EUR/USD continues to stay above 1.19 and it could retest the buyers again in the short term. Technically, the pair is located within a neutral zone at the time of writing, so anything could happen.
The pair changed a little lately, but the FOMC meeting should bring high volatility tonight. The FED is expected to hold the Federal Funds Rate steady at 0.25%. Personally, I believe that the economic projections and the press conference will be decisive for USD's future.
As you already know, the US Dollar Index indicated a bullish reversal by making new higher highs. USDX has slipped lower in the short term and needs a bullish spark to be able to resume its swing higher. EUR/USD will develop a strong sell-off if the Dollar Index jumps higher after today's high-impact event.
EUR/USD FOMC In Spotlights!
EUR/USD is trading back near the 61.8% retracement level after ending its rebound at the 50% level. It stays below the major descending pitchfork's median line (ML) and under the Pivot Point (1.1925) signaling some pressure after failing to stabilize above the median line.
Stabilizing below the median line (ML) and dropping below 61.8% could activate a new sell-off. The most recent rebound was somehow expected after the aggressive breakdown through the median line.
I've drawn a minor ascending pitchfork hoping that I'll get a selling signal if EUR/USD escapes from its body, after a valid breakdown below the lower median line (lml). Personally, I believe that the downside scenario, a larger correction, will be invalidated only if the rate stays above the 61.8% level and if it comes above the 1.2 psychological level without dropping and closing below the lower median line (lml).
EUR/USD Trading Tips!
Dropping, closing, and staying below the lower median line (lml) and under the S1 (1.1860) represents a selling opportunity. Escaping from the minor ascending pitchfork's body and registering a new lower low could signal a drop towards 1.17 and 1.16 levels.
