• EUR/USD fades bounce off 21-day EMA inside rising wedge bearish chart pattern.
• RSI’s retreat from overbought territory, bearish MACD signals also favor downside bias.
• 200-day EMA acts as additional key support while buyers need validation from 1.0965 for a free move.
• Dovish bias on Fed signals room for extreme reaction to surprise outcome.

EUR/USD buyers seem running out of steam as the quote seesaws near 1.0860-70 heading into Wednesday’s European session.

That said, the major currency pair bounced off the 21-day Exponential Moving Average (EMA) the previous day but stays inside a three-month-old rising wedge bearish chart pattern as traders await the Federal Open Market Committee (FOMC) monetary policy meeting results.

Also read: EUR/USD slides to 1.0850 as German/US data intensifies ECB vs. Fed battle

It’s worth noting that the RSI (14) pullback from overbought territory joins the bearish MACD signals to challenge the EUR/USD bulls.

Also acting as an upside hurdle is the pair’s multiple failures to cross the 1.0930.

Even if the quote rises past 1.0930, the stated wedge’s top line surrounding 1.0965 could challenge the EUR/USD bulls before directing them to cross the 1.1000 psychological magnet.

On the flip side, the 21-day EMA level of 1.0800 restricts immediate EUR/USD moves ahead of highlighting the stated wedge’s lower line, close to 1.0775 at the latest.

Should the EUR/USD bears manage to conquer the 1.0775 key support, the odds of witnessing a slump toward the late 2022 lows can’t be ruled out. However, the 200-day EMA level near 1.0500 may act as an intermediate halt during the likely slump.

EUR/USD: Daily chart

Trend: Downside expected