Dovish Tilt

The U.S. dollar sold-off after Federal Reserve Chair Jerome Powell signaled the central bank will slow the pace of interest rate increases this month. Following four straight 75bp rate hikes, the Fed is expected to raise rates by 50bp when they meet December 13-14.

Even if Powell reiterated that rates will be going higher, the slowdown in the Fed’s rate hike path was interpreted as a dovish tilt by markets.

Regarding rate hikes, “we think that slowing down at this point is a good way to balance the risks” to the economy from inflation and slower growth, Powell said. As for the high inflation Powell added that “despite the tighter policy and slower growth over the past year, we have not seen clear progress on slowing inflation.”

Today, traders will pay attention to the PCE index due for release at 13:30 UTC.

From a technical view it seems as if there is room for another upward movement in both EUR/USD and GBP/USD.

EUR/USD: Higher targets are seen at 1.05 and 1.0580 while 1.03 could act as a support.

GBP/USD: Above 1.19, we favor the uptrend with a next target at 1.2250.

Our trading ideas for today 1/12/22:


Long @ 1.0475

Short @ 1.0440*


Long @ 1.2125

Short @ 1.2085*

DAX® (GER40)

Long @ 14580

Short @ 14470

Settings for all trades today: Entries from 8:00 am UTC, SL 25, TP 40

Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.

We wish you good trades!

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