EUR/USD upside faltered near 1.2300 ahead of FOMC
- The pair’s up move run out of legs just below the 1.2300 handle.
- USD stays offered and challenges the key 90.00 milestone.
- Spot should come under scrutiny on the expected Fed’s move on rates.
The upbeat tone around the European currency stays well and sound on Wednesday, with EUR/USD attempting – without success so far – to regain the key barrier at 1.2300 the figure and above.
EUR/USD bolstered by USD-selling, Fed on sight
The pair is extending its recovery following yesterday’s sharp sell-off, coming back from as low as the mi-1.2200s to test the proximity of the 1.2300 mark earlier in the session, or daily peaks.
The renewed selling bias around the buck stays as the main catalyst of today’s advanced in spot, although the up move should be clearly put to the test later in the day in light of the Fed meeting and its expected 25 bp rate hike.
Despite market participants have almost fully priced in higher rates today, the focus of attention will remain on the overall tone from the first press conference by Chief Powell as well as the updated outlook on the economy and the critical ‘dots plot’.
Data wise in the US docket, Existing Home Sales surprised to the upside expanding at a monthly 3.0% in February, or to 5.54 million units.
EUR/USD levels to watch
At the moment, the pair is gaining 0.38% at 1.2288 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).