EUR/USD Price Analysis: Challenges key support at 1.1295 ahead of Fed

• EUR/USD remains vulnerable while defending key support.
• Bulls take a breather ahead of the critical Fed decision.
• RSI stays bearish, Tuesday’s low of 1.1263 remains in sight.

EUR/USD is flirting with 1.1300, holding the lower ground amid a pause in the US dollar decline across the board.

The US Treasury yields remain on the defensive, as investors await the Fed decision to gauge how hawkish Jerome Powell and Company have turned out.

The divergent monetary policy outlooks between the Fed and the ECB will likely keep the bulls on the sidelines, as the FOMC is widely expected to hint at a March interest-rate hike on Wednesday.

The main currency pair staged a decent comeback on Tuesday, although finished in the red zone amid mixed German IFO indicators and unimpressive comments from the ECB Chief Economist Phillip Lane.

Looking at EUR/USD’s daily chart, the price is challenging the two-month-long ascending trendline support, aligned at 1.1295.

Daily closing below the latter will fuel a fresh downswing towards 1.1250. Ahead of that, Tuesday’s low of 1.1263 will be put to test.

The 14-day Relative Strength Index (RSI) is inching lower below the midline, suggesting that the downside bias remains intact.

EUR/USD: Daily chart

On the flip side, recapturing 50-Daily Moving Average (DMA) support-turned-resistance at 1.1315 is critical to unleashing the further recovery.

The next significant resistance is envisioned at the horizontal 21-DMA at 1.1345. Further up, buyers will look to take out the 1.1400 round level.

EUR/USD: Additional levels to consider