Bullish view
Top Regulated Brokers
Buy the EUR/USD pair and set a take-profit at 1.1485.
Add a stop-loss at 1.1300.
Timeline: 1-2 days.
Bearish view
Sell the EUR/USD pair and set a take-profit at 1.1300.
Add a stop-loss at 1.1485.
The EUR/USD pair rose slightly as investors waited for the upcoming Federal Reserve interest rate decision. It rose modestly after Iran launched a surprise attack against the United States military overnight. It was trading at 1.1400, a few points above this week’s low of 1.1353.
Federal Reserve Interest Rate Decision
The EUR/USD pair rose even as the Iranians launched strikes against a US base in Jordan. This was the first time the country launched attacks since the fighting paused last week. It happened even as President Donald Trump continued to insist that the two sides were negotiating.
Therefore, there is a likelihood that the US will respond by launching more attacks against Iran targets. It happened even as US media reported that the military was running out of ammunition.
The EUR/USD pair wavered as traders focused on the upcoming Federal Reserve interest rate decision. Economists expect the bank to leave interest rates unchanged between 3.50% and 3.75%. Officials are expected to deliver a hawkish pause, with officials expected to signal future rate hikes because inflation has remained above 2% in the past five years.
The Fed rate decision comes a day after the Conference Board published the latest consumer confidence report. This report showed that confidence dropped to 90 this month as the US restarted its war against Iran, pushing oil prices higher. Gasoline prices have jumped to $4.099 from last month’s $3.8.
The other key data to watch will be the US GDP and Personal Consumption Expenditure (PCE) numbers. The GDP report is notable as it will be the first one to show how the economy grew in the second quarter. On the other hand, the PCE report will shed more light on the state of inflation in the country.
EUR/USD Technical Analysis
The daily chart shows that the EUR/USD pair has risen in the last two consecutive days, reaching a high of 1.1400. This rebound happened as it formed what resembles a double-bottom pattern, which often leads to a reversal.
The Relative Strength Index (RSI) has moved from the oversold level of 29 to the current 44. It has remained below the 50-day Exponential Moving Average (EMA).
Therefore, the pair will likely remain in this range ahead of the FOMC decision. A rebound may push it to the upper side of the double-bottom of 1.1483. A move below the support level of 1.1323 will invalidate the bullish outlook.