The Federal Reserve has raised interest rates to 5%–5.25%, the highest level since September 2007.
"The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 5 to 5-1/4 percent," the FOMC report said.
It is worth noting that the Fed's meeting minutes have become more cautious, with no indications of further rate hikes. This may mean that the Fed is slowing down the rate hike cycle, which could lead to a temporary pause in the process of tightening monetary policy. However, when asked about the possibility of halting the rate hike cycle, Fed Chairman Jerome Powell did not give a definitive answer, stating the need to make decisions based on incoming data.
"We will make that determination meeting by meeting, meaning based on the totality of incoming (macroeconomic data)," Jerome Powell said.
Speculators are already factoring in a possible pause in the rate hike cycle, which could lead to changes in financial market prices.
EUR/USD strengthened due to a strong flow of information, which triggered speculative activity in the market. This led to the emergence of a technical signal for the continuation of the medium-term upward trend.
GBP/USD not only recovered its value after a recent pullback but also continued the upward trend. This movement triggered an increase in long positions' volume and indicated the possibility of further trend development.
Economic calendar for May 4Today, investors are focused on the outcome of the European Central Bank (ECB) meeting, where an interest rate hike of at least 25 basis points is expected. Given the latest inflation data in the European Union (EU), which shows an increase, it is unlikely that the regulator will announce a pause in the monetary policy tightening cycle. This decision is expected to confirm the euro's current strong position against the U.S. dollar and allow for further euro appreciation.
Time targeting:
ECB meeting outcome – 12:15 UTC
ECB press conference – 12:45 UTC
EUR/USD trading plan for May 4If the euro price consistently holds above the 1.1100 level, it can be assumed that the volume of long positions in the euro will increase, which may boost the upward trend. If the price does not remain stable above the key value, a variable price swing and a reversal to the 1.1000 level are possible.
To continue the upward trend in the market, the price needs to be held steadily above the 1.2550 mark. In this case, the next resistance level of 1.2700 may serve as a guide for buyers.
The candlestick chart type is white and black graphic rectangles with lines above and below. With a detailed analysis of each individual candle, you can see its characteristics relative to a particular time frame: opening price, closing price, intraday high and low.
Horizontal levels are price coordinates, relative to which a price may stop or reverse its trajectory. In the market, these levels are called support and resistance.
Circles and rectangles are highlighted examples where the price reversed in history. This color highlighting indicates horizontal lines that may put pressure on the asset's price in the future.
The up/down arrows are landmarks of the possible price direction in the future.