Greenback Still Intended for Growth

EUR/USD is still going down, keeping up the impulse formed on Mar 14. By Monday, Mar 19, the major pair is retreating towards 1.2260, while being still somewhat far from the local lows. This week is going to be very busy for the dollar, the leading event being Fed meeting, the very first one for its new governor Jerome Powell.

A key interest rate is extremely likely to be raised during the meeting, the investors and analysts say, but this is not the major question here. The markets will be expecting any comments or hints regarding future policies and steps the Fed is going to take. In particular, the investors are interested in how the interest rate will be raised further in 2018. The Fed previously said they were going to raise the rates at least thrice; Powell, however, said that the economic system in the US was stable, and the inflation would be more ‘active’. The governor made these comments during his Congress speech, and the market interpreted it as a possibility of raising the interest in December. Nobody denied this possibility afterward, and this is why the USD is still that strong.

Additionally, the greenback is well supported by the fundamental data. On Friday, Michigan consumer confidence came at 102.00, exceeding the expectations of 99.60 and the previous value at 99.70 far away. These stats are preliminary, but the real value hardly ever differs from this. Anyways, Michigan rising above 100.00 is very much positive for the US dollar.

No significant reports are expected today or tomorrow in the US, so the market attention will be driven towards the EU reports and then the results of the Fed meeting.

Technically, EURUSD is descending, with the price breaking out the ascending correction channel support. The new target of the descending impulse is now the projection channel support, which is at the same time the major channel center, at 1.2220. After reaching this target, the pair may start rising again, while hitting and breaking out the major channel resistance at 1.2390 may then lead the price towards 1,2555. Conversely, the breakout at 1.2220 may allow the price to test the support at 1.2000, with the resistance being at 1.2335.

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Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.