EUR/USD – H4
The US Federal Reserve signaled rate hikes as early as March on Wednesday and the conclusion of its asset purchases program in the same month, while focus will shift to the European Central Bank (ECB) this week, as it hands down its monetary policy decision on Thursday.
The pair dropped after the Fed's decision, since the monetary policy differential works against it, but contained losses on Friday, despite US Core PCE inflation rising 4.9% y/y in December, compared to 4.7% prior.
On Sunday, Atlanta Fed President Raphael Bostic did not rule out a 50 bps rate hike if needed, on a Financial Times interview . However, Mr Bostic is not a voter this year.
EUR/USD is in a good mood today, reacting from last week's plunge to the lowest level since June 2020. It tries to retake EMA100 (1.1200-10), which will ease downwards risk, but a catalyst will be needed in order to challenge mid-1.1200s and the descending trend-line form the January high.
Despite today's upbeat mood, the common currency is in a precarious position and vulnerable to 1.1120-1.1099, although 1.1049 looks distant at this stage.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
Retrieved 10 Dec 2022 https://www.ft.com/content/5f6fae25-de70-4977-aeb7-271fa3af5bc3