EURUSD Analysis: Market Reaction To The Fed's Decision

FXOpen

The Fed raised the rate yesterday by 0.25%, to 5.25%.

→ Now market participants expect a pause in the tightening policy. Moreover, the WSJ is hinting that the rate hike cycle may already be over.

→ According to Powell, it is important to raise the US debt ceiling, but not just raise it, but raise it on time (that is, not drag it out).

→ The Fed believes that the banking system is reliable and there is no cause for concern (by the way, PacWest bank shares fell 50% yesterday — bank management is considering selling it).

Although the decision was expected, it caused increased volatility:

→ US stock market indexes declined.

→ Gold jumped in price.

→ The US dollar index fell to dollar lows. Accordingly, the major currencies rose against the USD.

The daily chart shows that EURUSD is near the high of the year. Note, however, that each of the two renewals of the year's high in April (shown by the arrows) was minor, followed by a pullback. This indicates the strength of sellers around the level of 1.100. It looks like the level is working as a serious resistance preventing the continuation of the uptrend (shown by the blue channel).

By the way, today at 15:15 GMT+3 the decision on the ECB rate will be published (an increase of 0.25% is also expected).

This article represents FXOpen Companies’ opinion only, it should not be construed as an offer, solicitation, or recommendation with respect to FXOpen Companies’ products and services or as financial advice.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Stay ahead of the market!

Subscribe now to our mailing list and receive the latest market news and insights delivered directly to your inbox.

forex

Forex Trading with FXOpen

Forex Trading with FXOpen

Experience ECN technology for deep liquidity and light-speed trade execution

  • Access over 50 markets
  • Trade with spreads from 0.0 pips
  • Take advantage of commissions from $1.50/lot
Learn more

Latest articles

Shares

UnitedHealth (UNH) Share Price Plummets

UnitedHealth shares crashed by nearly 23% yesterday after the healthcare giant reported weaker-than-expected Q1 2025 results:

→ Earnings per share: actual = $7.20, expected = $7.29
→ Revenue: actual = $109.5bn, expected = $111.5bn

Technical Analysis of UNH Share Chart

As far

Indices

Stock Markets Consolidate Ahead of the Holidays

A lull is expected on the financial markets today due to a shortened trading week related to the Easter holiday celebrations.

It is reasonable to assume that traders will get a “breather” after a news-heavy April, which caused a volatile

Forex Analysis

The Pound and Euro Reach New Yearly Highs

Despite global economic instability and Donald Trump’s tariff policy, the EUR/USD and GBP/USD currency pairs are demonstrating upward momentum, reaching new yearly highs.

Today, market participants are focused on the European Central Bank meeting, where significant statements

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.