EUR/USD Daily Forecast – U.S. Dollar Is Flat Ahead Of Fed Interest Rate Decision

EUR/USD Stays Near Resistance At 1.2130

EUR/USD is currently testing the resistance at 1.2130 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index did not manage to settle above the resistance at the 50 EMA near 90.60 and pulled back below 90.50. If the U.S. Dollar Index settles below 90.50, it will head towards the support at 90.30 which will be bullish for EUR/USD.

Today, foreign exchange market traders will stay focused on the Fed Interest Rate Decision. The rate is expected to stay unchanged, and the market will pay attention to Fed’s commentary and economic projections. Any signs that Fed is worried about rising inflation could provide support to the American currency. However, it remains to be seen whether Fed is ready to signal that inflation is a problem before it sees additional data.

Traders will also have a chance to take a look at Building Permits and Housing Starts reports from the U.S. Analysts expect that Buidling Permits increased by 0.9% month-over-month in May while Housing Starts grew by 2.5%.

Technical Analysis

EUR/USD is currently trying to settle above the resistance level at 1.2130. RSI remains in the moderate territory and there is plenty of room to gain upside momentum, but it remains to be seen whether traders are ready for any notable moves ahead of the Fed Interest Rate Decision.

In case EUR/USD manages to settle above 1.2130, it will head towards the next resistance level which is located near the 20 EMA at 1.2155.  A successful test of this resistance level will push EUR/USD towards the next resistance at 1.2175. In case EUR/USD gets above 1.2175, it will head towards the resistance at 1.2200.

On the support side, the nearest support level for EUR/USD is located near the 50 EMA at 1.2115. If EUR/USD manages to settle below 1.2115, it will move towards the next support level at 1.2080. A move below the support at 1.2080 will push EUR/USD towards the support level at 1.2060.

For a look at all of today’s economic events, check out our economic calendar.