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The market froze in anticipation of the outcome of the Federal Reserve meeting, so it is not surprising that the single European currency literally froze in place. And there is practically no doubt that the stagnation will last almost until the announcement of the results of the meeting and the subsequent press conference. There are two possible scenarios.
The first of them is the announcement of the beginning of the gradual curtailment of the quantitative easing program. Of course, not directly from tomorrow, but somewhere in November. The Fed should naturally announce this in advance. The US central bank has been preparing the markets for such an outcome over the past couple of months. As a result, the dollar will resume its growth, as its supply will decrease in the market. According to the law of supply and demand, if the product becomes smaller, then its price inevitably increases. And here it doesn't even matter how much the quantitative easing program will be reduced. This will only affect the scale of the dollar's growth.
The second scenario, although somewhat different, does not fundamentally change anything. The Fed may postpone consideration of the issue to the next meeting, which will be held in November. In this case, the dollar will certainly start to get cheaper. But the scale of the pound's growth will be quite modest, since the very curtailment of the quantitative easing program is in principle inevitable. Representatives of the Fed have repeatedly talked about this. Even those who spoke out against the adoption of such a decision during the September meeting. It's just that the markets will be given a little more time to prepare.
During the intense downward movement, the level of 1.1700 stood in the way of the bears, relative to which there was a pullback, and then stagnation within the boundaries of 40 points. Despite the absence of a full-size correction and the oversold status, there is still a downward interest in the market.
Based on the daily period, the dollar rate is recovering by about 85% against the correction from August 23 to September 3.
Expectations and prospects:
In this situation, the level of 1.1700 is considered as a variable pivot point, where if the price stays below it, a path will open in the direction of the local low on August 20 at 1.1664.
It should be noted that due to the strong information and news background, market speculations are expected today. This can lead to dramatic price changes in a short period of time.
Comprehensive indicator analysis provides a sell signal based on short-term and intraday periods due to price concentration within the bottom of a downward trend cycle.
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