– The pair has quickly eroded post-FOMC decision up move to the 1.18 area.
– The greenback manages to rebound from lows near 93.90 on Powell’s presser.
– Chief J.Powell gave an upbeat view of the economy.
EUR/USD faded the initial optimism and has now moved into the negative territory following the press conference by Chief Jerome Powell after the Fed raised rates by 25 bps.
EUR/USD now offered, challenges lows
Sellers are now clustering around the pair, forcing it to retreat to the 1.1730 area in response to a hawkish tone from J.Powell at his press conference following the Fed’s move on rates.
Powell has once again stressed the good health of the US economy, adding that fiscal policy has boosted the economy and noting at the same time that inflation should stay around the Fed’s target on a sustained basis while wages are seen rising along with the solid labour market.
He also signaled that having removed the word ‘accommodative’ does not mean a change in policy and he also aknowledged that some assets are in the upper bound of their historical range.
EUR/USD levels to watch
At the moment, the pair is losing 23% at 1.1740 and a breakdown of 1.1712 (10-day SMA) followed by 1.1664 (21-day SMA) and then 1.1526 (low Sep. 10). On the upside, the next barrier aligns at 1.1815 (high Sep.24) would target 1.1853 (monthly high Jun.14) en route to 1.1946 (200-day SMA).
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