• Euro bulls lose momentum and the pair stalls at 0.8400.
• BoE rate hike expectations are supporting the GBP
• EUR/GBP, looking for direction between 0.8385 and 0.8450.

The euro has been moving sideways around the 0.8400 level on Wednesday, looking for direction after pulling back from one-month highs at 0.8450.

The euro remains flat with all eyes on the Federal Reserve

In absence of first-tier macroeconomic data in Europe or the UK, the EUR/GBP remains practically unchanged on the daily chart, with the investors awaiting the release of the Federal Reserve’s monetary policy decision.

The Fed is widely expected to hike interest rates for the first time since 2018 with the country facing the highest inflation in four decades. The main focus, however, will be on the bank’s statement and the ensuing press release to assess how is the Fed going to manage to bring consumer prices under control without hurting economic growth in a rather delicate moment.

Furthermore, the Bank of England is expected to follow suit and raise its benchmark interest rate on Thursday, which might be supporting the GBP from further depreciation.

EUR/GBP is trapped between 0.8450 and 0.8385

At the moment, the pair remains capped below March 15 high at 0.8450, which is defending February 7 high at 0.8475 and December 20 and 21 highs at 0.8550.

On the downside, immediate support lies at 0.8385 (March 15 low) and below here, 0.8355, where the 50-day SMA and March 11 lows meet. A breach of that level would cancel the near-term uptrend and, probably add pressure towards 0.8300 (February 21, 22 lows).

Technical levels to watch