FX.co ★ Global macro overview for 23/03/2018

As expected, the range for the federal funds rate was raised by 25 bp to 1.50-1.75%. In the statement, the Fed pointed out that the risks for the economy remain balanced. Importantly, the economic outlook has improved over the past months and inflation will continue to be monitored. Further gradual interest rate increases are expected. Although three increases in interest rates are still to be made this year, raising forecasts for economic growth translated into a higher mid-term interest rate path (2019-2020). The lack of a median shift in money prices forecasts for this year, however, exaggerated the dovish reception of the March Fed decision and contributed to the weakening of the US Dollar. Inflation projections have not changed much. The first FOMC meeting under the leadership of Powell does not indicate changes in the current direction taken in monetary policy. The Fed chief, however, pointed out that trade policy had become

the element of risk for the economic climate in the USA.

Today's Durable Goods Orders data has beat the market expectations of 1.6% with the way better number of 3.1%. Moreover, the Core Durable Goods Orders increased 1.2% versus 0.5% expected number. Because orders for goods have large sway over the actual production, this figure serves as an excellent forecast of US output to come. Durable Goods are typically sensitive to economic changes. When consumers become skeptical about economic conditions, sales of durable goods are one of the first to be impacted since consumers can delay purchases of durable items, like cars and televisions, only spending money on necessities in times of economic hardship.

Let's now take a look at EUR/USD technical picture at the H4 time frame. The market is still trading below the golden trend line resistance, in between the trading range of 1.2257 - 1.2388. The momentum remains hovering around its fifty level, this would indicate a rather neutral sentiment of the market participants even after the better than expected data were published.