Market players are still processing the FOMC Meeting Minutes published last Wednesday. The document says that the benchmark interest rate may be raised sooner than expected earlier due to constantly increasing inflation. It also mentions that the QE programme may be closed as early as March instead of June as it was announced in the past.
Investors also paid attention to the regulator’s comments that it didn’t exclude a possibility of decreasing its own balance right after the rate hike. In fact, it may happen in the first half of 2022, which means that the liquidity ratio will drop.
In the H4 chart, EUR/USD has finished another ascending wave at 1.1363. Possibly, today the pair may correct to reach 1.1310 and then grow towards 1.1333, thus forming a new consolidation range. If later the price breaks this range to the upside, the market may resume growing towards 1.1400; if to the downside – start a new decline with the target at 1.1200. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving above 0 and may later resume falling to return to this level.
As we can see in the H1 chart, after completing the ascending wave at 1.1361 and rebounding from this level, EUR/USD is correcting and the first correctional wave is expected to reach 1.1310. Later, the market may grow towards 1.1333. From the technical point of view, this idea is confirmed by the Stochastic Oscillator: its signal line is moving below 20, thus indicating a further downtrend in the price chart.
By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.