20.06.201908:07 Forex Analysis & Reviews: EURUSD: Fed will not rush to change the course of monetary policy, but will do so if necessary

Yesterday's focus shifted on the Fed's interest rate decision, as well as Jerome Powell's press conference, which took place a little later. Of course, no one expected the Fed to signal an interest rate cut already at this meeting, but traders were counting on signs of a change in policy in the near future.

According to the data, the Fed left the range of interest rates on federal funds unchanged between 2.25% and 2.50%. The Fed Open Market Operations Committee voted 9 against 1. The Fed also left the discount rate at 3.00%.

Fed officials expect the Federal funds rate to average 2.4% at the end of 2019 and 2.1% at the end of 2020. In 2021, it is expected to return to the level of 2.4%.

The Fed noted that they would act as it is appropriate in order to support economic growth, as well as closely monitor incoming data.

Seven out of 17 Fed officials expect interest rates to be reduced by 0.5 percentage points by the end of 2019.

The main problems that are currently observed in the economy are weak investments of companies in fixed assets, as well as inflation, which remains below 2%. Fed officials also raised the unemployment rate forecast in 2019 to 3.7% from 3.6%.

During Fed Chairman Jerome Powell's press conference, traders also did not hear statements about a change in monetary policy, although many counted on it.

Powell said that the Fed has made some significant changes to the monetary policy statement, since there were opposing factors during the weeks that have passed since the last meeting. The Fed chairman also emphasized that trade uncertainty is beginning to manifest itself in the incoming data, in connection with which some managers see increasingly weighty arguments in favor of a softer policy, and their arguments in favor of additional policy easing become stronger and stronger.

Meanwhile, Powell himself did not see significant support for the pace of interest rate cuts among Fed representatives at this meeting and believes that it would be better to initially get a clearer picture of the situation in the economy, since the basic scenario of the economic outlook is positive.

Responding to the question regarding his possible demotion by US President Donald Trump, Powell made it clear that, according to the law, his term will last for four years and he intends to serve it.

As for the current technical picture of the EURUSD pair, further growth will depend on whether buyers of risky assets will be able to remain above support at 1.1240, as well as consolidating on resistance at 1.1290, which opens up new prospects for bullish movement to highs at 1.1240 and 1.1400.