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Forex pairs in this Article » EUR/USD
FXstreet.com (Córdoba) - The EUR/USD weakened slightly and fell to the 1.3740 area as the dollar remains supported ahead of the Fed decision.

EUR/USD contained by 10-day SMA

The EUR/USD dropped to a low of 1.3743 during the European session weighed by Italy's PM Letta saying EU should work to lower EUR/USD exchange rate. However, the 10-day SMA helped to contain the slide and left the pair hovering around 1.3750, where it is 0.1% below its opening price as markets await the FOMC outcome.

Will the Fed deliver?

"In terms of the FOMC, we expect the Fed to keep its QE purchases size unchanged at $85B per month, but to signal its intent to begin cutting purchase sizes as early as January. The risk of a taper announcement today exists and would come as a surprise to the market", the TD Securities team commented. "However, given that a non-trivial fraction of the market expects a December tapering decision, we do not expect an overly sensitive market response if the taper size is in the $5B to $10B range".

EUR/USD technical levels

As for technical levels, the EUR/USD could face immediate supports at 1.3743 (daily low), 1.3722 (Dec 17 low) and 1.3708 (Dec 13 low). On the upside, resistances are seen at 1.3777/81 (Dec 18 & 17 highs) ahead of 1.3811 (Dec 11 high) and the key 1.3832 level (2013 high Oct 25).
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