Only 2 rate hikes in 2016
The Fed cut their projection for rate hikes from 4 to 2 which was less than expectations of a move to 3 hikes. The initial reaction is to sell the dollar.
The EURUSD has surged above the 200 hour MA at the 1.1123 level and took out the high for the week at the 1.1175 level on the surge. The correction printed a low of 1.1137. The 38.2% of the days range is at that level. So it will be eyed as a new level to watch (i.e risk for longs). The other key risk level below would be the 1.1122 level. The 50% of the day s range and the 100 hour MA are both at that level.
Looking at the 1 minute chart, the first surge took the price above the 100 hour MA to a high of 1.1140ish. Most traders who bought paid above that level. Reversals happen when the surge buyers pay too dear a price. They feel that pain when the price goes below the entry level. Until then all is ok. The buyers are in control.
The high last week at 1.1216 becomes the next target on another squeeze higher. Above that and traders will be looking toward 1.1300. Yellen starts at 2:30 PM.
