As already known, the Committee on open market operations of the Federal Reserve voted by all 9 votes for the increase of the base rate by 0.25% to 2.25%. At a subsequent press conference, Federal Reserve Chairman Powell confirmed the Fed's plans for another interest rate hike in 2018 and 3 rate increases in 2019.
Given the strength of the US economy, the Fed is unlikely to seriously reconsider its plans, if something does not happen that has an extremely negative impact on the US and its economy.
The dollar index DXY, which tracks the rate of the US currency against the basket of 6 other major currencies, rose by 38 points on Thursday to 94.26.
The situation is that the Fed remains the world's single largest central bank, openly announcing a further tightening of monetary policy. This can not be ignored, and this, in the end, becomes the main fundamental factor in favor of further strengthening of the dollar. Tactical downward correction of the dollar is also not excluded. But in general, the upward trend of the dollar will be maintained. Its investment attractiveness will grow, which will create prerequisites for its further strengthening, including against the euro.
Technical Analysis
The trend line at the support level 1.1725 (EMA200 on the 1-hour chart) is punched. Nothing prevents EUR / USD from passing calmly down to the next support level 1.1655 (EMA200 on the 4-hour chart, EMA50 on the daily chart). Its breakthrough will open the way to further decline with a target at support levels of 1.1535, 1.1510. The long target of the decline is at the support level of 1.1150 (the lower boundary of the descending channel on the weekly chart).
Indicators OsMA and Stochastics on the 4-hour and daily charts went to the side of sellers.
From a fundamental and technical point of view, we expect a resumption of the EUR / USD decline. In this situation, short positions are preferred.
Support levels: 1.1700, 1.1655, 1.1600, 1.1535, 1.1510, 1.1400, 1.1345, 1.1285, 1.1150
Levels of resistance: 1.1725, 1.1770, 1.1790, 1.1815
Trading recommendations
Sell in the market. Stop-Loss 1.1735. Take-Profit 1.1700, 1.1655, 1.1600, 1.1535, 1.1510, 1.1400, 1.1345, 1.1285, 1.1150
Buy Stop 1.1735. Stop-Loss 1.1680. Take-Profit 1.1770, 1.1790, 1.1815, 1.1900, 1.2000, 1.2070
Author signals - https://www.mql5.com/en/signals/author/edayprofit
*)presented material expresses the personal views of the author and is not a direct guide to conduct trading operations.
