The Euro edged higher in European trading on Wednesday, shy of one-week low (1.1882) posted on Tuesday after three-day pullback following double-rejection at key 1.20 resistance zone.
Quiet near-term mode comes ahead of today’s key event –” end of Fed’s two-day policy meeting and announcements of central bank’s economic projections, which are expected to provide fresh signals.
Market expectations are optimistic, with rising hopes that post-pandemic recovery would speed-up and prompt Fed to start tightening policy earlier than initially anticipated.
Underlying downtrend remains intact with the latest bounce seen as corrective action preceding attack at key support at 1.1835 (Mar 9 low, reinforced by rising 200DMA).
Near-term bias turned negative after recovery attempts were capped by important 1.20 zone barriers.
Bears look for eventual break of cracked Fibo support at 1.1887 (61.8% of 1.1602/1.2349) to confirm bearish stance for test of 1.1835, with clear break here to spark fresh bearish acceleration and expose next key supports at 1.1600 zone (Sep-Oct 2020 higher base/weekly cloud top).
Rising bearish momentum on daily and weekly charts supports the notion, along with multiple DMA’s bear crosses.
Falling 10DMA (1.1922) should ideally cap the action and guard spike highs of past two days (1.1951/67).
Res: 1.1922; 1.1951; 1.1967; 1.1990
Sup: 1.1882; 1.1868; 1.1835; 1.1800