Yesterday we saw the EUR/USD pop up to 1.1040 after the FOMC statement. Let’s take a look at the charts and follow up on that initial reaction.
After retreating from 1.1040, EUR/USD remained under 1.09 for the most part and fell to 1.0650 by the start of the 3/19 US session. The 1.06-1.0650 area should hold if the market is still in consolidation/bullish correction. Also, if the 1H RSI holds above 40 during the US session, we would see maintenance of yesterday’s bullish momentum. In this scenario, the market would remain in consolidation with short-term upside risk back to 1.10.
However, a close below 1.06 after today’s US session would indicate loss of yesterday’s bullish bias, especially since the RSI would likely fall below 40. The pressure would return towards the 1.0462 low on the year, with risk of extending towards 1.04 by next week.
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