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The Federal Reserve's monetary policy release yesterday turned out to be a bit more hawkish than expected — the closest rate change will take place no earlier than the spring of 2021, which can be mistaken for official recognition not to change rates just before the presidential election. Economic forecasts were unchanged: GDP 1.9% in 2021, inflation 2.0%. The euro jumped by 40 points with the release. The speech of Fed Chairman Jerome Powell was neutral, in fact, he declared the provisions of already issued forecasts. Furthermore, the euro has not changed in value. Thus, we accept the growth as speculative, to the nearest target of 1.1155 (110.0% of the Fibonacci level on the daily chart), there is around 20 points from the current moment. A downward price movement is possible from this level, albeit with a low probability
But the market has another goal, just above the Fibonacci level - this is a strong price level of 1.1180 - October 21 high, June 18 low and March 7 low. By inertia, growth can continue to this level.
The ECB will make a decision on monetary policy today. No changes are expected here. General elections for the UK Parliament are also held today. Probably, against this background, speculators will refrain from active actions. We look forward to increasing volatility with the advent of the first results on Friday night. And even here, the first reaction of the market over the next day can be purely speculative. The problems of the moment in the likelihood of getting a "hung" Parliament in the event that the Conservatives do not gain the predicted 340 seats. In this case, the story will drag on with the formation of coalitions and other difficulties in solving the main task - in forming a deal with the EU.
As a result of the next stage of increasing speculative sentiment, it is likely that the price will overcome the signal level of 1.1180 and the euro will rise to the Fibonacci level of 100.0% at the price of 1.1215. And of course, in our main scenario, the price can break yesterday's low, which coincides with the Fibonacci level of 123.6%, and fall to the Fibonacci level of 138.2% at the price of 1.0985.
The price is above the indicator lines of balance and MACD on the four-hour chart, the signal line of the Marlin oscillator is growing, but it is possible for a divergence to form, that is, the duality of the scenarios is confirmed.
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