EUR/USD plummets due to Federal Reserve

Note: This section contains information in English only.
Source: Dukascopy Bank SA


On Wednesday at 19:00 GMT, the US Federal Reserve confirmed that it would end quantitative easing, gradually decrease its balance sheet and hike interest rates. The event resulted in a minor decline of the USD, which was followed by a sharp surge of the US currency.

By the middle of Thursday's European trading, the event had resulted in a decline of the EUR/USD to the 1.1160 mark. By declining so low, the rate broke the channel down pattern, which was expected, as such fundamental event is above technical analysis.

In regards to the near term future, the use of technical levels is set to be secondary, until the markets take in the information. Note that the rate has not been this low since the first part of 2020. Namely, the EUR/USD has passed the 2021 low level and booked a new low.
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