• EUR/USD plunged to a fresh month low at 1.1683.
  • Fed’s monetary policy statement hints that bond tapering is nearby.
  • Chairman Powell down talks the labor market, said: ”does not need a very good jobs report to go ahead with the tapper.”

The EUR/USD dipped to new month around 1.1680’s, though staged a rebound is trading at 1.1695, down 0.26% at the time of writing. 

Fed’s monetary policy statement hints that a bond taper is nearby

The Federal Reserve released its monetary policy statement. The interest rate and the bond purchasing program were unchanged. Substantial further progress in employment has not been achieved but has shown signs of improvement.

The bolded remark was crucial on the market’s reaction:

“Last December, the Committee indicated that it would continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward its maximum employment and price stability goals. Since then, the economy has made progress toward these goals. If progress continues broadly as expected, the Committee judges that moderation in the pace of asset purchases may soon be warranted,”

The market’s reaction saw the EUR/USD jumped to 1.1755, as the market priced in some sort of Fed's hint regarding the bond tapering process. Once the dust settled, the pair stabilized around 1.1746. 

Fed’s Chairman Jerome Powell turned hawkish

The Federal Reserve Chairman Jerome Powell sounded as hawkish as never before, in his press conference.

Summarizing some of his remarks, he commented that the inflation is expected to moderate back to the longer goal; however, the Fed would respond if it remains higher than expected. 

Regarding bond tapering assets, he said, “Fed discussed the appropriate pace of tapering once conditions for doing so are satisfied." Additionally, he commented that the taper process could conclude around the middle of next year. Further, he added, “there is broad support on the committee for timing and pace of taper.”

About the labor market, he said that "It would not take a knock-out employment report for me to feel taper test has been met." and he does not need a robust job report to go ahead with the tapper.

Market's reaction

The EUR/USD plummeted to 1.1683 on the more hawkish than expected, Fed's Chairman Powell.

KEY TECHNICAL LEVELS TO WATCH

EUR/USD

Overview
Today last price 1.1695
Today Daily Change -0.0031
Today Daily Change % -0.26
Today daily open 1.1726
 
Trends
Daily SMA20 1.1803
Daily SMA50 1.1792
Daily SMA100 1.192
Daily SMA200 1.1987
 
Levels
Previous Daily High 1.1749
Previous Daily Low 1.1715
Previous Weekly High 1.1846
Previous Weekly Low 1.1724
Previous Monthly High 1.19
Previous Monthly Low 1.1664
Daily Fibonacci 38.2% 1.1736
Daily Fibonacci 61.8% 1.1728
Daily Pivot Point S1 1.1711
Daily Pivot Point S2 1.1696
Daily Pivot Point S3 1.1677
Daily Pivot Point R1 1.1745
Daily Pivot Point R2 1.1764
Daily Pivot Point R3 1.1778

 

 

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