EUR/USD Pair Attempts to Break Key Resistance Level as Fed Hints at Policy-Tightening Pause

Posted Thursday, March 23, 2023 by
Arslan Butt • 1 min read

The EUR/USD pair is currently hovering close to the key resistance level of 1.0900 during the Asian trading session. This major currency pair is attempting to surpass this level, as the Federal Reserve (Fed) has hinted at a pause in its policy-tightening process. Fed Chair Jerome Powell’s statement that “some additional policy firming may be appropriate” has provided confidence to risk-associated currencies, implying that the Fed recognizes that the current monetary policy has progressed enough and will be restrictive enough to bring the United States Consumer Price Index (CPI) down to 2%. The US Dollar Index (DXY) has recently reached its lowest level in six weeks, at 102.61, as investors anticipate no further room for rate hikes from the Federal Reserve. The DXY is expected to continue its downward trajectory, as concerns over the US banking crisis persist.

EUR/USD Technical Outlook

The EUR/USD pair had a strong upward rally yesterday evening, surpassing the first target at 1.0800 and reaching the second target at 1.0900. This was influenced by the FOMC rate decision, increasing the possibility of the bullish trend continuing in the intraday and short term basis. Our recommendation is to aim for the previous high at 1.1032 as the next positive target.

We anticipate further increase in upcoming sessions, supported by the EMA50, which is still carrying the price from below. However, if 1.0820 is broken, the price may experience intraday bearish correction, heading towards 1.0745 areas before another attempt to rise.

Today’s expected trading range is between 1.0800 support and 1.0990 resistance.

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