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Market Overview
The Federal Reserve said that in light of a slowing global economy and last year's financial market turmoil, the central bank intends to remain "patient" in determining when to make future changes in its benchmark interest rate. The Fed's semi-annual report to Congress on monetary policy stood in contrast to its last report in July when it signaled that it was on track to keep raising rates at a gradual pace over the next two years. The new report cites a range of risks to the economy that have developed over the last six months, as well as continued muted inflation as reasons to slow further hikes.
Various Fed officials including Fed Chairman Jerome Powell have emphasized that change in speeches since the January 29-30 meeting. Powell will testify on the Fed's Monetary Policy report before Senate and House committees next Tuesday and Wednesday.
EUR/USD bulls remain in control despite the failure to register a daily close above the 1.1362 Fibo, a 38.2% retrace of the 1.1570 to 1.1234 (January to February) drop. Our EUR/USD long remains and it's progressing slightly. We are encouraged that the pair is consolidating short term gains. The consolidation should resolve with a break higher. Rising daily RSI and the long lower wick on February's candle are also encouraging.