US Dollar Gets a Boost from Optimistic Fed; EUR/USD, GBP/USD, AUD/USD – DailyFX

US Dollar vs. Euro, British Pound, Australian Dollar – Pricing:

  • USD Boosted by a prolonged period of higher Fed interest rates after hawkish policy FOMC prediction.
  • euro/usd and GBP/USD We are testing very strong support. Australian dollar/US dollar Withdrew from the main resistance.
  • what’s next EUR/USD, GBP/USD, and australian dollar/USD?

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The dollar strengthened overnight after the Federal Reserve signaled it would raise interest rates one more time before the end of the year and cut rates less than before. The Fed kept the federal funds rate unchanged at 5.25% to 5.5%, as expected, but raised its economic rating from “moderate” to “solid,” indicating that one more rate hike is possible as “inflation remains elevated.” I left my sexuality behind.

A summary of economic forecasts showed the rate cut in 2024 would be 50 basis points less than forecast released in June. The committee currently expects only two rate cuts in 2024, which would bring the fund rate to around 5.1%. With the U.S. economy outperforming some of its peers, the path of least resistance for the dollar remains flat-to-up.

EUR/USD weekly chart

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EUR/USD: Low price not confirmed

EUR/USD is testing fairly strong support at the May low of 1.0630. The oversold situation suggests that it may be difficult to break below this, at least on the first try. However, the broader sideways weak bias is unlikely to change unless EUR/USD can recover some lost ground, including a rally above the early August high of 1.1065. Below 1.0630, the next support is the January low at 1.0480.

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GBP/USD daily chart

Chart created by Manish Jaradi using TradingView

GBPUSD: Downward bias unchanged

The short-term bias in GBP/USD remains bearish due to the low->high->low->low series since July. For the first time since the end of 2022, cable fell below Ichimoku cloud support on the daily chart. This reflects a change in the bullish bias. For a further discussion, see “Pound’s resilience masks widespread fatigue: GBP/USD, EUR/GBP, GBP/JPY settings,” published on August 23.

However, cable appears oversold as it tests very strong central support at the end-May low of 1.2300, which is close to the 200-day moving average. This support is strong and a break below it is never imminent. However, a decisive break below the May low of 1.2300 would disrupt the high-low-high-high sequence seen since late 2022. The next important support is the March low at 1.1800.

AUD/USD 240 minute chart

Chart created by Manish Jaradi using TradingView

AUD/USD: Retreating from key resistance levels

AUD/USD has pulled back from a fairly strong concentrated resistance level at the August high of 0.6525, which coincides with the top of the ascending channel since early September. The focus now shifts to the significant cushion at Monday’s low of 0.6415 near the bottom of the Ichimoku cloud on the 240-minute chart. If the recovery from the start of the month needs to be extended, AUD/USD will need to sustain above support, otherwise the immediate bias will shift from bullish to range-bound. If the price falls below the August-September low of 0.6350, downside risk toward the November 2022 low of 0.6270 may materialize.

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— Written by Strategist Manish Jaradi

— Contact and follow Jaradi on Twitter: @JaradiManish

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