US dollar loses momentum amid an improvement in risk sentiment.
Wall Street turns green, US yields modestly off highs.
EUR/USD continues to consolidate ahead of the FOMC meeting.
The EUR/USD rose after the beginning of the American session and recently climbed to src.00src7, before pulling back to the parity area. It is posting modest losses on Monday, as it continues to trade in a range.
The move higher in EUR/USD took place amid a small retreat of the US dollar as Wall Street indexes turned positive. US yields are off highs but still near multi-year highs ahead of the FOMC meeting on Wednesday.
The US central bank is expected to raise interest rates by 75 basis points on Wednesday. The combination of an aggressive Fed and a cautious tone among investors regarding signs of a global economic slowdown support the greenback. “The repricing of Fed tightening risks is likely to keep the dollar bid across the board near-term. As we said during this most recent dollar correction lower, nothing has really changed fundamentally and the global backdrop continues to favor the dollar and U.S. assets in general,” explained analysts at Brown Brother Harriman.
Range prevails
The EUR/USD continues to trade around the parity level, as it had been the case since last Wednesday. A break above src.0030 should strengthen the euro, while on the flip side, the critical support is the 0.9950 area. A firm break under 0.9950 would expose the next support at 0.99src0. The next support is 0.9870, the last defence to fresh multi-year lows.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
