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04 Nov 2019
3 min read

FED’s Interest Rate Cut: EUR/USD and Bitcoin Price Analysis

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Written by OspreyFX News Team

EUR/USD rises sharply after Fed’s interest rate cuts following November meeting

The currency skyrocketed after the Federal Reserve decided to cut rates by 25 basis points (currently at 1.75%). Now it’s trading around the 1.1150 level. Fed Chairman, Jerome Powell, was dovish, giving hints that monetary policy wouldn’t generate any major changes in its December meeting. Consequently, the greenback fell sharply amid a highly volatile environment across the board, where it posted a new weekly high, according to the US Dollar Index (DXY).

Still favouring an upside continuation for the short and mid-term. Wednesday’s move consolidated EUR/USD above a bullish trend line drawn since the lows of October. The focus shifts to the resistance area of 1.1177, where a breakout should happen to extend the impulsive move towards the 1.1230 zone.

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Technical perspective for EUR/USD

Further hurdles came into play at 1.1280 and 1.1300. Since October’s highs, a Fibonacci retracement appeared, placing several key support areas on the flipside. One of them provided a key demand zone around 1.1072, which coincides with the 38.2% Fibonacci retracement level. If such a region gives up in favour of the bears, then a downside continuation is expected to make a leg lower towards the 200 SMA at the H4 chart.

Around such a moving average, the pair could find dynamic support to gather momentum and resume the bullish trend. Both RSI and Momentum oscillators are pointing upwards, favouring the current positive stance of EUR/USD. It should be noted that the RSI indicator is entering the overbought territory, which could be a signal that common currency is already trading inside a key supply zone to benefit the sellers in the short term.

Bitcoin remains steady after a muted reaction to the Fed’s interest rate decision

Bitcoin hasn’t shown much action amid a lack of news on Wednesday.  This favouring the current range-bound the currency is still trapped in. It ended lower, with losses fuelled by seemingly a selling-for-profit action from traders around the world.

BTC also had a muted reaction to the Fed’s rate cut. According to its Chairman, Jerome Powell, it could be the last of 2019. Currently, the quote is moving below the $9,200 handle, which is key to the upside, according to the H4 chart. There’s still a established demand zone around the $8,000 – $7,200 range. If BTC/USD plummets to test such an area, it’s highly likely that it will find support. There is also an ongoing golden cross of the 50 and 200 SMAs, which is supporting the overall bullish stance of the cryptocurrency across the board.

Once it breaks above the resistance level of $9,351.89, the next obstacle to overcome is at $9,775 and $9,900. Beyond these areas, all the focus shifts towards the $10,411 level, a key barrier on the upside road. A support zone lies at $8,663.29, where the bears should make a breakout to allow further declines towards the previously mentioned demand area.

The $8,000 round-figure level should be the next tough nut to crack, ahead of the psychological level of $7,200. Once bitcoin breaks below such a level, the bearish acceleration will increase and thus it can produce a leg lower which should strengthen the bears’ force. The RSI indicator is still showing a neutral stance, favouring further consolidation in the short term. While the Momentum oscillator is pointing downwards, but it’s not strong enough to validate further declines coming soon.