EUR/USD extended its down trend Thursday, striking a 6-month low after the possibility of theincreased following Wednesday's meeting, and the slide is likely to persist unless key U.S. data indicates the economy is weakening.
The Fed's hawkish dot-plot adjustment and
2-year spreads US2DE2=RR widened again Thursday, weighing on EUR/USD.
The dot plot adjustment also helped the U.S. dollar gains against most major and emerging market currencies.
EUR/USD technicals highlight the downside risks.
Falling daily and monthly RSIs imply downward momentum and EUR/USD's hold below the falling 10- and 21-day moving averages add to the bearish signals.
Investors await key U.S. data due over the next two weeks.
August core PCE, September payrolls, manufacturing PMI and services PMI, consumer confidence and University of Michigan surveys will gauge the health of the U.S. economy.
Should the data remain robust, markets will see the Fed as justified in holding rates up, facilitating a dollar rally and potentially a EUR/USD fall below 1.0500.
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