EURUSD traders got their answer from the Fed this week. The pair was rejected at the confluence of resistance near 1.1900, which we’ve been tracking all month. Sellers stepped in hard, and now the focus shifts to the 1.1800–1.1730 support zone.
In today’s EURUSD and DXY analysis, I’ll show you why 1.1730 is such a big deal, what happens if buyers lose that level, and how the dollar index lines up with this range.
By the time you finish watching, you’ll know exactly how to trade EURUSD following this week’s Fed decision.
EURUSD has traded below channel resistance for weeks. Wednesday’s Fed decision gave traders the perfect excuse to fade the euro again.
The pair ran into 1.1900, the same level we have talked about all September, and sellers stepped in. That keeps 1.1900 locked in as resistance until proven otherwise.
On the flip side, buyers are still defending 1.1800. This area has been tested several times, and each time the market has bounced.
That makes 1.1800 key support unless EURUSD closes a high time frame candle below it.
The bigger test sits just below. The February trend line comes in near 1.1730. A daily or weekly close below that would be the first real sign the range is breaking down. Until then, EURUSD is range-bound between 1.1900 and 1.1800, with a potential test of 1.1730 support.
So the plan is simple.
Range-bound conditions mean less chasing, more patience. Fade the edges, but do not forget that a confirmed close below 1.1730 would flip the script and open the door to bigger downside targets.
Now let’s shift to the US dollar index (DXY).
This market has been respecting the same monthly channel since 2011. It does not get much cleaner than that. Right now, the key level to watch is 96.60.
I have talked about this area all month, and the index is still holding above it. That keeps the near-term outlook neutral, if not slightly bullish.
On the upside, 97.70 is the resistance to break. A weekly close above 97.70 would turn momentum firmly bullish and point toward 98.60.
Until proven otherwise, the DXY is range-bound between 96.60 and 97.70.
Bottom line: Both EURUSD and DXY are range-bound, but Wednesday’s FOMC may have kicked off significant reversals. However, mind the levels, and respect the charts. Let the market tell you when it’s ready to trend again.
Key takeaways
- EURUSD reversed at 1.1900 resistance after the Fed
- 1.1800 is near-term support, with the February trend line at 1.1730
- A close below 1.1730 would be bearish. Until then, range-bound.
- DXY holding above 96.60 support, capped by 97.70 resistance
- Weekly close above 97.70 targets 98.60, otherwise sideways action
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