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EURUSD Trimming Its Gains, Fed Statement in Focus

EUR trimmed its gains today against US dollar after the downbeat Chinese data released on Saturday missed the economist’s expectations and again raised concerns among investors over the slowdown in the world’s largest economy. Official data showed that the Chinese industrial output slowed sharply last month. Separate reports also showed that the retail sales and fixed asset investment also slowed. US dollar continued to be supported ahead of the Fed policy meeting on Wednesday. Investors are expecting the early rate hike if Fed gives a hawkish view on the economy. Firstly the Fed is expected to cut its asset purchase program by another $10 billion in its meeting which will result in the winding up of the program by October and the increase in interest rates by mid of 2015.

EURUSD : Hourly Chart

On the hourly chart, the pair seems to be consolidating within the descending triangle chart and currently testing the key support at 1.2907. The descending triangle pattern is giving a bearish signal. Let's have a look at the broader time frame that is on the 4 hour chart.

EURUSD : 4 Hour Chart

Here also the pair seems to be consolidating within a descending triangle pattern giving a bearish outlook.There is a falling resistance trend line which continues to prevent the pair from rising above it. Although the pair is testing support at 1.2907, there is one more support at 1.2880 to which the pair may decline.