© O Financista.
The EUR/USD is a currency pairs of the Forex to which the impact of the Fed meeting yesterday evening has been the most significant.
Indeed, the rise of the Dollar in the face of a Fed’s less dovish than expected has sent the Euro-Dollar in a sharp decline, from 1.1140 about before the statements of the Fed, up a hollow near 1.1030 this morning.
The decisions of the Fed are plunging EUR/USD
Remember that although the Fed has lowered its key rate by 0.25%, it also provided some comments which have been considered hawkish, in a context where the bar was not set very high to “disappoint” the market, since investors ‘ expectations were strongly dovish, including a perceived probability of over 20% as the Fed lowers its rate to 0.50%, instead of only 0.25%.
But in addition to not lowering rates as much as the most optimistic had hoped for, the Fed has also provided a number of clues that call into question the possibility of further rate cuts in the near future, and it is this that has strengthened the Dollar since yesterday evening, and resulted in the EUR/USD pair to bypass the manufacturing PMI of the euro zone higher than expected published this morning.
The attention turns to the next news out of the US
It should be noted that the position shown by the Fed yesterday evening, which suggests that it will cut rates further only if the economy deteriorates, will give a special importance to future statistics, US.
In this regard, we will monitor today the ISM manufacturing index for the month of July, before the attention of traders will turn to the report of the NFP tomorrow.
It will also be necessary to monitor any statements of two Fed members who voted against the rate cut yesterday, Rosengren, and George, in order to obtain clarification on the motives of their decision.
This could strengthen the dollar further, although little new information is likely to be made.
Technical analysis EUR/USD
From the point of view of technical analysis; the dip observed in the face of the Fed on the EUR/USD allowed the pair EUR/USD to come out of the bottom of the range close that governed its development since the beginning of the week, breaking below the moving average 100 hours.
The pair has also broken without difficulty under the psychological threshold of 1.11, to come mark a new low in annual 1.1032 this morning, before getting back to 1.1050 at the time of the writing of this article.
If the decline continues, little support can be identified before the psychological threshold of major 1.10.
Up, the psychological threshold of 1.11, and moving averages 100 and 200 hours at 1.1125 and 1.1145 currently will be the initial resistance potential to monitor.