Did Fed finally showed off their hawkish cards?
“Fed officials are seeking controlled rate hike for an extended period in order to achieve their inflation target.”
US dollar climbed further up on Wednesday after Federal Reserve latest meeting minutes shows possibility for a longer period of rate hikes. From the minutes, several officials suggested that it would be wise to raise interest rates at a restrictive manner to assess the economy’s progress in bringing inflation target down to 2%. Likewise, some officials also noted that while recent inflation data shows some signs of cooling, they suggested that restrictive pace in rate hike would be maintained until future data provide confidence that inflation is heading down the path of 2%. Such signal from the minutes shifted market perception towards the economy as recent economic data suggests persistent price pressure which are far from falling away.
EURUSD, Daily: The pair extend its loss following prior rejection near 1.10 albeit a rather tumultuous depreciation due to lack of signals in the market. This suggests possible pickup in buying pressure as the pair move further downwards soon. For the time being, we expect the pair to continue its bearish bias, towards the direction of 1.05. Thereafter, 200-MA line would serve as a possible limit if selling pressure gave way to possible strong buying pressure from below.
Resistance level: 1.0860, 1.1190
Support level: 1.0500, 1.0110
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