The Fed left rates unchanged, sounding optimistic for a rate hike in December but lowering long-term forecasts and lamenting low productivity. 3 hawkish dissenters wanted a rate hike and Yellen set the bar low for a move in December. We now have a verdict of sorts.
The US dollar weakened initially but stabilized quickly. But now, the greenback is back on the back foot and EUR/USD reaps the benefits.
The pair currently trades at 1.1236, after reaching a high of 1.1240. It is far off the pre-FED levels of 1.1160 and the support line at 1.1120. Resistance can be seen at 1.1280, a level seen last week, albeit it is a soft cap. Stronger resistance awaits at 1.1370, which has been a high line of late. The pre-Brexit high of 1.1420 is the next level to watch.
On the downside, we find 1.1060 and 1.0960. EUR/USD has been a very frustrating pair of late. Is it about to break out of range? Monetary policy divergence suggests otherwise. We have a speech by Mario Draghi later on, and he might add his dovishness to the mix. It is important to remember that the ECB is looking to add QE while the FED is still on track to raise rates.
Share
