EUR/USD hits three-month highs above 1.1400 after Fed’s statement

• EUR/USD the euro rallies beyond 1.1400 for the first time in three months.
• The Federal Reserve sees a 6.5% economic contraction and unemployment reaching 9.3% in 2020. 
• Above 1.1400, the euro eyes 2020 high at 1.1495. 

The euro has appreciated further against the US dollar, to reach prices above 1.1400 for the first time since early March, following the release of the US Federal Reserve’s monetary policy decision.

The Fed anticipates a 6.5% economic slowdown in 2020

The Fed has left the target range for federal funds unchanged at 0%-0.25%, as widely expected, and has anticipated a 6.5% economic contraction in the current year, with the unemployment rate reaching 9.3% at the year-end.

Furthermore, the bank has confirmed its commitment to support the flow of credit to households and businesses, over the coming months by increasing its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace. In addition, they said, the Open Market Desk will continue to offer large-scale overnight and term repurchase agreement operations.

Above 1.1400, the pair eyes 2020 high at 1.1495

On the upside, a clear confirmation above 1.1400 would open the path towards 1.1495 (March 9 high) 1.1570 (Jan 2019 highs) and 1.1620 (Oct 2018 highs). On the downside, immediate support lies at 1.1320 (session lows) and below here, 1.1240 (Jun 9 lows) and 1.1195 (Jun 4 low).