- Summary:
- The EUR/USD is in a tight range ahead of the Fed interest rate decision. Here is how the currency pair will likely trade during this period.
The EUR/USD is little changed today as traders refocus on the flash manufacturing and services PMIs and the upcoming Fed interest rate decision. The pair is trading at 1.2163, which is where it has been in the past few days.
Fed decision: The Federal Reserve monetary policy committee will conclude its final meeting of the year today. Economists don’t expect much changes though. For one, it will leave interest rates at the current range of between 0% and 0.25% and extend its open-ended quantitative easing program.
This is unlike the ECB, which decided to tweak its asset purchases program last week. Therefore, unless the bank makes major changes to its policies, the EUR/USD will possibly remain at the current range.
Flash PMIs: The EUR/USD will also possibly react to the flash manufacturing and services PMI numbers set to be released in the morning session by Markit. Analysts expect the data to show that the manufacturing sector in both Europe and the US remained in an expansionary zone in December.
Also, they expect that the services PMI will remain below 50 but show some expansions. Therefore, the EUR to USD will also likely react mildly to these numbers.
EUR/USD technical outlook
What next for EUR/USD: On the four-hour chart, we see that the EUR/USD has been in a consolidation phase. It is trading at 1.2163, which is a few pips below the important resistance level of 1.2176. The pair has struggled to move above this level this month.
Therefore, this being an important top, the outlook for the EUR to USD is neutral. A move above the resistance will be a break-out, which will push the price higher. However, a move below 1.2122 will be a victory for bears.
EUR to USD chart
