The EURUSD is hanging above and below the 50% midpoint of the July trading range ahead of the important Fed decision at 2 PM ET. The Fed is expected to raise rates by 25 basis points, but it will be the expectations going forward that the market will be focused on. Fed Chair Powell will conduct his normal press conference starting at 2:30 PM ET and will give the market the hints, which should lead to the next shove (and move the price away from the 50% level).
Technically, the 50% midpoint comes in at 1.10539, and it will be THE barometer for traders. Bullish above. Bearish below.
On a move higher, the falling 100-hour moving average at1.10969 will be a level to eyed. Recall from last week, the price fell back below that moving average and stayed below on Thursday's corrective move higher. Willing sellers leaned against the level (see blue line in the chart below). Move above that moving average level and we could see a run toward the 200-hour moving average at 1.11619. Before that, the high for the week from Monday reached 1.1146 and if broken, would give traders more upside confidence.
On a move lower from a more hawkish fed, a swing area between 1.10102 and 1.10267 will be eyed, followed by the natural support at 1.1000. Below that, and a swing area between 1.09618 to 1.09759 would be targeted followed by the 100-day moving average down near the 1.0900 level.
Hanging around the 50% retracement level is not a bad idea. It means the market traders are unsure of the next move and awaits the next shove. So watch the targets above and below for the next clues after the FOMC rate decision today. It will help to show the way going forward.
