EUR/USD Stays Range-Bound Ahead Of Fed Interest Rate Decision

Unlock stock picks and a broker-level newsfeed that powers Wall Street.

Vladimir Zernov

Wed, May 4, 2022, 1:31 AM 2 min read

Euro Is Mostly Flat Against U.S. Dollar

EUR/USD continues its attempts to settle above the resistance at 1.0525, while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index has recently made another attempt to settle above the resistance at 103.60 but failed to develop sufficient upside momentum and pulled back towards 103.50. In case the U.S. Dollar Index declines below 103.50, it may gain additional downside momentum and head towards the support level at 103.25, which will be bullish for EUR/USD.

Today, foreign exchange market traders will have a chance to take a look at the final reading of Euro Area Services PMI report for April. Analysts expect that Euro Area Services PMI increased from 55.6 in March to 57.7 in April.

Euro Area Retail Sales are expected to decline by 0.1% month-over-month in March. On a year-over-year basis, Euro Area Retail Sales are projected to grow by 1.4%.

The main event of the day for markets is the Fed Interest Rate Decision. The Fed is expected to increase the interest rate from 0.5% to 1.0%, and markets will be extremely sensitive to comments from the Fed Chair Jerome Powell.

Technical Analysis

EUR/USD continues to test the resistance level at 1.0525. If EUR/USD manages to settle above this level, it will move towards the next resistance at 1.0550.

In case EUR/USD climbs above the resistance at 1.0550, it will head towards the resistance at 1.0580. A move above this level will open the way to the test of the resistance at 1.0600.

On the support side, EUR/USD needs to settle below 1.0500 to have a chance to gain downside momentum in the near term. The next support level for EUR/USD is located at 1.0485.

In case EUR/USD manages to settle below 1.0485, it will head towards the support at 1.0460. A move below this level will open the way to the test of the support at 1.0430.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire