EURUSD near to key support after hawkish Fed Bullard comments 📉

James Bullard, chair of the St.Louis Fed hawkishly commented on monetary policy today and we see further eurodollar's decline. According to Bullard, known for his hawkish stance, the Federal Reserve underestimated the strength of the U.S. economy, and interest rates should be near the terminal rate as soon as possible.

Fed Bullard

• The Fed policy needs to be sharp now and Fed have to control inflation this year. At the moment we don't see financial stress.
• The Federal Reserve risks that inflation will not fall or that it will accelerate again
• I forecast moderately slow growth this year with declining inflation. Markets may be overestimating the risk of a recession in 2023
• The Fed should only slow the pace of hikes once it reaches the terminal rate
• I still think we can lower inflation while maintaining a strong labor market
• We need to bring inflation down in 2023 though markets are pricing in a `difficult road ahead' on inflation
• The Fed rates will have to be above 5% level to stop inflation. In my projection, rates will rise near 5.375%

EURUSD weakened after Bullard's comments and approached the area last seen on February 17 and earlier in early January. The main resistance is marked by the 200-session moving average (red line) and the 38.2 Fibonacci retracement near 1.07. Bulls will try to rebound from the current levels of 1.064, which coincide with the 71.6 Fibonaccegio retracement of the upward wave started on January 8, 2023. The RSI indicator is at a neutral level of 48 points. 

Source: xStation5