The US Federal Reserve hiked rates by another 75 basis points on Wednesday and reiterated its commitment to bringing inflation down. However, chair Powell tried to prepare markets for potentially less aggressive moves ahead and did not provide guidance for September, pivoting to a "meeting by meeting" approach , which send EUR/USD higher.
It drops today though, unable to capitalize capitalize on the post-Fed jump. It does find some respite after the US GDP contraction earlier, as this could make it harder for the Fed to sustain its hawkishness, which has been the main source of strength for the USDollar.
The technical outlook has not changed much, since the risk of another visit to parity remains elevated, although 0.9856 still seems distant.
Hope is not lost yet for EUR/USD and it has not relinqueshed the chance to claim the key 1.0300-34 region, but the fact that it has not done so far, plays into our cautiousness in regards to its recovery prospects.
The aforementioned area contains the critical EMA200 and 23.6% Fibonacci of the 2022 High/Low drop and break above this region could potentially spark further recovery towards the 38.2% level (mid-1.0500s). However we need to see daily closes above it and the upside continues to look unfriendly, since the broader 1.0470-1.0650 area contains strong roadblocks.
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
Retrieved 03 Oct 2023 https://www.federalreserve.gov/monetarypolicy/fomcpresconf20220727.htm