- EUR/USD remains mildly bid near the six-month high ahead of the Fed meeting.
- Bearish candlestick, overbought RSI challenge further upside near the monthly resistance line.
- 100-SMA restricts immediate downside ahead of three-week-old ascending support line.
- US inflation cut hawkish Fed bets, favored EUR/USD bulls but FOMC is the key to near-term directions.
EUR/USD picks up bids to reverse the early Asian session pullback from a six-month high, mildly bid near 1.0640 by the press time. Even so, the major currency pair remains inactive during early Wednesday as traders await the key Federal Open Market Committee (FOMC) announcements.
Also read: EUR/USD floats above 1.0600 ahead of Federal Reserve monetary policy meeting
That said, the quote rallied to the highest levels since June the previous day before retreating from 1.0673.
The pullback moves could be linked to the EUR/USD buyer’s inability to cross a one-month-old ascending trend line as the RSI (14) line pokes the overbought territory. Also likely to have challenged the upside momentum is the late Doji candlestick at the multi-day top.
As a result, the pair’s pullback towards 1.0600 round figure appears imminent.
However, the EUR/USD bears are likely to remain off the table unless witnessing a clear downside break of the 100-SMA level surrounding 1.0455.
Following that, an ascending support line from November 21, close to 1.0380 at the latest, will act as the last defense of the EUR/USD bulls.
On the contrary, an upside break of the aforementioned resistance line from mid-November, near 1.0650 as we write, could challenge the EUR/USD pair’s immediate recovery before directing the bulls towards the latest swing high around 1.0675.
In a case where the pair remains firmer past 1.0675, the 1.0700 threshold and highs marked in June around 1.0775 will be in focus.
EUR/USD: Four-hour chart
Trend: Pullback expected