The market expects the Federal Reserve to hold interest rates steady, although there is still a possibility of a rate hike. After all, inflation in the United States has been rising for two consecutive months. So, from a formal point of view, there are grounds for another rate hike. And if that does happen, the dollar could rally.

But what if interest rates remain at their current level?

It will all depend on Fed Chair Jerome Powell's subsequent comments. Although, we shouldn't expect him to reveal any specific details about the Bank's monetary policy. Most likely, Powell will say that the decision on the rate will be based on macroeconomic dynamics, particularly inflation. He says this every time. However, after the European Central Bank made it clear that it no longer plans to raise its rate, even such rhetoric from Powell will appear excessively hawkish. This, too, will support the dollar's strength.

The dollar can only weaken if the Fed announces the end of its interest rate hike cycle. However, in the face of rising inflation, this seems improbable.

The euro has partially recovered against the US dollar from its recent decline. However, the scale of price changes is not enough to change the direction of movement.

On the four-hour chart, the RSI technical indicator is hovering around the 50 midline. It means a flat market.

On the same time frame, the Alligator's MAs are intersecting each other, indicating a stagnant phase.

Outlook

Speculative activity will be directly linked to the results of the FOMC meeting. Therefore, the flat phase will end today, ushering in volatility across the market. From a technical perspective, keeping the price below 1.0600 could extend the downward cycle. Meanwhile, a break above 1.0750 could strengthen the euro's recovery, which would favor long positions.

Complex indicator analysis provides a mixed signal in the short-term and intraday periods due to a prolonged trading range.