The FOMC minutes revealed that the Fed indeed discussing measures to be taken in order to prepare for future rate hikes. However, the minutes also reveals a slightly dovish outlook towards the timing of the rate hike which most believe is mid-year. According to the minutes many “saw the continuing weakness of core inflation measures as a concern”. The minutes also reiterated concern of the lack of wage growth.
There was neither a strong confirmation of a mid-year rate hike, or strong enough concern to raise significant doubt. The market did not like the minutes for the USD and we saw the greenback slide across the board.
The EUR/USD was consolidating this week under 1.1445 as we can see in the 1H chart. After the FOMC minutes, we can see that price is again poised to test the 1.1440-1.1450 area as resistance. Above that, the next resistance will be around 1.15.
The GBP/USD got a boost before the US session after seeing strong jobs data. It was stalling around the high on the week near 1.5440 before the FOMC minutes. Afterwards, we got a pop above the intra-session consolidation range and looks poised to continue its bullish trend at least in the short-term. The next key area will be around 1.56, but in the near-term, we might see some resistance around 1.55.
The USD/JPY looked like it wanted to revive a bullish trend this week after holding above 118.20. However, it is finding resistance around 119.40 and after the FOMC minutes, it fell back below 119.
A break below 118.20 might open up a common support level in the short-term around 117-117.20. Below that, we have a medium-term consolidation support around 116.56-85.
If price can climb back and stay above 119 however, the bullish outlook is still in play, with the 2014-high of 121.70 in sight.
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