FOREX Fundamental analysis on February 15, 2024Prices take everything into account – the old market postulate of forex currency trading. If the situation had been extremely unfavorable, stock indexes would not have shown growth. However, the S&P 500 began to recover after the January US consumer price report due to unexpected "dovish" comments from FOMC members. Financiers claim that the dynamics of inflation can be tortuous, but in any case it is moving towards the target set by the regulator. Is it possible, in this regard, that the Fed will cut rates in May? If so, the EURUSD may reach the bottom sooner than expected.The head of the Federal Reserve Bank of Chicago expresses the opinion that in order to be sure of a stable decrease in inflation towards the 2% target, it is not necessary that its indicator be as low as in the last 6 months of 2023. Even a small price increase is still consistent with the Fed's strategy. Austin Goolsby, repeats Powell's words that to begin lowering federal funds rates. no need to wait for the PCE to drop to 2%. There are other risks as well. For example, high borrowing costs can lead to a rapid increase in unemployment.Investors recall that the Fed often ignores single data, focusing on trends, and the current decline in inflation is visible to the naked eye. However, the surge in consumer prices followed by a recession indicates that standard approaches may not be effective. The Fed has limited experience dealing with such fluctuations, especially in the context of post-pandemic GDP growth.It is clear that even in a strong economy, a reduction in rates is not excluded. If we draw parallels, before COVID-19, gross domestic product expanded at the same rate, and unemployment remained at the same level as it is now. At the same time, inflation was below 2% with a significantly lower rate. In the current conditions, there is a risk that with the restoration of logistics chains, prices will fall below the target, and high rates will become a real threat to the economy. Why should the Fed wait for the implementation of a negative scenario?The regulator is aware of the need to ease monetary policy. The question is, when to start and how much to carry out monetary expansions? After the January inflation report, the probability of March easing decreased from 77% to less than 10%. The focus of attention is May, but rather June.So far, one thing can be said - even the strongest reports of the American economy will not stop the Fed from easing monetary policy in late spring and early summer. On the contrary, an unexpected increase in retail sales in the United States can restore the upward trend of stock indices, and through currency correlation improve risk appetite by supporting the euro. For EUR/USD to collapse, additional confirmation of inflation acceleration, including PPI, is required.We believe that the EUR/USD rebound from the bottom is close. This may happen even before the expected fall to the area of 1.06-1.064. However, we consider buying the pair before recovering to 1.08 to be unnecessarily risky.EUR/USD Technical analysisYesterday, EUR/USD tried to break below the target range of 1.0719 - 1.0702, but without success. As you know, if an asset does not move in one direction, then it will start moving in the other. As a result of the "bearish" failure, an upward correction began to form, and with its further development, we can expect the asset to recover to the resistance area 1.0787 - 1.0778. After testing the range 1.0787 - 1.0778, we suggest considering the possibility of new sales with a target at the previous local minimum.In case of a breakdown above the resistance 1.0787 - 1.0778, the upward correction will continue to the resistance area 1.0833 - 1.0820. This zone is the boundary of the trend, and can also be considered as a promising place to enter the EUR/USD sales.