EUR/USD firmer above 1.2000 ahead of FOMC

Another day, another drop in the greenback. The continuation of the selling bias around the US Dollar has lifted EUR/USD to fresh daily tops near 1.2020 during the Asian trading hours, although it receded some pips afterwards.

EUR/USD attention to Fed

Spot is extending its march north for the fifth consecutive session so far today, moving beyond the psychological handle at 1.2000 the figure amidst a weaker greenback and rising cautiousness ahead of the FOMC meeting due later today.

In addition, the pair managed to shrug off yesterday’s news citing some concerns among ECB’s rate-setters over the appreciation of the exchange rate in recent months.

Looking ahead, the FOMC interest rate decision will be the salient event today, where consensus sees the Committee leaving its status quo unchanged. According to strategists at TD Securities: “Our base-case is for the policy statement and press conference to convey a cautiously optimistic tone while the accompanying projection materials should reveal a downgrade to the long-run dot while leaving the median 2017 and 2018 dots unchanged. However, we believe the risks lean towards a more dovish outcome”.

Further US data releases will see August’s existing home sales and the DoE’s weekly report on crude oil stockpiles.

EUR/USD levels to watch

At the moment, the pair is up 0.13% at 1.2010 and a break above 1.2041 (high Sep.11) would target 1.2092 (2017 high Sep.6) en route to 1.2167 (50% Fibo of the 2014-2017 drop). On the flip side, the immediate support aligns at 1.1968 (21-day sma) followed by 1.1864 (5-month support line) and finally 1.1837 (low Sep.14).