20 SMA, now flat, while technicals point firmly to the upside within positive levels, suggesting more short-term gains on the docket. However, the pair remains trading well below a bearish 100 SMA, currently offering dynamic resistance around 1.0740”.
Technical levels
Source: Fx Street
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