Dollar dips over recent statements of Fed representatives
August 9, 2023 8:24 amVideo
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Dollar fell in price after Fed representatives said there may be changes in the monetary policy. Philadelphia Fed President Patrick Harker hinted at the possible end of the rate hike cycle, citing the progress in the fight against inflation.
While many Fed representatives pointed at a further quarter-point hike this year, opinions on where to go next became varied. John Williams said that rate hikes could end at any time, while Michelle Bowman advocated for additional hikes.
A study from CME Group indicated that markets see an over 85% chance that the central bank will leave rates unchanged at the September meeting, and the first decrease could occur as early as March 2024.
Undoubtedly, many economists fear that the Fed’s actions might pull the economy into a recession. However, Harker expressed confidence that inflation would gradually decrease to 2%, while unemployment will increase only slightly. US economic growth will also be just slightly below the rates achieved in 2023.
With regards to the technical picture for EUR/USD, pressure remains. But for buyers to regain control of the market, the quote needs to be above 1.0960. This will allow a move to 1.1005, as well as a rise to 1.1040 and 1.1070. Achieving this without support from major players will be quite challenging. On the other hand, the absence of bullish activity around 1.0960 will lead to a decline to 1.0915, and then to 1.0870.
In GBP/USD, demand started to return. A rise above 1.2790 will lead to further growth toward 1.2840, after which there may be a sharper uptrend to 1.2880. In the event of a decline, bears will attempt to take control of 1.2740, which could lead to a drop to 1.2690 and 1.2650.
The material has been provided by InstaForex Company – www.instaforex.com
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