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EUR/USD Short-Term Action Post FOMC Decision Amid Weak Eurozone Economic Data

The euro was down by 0.02% at 2 pm GMT on Thursday afternoon, reacting to the Federal Open Market Committee (FOMC) hawkish pronouncements on Wednesday to trade at 1.0813. Yesterday was the Fed’s first meeting in 2024, and while the Jerome Powel-led committee kept benchmark interest rates between 5.25%-5.5%, the hawkish undertones may have dampened the mood.

The Fed decision will be tested Thursday and Friday when the US Manufacturing PMI, and Nonfarm Payrolls (NFP) data comes out. On the other hand, the euro’s short-term positive or negative trend could be impacted by ECB president Christine Lagarde’s speech when she speaks later on Thursday afternoon.

The HCOB Eurozone manufacturing PMI at 46.6, had no effect on the Thursday EUR/USD market action, as gains in Spain (+1.3), Italy (+1.5) and Germany (+0.1) were neuralised by reduced industrial activities elsewhere in the economic block, with France’s January PMI at 43.1 against December’s 43.2. Furthermore, the CPI printed at -0.4% month-on-month, with the core CPI at -0.9%.

Technical Analysis

EUR/USD 30 minute price action

The EUR/USD Relative Strength Index (RSI) shows downside momentum, signaling a likelihood of further gains by the dollar. If the price goes below 1.0825, the next target could go as low as 1.0760, and further losses could see the pair hit 1.0740. However, if the price goes above 1.082, then further upward action could come if the price breaches 1.0845 and 1.0865 targets.