EUR/USD extends the rally after the FOMC shocker. Ben Bernanke and his colleagues decided NOT to taper QE at this point, on the background of unconvincing economic growth and tightening financial conditions. This surprise sent EUR/USD shooting up to levels last seen in February. What’s next from here? As the dust from the FOMC settles, Sunday’s German elections will eventually take the spotlight. Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar. EUR/USD Technical In the Asian session, EUR/USD consolidated its gains above 1.35, after earlier shooting up from 1.3370 or so. The move continued in the European session, with the pair peaking at 1.3570. Current range: 1.3520 to 1.3590 Further levels in both directions: Below: 1.3520, 1.3450, 1.3415, 1.3325 and 1.3240. Above: 1.3590, 1.3650 and 1.37. 1.3520 is turning into the first support line. 1.3590 is the first resistance line on the road to the YTD high of 1.3710. EUR/USD Fundamentals 12:30 US jobless claims. Exp. 331K. Actual: 309K. Positive surprise. 12:30 US Current Account. Exp. -96 billion. Actual -99 billion. 14:00 US Existing home sales. Exp. 5.27 million. 14:00 US Philly Fed Manufacturing Index. Exp. 10.2 points. 14:00 US CB Leading Index. Exp. +0.6%. * All times are GMT. For more events and lines, see the Euro to dollar forecast. EUR/USD Sentiment NO Taper shoots dollar down: Most analysts, including here, were surprised by the decision not to taper after many FOMC members said they were coming with an “open mind”. This sent the dollar down across the board. There were quite a few other reasons for tapering, but the Fed was worried about the tightening financial conditions (somewhat self-created with the taper talk in May-June) and the unconvincing growth in the economy. Bernanke reiterated that the unemployment rate overstates the real picture. However, he didn’t rule out the end of QE by mid 2014 nor a taper in October, when no press conference is scheduled. Here is the full live blog of Bernanke. Summers withdraws from Fed race: The dollar was already hit earlier in the week by another Fed related event. Surprisingly, Larry Summers, which was considered hawkish, has withdrawn his nomination, leaving Vice Chairman Janet Yellen as the favored candidate. Yellen is considered dovish and may be hesitant when it comes to QE tapering. The dollar responded to the news of Summers’ withdrawal by losing ground against the major currencies. Germans go to the polls: On Sunday, September 22nd, German voters will vote in federal elections. Incumbent chancellor Angela Merkel’s center right CDU party is expected to maintain power, but it might share it with the center-left SPD. Such a “grand coalition” might be more pro-European, leading to a third Greek bailout, but could also be unstable. Encouraging German sentiment: The last figure from Germany was upbeat: German ZEW Economic Sentiment releases was excellent in August jumping from 42.0 to 49.6 points, the best level since April 2010. These strong releases reflect the view of financial market experts that the German and Eurozone economies are picking up steam, after some other worrying figures US data is mixed: The housing sector is responding to higher rates (or tightening financial conditions according to the Fed) with less building permits and housing starts than expected. Also other figures are quite mediocre. Only the dropping jobless claims shine, with the lowest moving average since October 2007. Here is a post FOMC technical outlook for EUR/USD. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam EUR/USD DailyForex News Today: Daily Trading News share Read Next Post FOMC Video Rundown Yohay Elam 9 years EUR/USD extends the rally after the FOMC shocker. Ben Bernanke and his colleagues decided NOT to taper QE at this point, on the background of unconvincing economic growth and tightening financial conditions. This surprise sent EUR/USD shooting up to levels last seen in February. What's next from here? As the dust from the FOMC settles, Sunday's German elections will eventually take the spotlight. Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar. EUR/USD Technical In the Asian session, EUR/USD consolidated its gains above 1.35, after earlier shooting up from 1.3370 or so. 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