Global macro overview for 17.03.2016:
The US Federal Reserve has kept the short - term interest rate unchanged at the level of 0.50%, but during the press conference the Fed Chair Jannet Yellen eased the monetary policy through words. The Fed noted that moderate growth of the US economy and robust job gains would allow it to tighten the policy this year, but instead of previously anticipated four-rate hikes, new fresh economic projections might allow only two more hikes by the end of the year. The US economy is still facing headwinds mainly from the global economy and the Fed officials has lowered the long term target projections for the interest rates to 3.30% from 3.50% prior. The Inflation projections were lowered as well, down from the Fed's official 2% to 1.2% this year. This decrease comes together with the lower GDP projection to the level of 2.2% for this year, down from 2.4% in December, due to weaker global growth. In conclusion, the Fed presented a cautious approach to rate outlook compared to its policy meeting in January in light of a sell-off on financial markets, lower oil prices and sliding inflation expectations.
Let's now take a look at the EUR/USD pair after the Fed meeting at the H4 time frame. We can see that the bulls are clearly in control overt this market, and currently, the price is heading higher to test the recent local high at the level of 1.1376.