The ECB has followed the Fed and the BoE with its own 50bps hike. It also announced quantitative tightening from March 2023. Tone was hawkish, with the statement saying, “interest rates will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive to ensure a timely return of inflation to the 2% medium-term target.”

The US Federal Reserve slowed its tightening pace on Wednesday, but expects a higher terminal rate and delivered a largely hawkish message

FXCM’s USDOLLAR basket spiked on the news before settling, charting a long upper shadow (blue arrow). Notably, the hourly EMAs and the stochastic are in bullish mode (black ellipses). The greenback is showing signs of strength. However, the daily chart on the left shows that the dollar is still trading in its weak area between the lower blue and red bands. Dollar rallies may be targets. This is because US…

EURUSD is trading in its area of strength, between the upper blue and red bands (blue arrow), on its daily chart. Price appreciation is a likelihood the longer it maintains in this position. On the righthand side, the hourly chart also shows bullish signs, with the trend-following EMAs and the stochastic having both crossed positively (black ellipses). Momentum is near the 80+ region (red rectangle) and if it holds, a…

The pair jumped yesterday due to the downside surprise in US CPI, but treads water ahead of the Fed’s policy decision today, with the one from the European Central Bank following on Thursday

The headline CPI came in at 7.1% YoY, below the forecast of 7.3% YoY and less than last month's 7.7% YoY. The core CPI also moderated to 6% YoY. The consensus was at 6.1% YoY, and last month's print was 6.3%.

After Monday’s decline, the pair finds support today and awaits the US CPI inflation update and the latest policy decision by the Fed for the next leg of the move

The EURUSD trades in its daily area of strength between the upper blue and red bands (blue arrow). The longer this region is maintained, the greater the likelihood of further appreciation. The market seems to be pricing in strength ahead of Wednesday's Fed release and Thursday's ECB statement.

FXCM's USDOLLAR basket remains subdued in its daily bear channel between the lower blue and red bands (green rectangle). However, this position will apply more downward pressure to the greenback if it maintains.

The pair has been consolidating its gains recently, as markets brace for a data - heavy week, which includes CPI inflation from the US and the UK, as well as the interest rate decisions by the Fed and the ECB

The pair made a strong start to the week, reacting from the recent four-month lows, but has been consolidating its gain over the last few days