Positioning Ahead of FOMC - Long EUR/USD

FX:EURUSD   Euro / U.S. Dollar
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The FOMC rate statement today is expected to remain unchanged with swap traders pricing in a 2% probability of a rate hike today. The focus will be on the recent NFP figure, Inflation and if July remains 'live'.

The Fed will likely dismiss the NFP miss as Yellen already did in her speech last Monday. They should address stagnation in the PCE Index, and though it is probable the Fed will keep rate hikes on the table, some comments suggesting July is viewed as not likely would be appropriate given the lackluster economic data, including relatively weak GDP figures.

Technicals in the EURUSD             continue to point to a bullish trend from December lows, and while the rising channel on the daily chart remains intact, long positions are preferred. Two significant levels fall into play, 1.1150 marks support near the lower bound of the channel, while a breach of the 200 DMA at 1.1100 would provide a strong signal of a reversal.

As the Exchange rate trades near the lower bound of the channel, in an uptrend, risk to reward favors long position. The fundamental backdrop supports the trade as the pace of normalization appears to be slowing, while the ECB has gone into "wait and see mode."
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