No need to wait for the Fed: EUR/USD is already struggling

• The EUR/USD is trading on lower ground as markets await the Fed.
• Expectations for a press conference in every Fed decision drives the pair down.
• The technical picture leans a bit lower than beforehand. 

The EUR/USD is trading around 1.1740, in a narrow range which is typical to such days when tensions are high. The Federal Reserve is expected to raise rates but its tone is unknown. There are many factors to consider in the decision: the dot-plot, the wording on inflation, and lots more. See FOMC Preview: hike on the table… too little too late?

Nevertheless, the tension was already broken on Tuesday when the Wall Street Journal reported that Fed Chair Jerome Powell will hold a press conference after every meeting. Such a move would make every meeting a live one, thus opening the door to a faster pace of rate hikes.

The EUR/USD was hugging the 1.1800 level and the news sent it to a lower range. Things can change several times in the multifaceted Fed decision.

The EUR/USD will not have a lot of time to digest the Fed as the European Central Bank makes its own decision. The ECB will have a discussion on the beginning of the end of the bond-buying scheme. It is still unclear what exactly will be announced and whether the Frankfurt-based institution makes an announcement now or waits for July.

See: ECB Preview: The time is right to set the end-date for asset purchasing

Ahead of these crucial rate decisions, euro-zone industrial output disappointed with a fall of 0.9%, worse than had been expected. In the US, Core CPI rose by 2.2% YoY in May, a step up in comparison to April but exactly as expected. Today the US releases the Producer Price Index which is unlikely to make waves just hours before the Fed decision.

Outside the world of central banks and economic data driving them, trade wars still stir in the background. German Chancellor Angela Merkel said that including services, the US has, in fact, a trade surplus. This is a rebuff to incessant complaints by US President Donald Trump about global trade.

Trump had a historic meeting with North Korean Leader Kim Jong-un where some progress was made towards peace. The world watched it closely but market reaction was minimal.

Economic worries about Italy continue waning after the Euroskeptic minister Paolo Savona reiterated the nation’s commitment to the common currency.

All in all, many things are going on but central banks are left, right, and center.

EUR/USD Technical Analysis

The EUR/USD is one trading range down after the move on Tuesday. This erased the upside Momentum and set the RSI below 50. Adding the fact that the pair trades below the 50-day and 200-day Simple Moving Averages, the picture is now slightly bearish.

On the downside, we find the 1.1725 level after it supported the pair on May 21st and also as a cushion today. 1.1675 was a swing low back on May 23rd. Further down, 1.1650 was a support line on May 25th and remains important. The round level of 1.1600 is next.

On the topside, 1.1765 is the mid-May swing low and provides some resistance. 1.1830 is already a strong level of resistance after holding down the pair in June and providing support in May. Further up, 1.1915 was the January 15th low and 1.2000 is an important psychological level.

More: EUR/USD path of least resistance is down on Fed Day – Confluence Detector