Bitcoin seems to reverse up from the local dips. Are there enough reasons to buy it now?
Preview into the FOMC meeting
Pay attention: the FOMC meeting is today at 21:00 MT time
Why is it so important?
No changes to the interest rate are expected. The Fed will publish the statement, which will contain the commentary about the economic conditions, discuss the economic outlook and offer clues on the future path of the monetary policy.
The recent comments by policymakers on a rate cut later this year increased worries in the market.
In addition, various inflation measures dropped below the 2% target and raised concerns over the rate cut even more.
What to watch?
- If the dovish scenario is confirmed, we may see the revision of the inflation forecasts to the downside.
- Also, we expect the shift in dot plot to the expectations of one rate cut by the end of the year.
As the dovish expectations are already priced in, any hawkish comments by the Fed Chair Jerome Powell will bring positive momentum to the USD. On the other hand, strong dovish tone of the statement will weaken the greenback.
On the H1, the pair has been awaiting the FOMC meeting. It has been trading between the resistance at 1.12 and 1.1188 since the beginning of the trading day. Hawkish surprise from the Fed may pull the pair below the 1.1188 level. The next levels in focus for bears lie at 1.1177, 1.1162 and 1.1147. If the USD weakens today, bulls will break the resistance at 1.12 and target the next levels at 1.1211, 1.1222 and 1.1242.
On the same timeframe, the USD rose against the JPY at the beginning of the day but was not able to stick near the 100-hour SMA. At the moment of writing, the pair has been moving towards the support at 108.35. The next support levels are placed at 108.28 and 108.24. On the other hand, bulls keep their eyes on the resistance level at 108.44. If it is broken, the pair will rise further where it will face the 108.49 and 108.53 levels as resistances.
The US inflation will come out today at 15:30 GMT+3. Traders can’t wait to see the numbers as they will impact all the pairs with the USD!
The greatest sale of Bitcoin continues! It has approached the psychological mark of $30,000. The traders’ focus remains on Thursday’s report on US inflation.
The United States will release retail sales and producer inflation (PPI index) numbers at 15:30 MT time on June 15.
Gold has plunged amid the stronger US dollar as investors await the Fed’s meeting this week.
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