EUR/USD Weekly Forecast: Defying gravity near 1.0650 ahead of Fed’s decision

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The EUR/USD pair ends an intense week trading near a weekly bottom of 1.0632, its lowest since last March. The Euro advanced throughout the first half

“Based on its current assessment, the Governing Council considers that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target,” the accompanying statement read. Additionally, Lagarde said that the focus will probably move to the duration of higher rates rather than to the level of rates themselves.

Meanwhile, US data also resulted better than expected. August Capacity Utilization increased to 79.7% from 79.5% in July, while Industrial Production rose 0.4% vs expectations of a 0.1% advance. On a down note, the preliminary estimate of the Michigan Consumer Sentiment Index printed at 67.7 in September, down from 69.5 in August.Financial markets gear up for the US Fed monetary policy announcement next Wednesday. The central bank is widely anticipated to remain on hold.

Technical readings in the daily chart favor a bearish continuation. EUR/USD currently develops below all its moving averages, with the 20 SMA heading firmly south below the longer ones. Finally, technicalA strong static support area could be found at around 1.0640, where the pair bottomed several times between May and June. Once below the latter, EUR/USD can test 1.0515, the March monthly low. On the contrary, the 1.0700 figure comes as an immediate resistance level, followed by 1.

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