Yesterday, the dollar was strongly surprised. Moreover, the refinancing rate was raised from 1.25% to 1.50%, and the Fed is planning to increase the rate three times next year, which is up to 2.25%. It remains uncertain that the market initially considered the increase in the rate price, in this case, the quotes would remain unchanged. But the dollar fell sharply even US inflation accelerated from 2.0% to 2.2%.
Apparently, the unusual movement of the dollar cannot be clearly explained by playing in anticipation of the meetings of the Bank of England and the ECB this day. According to the Bank of England, everything is relatively clear. There is an idea that board members basically do not understand the appropriate thing to do when losing control over inflation, however, it is necessary to soften for the consequences of withdrawing of Britain from the EU. Hence, even economy may get hurt, the rates should be kept on its current level. But the ECB is waiting for statements about further plans. Moreover, the question is - can the ECB raise the rate under the conditions of the quantitative easing program. If Mario Draghi declares this, increase in the single European currency yesterday is justified. Otherwise, the exact scenario shown yesterday can be seen today.
The euro/dollar currency pair demonstrated an impulse movement against the background of news, pushing to the value of 1.1840. It is possible to assume that the price will go down to a periodic level of 1.180, where it will form a temporary stagnation. If the bearish interest persists, the trend will go to 1.1740 / 1.1715.
The pound/dollar currency pair approached the periodic resistance level of 1.3440, where it touches the ceiling and slowed the movement. Probably, it is expected that there will be some wagging within the level of 1.3415 / 1.3450. If the bears manage to work out the value, then a downtrend will go to 1.3370 / 1.3320.
* The presented market analysis is informative and does not constitute a guide to the transaction.
