EUR/USD Soft After Hawkish Fed Rhetoric


Fed Hawkish Remarks

Fed Governor Ms Brainard made some rather hawkish remarks on Thursday, which led to a US Dollar advance. She said that inflation is "much too high" and getting it down is of "paramount importance", noting that the bank is ready to take "stronger action" if warranted, which was largely interpreted as hint for more aggressive rate hikes. [1]

The Fed's preferred measure of Inflation, the Core Personal Consumption Expenditures climbed to highest level since early 1983 in March, coming in at +5.4% year-over-year last week. The central bank hiked interest rates last month by 25 basis points to combat surging consumer prices and markets currently expect a larger 50 bps move in May, with CME's FedWatch Tool assigning 76.6% probability to such an outcome. [2]

Ms Brainard also commented on the balance sheet, seeing a "rapid pace" reduction which could begin as soon the next meeting in May. The central bank's portfolio has ballooned to nearly $9 trillion as a result of the asset purchases program that ended in March.

Sanction Against Russia & Support to Ukraine

EU Commission President Ms von der Leyen proposed yesterday a fifth package of sanctions against Russia, following the "gruesome pictures from Bucha and other areas from which Russian troops have recently left". The plan consists of six pillars, which include a ban on coal from Russia, but no oil embargo. [3]

Western allies are also ready to provide further support to Ukraine, with the war having entered its 43rd day, as NATO Secretary General Stoltenberg said talked about sending "anti-tank weapons, air-defence systems and other equipment". He also expects "a new very concentrated Russian offensive in Donbas". [4]

TradingView Pro

As an FXCM account holder you could get TradingView Pro FREE for 1 year saving over $100.

EUR/USD Analysis

These developments are pushing the pair to the fifth straight negative, confirming our pessimistic view. It is now in danger of fresh 2022 lows (1.0805), although fresh catalyst may be requires for that, while 1.0635 seems remote for now.

Despite renewed trouble at the start of the European session, the Relative Strength Index (RSI) is at oversold levels that have not been reached since early March, which had then led to a EUR/USD rebound.

Such a scenario could play out again and the common currency could push towards 1.1000, but we remain cautious around its upside potential, while a break above the EMA200 (1.1080) is need for the downward bias to pause.

Market participants now look forwards to the FOMC minutes for more insight into the Fed officials thinking, a release that could determine the pair's next move.

Nikos Tzabouras

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 06 Apr 2022


Retrieved 06 Apr 2022


Retrieved 06 Apr 2022


Retrieved 29 Sep 2022


Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.

Risk Warning: Our service includes products that are traded on margin and carry a risk of losses in excess of your deposited funds. The products may not be suitable for all investors. Please ensure that you fully understand the risks involved.

${} / ${getInstrumentData.ticker} /

Exchange: ${}

${} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}