EUR/USD Trades Sideways as Markets Await FOMC Rate Decision

The EUR/USD currency pair was today trading sideways as the markets await the Fed interest rate decision scheduled for later today. The currency pair’s slight upward momentum was largely due to previous releases, which highlighted a positive outlook for most EU economies.

The currency pair was trading within a 32 point range with the support being established around 1.1990 and resistance being capped at 1.2022.

The positive sentiment around the euro was largely due to yesterday’s release of the positive German ZEW survey data. The euro’s current strength can also be attributed to the market expectation that the European Central Bank might start tapering its quantitative easing program in the near future. Investors are also confident in the strength of EU economies as well as the ECB’s future monetary policy direction under Mario Draghi‘s leadership.

The US dollar was largely weaker against the single currency largely because the markets have already priced-in a December rate hike by the Federal Reserve. Investors also expect that the Fed will begin reducing their massive balance sheet in October. President Donald Trump‘s maiden United Nations speech had minimal impact on the greenback even as he focused on North Korea.

The currency pair’s future performance is likely to be affected by the Federal Open Market Committee interest rate decision scheduled for later today at 18:00 GMT.

The EUR/USD currency pair was trading at 1.2000 as at 12:21 GMT having declined from a high of 1.2022 earlier today. The EUR/JPY currency pair was trading at 133.66 having dropped from a high of 134.02 during the Asian session.

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