The EUR/USD and S&P are higher in this week, but generally speaking markets are slow and sideways ahead of the FOMC later today. We are tracking an ending diagonal in the fifth wave on the EUR/USD, but as long as we have higher highs and higher lows in place , the trend remains up with possible test of 1.3450 in the near future.

The reason why we think the EUR can reach higher levels is the following USD index chart, where price is still above its lows from last week. Note the triangle here with wave (e) in view, before we see break lower that should support the EUR/USD. The critical level on the USD Index is around 81.00, and the market is bearish below.

E-mini S&P500 were higher in the last few sessions and successfully moved through 1647, as highlighted several times in past updates. We still believe that the market is making a wave (c) rally from 1596, so we need to be aware of a reversal lower from the 1655/1660 region.

Forex Analysis by Gregor Horvat at ForexPros. com