- EUR/USD has round-tripped and is back to square one following a non-eventful Fed interest rate decision, so far.
- Markets will now await Jerome Powell's presser for further insights and forward potential guidance.
- EUR/USD is technically overbought and the path of least resistance could be lower.
EUR/USD is currently trading at 1.1829 between a range of 1.1809 and 1.1882 so far following the Federal Reserve's interest rate decision event.
The Fed has left the door open for further easing, but there have been no great shakes in the event.
The Fed appears to be on hold through to 2023 as 13 of 17 officials have forecasted as such.
Key takeaways from the statement
FOMC statement says it would be prepared to adjust if risks emerge that would impede goals
The Fed is forecasting 2.0% inflation in 2023 and 4.0% unemployment.
2023 Fed fund dot plot shows four dots above zero, median unchanged.
We now await the presser from the Fed Chair Jerome Powell.
Watch live here
It would now appear that it is all going to be down to risk appetite and how well the world can cope with the spread of second waves of the virus through the flu season.
Hopes remain pinned on a COVID-19 vaccine.
The recent resilience of USD shorts in the CFTC data to swings in risk appetite is supporting the notion that the dollar bearish sentiment is becoming a structural component of FX markets.
For the month of September, we have seen the dollar attempt to rebound on a spot basis, but it has left no marks on the CFTC positioning data.
Indeed, although there is little evidence of speculative investors cutting their short positions on the greenback, the technical picture for both the euro and DXY scream the opposite.
The EUR has retained its role as the most overbought currency in the G10 space and could be due for a healthy downside correction.
The DXY looks poised for an upside correction having completed a 38."% Fibonacci retracement of its comeback impulse on the daily charts.
Next FOMC meeting is not until Nov 4-5, right after the election, so there is plenty of room for markets to move in what could be expected to be a very uncertain, this volatile path ahead.
DXY upside potential
-637358768247708614.png)
EUR/USD levels
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
EUR/USD hovers around 1.0700 after German IFO data
EUR/USD stays in a consolidation phase at around 1.0700 in the European session on Wednesday. Upbeat IFO sentiment data from Germany helps the Euro hold its ground as market focus shifts to US Durable Goods Orders data.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold price trades with mild negative bias, manages to hold above $2,300 ahead of US data
Gold price (XAU/USD) edges lower during the early European session on Wednesday, albeit manages to hold its neck above the $2,300 mark and over a two-week low touched the previous day.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.