EUR/USD almost unchanged ahead of Fed meeting

The euro was little changed against the US dollar on Tuesday, as market players were eyeing the outcome of Federal Reserve Banks two-day meeting on policy, starting today.

EUR/USD reached a session high at 1.3348 at 6:30 GMT, after which consolidation followed at 1.3344. Support was likely to be received at psychological level of 1.3300, while resistance was to be seen at September 16th high and also a three-week high, 1.3384.

Market players were eyeing the two-day meeting on policy by the Federal Reserve Bank, as most analysts projected a possible reduction of scale of stimulus to 75 billion USD from the current monthly pace of 85 billion USD of asset purchases.

“The current situation with consumer prices and the labor market doesn’t seem to warrant an urgent tapering this week, but the Fed is likely to make a small step forward, taking market conditions into account,” Daisaku Ueno, a senior foreign-exchange and fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo, cited by Bloomberg.

Also, yesterday it became clear that Lawrence Summers withdrew from the contest for the Federal Reserve Chairman position. He was expected to likely consider to unwind stimulus measures more aggressively than his main contender for the Governor post, Janet Yellen.

Meanwhile, according to published data by Eurostat yesterday, the harmonized index of consumer prices in the Euro zone rose by 0.1% in August on a monthly basis, after the registered 0.5% drop in July. In annual terms, the index climbed 1.3% in August, retaining the rate of increase in July and in line with expectations.

Later in the day the Euro region was to release data on its current account, trade balance, ZEW economic sentiment and ZEW current situation indexes, while Germany will reveal its Septembers ZEW economic sentiment and ZEW current situation indicators. Additionally, the United States will release reports on consumer price index, core consumer price index and treasury international capital flows.

Elsewhere, the euro was almost unchanged against the sterling, with EUR/GBP cross recording a 0.01% uptick to trade at 0.8389 at 7:11 GMT. EUR/JPY pair was gaining 0.27% to trade at 132.49 at 7:13 GMT.