EURUSD is forming a wedge, the nature of the pattern is consolidation. FOMC & FED meeting is ahead. The main issue is inflation and interest rate cuts. What should we expect?
100% probability that today the rate will remain unchanged, but Powell at the meeting may signal a Fed rate cut in the coming months amid slowing labor market growth. Eurozone consumer inflation fell from +0.2 to 0% (expected -0.3%) and core CPI rose by 0.1 to +2.9%, suggesting a generally improving environment for a stronger EUR.
Technically, the bulls are trying to hold the area of 1.08. A descending wedge is forming on the chart, another retest, if the fundamental background persists, may lead to a break of resistance. In this case, the market may move into the distribution phase, within which it is able to update the local maximum.
Resistance levels: 1.0852
Support levels: 1.08
Traders are in no hurry to act prematurely and will wait for the Fed and FOMC meeting. Technically everything is favorable to start the growth. Potential target is 1.100