We have viewed the Fed Policy Decision yesterday. The FOMC holds benchmark interest rate at 1.00-1.25% as expected. Fed says Balance-Sheet unwind to start relatively soon. The decision proved to significant price action in the market. The dollar index dropped dramatically.
Today:
In Turkey, the CBRT will hold its monetary policy council meeting, the day after the FOMC meeting. There is no market consensus regarding rate hike however the economists are divided between the idea that Bank would stop as inflation had its peak and the Bank should continue as upside risks on inflation are not over. Late liquidity window rate is currently at 12.25% and interbank rate also hit that level, suggesting that the Bank may need to create some space for itself for further tightening. There is no rate change expectation in neither marginal lending rate at 9.25% nor one-week repo rate at 8.0%. We may see some fluctuations in Turkish lira.
US Durable goods orders for March will be announced today. Core data excluding transportation is expected to rise 0.4% over the previous month according to preliminary numbers whereas it was 0.3% in the previous month. Data may create a positive reaction on the dollar should it comes better than expectation.
U.S Initial jobless claims will come out today and it is expected to be 241 K, which points to a rise from previous week’s 233 K. Any realization higher than expectations would be negative for the US dollar.
Daily Technical Analysis
EUR/USD - After the Fed Policy Decision, the dollar index dropped dramatically and the EUR/USD pair surged yesterday. In order for the bullish action to continue, it needs to sustain above the key level of 1.1740 on a four-hourly basis. At this point, the next resistance level will be at 1.1810. Otherwise, we may see a profit taking action and we will face support levels at 1.1665 and 1.1630.
Support: 1.1665 – 1.1630 – 1.1540
Resistance: 1.1740 – 1.1810
Gold - Gold price showed an upward movement yesterday and it is now trading above the key support level of 1255. As long as the yellow metal remains on a four-hourly basis above 1255, the bullish action may gain momentum. At this point, we will face resistance level at 1273. On the other hand, if the price drops below 1255, the next support level will be at 1236.
Support: 1255 - 1236 – 1226
Resistance: 1273 – 1286 - 1294
USD/TRY - The USD/TRY showed a bearish action yesterday. Ahead of Turkey Interest Rate Decision, the price is trading below the 3.5440 key resistance level. As long as the price trades below that level on a four-hourly basis, the Turkish lira may gain more value against the dollar. At this point, we will watch 3.5210 and 3.5020 as support levels. Although, if the pair goes beyond 3.5440 again, the next resistance level will be at 3.5550.
Support: 3.5210 – 3.5020
Resistance: 3.5440 – 3.5550