EUR/USD hits 1-month highs above 1.0700 after Fed’s events

EUR/USD rose further during Janet Yellen’s press conference following the decision of the Federal Reserve to raise rates, as expected, by 25bp. The pair peaked at 1.0717, the highest level since February 7. Currently, the pair is hovering around 1.0700, 75 pips above the level it had before the release of the FOMC statement and the updated staff projections. 

The US dollar tumbled in the market, weakened by the “dot plot” scenario, that showed little changes from December. The DXY fell to 100.43, reaching the lowest in almost a month as US bond yields decline sharply. 

“On balance, while the Fed did hike rates and the dot plot for Fed funds were upgraded, it does not meet our threshold for a hawkish hike.  After seeing the statement and dots, the market concluded that there was a somewhat less chance of a June hike”, said analysts from Brown Brothers Harriman. Fed's Yellen:

Yellen: Fed funds rate does not need to rise much to get to neutral

Technical outlook 

According to Valeria Bednarik, Chief Analyst at FXStreet, EUR/USD is trading at the higher end of its latest range, still unable to surpass the 1.0700/20 region, but maintains a sharp bullish stance after the news. 

“The risk is clearly towards the upside, given that in the 4 hours chart, the price has recovered above all of its moving averages, whilst technical indicators head sharply lower after surpassing their mid-lines, maintaining strong upward slopes and with the RSI indicator approaching overbought territory”, said Bednarik.