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The results of the Fed meeting pointed to further tightening of monetary policy. For the first time since 1994, the regulator raised the interest rate by 75 basis points, to 1.5–1.75% per annum. The reaction of traders was neutral, the rate increase was already taken into account in the quote, for this reason, the US dollar did not receive support in the market.
The main theses of the Fed:
- The Fed raised the rate by 0.75%
- a further rate increase is appropriate
- The Fed will raise rates by 0.5%–0.75% in July
- rate hike by 0.75% is unlikely to become common practice
- the Fed rate level of 3.0–3.5% is the most appropriate for the effective fight against inflation
- The Fed is committed to the previous plan to reduce the balance sheet
- The Fed is still predicting a rate cut in 2024.
The EURUSD currency pair reduced the volume of short positions during the control convergence with the local low of the downward trend. This led to a rebound in the price, where the value of 1.0350 serves as a support.
On the trading chart of the daily period, there is an attempt to prolong the medium-term downward trend. The recovery of the dollar relative to the recent correction is 97.5%.
The GBPUSD currency pair has not managed to stay below the psychological level of 1.2000. As a result, the market stagnated, followed by a corrective move.
Today, the attention of speculators will be focused on the Bank of England, which intends to raise the interest rate again. We are talking about 25 basis points this time, but even so, the change in the pound sterling may receive local support.
Note that the BoE was the first among major central banks to start raising the interest rate at the end of December last year.
During the American trading session, data on jobless claims in the United States will be published, where a slight decrease in their volume is expected. This is a positive factor for the US labor market, but given the long-term strengthening of the dollar, the statistics on applications may not be noticed by the market.
Statistics details:
The volume of continuing claims for benefits may be reduced from 1.306 million to 1.302 million.
The volume of initial claims for benefits may remain at the level of 215,000.
Time targeting
Bank of England meeting result - 11:00 UTC
US Jobless Claims - 12:30 UTC
The market will signal the prolongation of the downward trend at the moment the price holds below the value of 1.0350 for at least a four-hour period. Until then, the risk of correction or the formation of a short-term flat remains due to overheating of short positions.
The corrective move returned the quote to the area of the previously passed level 1.2155, where there was a slight stagnation. To prolong the correction, it is necessary to hold above the value of 1.2210. Otherwise, the corrective move may complete the formation, returning the quote to the area of the psychological level 1.2000.
A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices.
Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market.
Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future.
The up/down arrows are the reference points of the possible price direction in the future.
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