Euro Exchange Rate Today: EUR Forecasted Higher in Short-Term; Outlook Could However Change at 19:00

A look at the latest spot market quotes shows:

• The Euro Dollar exchange rate is 0.06 pct in the red at 1.3352.
• The Euro Pound exchange rate is 0.5 pct lower at 0.8359.
• The Euro Australian Dollar exchange rate is 0.03 pct lower at 1.4278.

BE AWARE: These are wholesale quotes. Your bank or provider will add their own discretionary rate when passing on retail FX. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering you more currency. Please learn more here.

The Euro has seen fresh losses against the British Pound this morning, the full story is covered in our rolling daily coverage here.

The big issue at hand is however how the shared currency will react to the FOMC Minutes later today.

Euro likely to be sold off

UniCredit Bank tell clients that they are forecasting the Euro to be sold in the wake of tonight's event:

"The Fed’s move is likely to induce some EUR-USD sales, but a retreat much below the 1.3240 support level appears unlikely and buying-on-dips strategies remain recommended."

UniCredit Bank expect the Fed to announce its intention to reduce its bond purchases, albeit by a small amount (by about USD 10bn), and to sound dovish on interest rates.

The dovish tone will occur through the newly-introduced 2016 economic projections, which will presumably show that the majority of FOMC members see the appropriate target rate at the end of 2016 at around 2% to 2½%.

"Despite a busy agenda today, dull trading of FX majors is likely to continue until the FOMC meeting outcome. The announcement of the Fed tapering at a pace of USD 10bn per month, as we expect, could lift the USD, but probably without sparking immediate and heavy purchases," say UniCredit.

Short term forecasts for Euro Dollar exchange rate

We turn to the charts for the near and medium term forecasts for the Euro. Note, the technical forecasts are likely to be at odds with the fundamental views, as expressed by UniCredit above.

ICN Financial Markets are forecasting positive trading from the Euro:

"The pair is still sable above 23.6% correction at 1.3290 and above Linear Regression Indicators. RSI is trading above line 50 in a bullish bias forcing us to think that the current bullish wave might extend. Of note, breaching 1.3440 and stabilising above it might trigger a stronger upside wave.

"The trading range for today is among the key support at 1.3205 and key resistance at 1.3440.

"The general trend over short term basis is sideways targeting 1.2775 as far as 1.3600 is daily-closing."

Luc Luyet at MIG Bank agrees that trade in EUR/USD is likely to remain positive in the near-term:

"EUR/USD remains in a short-term bullish  configuration as long as the support at 1.3325 holds. Resistances are at 1.3410 and 1.3452. Another support can be found at 1.3254 (13/09/2013 low).

"The FOMC decision tonight is likely to induce short-term volatility. Markets are expecting a $10bn tapering associated with dovish comments to tame the rise in borrowing costs."

Emmanuel Ng at OCBC Bank says:

"A better than expected German ZEW encouraged the EUR-USD higher past 1.3350. Expect the pair to be relatively listless ahead of the FOMC tonight although we stay flat to supported on the pair in the interim.

"On a related front, note the ECB’s Coeure trying to distance the central bank from the Fed’s potential taper, stating that a high degree of monetary accommodation is still needed.

"Immediate resistance is expected towards 1.3400 before 1.3450 while key support multi-session is expected at around 1.3240 before the 55-day MA (1.3227)."