December 21, OctaFX – The US Federal Reserve increased interest rates by a quarter-point this week but lowered its projections for future US rate increases.
The twenty-five basis point increase brings the US rate of interest to 2.50 per cent, marking the fourth rate increase by FOMC policy makers this year. The central bank lowered its projections to two rate increase next year, instead of the three rate increases previously forecasted.
The initial market reaction saw the US dollar index strengthen, US bond-yields tumble and global equity markets drop, as traders feared that the rate increase might hurt the United States economy and global growth.
EURUSD Technical Outlook
The EURUSD pair declined during the Asian session to a low of 1.1445. This decline came after the sharp rise seen yesterday. This price is along the 14-day moving average but lower than the 28-day EMA.
The Average Directional Index has fallen from above 53 to the current 18 while the MACD is falling. Today, the movement of the pair will likely depend on US politics and the final reading of the third quarter GDP.
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