EUR/USD is doing a balancing act as it flirts with the midway mark of its multi-week and multi-month ranges just as traders await key risks.
Indeed, the pair is near the midpoint of January's 1.1570-1.1289 slide as well as the midpoint of the broad 1.1200-1.1600 range that's prevailed since October.
This as traders brace for an onslaught of delayed U.S. economic data which might bolster the Fed's patient stance.
Wednesday's FOMC meeting will be closely scrutinized as traders look for any hints that the Fed will wind down its balance sheet reduction sooner than anticipated.
However, due to the government shutdown, the lack of U.S. economic data has the Fed just as much in the dark as the market, so balance sheet rhetoric is likely to be limited.
Thus, the Fed's patience stance is likely to be reinforced keeping the greenback on the defensive.
That said, EUR/USD bulls shouldn’t get too charged up because the ECB now sees risks to the downside and rate hike expectations are being pushed back.
Therefore, Euro upside will be limited with a cautious ECB, and the broad 1.1200-1.1600 range is likely to hold for now.
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