EUR/USD: extending the bid on hawkish Fed statement

Currently, EUR/USD is trading at 1.1115, up 0.49% on the day, having posted a daily high at 1.1124 and low at 1.1050.

The FOMC left rates on hold at 0.25-0.50%, as widely expected, although this time the vote was 8-2 with only George and Mester dissenting. There was lots of repetition in the statement, and a pretty muted action in the market as a result. The euro has caught a bid though on the event, extending yesterday's demand from 1.0959 to recent aforementioned highs.

Full statement Fed decision: Nov 2, 2016

The statement said that there has been some further evidence that a case for rate hike has continued to strengthen while inflation has increased some what since earlier this year. The general feel is that economic conditions will evolve and near term risks to the economy appear balanced. Markets are pricing in a 78% chance of a rate hike this December.

EUR/USD levels

EUR/USD has rallied higher through last week's high at 1.1040. Next key resistance comes in at the 1.1206 6-month resistance line. "This should hold and provoke failure. Attention should then revert to the downside and to the next support – namely the 1.0821 the March low," argued analysts at Commerzbank, adding, "Below here we target the 1.0682 32 year support line." Meanwhile, current price is 1.1115, with resistance ahead at 1.1124 (Daily High), 1.1138 (Daily 100 SMA), 1.1140 (Daily Classic R2), 1.1177 (Weekly Classic R3) and 1.1177 (Daily 200 SMA). Next support to the downside can be found at 1.1097 (Daily Classic R1), 1.1085 (Weekly Classic R2), 1.1080 (Hourly 20 EMA), 1.1070 (Yesterday's High) and 1.1055 (Daily Open).

Key event: US election panel

Meanwhile, don't miss our US election panel with expert guests, Adam Button and Martin Armstrong, hosted by FXStreet's Ross Burland.