Search ForexCrunch

EUR/USD is down some 50-60 pips, trading at 1.1160. This is the level that held the pair in late ay and also supported the pair last week.  The low so far is 1.1156, but this break is not confirmed just yet. Break or bounce?

Further support awaits at 1.11. This is not only around number but also was a swing low a month ago. The next level to watch is 1.1025, seen in early May just as Emmanuel Macron won the presidency.

Here is how it looks on the daily EUR/USD chart:

Fed fallout

The Federal Reserve not only raised rates but also sounded optimistic. Yellen shrugged off weaker inflation and said it is due to wireless bills and prescription drugs. Labeling the fall of inflation as a “one-off” erased the gains of EUR/USD seen earlier on weak US inflation data.

In addition, the Fed maintained its forecast for one additional rate hike this year and announced the beginning of Quantitative Tightening, albeit at a snail’s pace.

The dollar was hurt by a revelation that Trump is under investigation. However, the impact was clearer to see on USD/JPY. That pair is still below the levels seen at this time yesterday, while EUR/USD is showing weakness, or the dollar’s strength if you wish.

More:  EUR/USD: 6 Reasons To Stay Bearish N-Term – Nordea