EUR/USD Forecast: Bearish Confirmation Below 1.1715, FOMC Awaited

A modest US Dollar retracement during the Asian session on Wednesday helped the EUR/USD pair to recover a major part of previous session's drop to three-week lows. With investors looking past yesterday's stronger-than-expected US PPI print, news that a Democrat candidate has come out victorious in a hard-fought Senate race in Alabama was seen weighing on the greenback. Bulls, however, now seemed struggling to lift the pair back above 50-day SMA and await fresh directional impetus from the upcoming FOMC decision, due to be announced later during the NY trading session.

Heading into the key event risk, the latest US inflation figures, along with the US President Donald Trump’s speech on the tax reform plan at the Department of the Treasury, in Washington, would influence the USD price dynamics and might provide some meaningful trading opportunities.

Looking at the technical picture, the pair on Monday faced rejection near 100-day SMA and yesterday's close below 50-day SMA now seems to have confirmed near-term bearish outlook. The negative bias would be further reinforced once the pair decisively weakens through the 1.1715 horizontal support. A convincing break below the mentioned support would is likely to accelerate the fall towards 1.1660-55 intermediate support before the pair eventually drops to its next major support near the 1.1600-1.1585 region.

On the upside, any up-move beyond 1.1770 level might continue to confront fresh supply near the 1.1800 handle (100-day SMA), which if cleared might now negate the near-term bearish bias. Momentum beyond the said handle is likely to get extended towards 1.1835-40 resistance, above which bulls are likely to dart towards reclaiming the 1.1900 round figure mark with some intermediate resistance near 1.1865 level.