EUR/USD drops to test daily lows after Fed cut rates as expected

• US Dollar rises modestly after 25bps cut from the Fed. 
• Euro down versus USD; unchanged versus GBP, CHF. 

The EUR/USD pair was hovering around 1.1065 and dropped 1.1038, approaching daily lows after the release of the FOMC statement as the US Dollar rose moderately across the board. 

As expected, the Fed cut rates 25bp to 1.75%-2.00%. The new projections show that seven out of 17 Fed staff members see another rate cut this year. Two members (George and Rosengren) voted against the rate cut while one member (Bullard) wanted a 50bps cut. Now trader await Powell’s press conference. 

The Greenback rose immediately after the release of the statement but then pulled back. Equity prices turned lower but then moved off lows. 

EUR/USD Levels to watch 

So far EUR/USD has remained with today’s range. To the downside, immediate support might lie around 1.1035 followed by the strong 1.0990 area and 1.0960. On the upside, 1.1070/75 continues to be the resistance to break for a test of 1.1105/10. A close above 1.1110 would point to a continuation of the rally from 1.0925. 

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