The Euro is trading flat ahead of the major Fed announcements at 18:00 GMT. The news should be a market moving event despite some of its announcements being baked into the Euro. Traders expect the U.S. Federal Reserve to leave its benchmark interest rate unchanged. Additionally, it expects the Federal Open Market Committee’s economic projections to show a reduction in the number of interest rate cuts from two to one.
At 11:13 GMT, the EUR/USD is trading 1.1351, unchanged.
The Fed is also expected to announce its plan to reduce its massive balance sheet. Keep in mind that this move is a form of tightening. The more aggressive the Fed is in reducing its balance sheet, the more hawkish it will appear. This would be bearish for the Euro. If the Fed takes a less-aggressive approach to selling off its assets, then the Euro could rise.
Daily Technical Analysis
The main trend is down according to the daily swing chart. However, momentum has been trending higher since the March 7 bottom at 1.1177. A trade through 1.1362 will indicate the buying is getting stronger. The main trend will change to up on a move through 1.1420.
The last swing bottom is 1.1177. Sellers are not likely to take out this level, but since the EUR/USD is up nine sessions since its last main bottom, it begins today’s session in the window of time for a closing price reversal top. Watch for a higher-high, lower close.
The main range is 1.1420 to 1.1177. Its retracement zone is 1.1327 to 1.1299. Holding above this zone will give the market an upside bias. This area is new support.
Daily Technical Forecast
Based on the early price action, the direction of the EUR/USD on Wednesday is likely to be determined by trader reaction to the uptrending Gann angle at 1.1357 and the downtrending Gann angle at 1.1350.
Overtaking and sustaining a rally over the uptrending Gann angle at 1.1357 will indicate the presence of buyers. Taking out 1.1362 will indicate the buying is getting stronger. This could trigger a rally into the next downtrending Gann angle at 1.1385. This is the last potential resistance angle before the 1.1420 main top.
A sustained move under the downtrending Gann angle at 1.1350 will signal the presence of sellers. The first downside target is the Fibonacci level at 1.1327. This level is a potential trigger point for an acceleration into the 50% level at 1.1299. If this level fails as support then the selling is likely to extend into the next uptrending Gann angle at 1.1267.
This article was originally posted on FX Empire
More From FXEMPIRE:
- Trading Bullish and Bearish Divergences
- USD/JPY Fundamental Daily Forecast – Direction Comes Down to Dovish Fed Versus Safe-Haven Demand Due to Trade Concerns
- GBP/USD Price Forecast – British Pound Declines on Brexit Woes
- 3 False Breakouts that Can Make your Trading Day Better
- AUD/USD and NZD/USD Fundamental Daily Forecast – Traders Focusing on Fed’s Balance Sheet Reduction Plan
- DAX Index Daily Price Forecast – DAX to Trade in Red on Renewed Trade War Woes