The euro and the pound sterling continue losing value against the US dollar. Today's speech of Fed Chair Jerome Powell may seriously hit markets. Jerome Powell will hardly say anything new, but his tone will remind us that the Fed is ready to do everything in its efforts to combat inflation, which has reached a 40-year high. On Wednesday, Jerome Powell promised that officials would cap inflation. Meanwhile, the Fed raised the benchmark by another 75 basis points for the third time in a row. The regulator also dropped hints about a more aggressive hike. "We have got to get inflation behind us. I wish there were a painless way to do that," Fed Reserve Chairman Jerome Powell said on Wednesday just after the regulator increased the targeted level of the key interest rate to 3.25%.

"While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain," Powell stated.

According to recent estimates, interest rates may hit 4.4% by the end of the year and 4.6% in 2023. The regulator's approach has become more aggressive. It means that in November, the Fed may raise the benchmark rate by 75 basis points for the fourth time.

Today, Jerome Powell may discuss the average forecast, which presupposes the rise of 125 basis points. However, the decision will depend on macroeconomic reports. Most Fed representatives said that they would prefer to raise the benchmark rate by 1 percentage point only at the last meeting of this year. This is how politicians tried to reduce the negative effect on stock markets and the country's economy.

On Wednesday, Powell also said that he and his colleagues were determined to reduce inflation to the 2% target set by the Fed, and would adhere to this mandate until the work was done.

From the technical point of view, bulls are resisting and do not want to surrender the market, but apparently, this is inevitable. At the beginning of the European session, the euro returned to an annual low. What is more, the currency will hardly see a rosy future. Buyers should protect the support level of 0.9810, but it is difficult to say how to do this against the background of weak statistics. A breakout of 0.9810 will push the euro lower to 0.9770. Meanwhile, a breakout of this low will allow the pair to slide to 0.9720 and 0.9660. Under the current conditions, it is quite difficult to predict growth in risky assets. To begin with, bulls need to return to 0.9860, which will allow them to reach 0.9900. It will be possible to talk about a return to the parity level only after a breakout of 0.9952 and 0.9996.

The pound sterling also collapsed to figure 12, remaining under pressure. If the price returns to 1.1270, buyers could become more active. This will create quite good chances for a larger upward correction, which will allow the pair to climb to 1.1320 and 1.1360. The farthest target in the current bullish movement will be located at 1.1400. If pressure on the pair persists, buyers will have to try very hard to stay above 1.1215. Without doing this, we can see another drop to 1.1160 and 1.1110.