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EUR/USD: downside open after FOMC - FXStreet

FXStreet (Guatemala) - Valeria Bednarik, chief analyst at FXStreet explained Wednesday saw major pairs confined to tight ranges as investor's attention was centered in the outcome of the FOMC's meeting.

Key Quotes:

"And the US Federal Reserve surprised the markets with quite a hawkish tone, sending the greenback sharply higher across the forex board. The FOMC statement showed that officers acknowledge the latest weak employment figures, but they don't consider it to be a problem as the unemployment rate remains at record lows. Also, the Central Bank dropped the lines referring to international developments, while adding that they will discuss "whether it will be appropriate to raise the target at its next meeting." This is the first time the FED gives such a clear clue on a date, and despite they did not guarantee a rate hike for December, indeed they put it back in the table.

The EUR/USD pair plunged over 150 pips in the first hour after the release, falling below the 1.0900 figure for the first time since early August. The extreme movement, however, shows no signs of reversing in the short term, as the 1 hour chart shows that the technical indicators remain in extreme oversold levels, whilst the price has retreated sharply from a bearish 100 DMA.

In the 4 hours chart, the technical indicators maintain a strong bearish momentum, with the RSI indicator heading south around 22. The pair may consolidate some and even retreat partially, but the bearish trend is firm in place, now looking for a test of the base of these last months' range at 1.0840."

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