EUR/USD traded in a very narrow trading range in yesterday’s trading session as traders await the Federal Reserve decision on the monetary policy and the future trajectory path of short term interest rates. The currency pair has been trading in a very narrow trading range but continues to hold a negative bias. The German economic reports released yesterday disappointed the street and added pressure to the already flagging euro currency. The business sentiment index came in at 6.9 versus a consensus estimate of 8.9 which is indicative of the sluggish pace of growth in the German economy.
The report meant that the European Central Bank would be forced to keep interest rates lower in the near term and continue its bond buying program to be able to stimulate a stagnant euro-zone economy in the near term. Reports of Chinese authorities wanting to introduce monetary stimulus provided support to the Euro in the early Asian session but most traders would be turning their attentions towards the FOMC minutes followed by the press conference from Fed Chairwoman Janet Yellen. The economic sanctions imposed over Russia are also being seen as a reason that might take the Euro lower in the near term.
On the daily charts for EUR/USD, the currency pair continues to trade in a very narrow trading range as traders and investors gear up for the all important Federal Reserve meeting scheduled to end today. The resistance for the currency pair continues to remain $1.30024 and the support comes in at $1.287. The momentum indicators for the currency pair remain depressed and show no signs of an imminent revival. The currency pair continues to trade below all its important daily moving averages.
Short EUR/USD if it closes below $1.287 for a short term target at $1.2690 with a strict stop loss above $1.3002.