The Federal Reserve kept its benchmark interest rate unchanged on Thursday after a two-day meeting of its policymaking committee and said continued strong job gains and household spending kept the economy on track.
“The labor market is growing stronger … and economic activity is growing at a strong pace,” the Fed said in its latest policy statement, keeping its plans to continue raising interest rates gradually.
The Fed’s decision came in line with expectations by financial markets that it would keep overnight lending rates steady at 2.25 percent to 2.25 percent. The central bank has raised interest rates three times this year and is widely expected to raise them again in December.
The report focused on three important points:
- The US economy is strong and it’s on track.
- The Fed’s benchmark rate remains between 2 percent and 2.25 percent.
- The Fed is expected to increase that range by a quarter percentage point at its next meeting, scheduled for Dec. 18 and 19.
U.S Dollar Index, Up With Caution!
Although the U.S dollar index moved up yesterday affected by the positive news, the risk of correcting lower remains an option. Resistance comes at 96.95 level. A sustained breakout above that level is needed to push the index for further upside gains. Next resistance comes at 97.30 level. A break will advance the index to 97.70 level, further upside, resistance comes at 98.20 level.
Alternatively, a failure to hold above 96.62 on a daily closing basis could mean a return to 96.04 level with a cut below here opening the way to 95.70 ahead of 95.18 level.
EURUSD: The pair declined from 1.1446 level, bottomed at 1.1350 level. Stability below 1.1390 -broken support turned resistance- will keep the pair under pressure. Now eyes on 1.1313 level, a halt is likely but a cut would open 1.1260 level, further down, support comes at 1.1200 level(weekly target). On the upside, above 1.1390 aims 1.1446/1.1500 levels.
GBPUSD: The pair still capped by 1.3130 level (high of Oct 18, 2018). Above that level will turn medium-term outlook bullish and pave the way to 1.3256 level. Anyway; immediate resistance comes at 1.3054 (broken support turned resistance), Below that level remains under pressure, support comes at 1.3000. A halt is likely but a cut would open 1.2950, further down, support comes at 1.2918.
USDJPY: The pair is bullish above 113.65 (broken resistance turned support). Eyes on 114.20. A break would open 114.95, further upside, resistance comes at 115.45 level. On the downside, below 113.65 sees a pullback threats to 113.30/113.15 levels before another rise. Below that level will extend the corrective pullback to 112.55/112.29 levels.