EUR/USD traded in whip saw price action following the Federal Reserve Bank statement nW1N2PU03E as the U.S. rate market initially rallied before weakening but Fed Chair Jerome Powell's presser put a floor under US interest rates and ultimately rallied the dollar.
Powell said asset purchases still have a use but it's time to taper them.
He also said completing taper sometime around the middle of 2022 will be appropriate and that tapering has broad support on the committee. nW1N2B801K
The U.S. rate market erased their post-statement losses.
Ten-year yields US10YT=RR rallied off the 1.296% low and neared 1.35%.
December 2022 eurodollar EDZ2 prices fell from the session high and below trend line support.
It then struck a 17-session low.
Intense dollar buying ensued on the rate rallies.
EUR/USD erased all gains and turned negative.
It then hit a 23-session low after breaking the 1.1690/00 support zone.
Price action has reinforced already bearish technicals.
A daily bear engulfing candle is in place, daily and monthly RSIs have fallen further and the 38.2% Fib of 1.0636-1.2349 has been pierced again.
A break of the August 1.1664 EBS monthly low now seems probable.
Stops likely sit below and if run key support near 1.1600 will be tested.
Should bears clear that impediment EUR/USD could quickly trade toward 1.1490/1.1500 support.
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