EUR/USD inches higher to fresh session higs above 1.09 on USD weakness

The EUR/USD pair caught some fresh bids in the late US afternoon and reached its highest level since the beginning of the week at 1.0930. As of writing, the pair was trading at 1.0925, up 0.25% on the day.

A recent sell-off witnessed in the greenback seems to be the main catalyst behind the pair's move. Pressured by the falling Treasury yields, the US Dollar Index fell to a session low near 98.80 and allowed the pair to add to its daily gains above 1.09.

• US Dollar drops to new session low near 98.80

The bullish momentum is bound to remain temporary as the investors are likely to refrain from taking heavy positions ahead of tomorrow's Fed decision. Although no monetary policy change is expected from the Fed, the participants will look for clues in the monetary policy statement about the timing of the next rate hike. If the statement reinforces the expectation of a June hike, the greenback is likely to gather strength against its rivals and we could finally see a decisive DXY move above the 99 handle, which could drag the pair back below the 1.09 mark.

• CME Group FedWatch shows virtually no chance of a rate hike tomorrow

Technical outlook

The pair could encounter the first hurdle at 1.0950 (Apr. 27 high) ahead of 1.10 (psychological level) and 1.1070 (Nov. 8 high). To the downside, supports align at 1.0850 (Apr. 27 low), 1.0775 (200-DMA) and 1.0685 (100-DMA).