EUR/USD reverses and jumps toward 1.1845 on Powell’s comments
- US dollar reveres and drops across the board during Powell’s press conference.
- EUR/USD from a fresh daily low to two-week highs.
The EUR/USD reversed from 1.1771 and jumped to 1.1842, reaching the highest level since July 15. So far, the euro is facing resistance around the 1.1840 area as market participants digest the FOMC meeting and Powell’s press conference.
The bias in EUR/USD points to the upside. Above 1.1850 the upside could gain momentum. On the flip side, 1.1770 is the key short-term support that if broken would expose the July low at 1.1750.
Fed sees progress but not yet there
The Federal Reserve kept interest rates and the QE program unchanged as expected. It announced that established two standing repurchase-agreement facilities that will work “as backstops in money markets to support the effective implementation of monetary policy and smooth market functioning.”
"The economy has made progress toward goals since setting the bar for taper in December and will continue to assess progress in coming meetings", said the Fed. During the press conference, Powell mentioned "the labor market has a ways to go."
His comments favored the reversal of the US dollar across the board and boosted only modestly equity prices. Among majors, the greenback is only up for the day versus the yen and the kiwi.
The euro, despite the rally versus the dollar, is down against the Swiss franc with EUR/CHF trading at the lowest since January below 1.0800.
Technical levels