EUR/USD Awaits FOMC Outcome, Key Support Level at $1.08 in Play

Upward Trend: EUR/USD has been in an upward trajectory since mid-April, finding strong support above the $1.06 level. The rally has lifted the daily chart above a key moving average for the first time since March. Additionally, the 4-hour chart shows an ongoing upward trendline channel from the $1.06 low. The market now awaits a catalyst for the next directional wave.

Short-Term Consolidation: EUR/USD is maintaining a sideways pattern in the short term, confined between the $1.09 resistance level and the $1.0830 support. The market has been consolidating between these levels over the last three days, awaiting upcoming events such as the FOMC meeting to trigger the next move.

Key Support Levels: The support level defending the bullish momentum is currently set at the $1.0830 level. While above this level, momentum is expected to continue bullish. A break below this key area can signal weakness in the underlying trend and open the way to a retracement on the daily chart, with $1.08 and $1.0750 representing the next areas of support. Such a move would shift sentiment to a more neutral outlook.

Potential Bullish Pivot: The $1.08 level is outlined as the key area of interest with the market likely to retest the level before attempting another move higher. If the level manages to support the uptrend, a retest accompanied by bullish rejection patterns may offer an opportunity for bulls to initiate new positions to follow the upwards trend, targeting the immediate resistance level at $1.09.

Potential Bearish breakthrough: If $1.08 fails as support, it may signal a sentiment shift and potential correction. A break below and retest of $1.08 as resistance, followed by bearish signals, may present an opportunity for bearish traders to join the new directional move at its early stages.

Upcoming FOMC Meeting: The FOMC meeting tonight could shed more light on how the Fed has interpreted the latest data, potentially bringing the key level into play. Behaviour at this level will likely add clues and set the stage for the next directional wave. The market is focused on whether the Euro can maintain its current levels and break through the key resistance points.

Eurozone Data Release: The major Eurozone data release of the week will be on Thursday, with German Purchasing Managers Index (PMI) figures for May expected. The manufacturing sector is expected to remain in contraction, though it may show improvement over April’s data.

EURUSD 4 Hour Chart

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