Buying EURUSD after price slump

The following are key takeaways from yesterday’s Federal Open Market Committee (FOMC) meeting and Federal Reserve (Fed) Chairman Jerome Powell’s press conference:

The US central bank kept interest rates unchanged for the fifth consecutive session, maintaining the target range at 4.25–4.50%. The decision was in line with market expectations. Fed officials noted that inflation remains elevated and economic outlook uncertainty persists;

Two Fed governors—Christopher Waller and Michelle Bowman—dissented, advocating for immediate monetary easing. The last time a similar situation took place was in 1993.

During the press conference, Powell addressed questions about the likelihood of a September rate cut. He emphasized that the Fed would continue to assess incoming data, but most committee members view a moderately restrictive policy stance as appropriate at present. Markets are now pricing in less than a 50% chance of a September rate cut, down from over 60% the previous day.

The Fed’s monetary policy decision and official comments strengthened the US dollar against all other currencies, with the EURUSD pair being particularly affected. From a technical perspective, quotes had already begun declining several days before the meeting. Notably, the pair dropped without retesting a whole set of levels (these marks are shown as blue rectangles on the chart). At the same time, the RSI indicator isn’t showing any divergences. But the longer and deeper EURUSD falls, the greater the potential rebound it accumulates, like a stretched spring. A signal for the beginning of a bullish correction could be the formation of a divergence between the price and the RSI indicator. The key level of 1.1560 (shown in green) will serve as a target. Previously, prices had found local support at this level.

Buying EURUSD is recommended.

Take Profit: 1.1560. Stop Loss: 1.1320.

The volume of the opened position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance doesn’t allow opening a position of this size, it’s better to avoid entering the market on this signal and wait for other trade opportunities that meet low-risk criteria.