Ichimoku analysis (4-hour chart)
Tenken-Sen- 1.06768
Kijun-Sen- 1.06768
EURUSD declined sharply after the US Fed monetary policy. It hit a low of 1.06167 yesterday and is currently trading around 1.06553.
US Fed kept its rate unchanged at 5.25% -5.50% as expected. In the new dot plot, 12 members voted for a 25 bpbs rate hike this year. Median GDP growth forecasts for 2023 increased to 2.1% from 1%. the hawkish surprise came in 2024. The central bank expects to cut rates twice next year from four rate cuts predicted in June 2023.
According to the CME Fed watch tool, the probability of a no-rate hike in Nov decreased to 66.40% from 70.1% a week ago.
The US 10-year yield jumped more than 3.5% after Fed monetary policy. The US 10 and 2-year spread widened to -75% from -57%.
The pair trades below short-term 21 EMA, below 55 EMA, and long-term (200-EMA) in the 4-hour chart. Any break below 1.0600 confirms further bearishness. A decline to 1.0500/1.04350 is possible. The near-term resistance is around 1.0660, any breach above targets is 1.0700/1.0760.
Indicator (4-hour chart)
CCI – Bearish
Directional movement index – Bearish
It is good to sell on rallies around 1.0708-10 with SL around 1.0765 for a TP of 1.0600.
