Dollar Surge Puts Pressure on EUR/USD Ahead of Fed Meeting
The EUR/USD currency pair has been stuck in neutral for several months, but recent market movements suggest that it may be headed lower. This shift is largely driven by the US Dollar's performance, which accounts for around 75% of Forex market volume.
The upcoming Federal Reserve policy meeting on Wednesday will likely have a significant impact on the price. Although there is only a 30% chance of a rate hike, any increase would likely strengthen the US Dollar and affect almost all USD currency pairs, including EUR/USD.
A look at the long-term chart reveals a topping pattern, with last week's price closing at its lowest level in months. This technical sign suggests a bearish breakdown is underway. The US Dollar is nearing its 13-month high and may break through its key resistance level at 101.39, leading to further declines.
Adam Lemon, DailyForex Chief Analyst, notes that $1.1398 is the pivotal point for today's trading, but a bearish breakdown could be volatile. He advises short-term traders to consider long scalps from a bullish bounce off this level.