Today, the US dollar is falling against most major currencies ahead of the publication of the Fed’s decision on the key rate. In addition, macroeconomic data from Europe is intensifying pressure on the greenback.
Economists had expected the UK inflation to slacken to 9.7% from 10.1%. However, it accelerated to 10.4%, thus boosting the pound sterling. The fact is that now the Bank of England will have to raise the benchmark rate more. It means that in the near future, the key rate in the UK will exceed the one in the US.
However, it is not the key event of this day. Everything will depend on the FOMC meeting results. Just two weeks ago, analysts supposed that the Federal Reserve would raise the key interest rate by 50 basis points and announce further tightening. However, two US banks went bankrupt and at least one more bank is dealing with significant problems. In this light, the Fed may decide to raise the benchmark rate by just 25 basis points.
What is more, there is a likelihood that today, Jerome Powell will alter his rhetoric and switch to a gradual monetary policy loosening. This, in turn, will lead to a slump in the greenback. In other words, the US dollar will continue losing value against both the euro and the pound sterling.

At the moment, we see that the euro has approached the resistance level of 1.0800. It means that the market sentiment remains bullish, which allows the euro to recover after the tumble in February.
Since the level of 1.0800 is acting as resistance, we may see a decline in the volume of long positions. If the price consolidates above this level on the four-hour chart, it is likely to climb higher.

Meanwhile, the pound/dollar pair reached the resistance level of 1.2300 and returned to 1.2200. This bounce led to a change in the market situation and now, the level of 1.2200 is acting as support.
Under the current conditions, the volume of short positions dropped near 1.2200. As a result, the pound sterling slackened its depreciation and reversed. To form a signal of a further recovery after a decline in February, the quote should consolidate above the resistance level of 1.2300 at least on the four-hour chart. Otherwise, the price may slide to 1.2150.


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00:00 INTRO
00:17 UK ANNUAL INFLATION RATE
00:45 Fed’s key interest rate
01:22 The US dollar
01:43 EUR/USD
02:14 GBP/USD