EUR/USD: dollar choppy ahead of FOMC, dropped and popped 30 pip round turn

Currently, EUR/USD is trading at 1.1992, down -0.02% on the day, having posted a daily high at 1.2022 and low at 1.1984.

EUR/USD dropped and popped with the dollar passing hands erratically across the board. EUR/USD suddenly fell from a pip or so into the 1.20 handle to 1.1983 and was subsequently bought up there, moving back to 1.1997.

However, the ranges are narrow ahead of the FOMC outcome later today. There are conflicting views between analysts as to what we should expect today, but the most common consensus is a bullish outcome for the dollar. "With a Fed set to confirm its intentions to hike rates once more this year and in light of a market that is clearly not prepared for this, it would be tempting to conclude that EUR/USD should come lower near-term", according to analysts at Danske Bank.

However, there are risks that the Fed is not as hawkish as the market is positioned for and should there be no guidance elaborated upon in respect to a Dec hike, or indeed a more dovish outcome with regards to the dots, there could be fireworks in today session ahead.

EUR/USD levels

EUR/USD has printed fresh recovery highs today at 1.2022 while trading above the 10 and 21-DMAs. 1.2030, the September 11th high, comes as the next resistance while we await the FOMC and to the downside, 1.1960 was a supportive area in yesterday's trade.

Long-term trend (1-3 months): 

"Neutral to positive, scope to the 1.2168 50% retracement and then the 200-month ma at 1.2372, where we look for failure," argued bullish analysts at Commerzbank.