After cutting interest rates for the first time in more than a decade in late July, the Federal Reserve announced another rate cut after the monetary policy meeting that ended yesterday. The Fed unveiled its widely expected decision to cut interest rates by another 25 basis points to 2%. The recent rate cut was reinforced by the repercussions of global developments and their impact on economic outlook as well as muted inflationary pressures. The Bank's policy statement was largely unchanged from July, as the Federal Reserve reiterated that the labor market remained strong and that economic activity rose at a moderate rate. In its latest statement, the Fed acknowledged that exports had fallen along with the rate of business investment, although the central bank indicated household spending had risen at a strong pace.
The decision to cut interest rates was widely expected by economists, and was not without opposition from FOMC members. The price of EUR / USD was not affected much by the decision as the price moved from 1.1067 to 1.1013 support and stabilized around 1.1040 at the time of writing. Ahead of the announcement by the US central bank of its monetary policy decisions, inflation in the Eurozone was stable and unchanged as expected.
Last week, the European Central Bank (ECB) announced massive stimulus plans as it cut interest rates and reinstated its bond purchase plans, which was terminated at the end of last year.
According to the technical analysis of the pair: As per our expectations for the performance of the pair since the beginning of trading this week, the price of the EUR / USD, and in the long term, is still moving within a bearish channel, and the trend will strengthen if the stability restored below 1.1000 psychological support. Currently the closest support levels for the pair are 1.0955 and 1.0880 and 1.0800 respectively. On the daily chart, a break back above the 1.1100 resistance level will give momentum to the correction. Then it will be ready to move towards the resistance levels at 1.1145, 1.1220 and 1.1300 respectively. I still prefer to sell the pair from every bullish level.
On the economic data front: The current account in the Eurozone will be announced. from the United States, there are the claims of the unemployed, the current account, Philadelphia industrial index and existing home sales.