The pair surged to a weekly high of 1.0933 on Thursday following the Federal Reserve System's announcement of three interest rate cuts planned for 2024. These adjustments will reduce borrowing costs by 75 basis points.
The interest rate remains at 5.5% annually, the highest in 23 years, and has remained unchanged for five consecutive meetings.
Federal Reserve Chairman Jerome Powell said the regulator plans to cut the rate this year, likely achieving a 75 basis point reduction in three stages by the end of 2024.
The Federal Reserve is also continuing its balance sheet contraction plan, with no reinvestment of proceeds from maturing bonds and no plans to sell bonds from its portfolio.
The Federal Reserve's outlook was relatively optimistic this time, expecting the US economy to grow 2.1% quarter-on-quarter in the first quarter of 2024. Although the consumer price index is declining, it is still high and the labor market is strong due to the creation of new jobs. creation.
The Federal Reserve's inflation target remains 2%, and risks to expectations are considered balanced.
EUR/USD technical analysis
Influenced by the news, the EUR/USD H4 chart found support at 1.0836, leading to a correction. Today, the price is forecast to reach 1.0944, followed by a subsequent move lower with a target at 1.0818. The MACD indicator supports this scenario, with its signal line below zero, indicating further declines to new lows.
A corrective growth structure has formed towards 1.0940 on the EUR/USD chart of the first half. After reaching this level, a drop to 1.0888 is possible, followed by a possible rise to 1.0944. Then, a new bearish wave may begin until 1.0818, the first target. The stochastic oscillator, with its signal line below 50, indicates a continuation of the decline towards 20.
By RoboForex Analysis Department
Disclaimer: Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
