U.S. Dollar Retreats As Fed Goes Predictable Route
The U.S. dollar retreated following the Federal Reserves’ statement as the central bank went the predictable route. Policy makers have finally realized they have a serious inflation problem and need to act. While they are willing to hike rates faster and higher than previously expected, Fed Chair Jerome Powell played down the risk of recession for the U.S. economy. However, the 25bps rate hike and the projection of six more increases this year were already priced in, which is why the greenback retreated.
While waiting for bigger moves, we have tried two buy attempts in the EUR/USD that finally ended with a net loss of -10 pips as gains were capped at 1.1040.
GBP/USD – All eyes on the Bank of England rate decision today at 12:00 UTC
The BoE is expected to hike 25bps today, the third rate increase in row.
Technically, we will pay attention to a significant break above 1.3210 in order to anticipate further gains towards 1.3350. Bears on the other side will watch out for prices below 1.3080 in order to shift their focus to lower targets at 1.2950 and 1.29.
Our short-term trading idea for 17/3/22
Long @ 1.3210
Short @ 1.3140*
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