EUR/USD approaches 1.2100 after the FOMC statement

• Federal Reserve keeps rates unchanged as expected.
• US dollar reacts initially to the upside, then drops.

The EUR/USD dropped to 1.2065 after the Federal Reserve released its statement and then bounced back above 1.2080 area, where it was trading prior to the event. The US central bank offered no major surprises and the dollar appreciated only for a few minutes. Now attention turns to Jerome Powell.

Fed show no big signs

As expected, the Fed kept its monetary y policy unchanged.  In the statement, the Fed mentioned the economy and employment have strengthened. The US dollar rose after the release amid higher US yields, but then prices went below pre-Fed levels. The 10-year yield spiked to 1.66% and pulled back later to 1.64%. Now market participants await Chair Powell's press conference.

After the initial run, the US dollar pulled back across the board, as it was the case before the FOMC statement. US stock remains in negative territory.

Follow our live coverage of the FOMC decision and the market reaction.

From a technical perspective, EUR/USD is back again, approaching  1.2100 but still holding below. A break above 1.2100 is needed in order to clear the way to more gain. On the flip side, the immediate support is seen at the daily low at 1.2055 and below at 1.2035. Volatility is expected to remain elevated during Powell’s press conference.

Technical levels