EUR/USD Daily Fundamental Forecast – March 21, 2018

The EURUSD pair has moved back to the lows of its range as the dollar gained in strength in anticipation of the FOMC announcement that is scheduled to be released later in the day today. The market is hopeful for some hawkish news from the Fed, apart from the fact that they expect a rate hike, the first one for thi year from the Fed and that is the cause of the dollar strength.

EURUSD Under Pressure

It is going to be a big battle between the bulls and the bears during the course of the day in the lead up to the announcement as the pair is in the strong support region which has not been breached over the past few weeks despite some repeated attempts by the bears. It remains to be seen whether the region would be broken today and even if it were, we have to wait and see whether the break would continue to hold later in the day after the announcement is made.

This is where the traders need to be careful and ensure that they dont get carried away by all the news and rumors floating around and ensure that they jump in to the traders only at the right time. Though it is widely expected that the Fed would indeed hike the rates later in the day, it remains to be seen whether that would be enough to satisfy the markets. The market expects the Fed to lay out the timelines for some accelerated rate hikes in the meeting today and anything short of that would disappoint them.

This is where the Fed is likely to slip and not satisfy the expectations of the market and this could lead to some pressure on the dollar in the short term. This is likely to be the focus of the markets for today and lead to a lot of volatility.