The dollar is weaker after The Fed Decision and US CPI data. Federal Reserve hikes interest rates by 25 basis points, as expected. Fed raises target interest rate to 1.25 - 1.50 percent, The Fed projected three more hikes in both 2018 and 2019 before a long-run level of 2.8 percent is reached. That is unchanged from the last round of forecasts in September.
Today;
The European Central Bank will hold the final meetings of the year, the day after the FOMC meeting.There is no rate change is expected from the ECB this Thursday, however, Governor Draghi’s statements about the ECB view for 2018 will be closely followed by the market.
Bank of England will also announce its monetary policy decision. The market does not expect to raise rates again until towards the end of 2018 when it will add another 25 basis points. However, a surprising revision would lead to a volatility in GBP/USD.
Additionally, In Turkey, the CBRT will hold its monetary policy council meeting. There is no market consensus regarding rate hike however the Bank should continue to have the tight monetary policy. After having hit a new peak 12.98% in inflation would also urge the Bank to make a move to tighten monetary policy. Late liquidity window rate is currently at 12.25%. There is no rate change expectation in neither marginal lending rate at 9.25% nor one-week repo rate at 8.0%. The market might show us some fluctuation in USD/TRY pair after the rate decision.
Technical Analysis:
EUR/USD: The EU/RUSD moved up after FOMC rate decision and it is trading just above the 1.1812 daily level. Ahead of ECB Decision, If the price stays above 1.1812, the rise may continue and we will face 1.1884 and 1.1968 as key resistance levels. On the other hand, if the price drops below 1.1812, next support levels can be found at 1.1768 and 1.1720.
Support: 1.1812 – 1.1769 – 1.1720
Resistance: 1.1884 -1.1884 – 1.1968
GBP/USD: The GBP/USD found buyers from the 1.3305 key support level and moved up to 1.3432 yesterday. Ahead of BOE Policy meeting, the pair is testing the resistance level of 1.3432. In order for the bullish action continue, it needs to rise and remains above 1.3432, on a four-hourly basis. In this case, the next daily resistance level will stand at 1.3484. On the other hand, if the price shows a downward movement below 1.3432, we will watch again support level at 1.3370.
Support: 1.3370 – 1.3305 – 1.3241
Resistance: 1.3432 – 1.3485 – 1.3555
USD/TRY: The USD/TRY pair has moved down for two and a half weeks after hitting new all-time high record. Today is an important day for Turkey, the CBRT will hold its monetary policy council meeting. Ahead of CBRT rate decision, If the price continues to pullback, we will face the daily support level of 3.7760. In order for the Turkish lira to gain more value versus the greenback, it needs the breakdown and closed the week below 3.7760. At this point, the next support level will be at 3.6830. Otherwise, the bearish action may be limited and we will follow a daily resistance level at 3.9035
Support: 3.7760 – 3.6830
Resistance: 3.9035