EUR/USD keeps rising after FOMC, looks at the ECB near 1.0700
The EUR/USD rose again on Wednesday amid a lower US Dollar across the board, weakened after the FOMC meeting. The euro climbed to a fresh multi-month high near 1.0700.
The Federal Reserve raised the key interest rate as expected by 50 basis points to 4.25 to 4.5%. The move represents a slowdown compared to the previous meetings, when it hike rates by 75 basis points. The US Consumer Price Index fell in November to 7.1% (annual), the lowest in 11 months. The decline in the annual inflation rate helped the Fed at a slower pace.
Fed Chair Powell did not surprise market participants. He kept the tone of his latest comments, saying the Fed needs to continue to tighten its policy. Regarding potential rate cuts in the future, Powell said they won’t be cutting until they are confident inflation is moving toward 2%.
On Thursday, the European Central Bank will have its monetary policy meeting. A rate hike of 50 basis points is expected. Also, the Bank of England and the Swiss National Bank will meet.
From a technical perspective, the EUR/USD remains bullish although indicators show not much strength on the current move. A break above 1.0700 could give more momentum to the European currency. The next target is seen at June highs around 1.0780.
A correction might find support near the 1.0595 area. Below the next critical area is seen around the 1.0450 area that contains the 20-day simple moving average. A break under that level could point to a change in the short-term bias from bullish to neutral/bearish.
The Federal Reserve raised the key interest rate as expected by 50 basis points to 4.25 to 4.5%. The move represents a slowdown compared to the previous meetings, when it hike rates by 75 basis points. The US Consumer Price Index fell in November to 7.1% (annual), the lowest in 11 months. The decline in the annual inflation rate helped the Fed at a slower pace.
Fed Chair Powell did not surprise market participants. He kept the tone of his latest comments, saying the Fed needs to continue to tighten its policy. Regarding potential rate cuts in the future, Powell said they won’t be cutting until they are confident inflation is moving toward 2%.
On Thursday, the European Central Bank will have its monetary policy meeting. A rate hike of 50 basis points is expected. Also, the Bank of England and the Swiss National Bank will meet.
From a technical perspective, the EUR/USD remains bullish although indicators show not much strength on the current move. A break above 1.0700 could give more momentum to the European currency. The next target is seen at June highs around 1.0780.
A correction might find support near the 1.0595 area. Below the next critical area is seen around the 1.0450 area that contains the 20-day simple moving average. A break under that level could point to a change in the short-term bias from bullish to neutral/bearish.