EURUSD Bulls Eyeing FOMC–Will Powell’s Dovish Tone Fuel a Rally?

Mar 19

As we approach the much-anticipated FOMC rate decision and Powell’s press conference, market sentiment is shifting, and EURUSD(EURUSD) traders are closely watching for clues on the Federal Reserve’s next move. With recent economic data pointing to signs of slowing growth and cooling inflation, the Fed might adopt a more dovish tone, fueling further upside for EURUSD.

Key Factors Driving the Bullish Outlook:

Inflation & Economic Data: CPI and PPI data indicate a gradual cooling of inflation, which strengthens the case for a potential rate cut later this year. If Powell acknowledges this shift, it could weigh on the dollar.

Market Pricing of Rate Cuts: Investors are already pricing in multiple Fed rate cuts for 2024. A dovish Powell could accelerate these expectations, weakening USD and pushing the EURUSD higher.
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Now let's take a look at the EURUSD chart on the 2-hour time frame.

EURUSD is moving near the Resistance zone($1.0983-$1.0916) and Yearly Resistance(1).

Regarding Elliott Wave theory, it seems that EURUSD has managed to complete the main wave 4. The structure of the main wave 4 is the Double Three Correction(WXY).

The main wave 5 is likely to complete near the upper line of the ascending channel(possible) and Monthly Resistance(4).

I expect EURUSD to rise in the coming hours to the targets I have indicated on the chart, although the Federal Reserve Conference could create long shadows, but I think the supply and demand zones will still work but still pay more attention to money management today.

Note: If EURUSD can break below the Potential Reversal Zone(PRZ)[$1.0880-$1.0834], there is a possibility of further decline in EURUSD.

Please respect each other's ideas and express them politely if you agree or disagree.

Euro/U.S. Dollar Analyze (EURUSD), 2-hour time frame.

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Mar 20

Trade closed: stop reached