The Euro drops back below the 1.1400 mark as the US Dollar strengthened. During yesterday's FOMC meeting, the Fed decided to raise the Fed Funds rate from 2.25% to 2.50% and signaled a possibility of two rate hikes in December. The rate hike was expected, but what was not expected was the two rate hike plan for 2019, which led to the strong upsurge in the US currency. Additionally, the pair dropped as investors stirred away from high beta currencies such as the Euro after the Fed warned of a possible softening in the US economy. For today, the market will continue to digest yesterday's news, while also taking into account the economic results from the US's Philadelphia Fed Manufacturing Index. Keep in mind that the US Dollar might weaken if investors feel like the Fed will not raise rates twice next year, given that the Fed pointed out a potential slowdown in the US economy.
The Euro clearly rejects the 1.1430 resistance twice and drops lower. For now, the directional bias for the pair can not be decided on since prices are ranging around all the three major moving average. Such behavior reflects indecision in the market, and this makes sense at this point given that prices are also stuck within a key price action level. The break above the upper end of this level at 1.1393 will signal that bulls have taken control and the next key level to watch will be at 1.1430. On the other hand, the break below the lower end of this level at 1.1356 will signal that bears have taken control and the next key level to watch will be at 1.1265.
Support: 1.1356 / 1.1265
Resistance: 1.1393 / 1.1430