The FED released some interesting facts at the regular press conference, after spreading the interest rate decision. The most relevant fact is that a drop of 6.5% of GDP is expected this year. For now the Forex market remains somewhat calm.
Not all of it was bad news from the FED, since it predicted that by 2021 the American economy could grow up to 5%. That is more than encouraging data, taking into account the current situation of the world’s leading power.
At the time of writing the EURUSD is trading around 1.1370, after hitting a daily high at 1.1423.
The price of money unchanged until 2021
Although there were no surprises in the interest rate decision by the FED, the interesting thing was that in the post-data speech, it was reported that the price of money should remain at this level until at least 2021.
However, in the long term they marked that the interest rate should be at an average of 2.5%.
The main Wall Street indices recovered on the final stretch closing with a mixed trend. The SP 500 and the Dow Jones lost 0.53% and 1.04% respectively. While the Nasdaq technology index climbed 0.67%.
For its part, Gold had a very positive session, closing with a rise of 1.38% to US $ 1,745. The precious metal is getting closer to its annual peak of $ 1,769, noted back in mid-March, when the Coronavirus pandemic broke out.
Forex Market: The dollar loses against the main currencies
The main Forex cross, the EURUSD posted a 3-month high up to 1.1423. We will see if it was a speculative increase due to the FED decision, or if we are facing a possible escalation of the Euro.
For its part, the British Pound exceeded 1.28 for a few moments, then returned to its key resistance of 1.2750.
The dollar / yen falls to 107.11, with a marked upward trend for the Japanese currency. The USDJPY’s key support lies at 105.90. In case of transferring it can lead to aggressive sales.
Cryptocurrencies: The dollar also falls against Bitcoin
The drop in the dollar on all fronts, made itself felt strongly in the crypto market, especially against Bitcoin, which at the time of writing is close to $ 9,900.
If the greenback continues to weaken, the price of Bitcoin should have no greater problems in exceeding 10k. Although we know that BTC moves by many parameters apart from the fluctuation of the dollar.
3 key points to watch
- The key resistance of the Euro at 1.14. If it consolidates above this level, it can accentuate the weakness of the dollar in the short / medium term.
- The ounce of spot gold. If it exceeds the annual maximum of $ 1,769, it may indicate that investors are taking refuge in the precious metal because something bad is coming for the economy.
- Lastly, pay attention to the data on US consumer confidence. It will be known on Friday and it is expected to be positive up to 75 points.