EUR/USD remains bid even as the Federal Open Market Committee (FOMC) reiterates that ‘economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate,’ and the pair may continue to exhibit a bullish behavior as the Relative Strength Index (RSI) sits in overbought territory.
The fresh remarks from the FOMC suggests the central bank is on track to deliver three rate-hikes in 2018 as ‘market-based measures of inflation compensation have increased in recent months,’ and the U.S. Non-Farm Payrolls (NFP) report may fuel bets for an imminent Fed rate-hike as both job and wage growth are expected to pick up in January. A positive development may rattle EUR/USD as it encourages Fed officials to implement higher borrowing-costs at its next meeting in March, but another bag of mixed data prints may keep the euro-dollar exchange rate afloat as the FOMC struggles to achieve the 2% target for inflation.
With that said, recent price action keeps the near-term outlook tilted to the topside as bullish momentum persists, with EUR/USD at risk of making fresh yearly highs as long as the RSI holds above 70.
EUR/USD Daily Chart
The near-term rally in AUD/USD unravels just ahead of the Reserve Bank of Australia (RBA) meeting on February 6, with the pair at risk for further losses as it snaps the upward trend from the December-low (0.7501).
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