EUR/USD approaches key resistance levels in post-FOMC trading
After a bit of a whipsaw during the FOMC meeting decision and Powell's press conference, the dollar has moved lower with more follow through weakness seen in the new day.
That has seen EUR/USD buyers seize near-term control in a move above the key hourly moving averages and price is now challenging swing region resistance around 1.1163-79.
The levels above will prove to be a key near-term area that buyers must break to establish more upside control. However, looking at the daily chart:
The 200-day MA (blue line) rests at 1.1199 and will be a more important level to watch out for in the short-term. Unless buyers break above that, sellers can still find a key level to lean on in order to limit the scope for any upside move.
Looking ahead, markets are still continuing to digest the aftermath of the FOMC meeting but with US-China trade talks and non-farm payrolls due tomorrow, it adds more intrigue as we approach the weekend.
I find it hard to argue for a prolonged period of weakness in the dollar considering that the Fed is shelving rate cuts for the time being. Comparing to other major economies, the US is still the place to be i.e. the cleanest shirt among the dirty pile.
Then again, the Fed has shown little poise to fight back against market expectations in the past and may just get bullied into another decision next year. So, there's that to consider.
But for now, reactive flows and technicals are at play so let's see if there is any further follow through momentum to the move since yesterday.
