The US currency is declining during the trading session on Thursday, reacting to the results of the US regulator’s meeting. As expected, the Federal Reserve raised the rate by 0.25% to 5.25%. Jerome Powell said at a press conference that the decision to pause the rate hike has not yet been made. However, everything will depend on macroeconomic data and the state of the banking sector. He also noted that many banks have asked the regulator to provide liquidity, which confirmed the problems in the sector.
Although Powell did not confirm the regulator’s readiness to end the current cycle of policy tightening, many analysts are confident that this will happen. In addition, there is still a possibility that the regulator may lower the rate by the end of the year if the situation in the economy continues to deteriorate. That being said, pressure on the dollar may continue.
SELL STOP 100.70/TP 100.00/SL 101.00
EUR/USD
The EUR/USD pair is approaching the resistance of 1.11. Today, the ECB meeting is in the spotlight of traders. Investors are confident that the ECB will maintain its hawkish stance, but the rate increase is still in question. Forecasts suggest a 25 basis point hike after three consecutive 50 basis point increases. The probability of a slowdown in policy tightening increased after the release of data on the consumer price index in the Eurozone, published earlier in the week. Despite the fact that in April the indicator rose from 6.9% to 7%, core inflation, which does not take into account fuel and food prices, showed a downward trend for the first time in 10 months, amounting to 5.6% after 5.7%. However, a rate hike of even 25 basis points is still worth considering a bullish signal for the euro.
BUY STOP 1.1100/TP 1.1180/SL 1.1070
Brent
Brent crude is consolidating near $73 per barrel. The pressure continues to come from the US banking concerns, which significantly increased the likelihood of a recession in the United States. In addition, market participants fear that a rate hike by the world’s leading regulators may cause a global economic downturn, which will negatively affect oil demand. As the market continues to ignore positive factors such as OPEC output cuts, there is a strong possibility that oil may be heading for new lows. We recommend holding short positions.
SELL STOP 72.80/TP 71.00/SL 73.50