EUR/USD Price Analysis: Spikes to mid-1.1300s, bulls back control

• EUR/USD reversed an early dip to 1.1240 region and rallied over 100 pips.
• The set-up warrants some caution for bulls ahead of FOMC on Wednesday.

The EUR/USD pair rallied nearly 120 pips from the daily swing lows, around the 1.1240 region and refreshed daily tops during the early North American session.

The early downtick showed some resilience below 100-hour EMA, with the emergence of some fresh USD selling pressure assisting the pair to regain positive traction. The pair jumped back closer to multi-month tops set on Friday, albeit slightly overbought conditions on hourly/daily charts warrant some caution for bullish traders.

Heading into the FOMC monetary policy decision on Wednesday, bulls might be inclined to lighten their bets, which might further contribute towards capping gains. Hence, any subsequent move up seems more likely to run into some fresh supply and remain capped below the recent swing high, ahead of the 1.1400 round-figure mark.

On the flip side, the 1.1300 mark now seems to act as strong support, which if broken might prompt some technical selling and pave the way for a further decline. The pair might then accelerate the slide further towards the 1.1270 region (100-hour SMA), en-route daily lows, around the 1.1240 level and the 1.1200 round-figure mark.

EUR/USD 1-hourly chart

Techincal levels to watch