This week is important for the US dollar as the Federal Reserve of the United States announces its interest rate decision on Wednesday. The market expects the Fed to hold the rate at the same level, which would be the second pause in the current tightening cycle. Instead of the decision, the focus will be on what the Fed will signal for the future.
Inflation in the US has dropped from its highs and is continuing to do so. This could be similar to Europe, where prices of goods and services have dropped drastically in October. If this is mirrored in the US, the Fed might be signaling the end of the tightening cycle.
This has been noticed in the cryptocurrency market, where Bitcoin rose to $35k. Cardano is one of the cryptocurrencies that anticipates a dovish Fed. ADA/USD rallied from horizontal support and is attempting to break dynamic resistance. This could potentially form a bullish reversal pattern, with a move above $0.35 triggering more strength. If it drops below the 2023 lows, this would invalidate the pattern.
The Fed’s decision this week could be a game-changer for the US dollar and the cryptocurrency market. Both will be eagerly awaiting the outcome to see if it will be a dovish Fed or not.