EUR/USD upside falters near 1.1360 ahead of FOMC

• The pair’s bullish momentum loses vigour near 1.1360.
• A weaker USD remains behind the up move in spot.
• The FOMC meeting will be the salient event later today.

The upside bias in the shared currency seems to be taking a breather on Wednesday and is now prompting EUR/USD to return to the 1.1350/40 band.

EUR/USD looks to FOMC, Brexit

After three consecutive daily advances, the pair appears to have met a tough resistance around 1.1360, where sits the key 55-day SMA.

In the meantime, the unconvincing performance of the greenback remains supportive of the recent up move in the pair amidst fading optimism in the US-China trade negotiations and rising uncertainty in Brexit talks.

Later today, the Federal Reserve is expected to keep rates on hold, although investors will closely follow the Fed’s ‘dots plot’ and fresh revisions of growth, inflation and employment for the next years as well as the balance sheet run-off.

Earlier in the morning, German Producer Prices contracted 0.1% inter-month in February and rose 2.6% over the last twelve months, both prints coming in below prior surveys.

What to look for around EUR

Market participants have left behind the recent and renewed dovish stance from the ECB, focusing instead on the broad risk-appetite trends and USD-dynamics as the main drivers of the price action. Looking to the broader picture, the performance of the economy in the region should remain in centre stage along with prospects of re-assessment of the ECB’s monetary policy. In this regard, it is worth mentioning that investors keep pricing in the first rate hike by the central bank at some point in H2 2020. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be on the potential increase of the populist option among voters.

EUR/USD levels to watch

At the moment, the pair is losing 0.09% at 1.1341 and a break below 1.1320 (21-day SMA) would target 1.1293 (10-day SMA) en route to 1.1234 (low Feb.15). On the other hand, the immediate hurdle emerges at 1.1363 (55-day SMA) seconded by 1.1419 (high Feb.14) and finally 1.1482 (200-day SMA).