EUR/USD volatile, now recedes below 1.2000

• The pair alternates gains with losses in the 1.20 neighbourhood.
• DXY returns to the positive territory in the vicinity of 92.60
• FOMC says economy warrants further gradual rate hikes.

The bull run to the 1.2030 region lacked of follow through and EUR/USD has now returned to sub-1.2000 levels as markets continue to digest the Fed event.

EUR/USD upside halted near 1.2030

The pair has now faded the earlier advance to the 1.2030 region, as sellers appear clustered just above the critical 200-day sma at 1.2015.

The greenback, instead, managed to revert the post-FOMC drop to the 92.40 zone and is now resuming the upside and challenging the mid-92.00s.

The recovery in the buck comes despite yields of the key US 10-year reference remain parked in the 2.96% area after failing to retake the 3.0% level during early trade.

The buck reverted the initial negative reaction to the FOMC meeting, where the Federal Reserve left the overnight rates unchanged at 1.50%-1.75%, as universally expected. The greenback initially suffered the somewhat dovish tone after the Committee appears to now consider the probability of some overshooting in inflation.

EUR/USD levels to watch

At the moment, the pair is losing 0.03% at 1.1989 and a break below 1.1953 (low May 2) would target 1.1916 (2018 low Jan.19) en route to 1.1718 (monthly low Dec.12 2017). On the upside, the next hurdle emerges at 1.2033 (high May 2) seconded by 1.2155 (10-day sma) and finally 1.2210 (high Apr.26).