The EUR/USD pair seesawed between gains and losses on Wednesday in the aftermath of the U.S. Federal Reserve's decision to raise rates by 75 basis points for the fourth meeting in a row, taking the federal funds' range to 3.75%-4.0%.
Although market participants widely anticipated the decision, the accompanying statement was perceived as dovish as it mentioned that the Federal Open Market Committee (FOMC) "will take into account cumulative tightening, policy lags, and economic and financial developments in determining the pace of rate hikes."
However, during the press conference, Chairman Jerome Powell said that recent data suggests "that the ultimate level of interest rates will be higher than expected." Additionally, he stated that the FOMC needs to see inflation "coming down decisively, and good evidence of that would be a series of down monthly readings," but that is not the appropriate test for slowing the pace of increases.
Powell's comments failed to convince investors that a slowdown in the tightening pace was imminent while lifting the terminal rate expectations, which boosted U.S. yields and the dollar.
The EUR/USD pair shot higher and hit a high of 0.9975 right after the statement, only to tumble toward a fresh weekly low of 0.9821 after the press conference. At the time of writing, the EUR/USD trades at the 0.9825 area, 0.49% below its opening price.
From a technical perspective, the EUR/USD pair maintains a neutral to slightly bearish short-term bias as indicators turn lower on the daily chart. At the same time, the price continues to post lower lows and has failed to sustain the channel as support.
On the downside, the following supports are now seen at 0.9700, ahead of October's low at 0.9630. On the flip side, immediate resistances and parity could be found at 0.9975.