24.04.202312:43 Forex Analysis & Reviews: Markets will consolidate ahead of the Fed meeting

World stock markets ended the week with mixed dynamics, heavily influenced by corporate earnings releases. This clearly shows that the recent rate hikes have led to a slowdown in national economies and, as a result, prompted cautious actions from investors over the purchase of company stocks.

Interestingly, despite the existing uncertainty, markets are ending the month on a positive note, thanks to falling US inflation and statements from Fed representatives that interest rates should continue to be raised. That being said, the outcome of the Fed meeting on May 3 will play an important role.

Another key event is the release of important economic data such as the Personal Consumption Expenditures Price Index and the indicator for income and expenses. All this should show a continued decline, which fits perfectly into the trend of slowing inflation growth in the US.

If the data, as as well as the number of initial jobless claims presented this Thursday, turns out to be at least in line with expectations, then those who still want to raise rates may be convinced that it is time to take a pause. If that happens, following a 0.25% rate hike this May, the Fed may announce a pause or hint at such a decision.

Stocks will either remain in a sideways trend or try to grow weakly upwards. A similar dynamic may persist in the forex market. The ICE dollar index is more likely to continue consolidating in a fairly narrow range around 101.50 points.

Forecasts for today:

EUR/USD

The pair is currently trading above 1.1000. Expectations of further rate hikes from the ECB and a possible halt by the Fed may push the pair to further growth, initially towards 1.1075, and then to 1.1160.

GBP/USD

The pair is trading below 1.2465. If it rises above it, there is a chance of a limited growth to 1.2540.