EUR/USD Technical Setup: Fed Decision Day Volatility Ahead
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Broader risk sentiment ahead of the Fed decision offers useful context for EUR/USD technicals. Silver's slide below $64 and softening crypto prices both point to a broad de-risking mode across markets, a backdrop that historically correlates with dollar demand and downward pressure on EUR/USD.
Equity markets are also flagged as vulnerable to a tougher road if the Fed hikes, reinforcing a risk-off tone. In such environments, EUR/USD often trades heavy as capital rotates into dollar-denominated safe havens.
Given this cross-asset alignment, traders should prepare for EUR/USD to test key support levels should the Fed opt for the more aggressive 50bp scenario currently being floated by some strategists.