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EUR/USD falls into 1.0660 as Greenback bolstered by Fed

The EUR/USD has rapidly reversed Wednesday's direction after getting knocked lower by Fed rate call.
Fed keeps rates at 5.5%, but sees at least one more rate hike by the end of 2023.
Markets have piled into the USD after the Fed updated its forward-looking rate expectations.

Joshua Gibson FXStreet

The EUR/USD is sharply off the day's highs of 1.0735, trading into the low end and chalking in a new low for Wednesday near 1.0650.

The Federal Reserve (Fed) updated their Summary of Projections (SEP), which shows Fed officials expecting the interest rate to hit 5.1% by the end of 2024 (previously 4.6%). Despite the Fed holding steady on rates at 5.5% for the time being, the uptick in the rate of interest rate cuts has sent the US Dollar broadly up across the board.

Jerome Powell speaks on monetary policy after deciding to hold interest rate steady

Fed dot plot points to one more 25 bps hike in 2023 and 50 bps cut in 2024

Up next on the economic calendar, US Initial Jobless Claims are slated for Thursday at 12:30 GMT, and the figure is expected to print slightly higher at 225K versus the previous 220K.

Forex Today: US Dollar strengthens after Fed’s hawkish pause

Friday sees Purchasing Manager Index (PMI) figures for both the European Union (EU) and the US. EU Composite PMI is forecast to dip slightly to 46.5 from 46.7, while the US side is anticipating a minor improvement. The US Manufacturing PMI is expected to tick up from 47.9 to an even 48.0, while the Services component is anticipated at 50.6 versus the previous 50.5.

EUR/USD technical outlook

Wednesday's Fed-sponsored decline in the Euro-Dollar pairing sees the EUR/USD giving up most of the gains for the week, trading into the 1.0660 level after getting knocked back.

Price declines in the pair are starting to accelerate from a descending trendline on the daily candlesticks, marked in from July's swing high near 1.250.

The 200-day Simple Moving Average (SMA) also rests above current price action, turning flat near 1.0830.

Continued selling pressure from here will see the EUR/USD set to close in the red for a tenth straight week and set to challenge the year's lows currently marked in near 1.0500.

EUR/USD daily chart

EUR/USD technical levels

EUR/USD

Overview
Today last price	1.066
Today Daily Change	-0.0020
Today Daily Change %	-0.19
Today daily open	1.068

Trends
Daily SMA20	1.0763
Daily SMA50	1.0918
Daily SMA100	1.0889
Daily SMA200	1.0829

Levels
Previous Daily High	1.0718
Previous Daily Low	1.0675
Previous Weekly High	1.0769
Previous Weekly Low	1.0632
Previous Monthly High	1.1065
Previous Monthly Low	1.0766
Daily Fibonacci 38.2%	1.0691
Daily Fibonacci 61.8%	1.0702
Daily Pivot Point S1	1.0664
Daily Pivot Point S2	1.0648
Daily Pivot Point S3	1.0621
Daily Pivot Point R1	1.0707
Daily Pivot Point R2	1.0734
Daily Pivot Point R3	1.075

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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