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EURUSD is once again at an interesting technical level coming into key US data this week. After holding firm in a rising channel for most of 2023, price fell away in early September. This coincided with the price also falling below the 200 SMA which also acted as support multiple times in 2023 so far.
After bouncing nicely on the first horizontal support zone, we saw this level fail last week. A couple of days of positive trading sees price back up at this key zone, where we will be waiting to see if that horizontal support flips to resistance to bounce price back south and continue the downward trend. With the US interest rate decision out on Wednesday, we could be in for some volatility on this pair.
The market is currently predicting a 99% change of a continued pause, keeping rates at 5.5%. Any deviation from this is likely to cause some big movements in the USD, and this pair.
With mixed inflation data out lately and oil prices soaring, this will be an important decision for the US Fed. If the 1% probability occurs and the Fed hikes rate, this will likely see strength form in the dollar.
With price currently at some key technical levels going into big economic data, it could be an interesting trading period for EURUSD this week.
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