EUR/USD Price Analysis: Gearing up for the Fed at 1.0800 resistance, supported eyed at 1.0770
- EUR/USD bulls are in the market and target a move beyond 1.08 resistance.
- Bulls need to stay committed between 1.0700/50.
- First key support is located near 1.0770/85.
EUR/USD is meeting supply at the 1.08 resistance ahead of the Federal Reserve interest rate decision at 1400ET/1800 GMT. Implied Fed futures are erring towards pricing in a 25 bp rate hike.
The Fed is due to publish new economic projections and the market will be focussing on whether the dot plots are pricing in an easing of policy. ´´In our view, there is the risk that the market will not see the dovish hike that has been predicted today. This should provide support to the USD and reinforce the strength of the EUR/USD1.08 resistance,´´ analysts at Rabobank argued.
EUR/USD technical analysis
The 4-hour charts have the price on the backside of the bullish trend, which is a bearish factor. However, the falling wedge, and triple bottom are bullish:
So long as the support structure holds between 1.0700 and 1.0750/60, there will be prospects of a bullish continuation for the foreseeable future.
In the meanwhile, we have a W-formation in play. This is a reversion pattern and the bears are already moving in.
The price remains on the front side of the bullish dynamic trendline support so if there are any pullbacks, bulls will be keen to see a deceleration above the 78.6% Fibonacci retracement and in line with the neckline and trendline support.