Not only failures to cross the support-turned-resistance line during the previous week’s bounce but bearish MACD and weak RSI, not oversold, also favors EURUSD bears as global markets prepare for the Fed decision on Wednesday. However, 61.8% Fibonacci retracement of November 2020 to January 2021 upside, around 1.1885, offers immediate support to the quote before dragging it to the key 200-day SMA (DMA) near 1.1835. Should Powell & Company use the word “taper”, odds of the pair’s further downside towards November 11, 2020 low near 1.1745 can’t be ruled out.
Meanwhile, 50% Fibonacci retracement level and the previous support line, respectively around 1.1975 and 1.1990 guards immediate EURUSD upside ahead of the 1.2000 threshold if at all the Fed overcomes the bearish hopes stronger than now. Also acting as the key upside barrier is the mid-February lows near 1.2020 as well as the monthly peak surrounding 1.2115. Overall, EUR/USD moves are likely to remain sluggish, but bearish, ahead of the Fed while the following performance depends on how the US central bank manages to praise the fiscal stimulus and reject reflation/tapering fears.