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    EUR/USD spikes to monthly R1 after soft Fed

    © Dukascopy Bank SA
    "The market's reaction of selling dollars actually serves the Fed well as it creates favorable conditions for a country raising rates while capping its currency's strength."
    - Sumitomo Mutsui Trust Bank (based on Bloomberg)

    Pair's Outlook
    The Federal Reserve turned somewhat bearish on monetary policy yesterday, therefore leading to weaker Greenback and uplifted EUR/USD cross. The rally exceeded 100 pips and was stopped by the first monthly resistance, as it had been expected. We are not ruling out a setback on Thursday and a correction to the downside, while even the daily RSI indicator assumes the pair became overbought on the basis of 24 hours. However, in case the bulls manage to push EUR/USD beyond 1.1227 and close there, then next bullish goals will be two major downtrends around 1.1330.  

    Traders' Sentiment
    Only one percent was lost on the bullish side of open positions, down to 41% from 42%. Alongside, pending orders continue to support a rally of the Euro in 54-51% of cases depending on the range from the spot. 

    © Dukascopy Bank SA

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