EUR/USD Oscillates After Fed Hikes 75 Basis Points
The EUR/USD pair oscillated sharply on Wednesday following the Federal Reserve monetary policy announcement.
The Federal Reserve decided to raise rates by 75 basis points taking the federal fund range to 1.5%-1.75%, being the highest increase since 1994. Besides, the dot plot showed the median rate expected by the end of 2022 was 3.4%, paving the way for at least two or three more hikes this year.
The EUR/USD initially moved lower and struck a one-month low of 1.0358, before bouncing to levels above 1.0500 with Jerome Powell conference.
Chairman Powell said that labor market remains extremely tight and inflation high, so they considered appropriate a 75 basis point increase at the June meeting. He also said that either a 50 bps or 75 bps rate hikes will be appropriate at next meeting and will remain data dependent.
Despite the hawkish tone, the dollar turned lower alongside with yields, while Wall Street indexes advanced following the presser.
Also worth mentioning, the European Central Bank called an urgent meeting on Wednesday and announced that it plans to create a tool to tackle the risk of eurozone fragmentation. The ECB said it will reinvest redemptions from its emergency bond-purchasing program (PEPP) in a flexible way.
The EUR/USD moved from a low of 1.0358 to a high of 1.0508 before settling at mid-range around 1.0450. The short-term technical perspective remains negative for the EUR/USD, according to the daily chart.
The RSI remains below its mid-line although it has turned flat, while the MACD shows decreasing red bars.
Now that the FOMC is behind, the pair could enter a phase of consolidation. On the downside, key support is seen at the 1.0350 area, while significant resistance could be found at the 1.0520 zone.
The Federal Reserve decided to raise rates by 75 basis points taking the federal fund range to 1.5%-1.75%, being the highest increase since 1994. Besides, the dot plot showed the median rate expected by the end of 2022 was 3.4%, paving the way for at least two or three more hikes this year.
The EUR/USD initially moved lower and struck a one-month low of 1.0358, before bouncing to levels above 1.0500 with Jerome Powell conference.
Chairman Powell said that labor market remains extremely tight and inflation high, so they considered appropriate a 75 basis point increase at the June meeting. He also said that either a 50 bps or 75 bps rate hikes will be appropriate at next meeting and will remain data dependent.
Despite the hawkish tone, the dollar turned lower alongside with yields, while Wall Street indexes advanced following the presser.
Also worth mentioning, the European Central Bank called an urgent meeting on Wednesday and announced that it plans to create a tool to tackle the risk of eurozone fragmentation. The ECB said it will reinvest redemptions from its emergency bond-purchasing program (PEPP) in a flexible way.
The EUR/USD moved from a low of 1.0358 to a high of 1.0508 before settling at mid-range around 1.0450. The short-term technical perspective remains negative for the EUR/USD, according to the daily chart.
The RSI remains below its mid-line although it has turned flat, while the MACD shows decreasing red bars.
Now that the FOMC is behind, the pair could enter a phase of consolidation. On the downside, key support is seen at the 1.0350 area, while significant resistance could be found at the 1.0520 zone.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.