EUR/USD vaulted higher in volatile trade on Wednesday, overcoming initial ambivalence following the Fed's as-expected 25bp rate hike as bulls took control during Chair Jerome Powell's dovishly interpreted news conference, which could set up further gains ahead.
Powell said more work remained on rate hikes and that inflation is well above the Fed's target but he indicated that past hikes were beginning to have an effect.
Powell said it will take time for the full effect of hikes to be realized, that policymakers were highly attentive to risks inflation poses to both sides of the Fed's mandate and it's not time to be complacent.
However, Powell said that the disinflationary process had started but was at its early stages and that it was good that it had not come at the expense of the labor market nW1N32Z00U.
rates EDZ3 and the dollar fell sharply while German-U.S.
tightened to levels not seen since January 2022.
EUR/USD hit a 10-month high and techs highlight upside risks which imply tests of 1.1075/1.1125 and possibly 1.1230/70 are possible.
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