Forex Analysis & Reviews: 03.10.2023 - Powell's speech contains no...

03.10.2023 12:55 PM

Powell's speech contains no surprises

While the euro and British pound were actively losing ground against the US dollar, the head of the Fed delivered another speech. "The Federal Reserve is focused on achieving a good labor market for a sustained period," Jerome Powell said at a roundtable event in York, Pennsylvania. "Lots of good things happen" in addition to real wage increases when a good labor market lasts for a sustained period of time, he added on Monday.

The head of the Fed also noted that there are expanded efforts to get more people into the workforce. One of these programs prepares prisoners for work a year before their release. "Actually it turns out that as an expansion gets longer and longer, more and more of the wage needs actually go to people at the lower end of the wage spectrum," Powell told workers, small business owners, and community leaders. However, in addition to his words, Powell made it clear that price stability is needed before increasing real wages. "Price stability is just a critical piece of bedrock for the overall economy over the years."

Despite the labor market-related comments, Powell ignored questions and did not leave remarks on the short-term interest rate prospects and the economy.

Notably, many representatives of the Federal Reserve are already advocating for a quarter-point rate hike this year. After last month's committee meeting, Federal Reserve Vice Chair for Supervision Michael Barr stated that much would depend on further economic data, although rates are now "at or very near" a sufficiently restrictive level.

Michelle Bowman also noted that multiple interest-rate hikes may be required to get inflation down to the central bank's goal even after data for August showed some of the slowest price increases since 2020.

At the end of last week, Federal Reserve Bank of New York President John Williams suggested that the US central bank may be done raising interest rates, though he said policymakers would keep them high for "some time" to bring inflation down to the central bank's 2% goal.

In any case, the more they talk about rate hikes, the more pressure the dollar puts on risk assets such as the euro and the British pound. In this regard, it is not surprising that these pairs are currently suffering heavy losses, especially after their recent corrections that allowed new sellers to enter the market at more attractive prices.

As for today's EUR/USD technical analysis, the euro continues to lose value. To regain control of the market, buyers need to break above the 1.0480 level. In this case, the euro will have a chance of rising to 1.0510 and probably 1.0540. However, the latter will be challenging without support from major players. In a bear case scenario, I expect major buyers to take action only at around 1.0440. If trading activity in this area is subdued, it would be a wise decision to wait for the price to dip to a new low at 1.0395 or go long at 1.0340.

Speaking of the GBP/USD pair, the British pound is back under pressure. Gains are possible only after the price consolidates above the 1.2080 level. In this case, one can expect a recovery to 1.2120 and probably 1.2160. In the event of a decline, bears will try to take control of 1.2030. Its breakout will bring the pound sterling down to 1.1970 and even 1.1930.

你今天已经点赞上这篇文章了

*这里的市场分析是为了增加您对市场的了解，而不是给出交易的指示。

If you have any content questions, please contact editorial-board@instaforex.com

Fundamental analysis

Jakub Novak,
Analytical expert of InstaForex
© 2007-2025

该作者的更多文章

电子邮件订阅

EURUSD

Euro vs US Dollar

选择时间框架

分钟

小时

天

周

开始交易

通过InstaForex赚取加密货币汇率变动的收益。

下载MetaTrader 4并开启您的第一笔交易。

推荐文章

6月11日該注意什麼？新手必看的基本事件解析

GBP/USD 概述 - 6月11日。通脹將產生什麼影響？

歐元/美元概況 – 6月11日：即使有談判消息也未能幫助美元

日本希望貿易談判取得積極成果——否則，經濟衰退和通貨膨脹上升即將來臨

GBP/USD：勞動力市場降溫，但英鎊堅守陣地

美元已經注定要衰落，雖然它還沒有意識到這一點

美元穩定，但不會持久

沒有消息就是好消息

EUR/USD。分析與預測

市場期望美中貿易談判取得突破（黃金和英鎊/美元可能持續下跌）

Top analytics