EURUSD is still consolidating inside a symmetrical triangle pattern on its 1-hour time frame, as traders are waiting for the FOMC statement as a catalyst for a breakout. At the moment, price is testing the top of the triangle and might still bounce off the resistance and test support.
Stochastic is on the way up, which means that bulls are still in control. RSI is on middle ground and not offering clear directional clues at the moment. Meanwhile, the 100 SMA is above the 200 SMA, suggesting that the uptrend might resume at some point. A downward crossover appears to be looming though, and this could be an early signal for a potential selloff.
The triangle is around 300 pips in height, which means that the breakout rally or selloff could last by the same amount. This could take EURUSD back to the 1.0900 area or until the 1.1600 in case a breakout takes place soon.
EURUSD Fundamental Factors
The upcoming FOMC statement might be the biggest market catalyst for a breakout move on EURUSD, as this should set the tone for longer-term dollar biases. The Fed is expected to confirm that they are looking to hike interest rates sometime this year, possibly in September, and this could mean strong gains for the US dollar.
However, if Fed Chairperson Yellen and her group of policymakers decide to play it safe and say that tightening is not guaranteed yet, the dollar might be in for more declines. The US economy suffered a slump back in the first quarter of the year and is still recovering in the past months.
Other event risks include any updates on the Greek debt negotiations, as the latest round of talks was still unable to produce a deal for the debt-ridden nation. Increased odds of a Grexit could be bearish for the euro and trigger a downside break for the pair.
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