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#1 12-12-2019 10:42:40

Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2886

EUR/USD: FED meeting yesterday, ECB meeting today - what will happen?

EUR/USD: the pair benefited from yesterday's FED meeting, now it's time for today's ECB meeting

Last night's Fed meeting didn't bring any monetary policy decisions as planned, as the Fed had warned for weeks that it intended to take a "break", but some of Mr. Powell's comments did have a considerable influence on the markets.

The Fed head said that rates shouldn't be raised unless the inflation target is "significant and persistent", which implies that rates may not be raised for years.

Moreover, the update of the Fed's dot-plot chart yesterday showed that no FOMC member expects a rate increase next year.

However, from there, it is more likely that the Fed's next rate move will be a rate cut than an increase, which weighed heavily on the dollar last night.

In this context, the EUR/USD jumped, finally managing to significantly cross the psychological resistance threshold of 1.11, with a peak at 1.1144, the highest since 4 November, and keeps most of its gains this Thursday morning.

Today, it is the ECB meeting that EUR/USD traders will focus on. No monetary policy decision is anticipated, but the fact that this is Mrs. Lagarde's first post-meeting press conference in her new role as head of the ECB gives this event a major importance, since deductions may possibly be made via the analysis of language differences between Lagarde and predecessor Draghi.

From a technical point of view, the next obstacle to overcome to confirm the increase is the 200-day moving average to 1.1153, ahead of the resistance area at 1.1175-80, and then the psychological threshold of 1.12.

On the downside, 1.11 will be the first support level to monitor, before the 100-day moving average at 1.1065.

Currently, the EUR/USD pair is trading at 1.1133 on the forex.

Daily EUR/USD chart

"Anything worth having is worth going for - all the way." - J.R. Ewing



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