There is no point in even dwelling on the fact that the Federal Reserve System’s refinancing rate was raised by twenty-five basis points, as this decision was expected and predictable. Much more important is what Jerome Powell said afterward. Although he did not answer the question about further interest rate hikes, and even hinted that it is not yet advisable to consider easing monetary policy, the market reaction is quite unambiguous. The rhetoric of the Federal Reserve System’s head was indeed more moderate and calm, without any hints of further tightening of monetary policy. This was enough for further growth of the single European currency.
Now the ball is in the European Central Bank’s court, and its actions will determine the further development of events. If the European regulator raises the refinancing rate by twenty-five basis points today, nothing supernatural will happen. Of course, the single European currency will grow a little more, but no more than that. However, just last week, two key representatives of the European Central Bank clearly hinted at the possibility of a more significant increase in interest rates. By fifty basis points. And if everything happens as such, then, in this case, the single European currency will, of course, continue to grow actively.
The euro has strengthened against the US dollar due to a strong flow of information and news, during which speculative activity was observed in the market. As a result, a technical signal emerged for the prolongation of the medium-term upward trend.
During the sharp price change, on the four-hour chart, the RSI technical indicator crossed the middle line 50 upwards. This signal indicates an increase in the volume of long positions on the euro.
On the same time frame, the Alligator’s MAs have numerous intersections, which corresponds to the current stagnation.
Outlook
We can assume that keeping the price above the 1.1100 mark will indicate a subsequent increase in the volume of long positions on the euro. This, in turn, may strengthen the uptrend. Failure to keep the price above the benchmark value paves the way for fluctuations, with a reversal to the level of 1.1000.
The complex indicator analysis points to an upward cycle in the short-term, medium-term and intraday periods.
The material has been provided by InstaForex Company – www.instaforex.com
There is no point in even dwelling on the fact that the Federal Reserve System’s refinancing rate was raised by twenty-five basis points, as this decision was expected and predictable. Much more important is what Jerome Powell said afterward. Although he did not answer the question about further interest rate hikes, and even hinted that it is not yet advisable to consider easing monetary policy, the market reaction is quite unambiguous. The rhetoric of the Federal Reserve System’s head was indeed more moderate and calm, without any hints of further tightening of monetary policy. This was enough for further growth of the single European currency.
Now the ball is in the European Central Bank’s court, and its actions will determine the further development of events. If the European regulator raises the refinancing rate by twenty-five basis points today, nothing supernatural will happen. Of course, the single European currency will grow a little more, but no more than that. However, just last week, two key representatives of the European Central Bank clearly hinted at the possibility of a more significant increase in interest rates. By fifty basis points. And if everything happens as such, then, in this case, the single European currency will, of course, continue to grow actively.
The euro has strengthened against the US dollar due to a strong flow of information and news, during which speculative activity was observed in the market. As a result, a technical signal emerged for the prolongation of the medium-term upward trend.
During the sharp price change, on the four-hour chart, the RSI technical indicator crossed the middle line 50 upwards. This signal indicates an increase in the volume of long positions on the euro.
On the same time frame, the Alligator’s MAs have numerous intersections, which corresponds to the current stagnation.
Outlook
We can assume that keeping the price above the 1.1100 mark will indicate a subsequent increase in the volume of long positions on the euro. This, in turn, may strengthen the uptrend. Failure to keep the price above the benchmark value paves the way for fluctuations, with a reversal to the level of 1.1000.
The complex indicator analysis points to an upward cycle in the short-term, medium-term and intraday periods.
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: