Tomorrow marks the first trading day of August and a return of the U.S. Federal Reserve (FED) to the limelight. The FED has two key events scheduled, with the Monetary Policy Statement and Interest Rate Decision both hitting the news wires around 2:00 PM EST. Given the importance of these items to the Greenback, forex players will be watching the FED announcements very closely.

CME FEDWatch Index And The FED Announcements

Tomorrow’s meeting of the FED is not viewed as having any surprises in store for the markets. The target rate is expected to be held static in the 1.75-2% range. In fact, the CME FEDWatch Index has assigned a 97% chance of rates remaining unchanged. With only a 3% shot of a hike, the forex is likely to react to the FED announcements in a measured fashion.

However, many in the financial media claim that there may be some hidden gems in the Monetary Policy Statement. Recent criticism of FED rate hikes by President Trump has made headlines. Acting Chair Jerome Powell left the door open to only raising the prime rate three times at his Congressional testimony earlier this month.

Will the FED temper verbiage toward the all-important fourth rate hike for 2018? In a little over 24 hours, we are certainly going to find out.

EUR/USD Technicals

It has been another tight one for the EUR/USD. At press time, prices are pretty much where they opened the session. The formation of a Doji candlestick on the daily chart is a distinct possibility as we roll toward the closing bell.

Here are the levels to watch going into the FED-dominated Wednesday session:

• Resistance(1): Swing High, 1.1790
• Support(1): Daily SMA, 1.1684
• Support(2): Bollinger MP, 1.1676

Bottom Line: For the rest of the trading day, going long from downside support is an affordable way to engage this market. Buys from 1.1685 with an initial stop at 1.1674 produce 11 pips when using a basic 1/1 risk vs reward management plan.

At press time, the EUR/USD is trading near the 1.1700 handle. This trade may go live at any time, so have your stops down and leverage in check!