EURUSD pushes to crucial resistance, again
14 December 2021
The EURUSD pair has shown little volatility recently, with the euro up 0.3% on Tuesday, trading at around 1.1320 against the greenback.
It looks like the euro will break above the declining trend line (currently near 1.1330), which has defined the movement since June. Should this happen, it could be a strong bullish signal, likely sending the euro toward the 50-day moving average (purple line) at 1.1450. However, the key resistance is at October/November lows at 1.1520. If the euro jumps above it, the medium-term trend could change to bullish.
The pair remains heavily oversold as investors brace for the outcome of Wednesday's FOMC decision. Risks are skewed to the upside in the EURUSD pair as the Fed's expected hawkishness should be already priced in.
Therefore, a slight disappointment could lead to a solid short-squeeze rally.
Alternatively, if the Fed sounds even more hawkish than anticipated, it could strengthen the USD further, sending the EURUSD pair toward its current cycle lows near 1.12.