The EUR/USD pair closed at 1.1978 after placing a high of 1.1986 and a low of 1.1885. After falling consecutively for three sessions, EUR/USD rose on Wednesday and reached near 1.1990 level. Investors were buying the U.S. dollar amid speculation that the Federal Reserve could take a more hawkish stance as the U.S. economy’s outlook has improved. Ahead of the U.S. policy decision from the Fed, the currency pair remained under pressure. However, after the release of the FOMC statement and the Fed’s decision, the speculation died, and the U.S. dollar came under pressure that eventually lifted the EUR/USD pair.
On Wednesday, the Federal Reserve kept its bond-buying program, and the interest rates remained unchanged and said that they would remain there until 2023. However, the Fed improved the forecast of economic growth for the country this year and the inflation projection. The Fed has predicted that inflation could surpass the annual target of inflation of 2% by the end of this year and reach 2.4%. Despite these projections, Fed chair Jerome Powell repeated that Fed would not increase interest rates or decrease bond purchases until 2023. The comments also defused the prevailing concerns and speculation of hawkish stance and weighed on the U.S. dollar that ultimately added in EUR/USD price.
On the data front, at 15:00 GMT, the Final Consumer Price Index for the year from Eurozone remained flat with the expectations of 0.9%. The Final Core CPI also remained unchanged at 1.1% in February. From the U.S. side, at 17:30 GMT, the Building Permits from February dropped to 1.68M against the expected 1.74M and weighed on the U.S. dollar, and added further gains in EUR/USD. In February, the Housing Starts also declined to 1.42M against the forecasted 1.56M and weighed on the U.S. dollar and supported the rising trend in the currency pair on Wednesday.On the Europe front, the General elections were held in the Netherlands, where Dutch Prime Minister Mark Rutte’s VVD party was expected to lead in votes on Wednesday. He was on track to win a fourth term in office with his conservative party. His party was leading exit polls in elections on Wednesday that were dominated by the coronavirus pandemic. Furthermore, on Wednesday, Greece raised 2.5 billion euros in a 30-year government bond sale that saw high demand and aimed to improve the country’s debt situation during the pandemic.
According to Greece Public Debt Management Agency, the yield was just below 2%, and the auction was more than ten times oversubscribed. It also supported the single currency Euro and lifted the EUR/USD currency pair on Wednesday.
Pivot Point: 1.1912The weaker U.S. dollar has driven sharp buying in EUR/USD amid a dovish FOMC meeting from the U.S., and now the pair is trading at 1.1962 level, facing immediate resistance at 1.1990 level along with a support area of 1.1954. A bearish breakout of…