EUR/USD better bid near 1.1220, eyes on US CPI, Fed verdict

Broad based US dollar selling seems to have paused, as we head into early Europe, fizzling out the renewed uptick seen in EUR/USD towards Tuesday’s high of 1.1225.

EUR/USD: 1.1165 or 1.1300 on FOMC?

Having stalled its overnight recovery at 1.1220, the spot manages to hold a minor bid above 1.1200 levels, as the USD bulls remains on the defensive heading into a Big day ahead.

Moreover, a lack of relevant macro news from the Euroland, should leave the major at the mercy of the USD dynamics and broader market sentiment, as investors gear up for the US CPI data, which is expected to have a huge bearing on today’s FOMC decision.

Meanwhile, prevalent cautious tone across the financial markets is expected to keep the sentiment around the funding currency Euro somewhat buoyed.

The immediate focus remains on the German final CPI data, which will virtually have no impact on the pair.

EUR/USD Technical Levels

Jim Langlands at FX Charts noted: “The short term momentum indicators are neutral and it looks set to remain choppy until the FOMC meeting, but back under 1.1185 would then allow for another test of 1.1160 and potentially of 1.1100/10. Further out, 1.1075 and 1.1040 are likely targets albeit that they are still some way off.”

“While the dailies remain toppish, selling rallies towards 1.1230/50 remains the plan, but with a tight SL placed above 1.1285, as we are then likely to see a run towards 1.1300/10 where I would again be looking to sell it with a tight SL above 1.1330,” Jim added.