The US Federal Reserve gave the greenback the last push, and the American currency finally fell over the cliff. The US Central Bank decided to downgrade its growth forecast for this year, revising GDP down to 2.2% from previous 2.4%. More relevant, the dot plot shows that policy makers have now the intention of rising rates just two more times this year, from previous four. Given that the FED has been largely overestimating the economic developments, market players saw an even darker picture and the dollar got sold-off.
Ahead of the release of the EU trade balance and latest inflation readings, the EUR/USD flirts with the 1.1300 level, its highest in over a month. And while the European future seems not that bright, the ongoing negative sentiment towards the dollar may see the pair advancing further ahead of the weekend.
View the Live chart of the EUR/USD
From a technical point of view, the 4 hours chart shows that the pair regained upward momentum after a limited consolidative stage, and that the technical indicators have accelerated through overbought levels, maintaining their upward slopes. Additionally, the price has broken above its 20 SMA with the FED's announcement, now turning north, but lagging. Anyway, the immediate support comes at the 1.1240/50 region, and as long as buying interest surges around this area, the upside is open towards 1.1375, the high set last February. Further gains beyond point to a test of 1.1460, a major long term static resistance, from where the pair retreated for most of the past 2015.
Should the decline accelerated below the mentioned support of 1.1245 on the other hand, the pair can correct lower, down to 1.1200 first, and 1.1160 then.
Latest updates on the EUR/USD Forecast
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
AUD/USD extends gains due to improved risk appetite
The Australian Dollar maintained its winning streak for the fourth consecutive session on Monday, buoyed by a hawkish sentiment surrounding the Reserve Bank of Australia. This optimism bolsters the strength of the Aussie Dollar, providing support to the AUD/USD pair.
USD/JPY snaps three-day losing streak above 153.50, Yellen counsels caution on currency intervention
The USD/JPY pair snap a three-day losing streak during the Asian trading hours on Monday. The uptick of the pair is bolstered by the modest rebound of the US Dollar and US Treasury Secretary Janet Yellen’s comments on potential Japanese interventions last week.
Gold price rebounds on downbeat NFP data, softer US Dollar
Gold price snaps the two-day losing streak during the Asian session on Monday. The weaker-than-expected US employment reports have boosted the odds of a September rate cut from the US Federal Reserve. This, in turn, has dragged the US Dollar lower and lifted the USD-denominated gold.
Bitcoin Cash could become a Cardano partnerchain as 66% of 11.3K voters say “Aye”
Bitcoin Cash is the current mania in the Cardano ecosystem following a proposal by the network’s executive inviting the public to vote on X, about a possible integration.
Week ahead: BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.