EUR/USD looks to regain 1.1650 ahead of Fed?

The EUR/USD pair reverses a dip below the key support located near 1.1625 region, and now regains the last, despite risk-on rally seen in the European equities.

EUR/USD: 1.1700 or 1.1550 on Fed?

The spot stalled its corrective slide from two-year tops just ahead of 1.16 handle, as renewed USD buying lost steam over the last hours amid a minor-retreat in Treasury yields across the curve. The USD index now trades modestly flat just below 94 handle, reversing from daily tops of 94.12.

Also, increased nervousness ahead of the FOMC decision also boosts the safe-haven currency Euro, prompting EUR/USD to make another attempt to regain 1.1650 levels. All eyes now remain on the Fed verdict, with markets expecting no surprises, although hints on the Fed’s announcement on its balance sheet normalization policies cannot be ruled.

EUR/USD Technical Set-up  

According to Slobodan Drvenica at Windsor Brokers Ltd, “Dips may extend towards next solid support at 1.1570 zone (Fibo 23.6% of 1.1188/1.1712 upleg), reinforced by rising 10SMA which guards pivot at 1.1485 (Fibo 38.2% / rising 20SMA). Firm break here would confirm reversal and trigger deeper correction. Deeper correction would signal healthier uptrend with final break above 1.1713/35 pivots expected to spark stronger upside action.”