Much awaited by investors, the results of the FOMC meeting earlier this morning saw the strengthening of the US dollar after a slow movement was exhibited since the beginning of the week.
The Federal Reserve (Fed) has issued a hawkish statement at this edition of the meeting with an indication that bond purchase reduction measures (tapering) will be implemented at the November meeting and interest rates will be raised next year.
Fed Chairman Jerome Powell sees a fit for the current inflation rate, but is seen as still unsatisfied with the labor sector. He stated there was no need for encouraging employment reports, enough with good readings to give confidence the jobs were at a stable level.
Drastic price movements were exhibited as the results of the meeting saw the US dollar also slightly at first before ending trading in the New York session stronger following investors ’positive reaction to the Fed’s hawkish statement.
On the chart of the EUR/USD currency pair during the FOMC meeting showed the initial rise of the price testing the level of 1.17500 which was the price support last week, before the price plunged below the support zone 1.17000.
The price movement slowed below the zone until continuing into the early Asian session this morning (Thursday).
Analysts expect the lower price decline to continue after the Fed gives clues for the direction of further price movements.
The strengthening of the US dollar will push prices lower towards the latest support zone at 1.16000 and hunt for the latest lows for 2021.
If the situation changes and the surging price makes a rebound, the resistance at the 1.17500 high tested during the FOMC meeting will be tested again.
Overcoming the barrier in turn will push the price back to the previous 1.18000 focus zone.
