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Before the FOMC Meeting, the EUR/USD Pair Revisits the Downward Trendline at 1.0720
The EUR/USD maintains its favorable momentum as US Treasury yields decline. Important levels of resistance and support to monitor as investors await the Fed meeting. EUR/USD at the three-way intersection: A mixture of resistances.
The EUR/USD has maintained a bullish bias for the past three days, propelled by renewed pressure on the US Dollar due to declining yields on US Treasury (UST) bonds. In response to a change in the repricing of interest rates, the yield on U.S. Treasuries has entered a corrective decline.
The three-day bullish rally for EUR/USD pair has led to a retest of the descending trendline that begins at the 1.1036 level and extends from February's high.
At 1.0720, the descending trendline crosses the 38.2% Fibonacci level, which coincides with the 50-Day Moving Average. (DMA). This convergence of factors produces a formidable and difficult resistance.
A decisive break above this level could propel the price to a series of resistances, beginning with last week's high at 1.0753 and continuing with the 50% Fibonacci level. The last line of resistance would be the Fibonacci level of 61.8%.
Any retracement is likely to be contained near the 23.6% Fibonacci level, which coincides with the 21-day moving average. A convincing break below this level could send EUR/USD to the multi-month low at 1.0525, which is also the final line of support.
As a significant Fed meeting approaches, it is not uncommon for investors to be divided over policy decisions. Therefore, the two will presumably tread water prior to the event. As volatility is anticipated during the FOMC policy decision, all crucial levels will continue to be monitored.
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