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The Fed signaled a quick sequence of rate

The Fed signaled a quick sequence of rate | 28 January 2022

28 January 2022, EUR/USD

The Fed signaled a quick sequence of rate

EURUSD trading plan:

The Fed signalled a quick sequence of rate hikes to bring down inflation, accelerating its divergence from an ECB that continues to pledge copious stimulus this year and essentially rule out any hike until 2023. Fundamentals back the ECB's stance. European inflation is lower, wage pressures are still muted and employment has yet to recover to pre-pandemic levels, all suggesting that high inflation, a function of soaring energy prices, will indeed pass, as now predicted. The problem lies with the increased aggressiveness of the Fed's stance because "nimble" action, as outlined by Chair Jerome Powell, suggests the U.S. central bank is also going complete its tightening cycle quicker than in the past, leaving the ECB with a shorter time to act.

Investment idea: sell 1.1187 and take profit 1.1123.

David Johnson
Analyst of «FreshForex» company
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