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Trading on the euro on Monday closed down. The EUR/USD rate fell from a maximum of 1.0714 to 1.0651 (-63 pips). The economic calendar was empty and the euro underwent a correction across the market after Friday’s rally.

Market expectations:

On Tuesday, the FOMC’s two-day meeting begins. On Wednesday, the Federal Reserve will announce its interest rate decision. Most are expecting a 0.25% hike in federal interest rates. The likelihood of a rate hike currently stands at 93%. The meeting will be followed by a press conference with the Chair of the Board of Governors, Janet Yellen.

The EUR/USD instrument is currently trading at 1.0653. I’m forecasting a drop to 1.0630. As it happens, there is still time for the euro to correct and take a wait-and-see stance before the Fed announces its decision.

Day’s news (GMT+3):

EURUSD on the hourly. Source: TradingView

Intraday forecast: low: 1.0630, high: 1.0659 (current in Asia), close: 1.0645.

Monday v Friday worked out as expected. The EUR/USD fell from a maximum of 1.0714 to 1.0651. In Asia, the minimum renewed at 1.0645.

The hourly trend line has been broken through, and a pin bar formation has recently appeared. The Stochastic has been crossed downwards. I’m forecasting a slide to 1.0630. I must warn you, though, that judging by patterns, the situation is 50/50. The euro could just as easily return to 1.0714, making a cup formation. I’ve decided to follow the cycles and go for a weakening of the euro today, followed by growth on Wednesday and Thursday.

Positives for the euro (+):