FOMC decided to slightly increase IOER yesterday while the dot chart pointed to a 2 rate hike in 2023. This, of course, does not mean that there will be 2 rate hikes in 2023 for sure but a signal was sent to the markets that monetary tightening in the United States, albeit still distant, is coming. And markets reacted in-line with these expectations - stocks and gold pulled back while US dollar strengthened.
EURUSD dropped more than 1% yesterday and reached a 50% retracement of a recent upward move (1.1986). Downward move is continuing today with the main currency pair trading at the lowest level in 2 months! The pair is approaching a key support in the 1.1900 area, marked with the 61.8% retracement as well as previous price reactions. Moreover, the upward trendline runs in the same place. Reaction to this area can be a key for the future moves of the pair.
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Source: xStation5
