The Euro retreats back towards the 1.1420 level as the US Dollar strengthens in anticipation of a hawkish statement from the Fed. This comes after Wednesday’s rally which occurred mainly due to positive Brexit negotiation talks and the weakening US Dollar post midterm election which saw the Democrats taking control of the House. With that being said, the most recent drop in prices suggest that the FOMC meeting will be the main driver of the Single currency.
Based on the chart below, the Euro's rally was paused when prices reach the 200-period moving average. The rejection at this level suggests that the market does not have sufficient information or a combination of reasons to consider shifting the long term bias of the pair. Today's FOMC statement will help determine whether the pair's bias will remain bearish or turn bullish. A hawkish FOMC statement will strengthen the US Dollar and cause the Single currency to break below the 1.1390 support exposing the 1.1347 level. The low probability scenario of a dovish FOMC statement will weaken the US Dollar and cause the Single currency to break above the 1.1500 resistance paving the way for a rise towards 1.1543.
Support: 1.1390 / 1.1347
Resistance: 1.1500 / 1.1543