EUR/USD: Higher volatility due to the Fed, before a busy day tomorrow

© Reuters. EUR/USD fluctuates, a sharp increase in volatility following the Fed

The EUR/USD pair demonstrated high volatility, as of yesterday evening : After having dropped from 1.1430 up to a low of 1.1364 face at the meeting of the Fed’s less dovish than expected, the Euro-Dollar has indeed displayed a rebound of more than 100 pips with a peak daily at 1.1485 on Thursday at mid-day, before retreating again, close to the psychological threshold of 1.14 at the end of the european session.

As is the case for several days, these developments in the EUR/USD pair are mainly due to the developments of the Dollar.

Strong increase in volatility following the Fed, the Euro is hesitating between rise and fall

The reaction in two stages in the Dollar against the meeting of the Fed can be explained by the fact that even if the Fed was shown to be less dovish than expected, it has proved dovish, by announcing provide for fewer rate hikes than previously to 2019.

Thus, after an initial reaction to the upward face of the surprise of seeing the Fed more confident than expected in his comments and his forecasts, the Dollar quickly lost ground, for the final score of new lows, with the Dollar Index, which marked a low point at 95.65 today, the lowest since 7 November.

As for the spike upward in the Dollar, and the return of the drop on the EUR/USD this afternoon, it can be attributed in part to profit-taking at this stage.

Technical thresholds to monitor in the short term on EUR/USD

From a graphical point of view, as long as the pair EUR/USD will keep 1.14, the possibilities of return of the increase will remain open, in the direction of 1.1450, 1.1485 (summit day), and 1.15.

A return to below 1.14 would expose itself 1.1350, before other media to 1.13, 1.1265-70 and 1.1215, the low annual 2018.

A calendar US very busy end to the week tomorrow

Finally, it will be recalled that the day of tomorrow will have an economic calendar particularly charged in the USA, which could lead to the end of the week-animated.

It will, in fact, durable goods orders, a new estimate of GDP , consumer spending and the index, PCE core, and the index of consumer confidence according to the University of Michigan.

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