EUR/USD is flirting with a fall to its lowest in more than 16 months near 1.1300 after extending its post-Fed slide, but the market appears to be awaiting a catalyst before challenging that key support. The broad based dollar bid, weakness in emerging market currencies and wider Italian-German and German-U.S.
yield spreads have combined to weigh on EUR/USD, though it's still showing resilience in the face of bearish risks. The Fed's statement suggested its rate path will remains unaltered, though fed funds and eurodollar futures are still pricing less than policy makers are projecting.
That's tamping down enthusiasm for the dollar. The market's extreme net-long dollar position might also be preventing a sharper move lower in EUR/USD.
Until a major bullish dollar catalyst or significant euro-negative factors emerge, 1.1300 support is unlikely to break.
That leaves the pair's broad 1.1300/1.1850 range intact, along with risks of short-term gains within that band.
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