EUR/USD: 1.22 before Fed's US interest rate hike?

• The Euro tanked on a big miss for ZEW confidence surveys.
• The USD is lifting and risk is coiling ahead of FOMC Wednesday.

The EUR/USD is pushing lower heading into the overnight session, testing into 1.2240.

It's all about the Fed for Wednesday

The Euro took a hammering in Tuesday's trading thanks to a dismal ZEW survey, with confidence tanking to an unexpected low of 5.1 compared to February's 17.8 and January's 20.4. Dollar gains further accelerated the EUR/USD's decline, with yields on 2-year Treasury notes lifting to 9-year highs as traders jostle for position ahead of the Fed's anticipated rate hike on Wednesday at 18:00 GMT.

The macro calendar is light on the Euro side for Wednesday, with the European Central Bank's (ECB) Non-monetary Policy Meeting at 08:00 GMT and a German bond auction in the European session. Market action is likely to continue tightening up as the Fed prepares to steal the show with their interest rate announcement.

EUR/USD Technicals

As FXStreet's own Flavio Tosti noted earlier, "The EUR/USD is currently treading water at 3-day’s low... while rejected from the 50-period simple moving average. The daily MACD is bearishly configured as well as the RSI, both pointing downward. Intraday support is seen at 1.2260, 3-day low followed by 1.2200 previous supply/demand zone while resistance is seen at 1.2360 3-day high, followed by 1.2450, a cyclical high."