The need for speed on rate hikes | 05 5月 2022

05 5月 2022, EUR/USD

EURUSD trading plan:

The Federal Reserve raised interest rates by a half percentage point for the first time since 2000 as the fight against elevated inflation heats up. "Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures," the Fed said. The balance sheet reduction program is expected to get underway on June 1 at a pace of $47.5 billion per month. "In addition, the Committee decided to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities on June 1," the Fed said. Under the plan, the Fed would initially allow about $30 billion in Treasury securities and about $17.5 billion in agency MBS to roll off its balance sheet, with the intent of gradually stepping up the pace after three months to $60 billion and $35 billion per month, respectively.

Investment idea: sell 1.0620 and take profit 1.0545.

David Johnson
Analyst of «FreshForex» company
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