EURUSD’s Technicals Teeter as FOMC Decision Nears

By Tomasz Wisniewski|

Published: March 19 2024, 10:51 GMT+0

EURUSD’s Technicals Teeter as FOMC Decision Nears


In today’s technical spotlight, we delve into the nuances of the EURUSD pair, a focal point for forex traders especially with the looming Federal Open Market Committee (FOMC) decision. Anticipation is rife, not for a change in rates—consensus leans towards stability—but for the subtleties in the statement and the ensuing press conference that might hint at the Federal Reserve’s future policy directions. The dollar, finding strength in recent sessions, has positioned EURUSD within a tight technical formation that merits a closer examination.

Upon inspecting the daily chart, EURUSD’s trajectory reveals a consolidation phase, neatly encapsulated within a symmetric triangle pattern, outlined by converging blue lines. This pattern, indicative of a market in balance, teeters on the brink of a decisive move as participants await cues from pivotal economic data and policy insights.

Compounding this anticipation is a mid-term flag formation, identified by parallel green lines, from which the price has taken a bearish detour downwards. This departure underscores the prevailing negative sentiment as EURUSD inches closer to the triangle’s lower boundary and a critical horizontal support marked in yellow. The confluence of these technical indicators suggests a heightened probability of testing this lower threshold, especially in light of the dollar’s recent assertiveness.

However, the upcoming FOMC event casts a long shadow, possessing the potential to radically alter the current technical landscape. While the setup leans towards a bearish outlook for EURUSD, especially with the pair gravitating towards significant support levels, the unpredictable nature of market reactions to policy announcements serves as a reminder of the inherent uncertainty that accompanies such pivotal moments.