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21.06.202315:36 Analisis Forex & Kajian: Dollar: Buyers expect new drivers

Exchange Rates 21.06.2023 analysis

Buyers of the dollar are awaiting the emergence of new bullish drivers after today's statements by Federal Reserve (Fed) officials.

Fed Chairman Jerome Powell will speak before Congress today and tomorrow (his speeches will begin at 14:00 GMT), including discussing the prospects of the U.S. central bank's monetary policy.

Today, comments will also be made by members of the Federal Reserve Board of Governors Lisa Cook, Philip Jefferson, Austan Goolsbee, and Loretta Mester.

Powell will likely indicate the possibility of resuming the rate hike cycle, possibly as early as the July meeting. The market currently assesses the probability of a rate hike in July at 74.0%, according to CME Group.

Exchange Rates 21.06.2023 analysis

Following the June Fed meeting, where the interest rate remained at 5.25%, the leaders of the U.S. central bank confirmed the need to return inflation to the target level of 2%. However, the forecast for the end of 2023 was raised to 5.6% (from the previous forecast of 5.1% in March), and the forecast for the end of 2024 was raised to 4.6% from 4.3% earlier. Fed officials consider it reasonable to make two more rate hikes this year and expect higher GDP growth rates in 2023, lower unemployment rates, and less progress regarding core inflation than they anticipated in March.

Commenting on the monetary policy outlook after the Fed decision, Chair Powell confirmed the Fed's commitment to a tightening policy and further rate hikes. "Almost all policymakers at the Fed view further rate hikes this year as appropriate," Powell said.

Given these expectations, U.S. government bond yields continue to show positive dynamics, providing additional support to the dollar.

Exchange Rates 21.06.2023 analysis

As of writing, its DXY index (CFD #USDX in the MT4 terminal) was hovering near the level of 102.18. A strong break of the resistance level at 102.50 will indicate the seriousness of the dollar buyers' intentions, giving it the necessary bullish momentum.

However, if Powell fails to convince market participants and only provides neutral statements regarding the prospects of the Fed's monetary policy, the decline of the dollar will resume with renewed force. A break below the intraweek low of 101.85 will serve as a signal for dollar sellers.

Support levels: 102.00, 101.50, 101.00, 100.60, 100.00, 99.40, 99.00

Resistance levels: 102.50, 102.84, 103.00, 103.10, 103.50, 103.70, 104.00, 104.65, 105.00, 105.85, 106.00, 107.00, 107.80

* Analisis pasaran yang disiarkan di sini adalah bertujuan untuk meningkatkan kesedaran anda, tetapi tidak untuk memberi arahan untuk membuat perdagangan.

Jurij Tolin,
Analytical expert of InstaSpot
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