15.12.202511:44 Forex Analysis & Reviews: Buyers of the U.S. dollar were not very convinced by the statements

Last Friday, the dollar continued to face difficulties in pairs with risk assets, as buyers were not very convinced by the statements made by representatives of the U.S. Federal Reserve.

According to comments by Cleveland Federal Reserve Bank President Beth Hammack, it is clear that she would prefer somewhat tighter interest rates to further put pressure on inflation, which remains too high. "Right now our policy is close to neutral," Hammack said on Friday during an event in Cincinnati. "I would prefer to take a somewhat more restrictive stance in order to continue exerting pressure on the inflation component of the central bank's mandate," she added.

However, despite such statements, the market appears to have already priced in a significant portion of the expected change in monetary policy. Investors are likely assessing the risks associated with overly aggressive rate hikes and believe that the Fed will be forced to further ease its stance in the coming months, which is reflected in the weakness of the U.S. dollar. This skepticism toward the Fed's hawkish rhetoric is fueled by recent economic data pointing to problems in the labor market. Taking these factors into account, market participants may have found Hammack's words less convincing than expected, which explains the limited reaction in currency rates.

Let me remind you that last week Fed officials cut interest rates for the third consecutive time, although a group of regional bank presidents made it clear that they opposed this cut. Two officials—Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeff Schmid—formally expressed their disagreement with the move, stating that they preferred to keep rates unchanged. Six members of the Board of Governors also presented preliminary rate forecasts indicating that they, too, oppose a rate cut.

Hammack does not vote on monetary policy decisions this year but will participate in voting in 2026. When asked whether she supported this week's rate cut, she did not answer directly, saying instead that it is a difficult decision, as officials face pressure both from those within their mandate and from those affected by it.

Let me also remind you that last month the head of the Cleveland Fed warned that cutting interest rates could prolong the period during which inflation remains above the target level. Previously, she stated that she opposed a rate cut in October and saw no strong justification for cutting rates in December.

Hammack also noted that she is very much looking forward to key data on prices and employment, which should help clarify economic trends. Let me remind you that the release of this data was delayed due to the shutdown of the federal government.

As for the current technical picture in EUR/USD, buyers now need to think about how to take the 1.1750 level. Only this will allow them to target a test of 1.1780. From there, it would be possible to move up to 1.1820, but doing so without support from major players will be quite difficult. The furthest target would be the high at 1.1855. In the event of a decline in the trading instrument, I expect any serious action from large buyers only around the 1.1715 level. If there is no one there, it would be advisable to wait for a renewal of the low at 1.1685 or to open long positions from 1.1650.

As for the current technical picture in GBP/USD, pound buyers need to take the nearest resistance at 1.3375. Only this will allow them to target 1.3405, above which a breakout will be quite difficult. The furthest target would be the 1.3434 level. In the event of a decline in the pair, bears will attempt to take control of 1.3340. If they succeed, a break of this range will deal a serious blow to bullish positions and push GBP/USD toward the low at 1.3320, with the prospect of moving down to 1.3285.