EUR/USD came under renewed bearish pressure and dropped below 0.9900 during the American trading hours on Wednesday. Reflecting the broad-based dollar strength ahead of the Fed's policy announcements, DXY trades at its highest level in two decades above 111.00.

The EUR/USD pair fell to 0.9983, a fresh two-week low, bouncing modestly to currently trade at around 0.9910. The shared currency plummeted after Russian President Vladimir Putin announced a mobilisation of reserve forces. Additional 300,000 citizens have been called to serve in Ukraine as Moscow loses ground in Ukraine. EU member states held a meeting to discuss a coordinated response to the continuation of the war, according to European Commission spokesman Peter Stano.

Ahead of the event, the EUR/USD pair is consolidating. From a technical point of view, the risk is skewed to the downside. The daily chart shows that it has extended its slide below a flat 20 SMA, which develops below firmly bearish longer ones. Technical indicators, in the meantime, hold within negative levels with uneven strength. The Momentum bounced modestly while the RSI extended its decline and currently stands at 39.

The 4-hour chart shows that EUR/USD remains well below all of its moving averages, with the 20 SMA turning south below the longer ones. Technical indicators have pared their declines but remain near oversold readings, falling short of suggesting a potential recovery in the make.

The decision, the tone, the dot plot and Powell’s words are expected to have a significant impact on financial markets including the US dollar. The DXY arrives to the meeting trading at the strongest level since June 2002, above around 111.00.

EURUSD Renewed Bearish pressure ?

Sep 21 2022

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