• A goodish pickup in the USD demand prompts some fresh selling.
• Repositioning trade, ahead of the Fed, adds to the downward pressure.
The EUR/USD pair broke down of its Asian/early European session consolidative trading range and dropped to fresh session lows, below mid-1.1700s in the last hour.
A goodish pickup in the US Dollar demand was seen as one of the key factors exerting some fresh downward pressure over the past hour or so, with the pair erasing of the previous session's modest gains to the 1.1800 neighbourhood.
The USD uptick lacked any obvious trigger and also defied the ongoing retracement in the US Treasury bond yield. Hence, the pair's latest leg of downfall could be solely attributed to some repositioning trade ahead of today's key event risk.
Despite good two-way moves, the pair remained confined within a broader trading range held since the beginning of this week and seemed to wait for a fresh catalyst.
Hence, the latest FOMC policy decision, scheduled to be announced later during the US trading session, will play a key role in determining the pair's next leg of directional move.
Technical levels to watch
The 1.1725 region might continue to act as an immediate support, which if broken might turn the pair vulnerable to slide further below the 1.1700 handle towards testing 100-day SMA support near the 1.1660 region.
On the flip side, the 1.1780 level now seems to act as an immediate hurdle and is followed by the 1.1800 handle, above which the pair seems all set to aim towards testing mid-1.1800s intermediate resistance en-route the 1.1900 handle.
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