(1 Hour post event )
(End of Day post event)
05/02/2018 18:00:00 GMT
1.50% to 1.75%
1.50% to 1.75%
May 2018 Federal Open Market Committee (FOMC) Interest Rate Decision
EUR/USD 5-Minute Chart
The Federal Open Market Committee (FOMC) stuck to the sidelines in May, with the central bank keeping the benchmark interest rate at 1.50% to 1.75% as ‘risks to the economic outlook appear roughly balanced.’ Nevertheless, the comments from Chairman Powell and Co. suggest the central bank will continue to implement higher borrowing-costs as ‘the Committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate,’ but it seems as though the FOMC is in no rush to extend the hiking-cycle as officials reiterate that ‘the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.’
More of the same from the FOMC dragged on the greenback, with EUR/USD spiking above the 1.2000 handle, but the reaction was short-lived as the pair closed at 1.1951. Learn more with the DailyFX Advanced Guide for Trading the News.
EUR/USD Daily Chart
- Broader outlook for EUR/USD remains mired by the break of the November-low (1.1554), with the fresh series of lower highs & lows raising the risk for further losses; break below the 1.1670 (78.6% expansion) to 1.1680 (50% retracement) region opens up the 2018-low (1.1510), with the next downside region of interest coming in around 1.1390 (61.8% retracement).
- However, recent developments raises the risk for a larger rebound in EUR/USD as the Relative Strength Index (RSI) breaks out of the bearish formation from earlier this year, with a break/close above the 1.1790 (23.6% retracement) to 1.1810 (61.8% retracement) region opening up the next area of interest around 1.1940 (23.6% retracement) to 1.1970 (23.6% expansion).
For more in-depth analysis, check out the Q2 Forecast for EUR/USD
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— Written by David Song, Currency Analyst
Follow me on Twitter at @DavidJSong.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.