The hawkish monetary policy | 06 January 2022

06 January 2022, EUR/USD

The hawkish monetary policy

EURUSD trading plan:

The minutes from the Fed's Dec. 14-15 policy meeting offered more details on the central bank's shift last month towards a more hawkish monetary policy. Policymakers had agreed to hasten the end of their pandemic-era program of bond purchases, and issued forecasts anticipating three quarter-percentage-point rate increases during 2022. “Participants generally noted ... it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated. Some participants also noted that it could be appropriate to begin to reduce the size of the Federal Reserve’s balance sheet relatively soon after beginning to raise the federal funds rate,” the minutes stated. This is a positive signal for the dollar.

Investment idea: sell 1.1340 and take profit 1.1265.

David Johnson
Analyst of «FreshForex» company
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