Today’s macroeconomic calendar includes one of the most important events for market participants - the long-awaited Fed meeting. In anticipation of the regulator's statement, volatility in the euro-dollar cross increased.
Today, the Fed is expected to keep interest rates as well as its $120 billion-a-month bond-buying program unchanged. Moreover, market participants do not expect any shocking announcements from the regulator. Some significant statements may be issued only at the Jackson Hole monetary policy symposium to be held next month. In the meantime, the Fed is likely to take a softer-than-before tone amid a worsening epidemiological situation in the country. In this casem, the US dollar may come under downward pressure.
Meanwhile, traders find no reason to buy the common European currency. Today, it became known that consumer sentiment in Germany is still pessimistic. The GfK Consumer Climate Indicator for August remained in negative territory, indicating the current stagnation of consumer confidence.
Now let’s move on to trading charts.
Yesterday, the euro/dollar pair managed to gain upside momentum. Thus, the quotes broke through the upper border of the sideways range, that is, the level of 1.1830. However, after reaching the control value, bullish activity subsided, and the volume of long positions decreased. As a result, the price slowed down and then pulled back down.
According to the current trading chart, the quotes are still trading in a sideways range between the levels of 1.1750 and 1.1830. Today, amid the Fed meeting, traders can face increased volatility. Therefore, it is worth following the pair’s movement relative to the specified range closely.
To confirm an upward scenario, the price needs to consolidate above 1.1850. In this case, the pair may well reach the 1.1900 mark.
In case the price fixes below 1.1750, it is likely to go down towards the level of 1.1700.
The pound/dollar pair managed to maintain its upward trend in the market. Thus, the quote consolidated above the 1.3850 mark and then headed towards the projected resistance level of 1.3900.
As can be seen from the trading chart, the price slowed down and then pulled back relative to the resistance area of 1.3900. As a result, the volume of long positions decreased. If the level of 1.3900* continues to act as resistance, the British currency may well correct to 1.3755, especially given its local overbought status. (*)
As an alternative, if the price consolidates above 1.3915, the way towards the psychological level of 1.4000 will open.