The Fed took markets by surprise last night with a much more dovish stance than expected. Chairman Powell announced that the central bank will put interest hikes on hold indefinitely, sending the greenback into a steep sell-off. In spite of sound economic data, policymakers have picked a wait-and-see attitude in face of global uncertainties. Some investors start to fear a rate cut down the road, which would explain the sharp reaction in the market.
On the technical side, EURUSD has broken above the 1.1420 daily resistance. This could be a signal for a reversal in the medium-term. The price is likely to find more buying interests around 1.1380.
The sentiment-price correlation chart shows the sentiment rising towards the neutral line. Daily news sentiment is moving higher and in 60% of the last 10 occurrences price has risen within 6 days.
