4 min readToday marks the highly anticipated Federal Open Market Committee (FOMC) meeting, a key event that often leads to significant market movements. The FOMC sets the US federal funds rate and provides forward guidance on monetary policy. As the US dollar is directly influenced by interest rate expectations, traders around the world closely watch this event. Shifts in tone or policy can create sharp moves in pairs like EUR/USD. With recent mixed data from both the eurozone and the US, the market is looking for clues on the Federal Reserve’s next steps.
From a technical perspective, EUR/USD remains in an overall uptrend but is currently showing signs of potential distribution. Price is trading within a defined range with support at 1.128 and resistance at 1.15. This range has been in place for several weeks, suggesting indecision between buyers and sellers as the market awaits a fresh catalyst.
To the downside, the key support level is at 1.12, which represents the previous high time frame range highs that have now flipped to support. A break below the range lows could suggest that this structure is in fact a distribution range. In that case, the next area to monitor is just below 1.11 where we have a significant breakout level and the daily 50 EMA offering additional support. Further down, the 200 simple moving average is positioned just below 1.08 and is aligned with a major high time frame support zone.
To the upside, a move above the range highs at 1.15 would indicate renewed bullish momentum. A breakout here could open the path toward the high time frame resistance zone between 1.16 and 1.17. It is also important to note that EUR/USD is currently trading at levels not seen since early 2022, highlighting the potential importance of today’s developments.
As the FOMC approaches, traders should remain vigilant. A clear break of either the range lows or highs could signal the next significant directional move for EUR/USD.
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