EUR/USD recovers towards 1.0400 as Fed prepares to slow rate pace

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  • The euro appreciated and the dollar weakened after the release of the Federal Reserve minutes for November.
  • Federal Reserve officials agreed to halt rate hikes, weakening the dollar.
  • EUR/USD Price Analysis: A daily close above 1.0400 may exacerbate a rally towards 1.0500.

The euro (EUR) shot himself in front of US dollar (USD) following the release of the Federal Reserve (Fed) monetary policy minutes, which showed policymakers agreed to slow the pace of rate hikes at the November Fed meeting. As of this writing , EUR/USD is volatile and trades around 1.0396, testing the 200 day EMA at 1.0396.

Federal Reserve Open Market Committee (FOMC) minutes for November

As mentioned above, Fed officials agreed to slow rate hikes, spurring US dollar weakness as EUR/USD inched towards its daily high of 1.0400. Furthermore, policy makers said that monetary policy is approaching a “sufficiently restrictive” level, acknowledging that the FFR spike is more important than the rate itself.

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On inflation, Fed officials agreed that there were few signs of easing inflationary pressures, although they stressed that inflation risks were skewed to the upside.

Officials expressed a high level of uncertainty about the peak of the FFR. However, several forecast interest rates to peak higher, as Federal Reserve Chairman Jerome Powell said at the monetary policy press conference.

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Meanwhile, the odds in money market interest rate futures for a 50 basis point hike at the December meeting increased to 79% following the release of the FOMC minutes.

The Dollar Index (DXY), a gauge of the value of the greenback against a basket of six currencies, extended its losses to nearly 1%, falling to 106,161, while US Treasury yields eased.

EUR/USD Price Analysis: Technical Perspective

EUR/USD has a bullish bias, as the 1 hour chart shows, after breaking above the 100 and 200 EMAs. Also, on its way north, EUR/USD broke above the R1 , R2 and is testing the daily R3 pivot point around 1.0400. If the Euro breaks above this last point, the main pair could rally towards 1.0500.

Therefore, the first resistance of the EUR/USD would be the daily high of November 16 at 1.0438, ahead of the R4 pivot level at 1.0440, followed by the R5 pivot point at 1.0490 before the psychological level of 1.0500.

EUR/USD

Overview
Last price today 1.0398
today change daily 0.0098
Today’s daily change in % 0.95
today’s daily opening 1.03
Trends
daily SMA20 1.0114
daily SMA50 0.994
daily SMA100 1.0024
daily SMA200 1.0403
levels
previous daily high 1.0308
previous daily low 1.0237
Previous Weekly High 1.0482
previous weekly low 1.0272
Previous Monthly High 1.0094
Previous monthly minimum 0.9632
Daily Fibonacci of 38.2% 1.0281
Daily Fibonacci of 61.8% 1.0264
Daily Pivot Point S1 1.0256
Daily Pivot Point S2 1.0211
Daily Pivot Point S3 1.0185
Daily Pivot Point R1 1.0327
Daily Pivot Point R2 1.0353
Daily Pivot Point R3 1.0398

Source: Fx Street

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