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EUR/USD back to square one ahead of Fed

FXStreet (Córdoba) - EUR/USD is back to square one following a short-lived advance inspired by lower-than-expected US consumer inflation figures.

Markets attention has turned to the Federal Reserve policy meeting, where the Fed is expected to make a hawkish shift and to modify its forward guidance in addition to tapering its bond buying program by another $10 billion.

Investors have chosen to stay sidelined ahead of the statement, confining the EUR/USD to a narrow range over the last sessions. EUR/USD reached a high of 1.2980 after inflation data, but failed to sustain gains and retreated to the 1.2955 zone where it is currently trading, little changed on the day.

EUR/USD technical outlook

“The EUR/USD retraces from a high of 1.2980 finding short term sellers on approaches to the 1.3000 figure; the 1 hour chart shows no directional strength coming from technical readings as it has been over the past sessions, with all eyes now placed on the outcome of the FED meeting”, said Valeria Bednarik, chief analyst at FXStreet. “Levels to watch then will be 1.3000 figure to the upside, or 1.2880 to the downside as a break of either extreme will likely set the trend for the upcoming days”.

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