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23.03.2023 08:34 AM
Breaking forecast for EUR/USD on March 23, 2023

The Fed's decision to raise the key interest rate by 25 basis points did not surprise traders. Thus, unlike the following press conference, it had zero effect on the market. The speech provided by the Fed Chair spurred a slump in the US dollar. It seems that the US regulator is in a panic and does not know what to do. Such an impression was caused by a transcript of Jerome Powell's comments. Earlier, the Federal Reserve talked about external factors and obstacles posed by Russia and sometimes by China. The situation has altered and the US has faced a grave banking crisis. Although Jerome Powell attempted to alleviate the situation, investors did not believe him. The regulator continues to repeat that it is necessary to reach the targeted inflation level and keep high employment. Nevertheless, such a sharp change in its rhetoric makes it clear that the Fed is a bit puzzled. It seems that the situation in the banking sector came as a surprise. It is evident that such an idea is frightening people. Thus, there is no use to explain the reasons for a possible cut in the key rate.

US Key Interest Rate

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The euro/dollar pair broke a resistance level of 1.0800 amid an inertial movement. As a result, the volume of long positions increased, thus pointing to the euro's recovery after a slump in February.

On the four-hour chart, the RSI is hovering at 81.64, which is the highest level since June 2019. In fact, it is a strong signal of the euro's overbought conditions.

On the four-hour and daily charts, the Alligator's MAs are headed upwards, which reflects the quote's movement.

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Outlook

Since the euro is overbought in the intraday period, it may show a bounce. In the event of this, the market situation may change. However, speculators may ignore the technical signal. In this case, the price may climb to the high of the mid-term upward trend.

The complex indicator analysis points to an upward cycle in the short-term and intraday periods.

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