Last week's Federal Reserve decision and Jobs Report provided key insights into the US economy and monetary policy. The Fed raised interest rates by 25 basis points per market expectations. However, Jerome Powell remained vague about the next move, indicating a "data-dependent" and "meeting-by-meeting" approach.
The Jobs Report indicated robust growth, with 253 thousand new jobs created, a decline in unemployment to 3.4%, and a steady participation rate of 62.6%. Wages also surprised on the upside, with significant month-over-month growth of 0.5%, the highest since November.
Federal Reserve interest rate
Despite the Fed's monetary tightening for over a year, the data confirmed the labor market remains tight. Investors await further data, such as the upcoming April consumer price index, to assess potential Fed action in June. While the awaited data is significant, it is not the only factor before the next Fed meeting, as another jobs report and inflation report will be released.
US Awaited April Consumer Price Index
If inflation data surprises on the upside, the market may price in another interest rate hike in June, pending the May jobs report and inflation figures, which could affirm or drop this expectation.
Dollar Index H4 EMA 21,55,200
On the technical analysis front, the dollar index remains in a tight range, trading at a crucial support zone. A negative scenario would entail a break of the current support, with the next significant support at 99.40. In a bullish scenario, the index would need to move above the upper limit of its recent range around 102.30, with the next resistance level at 103.50.