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.
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.
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.
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 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.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
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