EURUSD has formed lower highs and lower lows on its hourly time frame, creating a descending channel on the short-term chart. Price is closing in on the resistance, which might keep gains in check again.

The Fibonacci retracement tool shows that the 61.8% level is holding as a ceiling near the 1.1300 mark. A larger correction could reach the channel top close to the 100 SMA dynamic inflection point.

On the subject of moving averages, the 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that the downtrend is more likely to resume than to reverse. However, the gap between the indicators is narrowing to reflect slowing selling pressure.

Stochastic already reached the overbought zone to signal exhaustion among buyers, so turning lower would confirm a return in selling pressure. This could take EURUSD back down to the swing low near the channel support at 1.1265.

RSI has a bit more room to climb before reflecting exhaustion among buyers, so the correction could keep going until the oscillator reaches the overbought zone.

There are no major reports due from the eurozone today, so EURUSD traders would likely take cues from the FOMC decision. No actual changes are expected for now, but the central bank might confirm whether or not they’d be ready to hike rates in March.

A hawkish statement could bring plenty of upside for the dollar since this would put the Fed in tightening mode ahead of the ECB. On the other hand, a cautious announcement could mean some downside for the US currency, as this might increase the risk of stagflation while prices keep rising.

The advance GDP and core PCE price index are also due later in the week, and these might underscore the Fed’s monetary policy stance.