The dollar held just below a 20-year high against a basket of currencies on Monday before an expected Federal Reserve rate hike this week, with traders focused on the potential for the U.S. central bank to adopt an even more hawkish tone than many expect.
The Fed has taken an increasingly aggressive approach to monetary policy as it tackles inflation that is soaring at its fastest pace in 40 years. It is expected to hike rates by 50 basis points and announce plans to reduce its $9 trillion balance sheet when it concludes its two-day meeting on Wednesday.
Though the chances are seen as low, some investors are watching for the possibility of a 75 basis point hike, or a faster pace of balance sheet reduction than currently expected.(Reuters).
The EURUSD market is bearish still and warns for declines against 1.0460
⇒ 1.0408. Any minor corrective rebounds trapped inside Friday’s downturn will remain setup for selloffs. A rally over 1.0568 voids pressing bear forces. A close over 1.0620 (SAR) highlights a reversing turn to higher levels.
Resistance 2 1.0540
Resistance 1 1.0525
Support 1 1.0480
Support 2 1.0460