The dollar sold-off with the news, with European currencies advancing the most against the greenback. The EUR/USD pair broke above 1.1400 before the Wall Street’s closing bell and maintains a strong upward tone as the hourly chart shows that the technical indicators are heading sharply higher, despite being in overbought territory, while the price has accelerated far above its moving averages.
In the 4 hours chart, the price has found intraday support in a mild bullish 20 SMA, whilst the technical indicators have finally left neutral territory, with the Momentum indicator heading higher above 100 and the RSI consolidating around 65, pointing for additional gains on a break above the mentioned high, towards the 1.1460/70 region, a major static resistance area.
The US Federal Reserve maintain its rates on hold in between 0.00and 0.25% in their September meeting, with only 1 voter dissenting with such decision.
The accompanying statement was quite dovish, with officers concerned over dollar’s strength, energy prices and the global economic slowdown, as they could put further put further downward pressure on inflation in the near term, and therefore “these developments may also restrain U.S. activities somewhat.”