2022-12-15 • Updated
European Union is one of the most economically stable regions in the world. Inflation is usually low, so are the bank rates. Some of the banks even charge fees for depositing the euro. But coronavirus changed the game. Now, the European central bank needs to act to support the rapidly changing economy. This article will analyze the possible scenarios for the EU, and what's more important, look at the charts. There is a lot to see, let's go!
President Christine Lagarde's press conference fell quite clearly on the hawkish side on February 3. While there were no changes in the ECB's action, the comments during the press conference were interesting. As expected, all monetary policy instruments were left unchanged.
The ECB still expects a strong economic recovery and points to strong labor market developments over the coming months. At the same time, the risks to the economic outlook were still labeled as "broadly balanced," but the ECB stressed more downside factors than it has previously. Regarding the inflation assessment, the ECB spoke less about the expected inflation trajectory. Even more interestingly, the ECB reintroduced the phrase that "risks to the inflation outlook are tilted to the upside for the first time in years." This risk assessment had disappeared from the ECB's introductory statements when quantitative easing (QE) was started.
No one could have seriously expected the ECB to act today as there is simply nothing the ECB can do to bring down inflation immediately. But now, the market has a clearer view of the bank's plans. This year, Lagarde opened the door to a speeding up of asset purchase reductions and a rate hike. Considering all this and assuming that energy prices do not drive over the next four weeks, we expect the ECB to speed up the reduction of net asset purchases and bring them to an end in September. It will allow the ECB to hike the deposit rate at least once before the end of the year.
The support at 1.1180 got cleared, and bullish divergence on the RSI has formed. From now on, the euro looks strong against the dollar. We expect the pair to consolidate between 1.1300 and 1.1500 before the further surge.
EUR/USD daily chart
Resistance: 1.1500; 1.1680; 1.1900
Support: 1.1300; 1.1120
We see the reaction to round 132.00 round number in EUR/JPY. A pullback to 200-daily MA should happen before any growth.
EUR/JPY daily chart
Resistance: 132.00; 133.30
Support: 130.50; 130.00; 128.40
The same goes for EUR/GBP. Robust bullish momentum will slow down as the market decides the next movement. So a 0.8422 is a sweet zone for buy orders.
EUR/GBP JPY daily chart
Resistance: 0.8500; 0.8600
Support: 0.8422; 0.8380
To sum up, the euro skyrocketed a little bit too much and needs a minor correction. But overall, we expect EUR to rise in a matter of weeks.
During the Asian session on Wednesday, the USD/CAD pair rebounded after two days of losses, reaching around 1.3590. This uptick is fueled by a stronger US dollar and lower crude oil prices, which put pressure on the Canadian dollar. The decline in Western Texas Intermediate (WTI) oil prices to approximately $80.70 is attributed to...
Gold prices rose on Monday as the US Dollar weakened amidst speculation about potential Federal Reserve rate cuts starting in June. This weakened Dollar was partly due to improved risk sentiment pushing US Treasury yields lower. Despite facing challenges from declining yields, gold prices recovered to nearly $2,170 per troy ounce, driven by the Dollar's weakness. Federal Reserve Chair...
Canadian retail sales showed a slight rebound in February, rising by 0.1% after a 0.3% drop in January. However, this failed to fully offset the steeper decline earlier in the year, suggesting a weakening momentum in consumer spending. The increase in February was driven by gains in sectors such as sporting goods, hobby retailers, and building materials. Despite the...
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.
Your request is accepted.
A manager will call you shortly.
Next callback request for this phone number
will be available in
If you have an urgent issue please contact us via
Live chat
Internal error. Please try again later
Don’t waste your time – keep track of how NFP affects the US dollar and profit!
|
