At the two-day FOMC meeting, committee members left the range of interest rates unchanged between 0.00% -0.25% and maintained the current pace of bond purchases, saying that the situation in the economy has improved in recent months but is still worse than before the pandemic. Thus, current rates will continue to remain very low, as the course of the economy will depend on the situation with the coronavirus. Such resulted in a rise in demand for the US dollar, as well as weakening of risk assets including the euro.

Inflation was also discussed during the meeting. However, there are currently no problems there since weak demand and low oil prices caused by the coronavirus restrain inflation. The Fed expects that the pandemic will put strong pressure on the economy, both in the short and medium term.

As for the speech by Fed Chairman Jerome Powell, he reiterated that the Fed is still ready to use all its instruments to support the economy for as long as necessary, since the future course of recovery is extremely uncertain and will depend on the actions of the government.

Powell also agrees that direct fiscal and monetary support is still needed, probably hinting at maintaining the assistance programs that are currently being given to the population. He drew attention to the well-known fact that the rise in unemployment is most reflected on low-income workers, women, African-Americans and Hispanics. In this regard, he expects additional support from Congress, as many of those laid off cannot return to their previous jobs and will need further support.

Powell also noted that the current Fed programs issued fewer loans than expected, but despite that said that it is important to maintain access to credit at any given time. Hence, the Fed extended all lending programs until December 31, most of which were to be completed at the end of September. All seven emergency programs were extended in order to support economic activity during the period of overcoming the coronavirus pandemic.

Meanwhile, with regards to macroeconomic statistics, the report published yesterday included data on home sales contracts in the United States, which rose 16.6% in June to 116.1, according to the National Association of Realtors. Economists had expected the index to rise only 12.5% . Unsurprisingly, many consumers started enjoying record low mortgage rates after the pandemic receded, even amid the Fed's monetary policy.

As for the technical picture of the EUR/USD pair, a correction seems to be starting in the market, which may greatly affect the European currency. A number of reports on inflation and labor market in Germany and the eurozone are due today, at which any weak number could force many traders to close speculative long positions taken before the Fed's decision on interest rates. If this happens, a breakout from the support level of 1.1750 could occur, which will decrease demand for the euro and quickly push the quote to the level of 1.1700. The further direction of the pair will depend on this area, in which if the bulls turn out to be more active and the macroeconomic reports turn out to be good, a breakout may occur at the level of 1.1800, which will push the quote to the resistance levels 1.1830 and 1.1870.