The USD Continues Losing Value


The Fed clearly explained its further fiscal policy during one of the meetings this month. The Federal Reserve is continuing with three rate increases this year. The first was done, and two more remains. The interest rate now is somewhere between 1.50 percent and 1.75 percent, while the next increase will probably take a place for four months or even later.

The CPI is mingled according to an analysis from the Fed meeting, and there is no reason to wait for a new wave of inflation that may happen soon. Fortunately, the job market is doing well and a clear progress is already seen. However, this indicator alone is not a sufficient proof for the Fed to move up the interest rates.

The New Fed Governor Jerome Powell said that he was pretty surprised at the Federal Reserve has no interest in time-consuming rates on his first FOMC meeting. Still, many markets already had the same information on that point of view and moved it in the appropriate assets, so no reactions happened this time. But, the greenback was quickly sent lower following that FOMC meeting because the predictions were not met.

The USD is also facing various problems because of the United States government is too busy while planning new trade wars. No one knows what will these wars against China and Japan bring to the country, but citizens are not definitely ready to take such risk. The euro is not very interesting for investors these days, but the U.S. policy allows it to skyrocket because the markets do not know what will happen next to the USD, and that looks really unresponsible.

Meanwhile, the euro and the dollar are forming an uptrend. The former falling channels were broken by the resistance escape and that moved the price to the higher projection channels, at the same range to one of the former channels. The market is currently trying to test the projection gateway resistance. The present situation can lead to two different situations, and both are very possible.

The price might slightly break through the resistance at 1.240 and then move to the present short-term high at 1.244, while lastly go to the significant level of 1.250, with a small correction at the end. Also, another potential option is a return after trying to test the resistance, and that may derive with the price moving down to the backing area, which is pretty near $1.225.

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