Federal Reserve strike balanced tone towards the US economy

FED balanced

The US dollar became volatile after the FOMC interest rate decision, as Federal Reserve Chair Jerome Powell attempted to strike a balanced tone towards the US economy. The FOMC policy statement noted the recent improvement in US economic data and underscored that inflation continues to miss the Federal Reserve’s two percent target. FED Chair Powell also reiterated that policymakers remain patient when assessing the direction of US interest rates. Investors initially sold the US dollar, although the greenback soon recovered as FED Chair Powell sounded more hawkish than the previous FOMC meeting, as he answered questions on the US economy.

∙ The USDJPY pair is bearish while trading below the 111.60 level, key support is found at the 111.00 and 110.60 levels.

∙ If the USDJPY pair trades above the 111.60 level, buyers may test towards the 112.00 and 112.40 resistance levels.

EU growth

The euro currency staged a strong rally against the US dollar and antipodean currencies this week after growth data from the eurozone economy came in stronger than expected. EU GDP data came in much better than expected for the first-fiscal-quarter of 2019, with the eurozone economy expanding by 0.4 percent. The Spanish economy also posted its strongest quarterly GDP data in nearly three years, with the fifth largest economy in Europe expanding by 0.7 percent during the first three months of 2019. The Italian economy also moved out of a technical recession, following two- quarters of negative GDP growth.

∙ The EURUSD pair is only bearish while trading below the 1.1174 level, key support is found at the 1.1135 and 1.1110 levels.

∙ If the EURUSD pair trades above the 1.1174 level, key resistance is found at the 1.1264 and 1.1290 levels.

Pound rally

The British pound moved higher against the US dollar and the euro currency this week as UK economic data continued to stabilize, despite Brexit uncertainty. The Bank of England also struck a more hawkish tone towards the UK economy than expected, following its interest rate decision. The central bank kept interest rates on hold, but revised growth expectations higher and noted that the UK unemployment rate could fall to just 3.5 percent. The Bank of England also said that inflation remained fairly subdued, causing UK policymakers to lower second-quarter inflation forecasts.

∙ The GBPUSD pair is only bullish while trading above the 1.2975 level, key resistance is found at the 1.3125 and 1.3200 levels.

∙ If the GBPUSD pair trades below the 1.2975 level, sellers may test towards the 1.2900 and 1.2860 support levels.

Bitcoin supported

Bitcoin enjoyed another week of strong buying interest as the number one cryptocurrency by market capitalization found strong technical support from the $5,200 level. The BTCUSD pair steadily advanced towards the $5,500 level as the king of digital assets looked to build on April’s strong monthly performance. Ethereum and Litecoin both suffered mixed performances on the cryptocurrency market, as Bitcoin remained the cryptocurrency of choice amongst traders and investors.

∙ The BTCUSD pair is only bearish while trading below the $5,200 level, key support is found at the $4,900 and $4,600 levels.

∙ The BTCUSD pair is bullish while trading above the $5,200 level, key resistance is located at the $5,500 and $5,620 levels.