The Federal Reserve is still on hold at the moment , but raising interest rates is expected and very likely at some point this year.
It says, it will raise interest rates when it’s confident that inflation will move back to its target, the Fed also released its latest economic projections which shows where FOMC members expect interest rates to be at the end of this year, it hints that there will be 2 interest rate hikes this year, and 15 of 17 FOMC members expect that the first rate hikes will come this year.When the Fed released the statement , the market fluctuated up and down?!!! 30 minutes, When Fed Yellen started talking in press conference , the dollar sold-off , why ?!!! because Yellen used much of the same language as previous statements…..and also she was kind of cautious about September hike !!!
Market Impact :
USDINDEX : If we take a quick look at daily chart of US dollar index , momentum indicators are heading down , but as long as 94.30 support holds on a daily closing basis, the US dollar index remains in recovery mode and further upside couldn’t be ruled out . On the 4 hour chart, daily chart support at the 94.30 was rejected on a 4-hour closing basis, a failure to hold below the 94.30 levels on a 4 hour closing basis, could mean a return to the 95.60 levels.
Since the market has failed to cut the 94.30 levels, the US dollar may back to game any moment, and this decline probably is temporally as a normal reaction to FOMC statement and press conference!!!
EURUSD: The EURUSD pair jumped to 1.1357 levels . Momentum indicators suggest further upside towards the 1.1440 levels before the next fall but the problem here we have strong resistance at the 1.1385 levels. Since 1.1440 is not that far from 1.1385 levels, the market may spike to 1.1440 before falling and closing below 1.1385 or even below 1.1357 levels or 1.1309 levels in the same day (stop hunting) !!
On the downside, a failure to hold above the 1.1357 levels could mean a return to the 1.1205/1.1181 levels..Anyway: the pair is in overbought zone, in case the pair mange to reach 1.1440, I like to short the pair around this level !!!
Keep in mind , as long as 1.1466 holds on a weekly closing basis, the EURUSD will return to the 1.0461 levels, above 1.1466 will reverse risk towards 1.2220 levels.
Conclusion : As long as 1.1181 support holds on a daily closing basis, outlook in EURUSD remains – cautiously – on the upside towards the 1.1440 levels where topping is strongly suggested , below 1.1181 will open 1.1132/1.1048 levels…