The dollar index is trading near 100.50. The Fed raised interest rates by 25 basis points to 5.5% as expected. Powell noted that inflation remains high, so the Fed intends to return inflation to the target level of 2%. In his opinion, the banking system is stable, and the tightening of the policy will cause the deterioration of economic conditions in the country. In other words, the regulator said that future rate decisions depend on macroeconomic data. Today will be published annual data on GDP, orders for durable goods, as well as initial claims for unemployment benefits. According to forecasts, the statistics will again disappoint, which will increase the likelihood of the end of the current cycle of monetary tightening in the US. Against this background, the decline of the dollar may continue.
SELL STOP 100.60/TP 99.60/SL 100.90
EUR/USD
The European currency is consolidating near 1.11. The ECB is not going to ease the pressure on the economy due to high core inflation and today intends to raise the rate again by 25 basis points. Thus, the key rate will reach 4.5%. Market participants are confident that at the conference, the head of the ECB Lagarde again noted the importance of continuing the current policy against the backdrop of still high core inflation. The regulator is expected to raise rates again in September, in contrast to the Fed, whose rate likely peaked at 5.5%. Against this backdrop, the European currency retains growth potential against the dollar, as a result of which the EUR/USD pair may end the week above 1.1200.
BUY LIMIT 1.1050/TP 1.1150/SL 1.1020
BRENT
Brent oil updates local highs. Positive dynamics is supported by new measures to stimulate economic growth from the Chinese authorities. Recall that China plans to stimulate domestic household demand by increasing quotas for the sale of cars, and is also going to boost household income and business investment, which may cause an increase in demand for fuel. Prices were also supported by the latest report on oil stocks in the US from the Energy Information Administration, according to which stocks fell by 0.6 million barrels over the week. Given the above, we recommend holding long positions on Brent with a target of $85 per barrel.
BUY STOP 83.50/TP 85.50/SL 82.80
