EURUSD made a move to pass 1.17 resistance last week but fell short with the help of the rising Italy-Germany yield spread. After the sharp correction, EURUSD settled around 1.16 ahead of FOMC.

FED will most likely announce tapering at today’s meeting. The pace of tapering is expected to be $10 billion in government bonds and $5 billion mortgage back securities with a total of $15 billion per month. FED may state that pace of tapering may change according to the economic situation but asset purchases are expected to end in the summer of 2022.

At the press conference, questions about inflation and the market’s pricing of an early rate hike will be important for EURUSD parity. For down moves, the 1.1538-1.1524 zone will be the key support zone. Breaking below, the price may target 1.1490 – 1.1451 supports. For up moves, 1.17 is the main resistance which also may end the current downtrend if it breaks.