EUR/USD sidelined around 1.2280 ahead of Fed meeting

• The pair quickly reverted the knee-jerk to the 1.2260 region.
• USD remains offered albeit above the 90.00 handle.
• US FOMC gathering next on tap, with a rate hike already priced in.

The single currency remains bid on Wednesday amidst a generalized softer tone around the buck and EUR/USD looking to stabilize in the 1.2270/90 band ahead of the Fed meeting.

EUR/USD consolidative ahead of FOMC

The pair stays in recovery-mode following yesterday’s strong pullback to the 1.2240 region, coincident with the relevant short-term support line off 2018 lows (January 9), which continues to hold pretty well for the time being.

Looking ahead, spot is poised to come under pressure as market participants see the Fed delivering a ‘hawkish hike’ today. Despite the expected move on rates, the focus of attention should be on the first press conference by Chair Powell and the updated ‘dots plot’.

Apart from the Fed meeting today, Existing Home Sales for the month of February are due ahead of the EIA weekly report on US crude oil supplies.

EUR/USD levels to watch

At the moment, the pair is gaining 0.27% at 1.2274 and a breakout of 1.2414 (high Mar.14) would target 1.2448 (high Mar.8) en route to 1.2557 (2018 high Feb.16). On the flip side, immediate contention emerges at 1.2241 (low Mar.21) seconded by 1.2206 (low Feb.9) and finally 1.2165 (low Jan.18).