Dukascopy

EUR/USD spikes to monthly R1 after soft Fed

FX:EURUSD   Euro Fx/U.S. Dollar
80 0 2
"The market's reaction of selling dollars actually serves the Fed well as it creates favorable conditions for a country raising rates while capping its currency's strength."
- Sumitomo Mutsui Trust Bank (based on Bloomberg)

Pair's Outlook
The Federal Reserve turned somewhat bearish on monetary policy yesterday, therefore leading to weaker Greenback and uplifted EUR/USD             cross. The rally exceeded 100 pips and was stopped by the first monthly resistance, as it had been expected. We are not ruling out a setback on Thursday and a correction to the downside, while even the daily RSI indicator assumes the pair became overbought on the basis of 24 hours. However, in case the bulls manage to push EUR/USD             beyond 1.1227 and close there, then next bullish goals will be two major downtrends around 1.1330.

Traders' Sentiment
Only one percent was lost on the bullish side of open positions, down to 41% from 42%. Alongside, pending orders continue to support a rally of the Euro             in 54-51% of cases depending on the range from the spot.
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