EUR/USD Price Remains with Shallow Upside Ahead of FOMC

• Escaping from the Falling Wedge pattern signaled a EUR/USD price reversal.
• The FOMC and the US economic figures should bring high volatility.
• Only a new higher high activates a larger rebound.

The EUR/USD price dropped as low as 1.0795 on Monday, where it found strong demand again. Its failure to stay below the 1.0800 psychological level shows sellers’ exhaustion.

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After such a fall, an up-retracement is highly probable. Still, the fundamentals remain the key drivers today. In the short term, the price dropped slightly as the US CB Consumer Confidence was reported at 114.8 points, above 114.2 expected and compared to 108.0 points in the previous reporting period. Meanwhile, JOLTS Job Openings came in at 9.03M, even though the traders expected a potential drop to 8.73 M.

The Federal Reserve is expected to keep the Federal Funds Rate at 5.50%, but the FOMC Press Conference and FOMC Statement could change the sentiment.

Furthermore, the US is to release the ADP Non-Farm Employment Change which could drop from 164K to 148K, and the Employment Cost Index, which could report a 1.0% growth after a 1.1% growth in the previous reporting period. Also, the German Prelim CPI could have an impact as well.

EUR/USD Price Technical Analysis: Leg Higher

As you can see on the hourly chart, the EUR/USD price jumped above the downtrend line signaling that the downward movement could be over.

The false breakdown below the Falling Wedge’s support and through the weekly S1 of 1.0799 confirmed exhausted sellers.

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Now, it has tried again to retest the broken downtrend line before jumping higher. After the last rebound, the rate returned once again to retest the buyers.

I think the EUR/USD pair could give birth to a new swing higher as long as it stays above the 1.08 psychological level. Still, only a new higher high validates a border rebound.

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• Source: https://www.forexcrunch.com/blog/2024/01/31/eur-usd-price-remains-with-shallow-upside-ahead-of-fomc/