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More money? NOT YET, says FED! – Market Overview – December 17

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Miguel A. Rodriguez
Miguel A. Rodriguez
05 novembre 2022
The Federal Reserve, in its meeting yesterday, did not take any decision that would imply a change in its current monetary policy.

Expectations that the Fed would announce a temporary extension of its asset purchase policy were not met. However, both in the statement and President Powell's speech and press conference, they made very clear to the market their determination to maintain the current expansionary monetary policy for as long as necessary, with the main objective of reaching full employment levels.

 

Even if inflation levels exceeded the 2% level, on the other hand, the estimated projection of the growth and inflation data was slightly modified with some improvement in those of the current year. Still, those of subsequent years remained the same.

 

Ultimately, Powell was very dovish in his statement, ensuring low-interest rates for an extended period and allowing inflation spikes without modifying his current decision to implement ultra-expansive policies.

 

 

Dollar Vs. The world

 

The result of all this was the weakening of the Dollar against all currencies.

EUR/USD, after a brief setback when the Fed's decision was known that brought it to the 1.2120 level, jumped higher, surpassing the 1.22 level and reaching the 1.2244 area.

Technically, it is already close to the resistance level located between the 1.2300 and 1.2400 range. The previous concentration of prices during January 2018 and the RSI show signs of exhaustion of the upward movement. On the daily chart, RSI is close to the overbought zone and threatens a bearish divergence if there is a slight correction or stagnation from current levels.

 

The Dollar has had the same behavior in its price against the Japanese Yen.

USD /JPY has lost more than half a figure since yesterday's highs and what is more important from a technical analysis point of view is the loss of support located at 103.16. Below these levels, it makes its way to the 101 zone. It would need to make a daily close below the 103.16 resistance to confirm the bearish breakout.

 

GOLD

 

With a weaker Dollar and a very accommodative monetary policy that will continue for an extended period, gold finds all the fundamental factors in its favor.

In fact, after the Federal Reserve meeting, the precious metal experienced an upward momentum that has led it to overcome the resistance zone of $1875. Also, here it needs to confirm this break to the upside with a daily close above these levels, paving the way for higher gains towards the $1900 area, previous support, and a prior price accumulation.

With this confirmed upward movement, the downward trend leg that began at the beginning of last August and that can be considered a corrective consolidation movement of the primary upward trend that has been operating since June 2019 would be terminated.

 

Le informazioni contenute nel presente documento sono redatte da CAPEX.com/it e non costituiscono né devono essere interpretate come suggerimenti di investimento. Le informazioni di cui al presente documento costituiscono comunicazioni di marketing generali a scopo informativo e, in quanto tali, non sono state preparate nel rispetto dei requisiti di legge che promuovono le ricerche di investimento indipendenti. Inoltre, non sono soggette ad alcuna limitazione sulle transazioni condotte in anticipo rispetto alla divulgazione delle ricerche di investimento in questione.Gli utenti / lettori non dovrebbero fare affidamento esclusivamente sulle informazioni qui presentate e dovrebbero fare le proprie ricerche / analisi anche leggendo la ricerca reale sottostante.  Il contenuto è generico e non tiene conto di circostanze personali individuali, esperienza di investimento o situazione finanziaria attuale.Pertanto, Key Way Investments Ltd non accetta alcuna responsabilità per eventuali perdite di trader a causa dell'uso e del contenuto delle informazioni presentate nel presente documento. Le prestazioni passate e le previsioni non sono un indicatore affidabile dei risultati futuri.

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel ha lavorato per importanti istituzioni finanziarie, come Banco Santander e Banco Central-Hispano. È autore di libri sul trading di valuta con diverse pubblicazioni alle spalle.

I CFD sono strumenti complessi e presentano un rischio elevato di perdere denaro rapidamente a causa della leva finanziaria. Il 69.69% dei conti degli investitori retail perde denaro quando fa trading su CFD con questo fornitore. Considera se comprendi il funzionamento dei CFD e se puoi permetterti di correre il rischio elevato di perdere i tuoi soldi.