Fed closed meeting preview: What to expect of EUR/USD?

FXStreet (Córdoba) - The Federal Reserve is holding a closed meeting at 16:30 GMT with one item in the agenda: review and determination by the Board of Governors of the advance and discount rates to be charged the Federal Reserve Banks.

According to the Fed’s official web: “It is anticipated that the closed meeting of the Board of Governors of the Federal Reserve System at 11:30 AM on Monday, November 23, 2015, will be held under expedited procedures, as set forth in section 26lb.7 of the Board's Rules Regarding Public Observation of Meetings, at the Board's offices at 20th Street and C Streets, N.W., Washington, D.C. The following items of official Board business are tentatively scheduled to be considered at that meeting. 1. Review and determination by the Board of Governors of the advance and discount rates to be charged the Federal Reserve Banks."

Some analysts have speculated that the Fed could raise rates right away before the December meeting, although this seems an unlikely outcome, and others believe it will be focused on the discount rate (not Fed funds rate). The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility.

Or maybe, this could well be just part of the decision making process where FOMC members begin to get their stories straight regarding next policy meeting and how they will announce December decision whatever that is, to hike or not to hike federal funds target range.

Either way, the outcome could be a source of volatility for the US dollar, which should benefit from a discount rate hike, which could be understood as the Fed paving the way for the December lift-off.

EUR/USD technical levels

As for technical levels for EUR/USD, short-term supports are seen at 1.0600 (7-month low Nov 23), 1.0570 (Apr 15 low) and 1.0520 (Apr 13 low). On the flip side, resistances could be faced at 1.0702 (10-day SMA), 1.0762 (Nov 19 high) and then 1.0829 (Nov 12 high).
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