EUR/USD May Break 1.1200 Support Amid Fed Monetary Policy Announcement
The EUR/USD pair traded up to 1.1372 with the European opening, from where it fell down to 1.1282 early in the American session, with no actual catalyst behind the moves. Later, the pair bounced from a major Fibonacci support, the 61.8% retracement of the 1.1017/1.1713 advance, around the daily low, ending the day a few pips above the 1.1300 level.
As expected, the pair lacks clear directional strength ahead of the upcoming FED’s meeting starting next Wednesday, as investors are wary of driving currencies’ prices far away at this point.
Technically, a negative tone prevails in the short term, as the 1 hour chart shows that the price is below a bearish 20 SMA, whilst the technical indicators head slightly lower below their mid-lines.
In the 4 hours chart, the 20 SMA advanced further higher below the current level, now around the 1.1280 region, whilst the technical indicators hold above their mid-lines, but showing no actual directional strength.
Meanwhile an almost empty calendar left currencies on the hands of market sentiment, with risk aversion dominating the first half of the day, and making of the Japanese yen the overall daily winner.
The EU release its Industrial Production data for July that surprised to the upside, resulting in an increase of 0.6% monthly basis, and 1.9% compared to a year before, but failed to trigger buying interest.