EUR/USD jumps toward 1.1100 as the Fed raises rates as expected

• Federal Reserve raises rates as expected by 25bps to 5.00%-5.25%. 
• US Dollar tumbles across the board, US yields hits fresh lows. 
• EUR/USD soars above 1.1050, tests multi-month highs. 

The EUR/USD pair jumped from 1.1045 to 1.1091, reaching a one-week high after the Federal Reserve announced, as expected, a 25 basis points rate hike, and suggested a potential pause.

Fed delivers as expected

The US central bank raised rates with a dovish twist, which weighed on the US Dollar. As a result, the DXY dropped to 101.08, hitting a fresh weekly low, while at the same time, US 2-year yields fell below 3.90%. At 18:30 GMT, Chair Powell will deliver a press conference.

The EUR/USD pair rose towards the key area of 1.1100 and then pulled back modestly, holding above the 1.1050 area with a bullish impulse. A break above 1.1100 could trigger an acceleration and open the doors to the highest level since March 2022. 

On the contrary, a retreat below 1.1050 should keep the pair in the recent range. Below the key support, the next level of support is seen at 1.0950, with a slide below exposing 1.0900/10.

Technical levels