EURUSD picks up bids to reverse the previous day’s retreat from a month-old horizontal hurdle as traders prepare for the all-important US Federal Reserve (Fed) Interest Rate Decision. In doing so, the Euro pair defends last week’s U-turn from a 200-SMA while making rounds to a four-week-long bearish channel’s top line.
Along with the strong rebound from the 200-SMA, a positive RSI (14) supports the bullish outlook for the EURUSD pair. However, the key resistance area, a potential bearish signal on the MACD, and the cautious market sentiment ahead of the FOMC meeting may challenge any upward momentum.
For EURUSD bulls to take charge, they must break above the key horizontal resistance zone around 1.1145-55, especially if the Fed signals a dovish stance. If they succeed, the focus will shift to the yearly peak near 1.1200. After that, the 50% and 61.8% Fibonacci Extension (FE) levels of August-September moves at 1.1215 and 1.1265 will be next, followed by the previous yearly high of 1.1275.
Conversely, any pullback in EURUSD should find strong support at the 200-SMA level around 1.1045. Even if it falls below this, the monthly low of 1.1000, the lower boundary of the bearish channel near 1.0980, and an upward trend line from late June around 1.0930 will likely hold the bears back before they gain control.
Even if buyers face challenges, EURUSD sellers still have a tough road ahead before taking control. Key obstacles include the Fed's potential consecutive rate cuts in 2024 and a rising support line around 1.0930, which are both important factors to watch.
