The US dollar gave back its prior gains as the Federal Reserve statement did not mention a quicker pace of rate hikes market participants had looked for. On top of that there was a notable phrase concerning a symmetric inflation goal suggesting the Fed does not feel to be in a rush to lift rates quicker letting price growth run even above its official target 2%. The key remarks are as follows:
- economy has been growing at a moderate pace
- risks to the economy remain roughly balanced
- statement omits the phrase the committee keeps monitoring inflation developments closely
- household spending moderated during the first three months of this year, while business fixed investment continued to grow strongly
- core inflation has moved close to 2% (it was ’has run below 2%’ earlier)
- the line that economic outlook has strengthened in recent month was removed
As you can see above there is not too much to excite about, but the mention regarding the inflation objective symmetry seems to be the major point weighing on the greenback and buttressing gold prices. The bottom line is the Federal Reserve does not appear to fret about higher price growth, and it could be even eager to let it overshoot in the near term to be more convinced it came back to the aim sustainably. In effect, the greenback lost ground to some extent whereas gold prices moved off their lows - all moves in line with our previous analysis.
Gold prices bounce back from their pivotal technical area as the Federal Reserve refrains from making any binding clues with regard to the rate outlook. If this corrective move isn’t false, it could give rise to a move even toward $1375. Source: xStation5
The EURUSD moves off its lows at ca. 1.1955 making a brief high at 1.2025. A short-lived support zone can be localized nearby 1.1990. Given a longer-term a weekly close could be remarkably relevant offering an answer whether the pair is able to end the week below a lower bound of a channel seen at a higher time frame. Source: xStation5
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