EUR/USD rises on Monday but remains below 1.1200

EUR/USD is about to end Monday with a gain of less than 30 pips. The pair recovered ground after falling on Friday to 1.1148, the lowest level in 10 days. A weak US dollar pushed the pair to the upside at the beginning of the week and ahead of the Federal Reserve meeting that will start tomorrow.

EUR/USD before the central bank storm

The pair tested last week lows at the 1.1150 area but it managed to hold on top. Then it climbed toward 1.1200. It peaked at 1.1197 and turned to the downside. It was about to end the day hovering around 1.1170.

According to Valeria Bednarik, Chief Analyst at FXStreet the euro maintains a weak stance from a technical perspective in the short term. “The 4-hour chart, shows the price well below its moving averages, whilst technical indicators head modestly lower within negative territory, but off their early lows set in oversold levels.”

To the downside, the immediate support area could be seen between at 1.1150 (Sep 19 low), 1.1125/30 (Sep low) and 1.1100 (psychological level). On the flip side, resistances are seen at 1.1195/200 (daily high / 100-day SMA), 1.1220 (20-day moving average) and 1.1245/50 (Sep 16 high).

Volatility in forex crosses, including EUR/USD, could start rising during the next hours and particularly on Wednesday, not only because of the FOMC decision but also because of the Bank of Japan meeting. The decision from Japan has also the potential to move markets.