EUR/USD spikes 50 pips and respects market structure on Fed's dovish dot plot

• EUR/USD spikes on a bearish outcome for the US dollar in the Fed's dot plot. 
• The market will now tune into Powell's presser for further guidance. 

The FOMC ended a two-day meeting today and the expectation in the market was for a dovish hold.

As expected, there were no changes to the benchmark interest rate with the target standing at 0.0%-0.25% still. Interest rates on the excess reserves were also unchanged at 0.10%.

However, the market was paying close attention to the median dot plot for 2023 as well and this still shows no hike which is a bearish factor for the US dollar.

Consequently, EUR/USD has popped higher despite recognition within the statement that ''following a moderation in the pace of the recovery, indicators of economic activity and employment have turned up recently...'

Fed's Chair presser, watch live

Federal Reserve's Chairman, Jerome Powell, will now have to try to shift market expectations away from rising yields, otherwise, rates will likely gain traction again. 

Following the statement, the 10-year US Treasury yield is undecided with a spike both to the upside and downside within the day's range of between 1.6160% and 1.6870%.

EUR/USD technical analysis

The following illustrates how to price has respected the market structure:

Before the statement

Moments after the statement