EURUSD Euro near major support after Fed meeting

The EURUSD is has rebounded from its range in the wake of the Fed's statement that showed a growing number of officials favoring a rate hike in 2022.

Despite the lack of a tapering announcement and the downward revision of the economic outlook, the dollar managed to gain some ground Wednesday night against the major currencies.

The dollar benefited from more officials supporting a Fed rate hike next year. Nine committee members now expect at least one Fed rate hike in 2022, up from seven in June and four in March.

The median Fed rate estimate for next year is evenly split between one and zero rate hikes. An additional vote would tip the median rate into the full rate hike camp.

A rate hike next year may seem ambitious for the Fed even though it has not yet begun to reduce the pace of its asset purchases, but market participants are already anticipating this scenario according to EURODOLLAR futures.

From a technical perspective, the fundamental long-term outlook for EURUSD is bearish following the bottom of the descending triangle in early summer. The short-term outlook is mixed, however, as the EURUSD is back at the bottom of its range in which it has been oscillating for the past two months.

The EURUSD is attempting to bounce off the bottom of its range on Thursday. If this rebound is confirmed through a “swallow” or other reversal patterns, the outlook would be bullish again in the short term to the top of the range at around $1.19.

 (Chart Source: Tradingview 23.09.2021)

Otherwise,a breakout from the bottom of the range would open the way for acontinuation of the underlying downtrend. A return to $1.15 would beexpected in the short term.

Disclaimer: This materialhas been created for information purposes only. All views expressed inthis document are my own and do not necessarily represent the opinionsof any entity.