what is euro?

The unexpected crisis in the US banking sector has crushed all hopes for a new acceleration in the pace of interest rate hikes. Goldman Sachs economists said they no longer see the Fed raising rates next week, even after US authorities took steps to contain the crisis caused by the collapse of Silicon Valley Bank and Signature Bank. This caused two-year Treasury bond yields to fall by 18 basis points to 4.34%, reaching its sharpest three-day drop since October 1987. Expectations of a less aggressive policy stance and sharp demand for German bonds also affected the euro.

Exchange Rates 14.03.2023 analysis

Interest rate

Most likely, Fed officials will announce a pause in interest rate hikes this week ahead of their meeting on March 21-22. Economists were expecting to see around 0.25% to 0.5% increase earlier, but everything changed since last Sunday, when US authorities had to act very quickly in order to contain the spreading of SVB's problem to other US banks. The Fed had to open an emergency line of credit, allowin

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Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

Euro To US Dollar (EUR/USD) Chart Shows A Sliding Price Line | EU forecast: growth down, inflation up | Oanda

Kenny Fisher Kenny Fisher 16.05.2022 17:59
The euro is drifting at the start of the week, as EUR/USD trades slightly above the 1.04 level. The euro remains under pressure, as it continues to weaken against the US dollar. EUR/USD hasn’t mustered a winning week since March and hit a dubious milestone on Thursday, closing below the 1.04 line for the first time since January 2003. If the euro breaks below support at 1.03 it would be on track to fall to parity, a psychologically significant level. EU forecast sees lower growth, higher inflation The EU gave the eurozone a report card on Monday, and the data wasn’t pretty. The report was the EU’s first forecast since the Russian invasion of Ukraine. The forecast stated that eurozone growth would expand by 2.7% in 2022 and 2.3% in 2023. In February, the forecast stood at 4% and 2.7%, respectively. On the inflation front, the forecast was revised upwards to 6.1% in 2022 and 2.7% in 2023, up from the previous forecast of 3.5% and 1.7%, respectively. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The takeaway from the EU forecast is that as a result of the Ukraine war, the eurozone is experiencing lower growth and higher inflation, raising concerns that the eurozone could soon be gripped by stagflation. The eurozone has been particularly hard-hit by the conflict, due to its heavy reliance on Russian energy and geographical proximity to Ukraine. Unsurprisingly, investors don’t like what they are seeing, and the euro has taken it on the chin. Reports that the EU is trying to garner support for a ban on Russian oil, which would mark the ratcheting up of sanctions against Moscow, is putting further pressure on the wobbly euro. Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM The upheaval caused by the Ukraine war seems to have woken up the ECB from its dovish slumber. After years of monetary easing, ECB members are becoming more vocal about the need for tighter policy, and ECB President Christine Lagarde said earlier this week that QE would end in the third quarter, and a rate hike would follow “some time” after that. We could see the launch of a rate-tightening cycle as early as July. EUR/USD Technical 1.0398 has switched to resistance. It is a weak line and could see further action during the day. Above, there is resistance at 1.0473 There is support at 1.0321 and 1.0246 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

Will Petrol Prices Scare Drivers Again!? Crude Oil Price Reaches Really High Levels! US Dollar (USD) To Slowdown Its Skyrocketing? | Saxo Bank

Saxo Bank Saxo Bank 17.05.2022 11:09
Summary:  Market sentiment is mostly stable after a rare, uneventful day for global markets. Crude oil has pulled to a new local high as petrol prices in many countries have risen to record highs. The US dollar is on its back foot, helping to spark a sharp gold rally from capitulation lows after the precious metal had broken down through all major support levels. The mood in Asia brightened overnight on hopes China is set to ease its clampdown on the tech companies.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - S&P 500 futures closed just above the 4,000 level yesterday as US equities failed to extend their gains from Friday’s session. Tesla shares fell 6% as bubble stocks and crypto related companies fell almost 5% suggesting weakness in technology stocks continues. While the Empire State manufacturing PMI figures yesterday were from a little region of the US, they surprised significantly to the downside hitting levels typically consistent with low economic activity or even a mild contraction. S&P 500 futures are pushing higher trading around the 4,024 level with yesterday’s high at 4,043. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) rallied 2% and 1% respectively on prospect of relaxation of Covid restrictions in China.  JPMorgan’s 180-degree reversal to turn overweight in Chinese internet stocks also help the market sentiment. Alibaba (09988), Tencent (00700), Meituan (03690) and JD.COM (09618) gained about 5% to 6%. Auto makers, batteries and semiconductors surged on the prospect of normalization of supply chain from lockdown. Great Wall Motor (02333) rose over 10%. Ganfeng (01772) rose 6.7%. Hua Hong Semiconductor (01347) gained 6%.  Stoxx 50 (EU50.I) - European equities continue to trade at levels lower than a year ago as weakness is still widespread due to the war in Ukraine with BOE chief Bailey warning yesterday of the extreme risks related to galloping food prices and security of supply. Stoxx 50 futures are trading just below the 3,700 level this morning with the 50-day moving average at 3,732 being the key resistance level to watch on the upside. USD pairs – the US dollar weakened rather sharply yesterday as risk sentiment continued to stabilize. Traders should be on the lookout for whether the sell-off could extend sufficiently to trigger a tactical reversal in the USD bull trend. Levels worth watching include the 1.0500 resistance area in EURUSD, 0.7050-0.7100 resistance zone in AUDUSD, and 1.2400 resistance in GBPUSD. The Apr. Retail Sales report up later today could trigger market volatility. JPY pairs – JPY crosses have bounced hard from the steep sell-off late last week as risk sentiment has stabilized since Friday and, to a lesser degree, as bond yields pulled back higher. The volatility looks excessive relative to coincident developments. USDJPY will watch US treasury yields over the US data today with resistance around 130.00, while a break down through the important 128.00-127.50 area and consolidation back toward 125.00 likely needing a significant consolidation lower in US treasury yields. AUDJPY and GBPJPY have been particularly volatile JPY pairs since a one-off meltdown last Thursday that has now largely been erased. Gold (XAUUSD) trades higher supported by a softer dollar, higher oil prices and tailwind from silver (XAGUSD), as the industrial metal sector receives a boost from the prospect of easing lockdowns in China. The recent loss of momentum which helped attract fresh tactical short sellers was driven by the relentless rise of the dollar and the markets belief in the FOMC’s ability to bring down inflation without hurting growth. With the latter increasingly seeing downgrades, the risk of recession has not gone away, and it raises the question of whether real yields may pause following its March to May near 1.5% jump. Further weakness below 0.09% may signal a period of consolidation in US ten-year yields. Gold needs to break above its 200-day moving average at $1838 to force a further improvement in sentiment. Crude oil (OILUKJUL22 & OILUSJUN22) returned to an eight-week high overnight after China signaled it would start unwinding lockdowns in the Shanghai. Also underpinning prices is the continued strength in the price of fuel products, driven by strong demand and restrained refining capacity. Recently led by a record high price of RBOB gasoline future. Global demand has yet to show signs of demand destruction and with Chinese demand starting to recover the risk of higher prices remains, not least considering Europe’s continued efforts to reduce its dependency on Russian oil and gas. HG Copper (COPPERUSJUL22) has bounced back after hitting a seven-month low last week, and as we highlighted in a recent update, the market has been under pressure due to China lockdowns, and with those now starting to ease a bid has returned. If the change in sentiment towards a more favorable outlook takes hold, hedge funds may soon be forced to cover a short position which according to the latest COT report doubled to a two-year high in the week to May 10. The industrial metal sector slumped 25% during since early March as China closed, but with lockdowns now easing, stimulus policies focusing on the property sector and infrastructure will likely support a recovery. What is going on? High yield credit spreads continue to widen, signaling rising stress in corporate debt markets.  One measure of credit spreads, the Bloomberg US Corporate High Yield Average option-adjusted-spread, has widened to above 450 basis to US treasuries, the highest levels since late 2020. Back in late 2018, the spread peaked at 537 basis points just before the Powell Fed pivoted to easing policy. Lockdowns start to ease in Chinese cities. China’s nationwide (excluding Hong Kong) new local cases fell to 1,049 (sharply lower from the April 13 high of 29,317 cases), of which 823 cases from Shanghai and 52 cases from Beijing.  Shanghai reported three consecutive days of zero community (i.e. outside of quarantine) transmission.   The municipality expects to gradually resume public transportation services from May 22.  Starting from today train services and air flights to and from other Chinese cities is gradually resuming services.  The Shanghai government expects that the lockdown will be completely lifted in June.  Chinese tech stocks trade higher on hopes for easing stance from regulators. A symposium hosted by a prominent advisory body today in China has sparked hopes for a revival of tech stocks as executives of prominent companies like Baidu Inc were invited. JP Morgan Chase & Co. analysts yesterday announced upgrades to ratings on major Chinese tech names like Alibaba and Tencent Holdings. Bank of England Governor Bailey fears “apocalyptic” risk from rising food prices. Governor Bailey testified before a parliamentary committee yesterday and said the rise in prices is “a major worry not just for this country but for the developing world.” Bailey bemoaned the series of supply shocks that are driving a cost-of-living crisis for the many UK citizens as the price of food and energy, in particularly have risen sharply, the latter a direct result of the Russian invasion of Ukraine. Bailey also noted a 1.3% fall in the size of the labor market, which also limits economic growth potential. Deputy Governor Ramsden added that “we hear companies telling us that even people on median incomes are overextended.” RBA opening the door for bigger rate hikes. Minutes of the Reserve Bank of Australia's May monetary policy meeting showed that members considered three options, raising the cash rate by 15 basis points, 25 basis points or 40 basis points. The 40bps rate hike was avoided considering that the board meets monthly and would have the opportunity to review the data flowing in to decide on the size of future interest rate hikes. With inflation being seen as a key concern and Q1 inflation hitting 5.1% - the fastest pace in two decades – this likely suggests that there is room for 40bps (or more) of rate hikes in the upcoming meetings. What are we watching next? The European Commission downgraded GDP forecasts for 2022 and 2023. The EU Q1 GDP estimate is out later this morning. Official real GDP growth in both the European Union and the euro area is now forecast at 2.7 % in 2022 and 2.3 % in 2023, down from 4.0 % and 2.8 % (2.7 % in the euro area) in the last forecast released in February 2022. The forecast for 2022 is likely too optimistic. Several countries are facing a very challenging economic environment (stagflation risk in Germany and risk of technical recession in France, for instance). France’s wage negotiations are kicking off. According to a blog article published by the Bank of France last week, wages are likely to increase by 3% this year, on average. From 2014 to 2020, wages barely moved (+1 %). This is still not enough to cope with higher inflation (4.8 % YoY in April). April U.S. retail sales are out today. Expect the positive momentum to remain in place. Several factors are pushing retail sales up: solid auto sales, significant cash savings buffers (built during the pandemic) and rising wages (though they are not keeping pace with the increases in the cost of living). In the short-term, we believe consumer spending will remain robust and the domestic economy will be in a good position. Earnings Watch. As with many earnings release dates for Chinese companies they are postponed and that happened to Meituan yesterday. The Q1 earnings release has been postponed to 23 May. Today’s focus in Europe is Vodafone which could show its qualities as a defensive company during the current declines and then Nibe Industrier which is big on air-to-heat water pumps which are a declared preferred technology by the EU in its quest to become independent of Russian natural gas. In the US session, the focus will be on Walmart, Home Depot, JD.com and Sea Ltd. The two big retailers Walmart and Home Depot will provide great insights into consumer behaviour in their outlook. Today: Engie, Vodafone, Nibe Industrier, Sonova, Walmart, Home Depot, JD.com, Sea Ltd Wednesday: Tencent, Experian, Burberry, Singapore Airlines, Cisco, Lowe’s, Target, Analog Devices, TJX, Synopsys, Copart, Trip.com Thursday: Xiaomi, Generali, National Grid, Applied Materials, Palo Alto Networks, Ross Stores, DiDi Global Economic calendar highlights for today (times GMT) 0900 – Euro zone Q1 GDP forecast 1005 – UK Bank of England’s Cunliffe to speak 1230 – US Apr. Retail Sales 1315 – US Fed’s Harker (non-voter) to speak 1315 – US Apr. Industrial Production and Capacity Utilization 1400 – US May NAHB Housing Market Index 1700 – ECB President Lagarde to speak 1800 – US Fed Chair Powell Interview at event 1830 – US Fed’s Mester (voter) to speak 2030 – API Weekly Report on U.S. oil and fuel inventories 2350 – Japan Q1 GDP estimate 0130 – Australia Q1 Wage Price Index Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Saxo Bank
The Canadian Dollar Gains Momentum as Crude Oil Prices Surge

Chart of the Week : Real Effective Exchange Rates (EUR and USD) | Saxo Bank

Christopher Dembik Christopher Dembik 17.05.2022 21:52
Summary:  In today’s ‘Macro Chartmania’, we focus on the Real Effective Exchange Rate (REER). All the data are collected from Macrobond and updated each week. Click to download this week's full edition of Macro Chartmania composed of more than 100 charts to track the latest macroeconomic and market developments. The below chart shows the Real Effective Exchange Rate (REER) for the euro and the U.S. dollar. This is the weighted average of a country’s currency against a basket of other major currencies. It is used for international comparisons, especially by the International Monetary Fund and the World Bank, for instance. Currently, the U.S. dollar is 27 % too high compared to the euro, based on the REER. The last time the gap was so wide was when the outbreak started in 2020. This is only the beginning, in our view. U.S. dollar net speculative positioning continues to increase at a speedy pace. Several factors are pushing investors to look for the default safe haven : risk of technical recession or stagflation in several developed economies (France, Germany and the United Kingdom, for instance), skyrocketing commodity prices (especially for agricultural goods due to the Ukraine war and the drought in India), equity bear market, lockdowns in China which will push down global GDP growth this year, persistent inflationary pressures (resulting from supply chain disruptions and higher wage compensations, amongst other things) etc. From a technical point of view, the USD is likely to move upward in the short-term. We expect that risk-off waves will push the DXY index well above 105.00. The EUR/USD is likely to remain under pressure too. How long do you think this can go on before something snaps ? My bet : the European Central Bank (ECB) will have no other options but to increase interest rates at the July meeting to bring support to the EUR and close the gap with the U.S. dollar. Timing is everything : the July meeting will take place just one day after the release of the first estimate of the eurozone Q2 GDP. If the Governing Council decides to move forward with a rate hike, this would reduce imported inflation, in theory. The ECB is caught between a rising dollar and a weak euro. This is simply intolerable. Several governing council members, including those considered as the most pragmatic, are now leaning in favor of a rate increase and exiting negative rates by the end of the year (Banque de France’s Villeroy de Galhau, for instance). This will certainly not solve from one day to another inflationary pressures within the eurozone (inflation is partially driven by external forces such as commodity prices). But it will at least reduce the FX-passthrough into inflation which is becoming problematic. Source: Saxo Bank
Only Ugly US Data Could Reverse Sentiment | Gilt Yields In UK Were Steady To Lower

(WMT) Walmart Price Dropped Down As The Earnings Turned Out To Be Quite Low. Jerome Powell (FED) Seems To Be Ready To Get His Foot Down Regarding Monetary Policy And Boost US Dollar (USD) Further | Saxo Bank

Saxo Bank Saxo Bank 18.05.2022 09:10
Summary:  Risk sentiment remained strong in the US yesterday, as the major indices closed strongly at a more than one-week high on a day that saw both a strong US Retail Sales report for April and largest US retailer Walmart’s stock punished by the most in a single day since 1987 on a weak profit forecast. Fed Chair Powell said that the Fed won't hesitate to raise rates above neutral if necessary, helping to lift the entire US yield curve and perhaps helping to cool sentiment overnight.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - S&P 500 futures pushed higher yesterday closing the recent short-term selloff cycle that started last Monday but are trading a bit softer this morning around the 4,075 level. US retail sales yesterday showed that the US consumer is still alive and comments from Home Depot’s CEO suggest that the US housing market is still strong despite recent higher mortgage rates with tight supply of homes to last several years. Overall, the dynamics are still the same with tighter financial conditions ahead and hawkish comments yesterday from several Fed members suggest our defensive stance on US equities is correct. Stoxx 50 (EU50.I) - Stoxx 50 futures closed above its 50-day moving average that we highlighted as the key focus point for the market in yesterday’s quick take. This is the first time since 20 April when technology stocks were staging a comeback with risk appetite before everything turned lower again. If Stoxx 50 futures can manage to stay above this moving average, there might be enough energy for a test of the 3,800. European car sales figures are out this morning and they are still weak which might add a bit of negative pressure among carmakers and car parts suppliers. EURUSD – strong risk sentiment and a weaker US dollar clearly go hand in hand, as yesterday’s market action demonstrated, but the euro got an extra boost from ECB governing council member Klaas Knot saying that the ECB shouldn’t exclude 50-basis point hikes from the menu of options. This drove a strong boost in ECB rate expectations, with end-2022 now priced for a +0.45% policy rate, 10 bps higher than the previous day. EURUSD traded up through 1.0500, a bullish reversal as that was a sticking point on the way down. Still, very heavy lifting would be needed to turn the bearish tide, with next resistance at the prior pivot higher near 1.0640, while more like 1.0800-1.0850+ would be needed to suggest a structural reversal. A new sell-off in risk sentiment will test the degree to which the latest hawkish tile from a growing number of ECB members weighs on the EURUSD exchange rate. USDJPY and JPY pairs – watching JPY crosses and USDJPY closely after US treasury yields jumped yesterday, especially at the long end of the curve, to which the JPY is traditionally most sensitive. Japan’s Q1 GDP estimate out overnight was better than anticipated as nominal GDP rose +0.1% and the economy (in real terms) contracted less than expected. In the JPY crosses, we have seen a wild ride on the recent swings in risk sentiment that now have pairs like EURJPY, AUDJPY and GBPJPY back near important retracement levels after steep sell-offs last week. These will likely tilt lower if bond yields stay calm and we see renewed risk aversion. Otherwise, the Bank of Japan will likely only come under fresh pressure to alter its policy if the USDJPY rate jumps to strong new highs and, for example, if global oil prices do likewise, increasing cost-of-living in Japan, etc. Gold (XAUUSD) trades lower after Fed chair Powell said the Fed will keep raising rates until inflation is brought under control. His comments helped lift inflation adjusted US Treasury yields with the 10-year real yield rising to 0.25%. The weaker dollar yesterday also helped boost risk appetite with stocks being the main recipients of these flows. For now, the bears remain in control, especially after the rejection yesterday at $1838, the 200-day moving average on XAUUSD. Silver (XAGUSD) meanwhile enjoyed some tailwind from recovering industrial metals with the XAUXAG falling to 83.90 after hitting a 22-month high of 88.5 last week. Crude oil (OILUKJUL22 & OILUSJUN22) tried but failed to break higher on Tuesday after the tailwind from a potential pickup in Chinese demand, as lockdowns begin to lift, was being offset by hawkish comments on interest rates from Fed chair Powell, and news that the US may ease some economic sanctions on Venezuela, a 2m b/d producer in 2017 reduced to just 0.7m b/d at present. The bid, however, returned late in the day when the API published a bullish inventory report that pointed to a continued and worsening tightness in the US crude and gasoline market after they saw stocks falling by 2.4m barrels and 5.1m barrels, respectively. The EIA will release its official report later Wednesday. Dutch TTF benchmark gas (TTFMM2) remains rangebound within a €85 to €110 range despite the fact Europe's gas inventories are rebuilding at the fastest rate on record as the region's buyers outbid competitors from Asia to acquire as much gas as possible at any price. According to Gas Infrastructure Europe total stocks have since the March low climbed by 202 TWh to 446 TWh, and at this rate will surpass the five-year average within the next few weeks. Asia’s LNG buyers have been less active than normal, driven by a combination of stocks being allowed to run down due to soaring prices and lower Chinese demand as its coronavirus outbreaks and lockdowns take its toll on demand for gas. US Treasuries (TLT, IEF) - sold off yesterday and took the 10-year Treasury benchmark yield sharply back higher toward 3.00% in the wake of strong US Retail Sales data and amidst positive risk sentiment. If the 10-year yield continues higher after yesterday’s 10 basis point jump, it is worth nothing that the recent top of 3.2% was within a few basis points of the 2018 high for the cycle at 3.26%. Meanwhile, the 30-year T-bond yield closed at 3.185, the second-highest daily close for the cycle, with an intraday cycle high of 3.31%. The US Treasury is set to auction 20-year T-notes later today. What is going on? Fed Chair Powell says “won’t hesitate at all” to take Fed Funds rate above neutral after saying that “what we need to see is inflation coming down in a clear and convincing way, and we’re going to keep pushing until we see that.” Powell admitted that taking levels above neutral could bring some pain and a rise in the unemployment rate. End-2022 Fed expectations rose about 10 basis points yesterday and sit at 2.82”, just shy of the 2.88% cycle highs from before the May 4 FOMC meeting, at which Powell discouraged the idea of hiking more than 50 basis points at a time. UK Apr. CPI out this morning in line with expectations. The headline year-on-year reading was 9.0% vs. 9.1% expected and 7.0% in March, while the Core CPI was 6.2% as expected and vs.5.7% in Mar. The month-on-month headline CPI was 2.5% vs. 2.6% expected and 1.1% in March. Walmart, the world’s largest retailer, suffers worst single-day price drop since 1987 as it cut its profit forecast, citing margin pressure concerns due to inflation, and the CEO vowing that “price leadership is especially important right now.” Home Depot gains on strong Q1 and better than expected Q2 outlook. The US home improvement retailer gained yesterday on a surprise Q1 comp sales of +2.2% y/y vs est. -2.4% y/y and saying on the conference call that Q2 was off to a strong start; the company says it is not seeing the consumer holding back and sees tight housing inventory lasting for five years. Japan Q1 GDP contracted less than expected. Japan’s Q1 GDP showed a contraction of 1% q/q sa following a 3.8% expansion in Q4, but it was still better than expected. The omicron wave and supply drags created pressures, but the outlook for Q2 is appears to be improving as the economy reopens and pent-up demand boosts consumer spending. UK unemployment drops to a 50-year low of 3.7%. For the first time since records, job openings (1.3 million) outnumber those out of work. In addition, the number of payrolled employees grew by 121,000 between March and April, to 29.5 million. A lot of people have chosen salaried employment over self-employment due to fear of recession and higher cost of living. Wages continue to move upward. But this is not enough to cope with inflation. Pay, excluding bonuses, rose by 4.2 % between January and March while cost of living was at 7 % in March and is expected to jump to 9 % in April. The situation is becoming unbearable for many households. We believe that the Bank of England will have no other choice but to speed up the interest rate hike cycle before pausing perhaps after the summer. As expected, U.S. April retail sales show the U.S. domestic economy is very resilient. Retail sales were out at 0.9 % versus the expected 1 %. After adjusting for monthly inflation, it was at 0.6 %. This is still very solid. There is no sign of imminent recession in the United States when we look at the U.S. consumer. Peloton sees twice the demand for its $750 bond offering. The struggling health company has seen strong demand for its bonds in a sign that risk appetite is still intact in the high yield debt market in the US. Australian wage growth in Q1 slightly softer than expected. The report showed Australian wages rising only +0.7% QoQ and +2.4% YoY vs. +0.8%/+2.5% expected, respectively and vs. +2.3% YoY in Q4. What are we watching next? Earnings Watch. Today’s focus is Tencent given the latest support from the Chinese government including comments yesterday from the Vice Premier signaling support for platform companies. Consensus is looking for Q1 revenue of CNY 141.1bn up 4% y/y and EPS of CNY 2.77 down 5% y/y. SQM is also reporting today and is one of the world’s leading lithium miners earning 41% of its profits from lithium and 59% from fertilizers and plant nutrients including potassium, and as well as other agricultural sector products. Both lithium and fertilizers are seeing high prices due to tight supply-demand situation. Today: Tencent, Experian, Burberry, Singapore Airlines, Cisco, Lowe’s, Target, Analog Devices, TJX, Synopsys, Copart, Trip.com, SQM Thursday: Xiaomi, Generali, National Grid, Applied Materials, Palo Alto Networks, Ross Stores, DiDi Global Economic calendar highlights for today (times GMT) 0800 – South Africa 1230 – US Apr. Housing Starts and Building Permits 1230 – Canada Apr. CPI 1230 – Canada Apr. Home Price Index 1430 – EIA's Weekly Crude and Fuel Stock Report 2000 – US Fed’ Harker (Non-voter) to speak 2350 – Japan Apr. Trade Balance 0130 – Australia Apr. Employment Data Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Saxo Bank
Supported Euro Affects EUR/USD, Recovering New Zealand Dollar Duels With US Dollar (NZD/USD), Scared Investors And US 30 Performance | Orbex

Supported Euro Affects EUR/USD, Recovering New Zealand Dollar Duels With US Dollar (NZD/USD), Scared Investors And US 30 Performance | Orbex

Jing Ren Jing Ren 17.05.2022 09:14
EURUSD goes sideways The euro edged higher after an ECB official supported the idea of a stronger currency to combat inflation. The pair is bouncing off December 2017’s lows at 1.0350. The RSI’s oversold situation on both daily and hourly charts led some sellers to cover as a wave of profit-taking could help the euro snap back from this demand zone. The bias remains down unless the bulls lift the first hurdle (1.0530) from the latest sell-off. 1.0640 on the 30-day moving average is a major resistance to clear before a bullish reversal could happen. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM NZDUSD stays under pressure The New Zealand dollar recovers as weak data from China may trigger more policy support. The RSI’s double dip into the oversold territory shows an overextension. The sell-off has become such a crowded one-way trade and the kiwi could use some breathing room. A bullish RSI divergence suggests a slowdown in the downtrend but needs a breakout to confirm buying interest. 0.6380 is a fresh resistance and 0.6450 on the 20-day moving average a major obstacle. A drop below 0.6220 would further extend the kiwi’s losses. US 30 tests resistance The Dow Jones 30 struggles as investors still ponder a recession scenario. A break below the daily support at 32600 has put the bulls on the defensive. Bargain hunting may cause limited rebounds, but the lack of buying momentum means that the mood is still extremely cautious. 32600 has become a resistance and its breach could extend the recovery to 34000, where sell orders could be expected from trend followers. 31250 is the closest support and a breakout may send the index to the psychological level of 30000. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM
GBP: Softer Ahead of CPI Risk Event

FX Update: Powell brings back the hike-until-it-breaks narrative. | Saxo Bank

John Hardy John Hardy 18.05.2022 15:57
Summary:  After the odd tapping on the brakes at the May 4 FOMC meeting, when the Fed wanted to take the idea of 75-basis point rates off the table, Fed Chair Powell reminded the market of its mission to ensure that it will not let up on policy tightening until it has achieved a sustained drop in inflation. Elsewhere, the sterling squeeze is fading fast and the status of key USD charts is pivotal. FX Trading focus: Powell puts back on the hawkish hat, GBP squeeze fading fast, USDCAD spotlight Fed Chair Powell reminds us of the Fed’s mission in saying that the Fed “won’t hesitate at all” to take the Fed Funds rate above neutral, and that “what we need to see is inflation coming down in a clear and convincing way, and we’re going to keep pushing until we see that.” Powell admitted that taking levels above neutral could bring some pain and a rise in the unemployment rate. End-2022 Fed expectations rose about 10 basis points yesterday and this morning were at 2.82%, just shy of the 2.88% cycle highs from before the May 4 FOMC meeting, at which Powell discouraged the idea of hiking more than 50 basis points at a time (why?). This only offered the USD a modicum of support overnight as risk sentiment absorbed the news without much fuss. GBP shorts caught in quite the squeeze yesterday, likely aggravated badly by positioning, which is quite heavily bearish in the US futures market and in general. Yesterday I mentioned the very strong payrolls data as a driver, but there was also the news that the UK government may be considering tax cuts, including a lowering of the VAT, as well as cost-of-living support for the most vulnerable citizens. In the first instance, this could eventually help ease inflation levels and thus allow the Bank of England to hike more than previously expected, but the follow-on thinking is that it could also keep demand higher than it would be otherwise and continue to driver extreme external deficits for the UK, eroding the sovereign UK balance sheet and therefore possibly trust in sterling as well. Sterling has surrendered much of yesterday’s gains – watching for a capitulation again in GBPUSD, while the EURGBP has bounced back above the existential 0.8450 area that  was pivotal on the way up. A very choppy chart there. USDCAD and US vs. Canada Housing spotlightThe CAD has received a double dose of support from the recent strong bounce in risk sentiment and crude oil prices pulling into the top of the range and beyond at times recently. But let’s look a bit further ahead at the inevitable gathering storm that is set to hit the housing market in coming months, after yields have lurched sharply higher. The headline is that if an ugly housing slowdown lies ahead, it will hit Canada’s economy with far more force than it will the US economy. Construction itself contributes about 75% more to GDP in Canada than the US (about 7.5% vs. 4.3%), and private balance sheets in Canada are far more levered, with notable local housing bubbles in Toronto and Vancouver making UBS world top ten list (at #2 and #6) of worst housing bubbles in 2021. The Greater Toronto area, by the way, represents over 17% of the Canadian population. I have better data on the US market and can see solidifying signs in leading indicators that the US housing market is set for a slowdown, including yesterday’s worst of the cycle drop in the NAHB for the May data point, which fell 8 points to 69 versus 75 expected and 77 in April. The latest Housing Starts and Building Permits data is up today (for April), although this lags the NAHB historically by about six months in directional terms. US Pending home sales have also rolled over as discussed in today’s Saxo Market Call podcast and are another leading indicator. So, while near term, an additional boost to sentiment and energy prices could see a break-down in USDCAD, the Canadian economy will face disproportionately large end-of-cycle pressures once the recession arrives, so clouds remain over the cycle outlook for the loonie. Chart thoughts below for USDCAD Chart: USDCADThe USDCAD chart has retreated to critical levels for bulls, as a significant punch below 1.2800 makes the chart look a lost cause for the bulls (arguably, the last, last gasp area is just ahead of 1.2700 at the prior pivot lows or even 1.2660 if using the 61.8% retracement and the 200-day moving average, although the reversal back down through 1.2900-50 has already been a disappointment after that level to the upside was broken. An impulsive recovery back above 1.3000 to put the momentum back on track higher. Source: Saxo Group Underwhelming wage price data for Q1 from Australia overnight, which rose a mere 0.7% QoQ and 2.4% YoY, both 0.1% below expectations. This is meant to be the key data that would drive the RBA to accelerate its tightening regime if it provided evidence of a wage price spiral. Alas, the AUD seems more focused on hopes for China lifting Covid restrictions and swings in risk sentiment. The 0.7000-0.7050 zone remains the tactical resistance focus, with bears possibly needing to retreat back to 0.7200-50 if it does not hold. Table: FX Board of G10 and CNH trend evolution and strength.The USD is losing steam in a trending sense, and would need a solid new impulsive move higher soon to avoid a further breakdown in key pairs, and versus the G10 currencies generally. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.USDCAD is on the verge of flipping into a positive territory on the trend readings if it can’t rally soon. Also note the EURGBP rally hanging on by a thread here. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – US Apr. Housing Starts and Building Permits 1230 – Canada Apr. CPI 1230 – Canada Apr. Home Price Index 2000 – US Fed’ Harker (Non-voter) to speak 2350 – Japan Apr. Trade Balance 0130 – Australia Apr. Employment Data Source: Saxo Bank
Steel majors invest in green steel, but change might be driven by contenders

US dollar falls as risk sentiment rises | Oanda

Jeffrey Halley Jeffrey Halley 18.05.2022 16:05
US dollar retreats on higher risk appetite The US dollar weakened overnight despite US yields moving higher and hawkish Fed officials. Like equity markets, currency markets concentrated on positive US data, and a fall in oil prices which lifted risk-seeking sentiment, although I believe this is all part of a bull market correction. The dollar index slumped by 0.85% to 103.30, edging higher to 103.40 in Asia as US index futures fell. Resistance remains at 105.00, and the daily close below 104.00 suggests support at 102.50 could be tested. Failure suggests a deeper correction still. EUR/USD was one of the main beneficiaries of the swing in risk sentiment, jumping 1.15% to 1.0555 before edging lower to 1.0535 in Asia. Having based at 1.0350 on Friday, EUR/USD has rallied through 1.0500 overnight and could test 1.0650 and possibly even the 1.0800 37-year breakout line. I continue to believe that any rally above 1.0700 will be hard to sustain in the medium term. In a similar vein, GBP/USD has traced out a low at 1.2155 last week and leapt 1.40% higher to 1.2490 overnight, where it remains in Asia. The next resistance is at 1.2650; however, like Europe, the United Kingdom’s structural headwinds leave the longer-term picture still bearish. The rise in US yields overnight has left USD/JPY trading sideways at 129.20 in Asia, barely changed over the past few days. If US yields remain at these levels, a deeper correction to 127.00 becomes unlikely. In the bigger picture, USD/JPY remains at the mercy of the US/Japan rate differential. The rally in global sentiment has allowed AUD/USD and NZD/USD to book 0.85% gains once again overnight, rising to 0.7030 and 0.6360 respectively, where they remain in Asia. Any rally to 0.7200 or 0.6500 is likely to see sellers lining up though as both will continue to be buffeted by swings in investor sentiment, especially in China. Likewise, Asian currencies had a good night overnight, with CNY, CNH, KRW, and SGD the standout performers. USD/CNY at 6.8000 and USD/CNH at 6.8500 have proved formidable barriers, and if both USD/Yuans remain below these levels, more Asia FX strength is possible. Lower oil prices will also help, but if US yields continue to track higher from here, then the US dollar correction versus Asia is likely to quickly run out of steam. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Sticky US Inflation Expected to Maintain Dollar Strength Ahead of FOMC Meeting

FX Update: Is the JPY finally ready to roar? | Saxo Bank

Saxo Bank Saxo Bank 19.05.2022 15:33
Summary:  The backdrop has increasingly weighed in support of the JPY as safe haven seeking in sovereign bonds has eroded the negative implications of the Bank of Japan’s yield-curve-control policy. And speculative positioning is very short the Japanese currency. Last week’s brief blow-up in the JPY crosses may have been a trial balloon for a far larger squeeze on JPY shorts. FX Trading focus: JPY focus on supportive backdrop The market action yesterday and overnight was at times rather out of synch with recent cross-market correlations. Yes, the worst day in two years for US stocks did see the US dollar rallying in most places, but only modestly so relative to the negative energy in risk sentiment that has been the "norm" in recent months. One possibly source of this was the big mark-down in USDJPY intraday yesterday, which shows that attention may be shifting more towards the old safe-haven role of the Japanese yen on the latter’s traditional sensitivity to the strength in safe-haven bonds, which picked up a powerful bid yesterday, flattening the US yield curve and suggesting a weaker economic growth/inflation outlook. Since much of the early USD buying in the aggravated rally in the greenback since late February was in USDJPY due to the rise in US long treasury yields, any further fall in these yields will likely continue to support the JPY the most among major currencies. A potential “after-burner” for the risk of a tremendous bout of JPY volatility here is market positioning, with the US futures speculative positioning at historically stretched levels.  That’s it for today’s update – JPY volatility is likely to dominate for the coming sessions if it is properly unleashed. Chart: USDJPYUSDJPY poking at the important local 127.50 support and other JPY crosses on the verge of (EURJPY and AUDJPY) or already having broken down (GBPJPY and NZDJPY) through some key support levels. The next obvious focus here could be the 125.00 round-level area, but when the yen works up a head of steam, it has a tendency to overshoot – so potential to 120.00 can’t be ruled out if equity markets are suffering a real liquidity event and safe-haven seeking in US treasuries sends the US 10-year yield benchmark, for example, back to 2.50%. Source: Saxo Group Table: FX Board of G10 and CNH trend evolution and strength.Holding breath here for JPY volatility potential – and with USDJPY under so much pressure, it could block the USD from serving as a safe haven in the crosses. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Apropos JPY crosses – USDJPY is on the verge of crossing over to negative finally if it closes near or below the 127.50 trigger level. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1130 – ECB publishes minutes of April ECB meeting 1230 – ECB’s Guindos to speak 1230 – US May Philadelphia Fed survey 1230 – US Weekly Initial Jobless Claims 1400 – US Apr. Existing Home Sales 1500 – Sweden Riksbank’s Floden to speak Source: Saxo Bank
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

FX Daily: Activity currencies remain under pressure | ING Economics

ING Economics ING Economics 19.05.2022 09:56
Wednesday was another bad day for equities where the MSCI World equity index fell another 3%. The fact that expectations for Fed policy tightening remain intact is a sign that investors appreciate that tackling inflation is now the priority for central banks. This continues to favour the anti-cyclical dollar, but also now the Japanese yen Source: Shutterstock USD: The cavalry ain't coming Yesterday saw the S&P 500 sell off 4%, led by consumer stocks. The fact that some of the biggest main street names are under pressure on the back of profit warnings is a reminder that the squeeze on real incomes is starting to hit home. Over prior decades, decades associated with very dovish Fed policy, one might have expected this magnitude of an equity market sell-off to put a dent in Fed tightening expectations - or expectations that the Fed would come to the equity market's rescue. In fact, the Fed funds futures strip barely budged yesterday. We read this as a sign that investors now appreciate that tackling inflation is the number one priority of the Fed - and the Fed will not easily be blown off course. At the same time, we are still only hearing concerns from Chinese policymakers about the slowdown, rather than any promise of major fiscal support. And one could argue what would be the use of major fiscal support if workers and residents remain trapped in Covid lockdowns? For that reason, it seems very difficult to argue that renminbi depreciation has run its course and we cannot rule out USD/CNY pushing through the 6.80 area over coming weeks and months. This all leaves the anti-cyclical dollar quite well supported. We had made the case on Tuesday for a bounce in the oversold dollar. That bounce did not last long and again it is hard to rule out the dollar edging back to recent highs. Not until the Fed blinks on policy tightening or the rest of the world's growth prospects start to look attractive - neither of which seem likely over coming months - will the dollar put in an important top.  For today, the US calendar is light with just initial claims and existing home sales for April. Housing looks to be one of the most vulnerable sectors of the US economy, but its slowdown (and its effect on dragging core inflation lower) looks a story for much later in the year. DXY has seen a modest bull market correction this week, but can probably edge higher to 104.10 today. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM EUR: ECB will have to talk a good game Providing the euro a little support this week has been even more hawkish commentary from the European Central Bank. We had felt that the market would struggle to price in more than 75bp of ECB tightening this year, but central bank hawks such as Klaas Knot have introduced the idea of the ECB moving in 50bp increments. This has helped narrow the two-year German Schatz-US Treasury spread to 225bp from recent wides at 250bp and provided some modest support for the dollar. This can be seen as verbal intervention from the ECB to support the euro. An important policy paper from the ECB a few years ago concluded that two-year rate differentials were the most significant driver of EUR/USD and the ECB's best hope of stablising EUR/USD may indeed be to talk up prospects of the forthcoming tightening cycle. For today, look out for the minutes of the April ECB meeting, where again it might choose to emphasise the more hawkish elements. EUR/USD has had its oversold bounce to 1.0550 and with the global environment remaining challenged, EUR/USD could today drift back through 1.0450/60 to 1.0400. Elsewhere, we note some short-term similarities between both the Swiss franc and the Czech koruna. The central banks behind both currencies would prefer stronger currencies to play their role in delivering stable/tighter monetary conditions. We conclude that EUR/CHF upside may be more limited - and the downside more open - than most believe. While for EUR/CZK, the Czech National Bank (CNB) will want EUR/CZK to continue trading under 25.00 and perhaps lower still - until at least 1 July when a new CNB governor takes over.  GBP: One month realised volatility at 8%! EUR/GBP one month realised volatility is back at 8% - which is very high for a European FX pair. Expect this volatility to continue given much uncertainty about the policy path for both the Bank of England (BoE) and the ECB. Here, we happen to think that tightening cycles in both are over-priced and one would probably think that the BoE cycle gets repriced lower first. Expect EUR/GBP to continue to trade in a very wide 0.8400-0.8600 range, while cable looks more one-way traffic. We have seen the bear market bounce to 1.2500 this week and the difficult external environment would favour a break of 1.2330 support in a move back to the 1.22 lows.  Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM ZAR: SARB expected to hike 50bp today The South African Reserve Bank (SARB) is widely expected to hike 50bp to 4.75% today. The policy rate is quite low by emerging market standards, but that is because core inflation is only running at 3.9% year-on-year. A 50bp hike looks unlikely to generate much support to the rand, which is currently being re-priced off of the Chinese growth cycle. With $70bn of portfolio capital having left emerging markets since Russia invaded Ukraine - and with South Africa having large weights in emerging market debt and equity benchmarks - we expect the rand to stay under pressure for the time being.  16.35 is big resistance for USD/ZAR, above which 17.00 beckons for later in the year. Rising US real yields and the China slowdown continue to make the bear case for emerging markets.   Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Sunrun's Path to Recovery: Analysts Place Bets on High Growth Amidst Renewable Energy Challenges

Nasdaq And S&P 500 Have Fallen, USD Is Still Really Strong. What About Asia? | Asia Morning Bites | ING Economics

ING Economics ING Economics 19.05.2022 08:59
Plunging US equities set the tone for Asian markets  Source: shutterstock Macro outlook Global: Yesterday was a horrible session for US stocks. Selling pressure was evident from the starting bell, and equity futures today are signalling no sign of buying the dip either. The S&P500 fell more than 4% and the NASDAQ was down 4.73%. The S&P now stands just one bad day away from an official bear market. The NASDAQ is already there. Benchmark FX markets reflected the risk-off tone and reversed yesterday’s moves and more. The EURUSD is now back down to 1.0474, and this has helped pull the AUD back below 70 cents. The JPY has begun to appreciate again and is now at 128.24 whilst the KRW also made gains on a day when most Asian FX was looking fairly weak. US Treasuries too were benefiting from the fall in risk sentiment. Yields on the 2Y US Treasury note fell 3.1bp to 2.669%, while those on the 10Y bond fell 10.2bp to take the yield to 2.884%. There’s not much on the macro calendar today. US existing home sales may just be worth a second or two’s glance. With growing talk of recession vs soft-landing, the interest-sensitive housing sectors may provide a sneak preview of any turn in the economic cycle. Australia: Australia releases its April employment report shortly, and the market is looking for employment growth of about 30,000 and a further slight fall in the unemployment rate to 3.9% from 4.0%. We don’t have any issues with these assumptions. A 3.9% or lower unemployment rate would be a new record low, but we don’t think it particularly changes the story for the RBA, now that they have accepted that inflation is sustainably above their target. Likewise, yesterday’s slightly lower than expected wage price index is not particularly binding right now. All that a very strong labour report may do is raise the prospects of greater than 25bp hikes at forthcoming meetings. China: The Shanghai lockdown is unwinding gradually. The government expects the end of the lockdown will be in early June. For now, Beijing and Tianjin both have districts under lockdown. We expect more districts will be locked down as more Covid clusters are found. The port of Tianjin is important for hard commodity trade. Though we have not seen disruption in Tianjin’s port yet, this could become an issue if stricter social distancing measures are applied. Domestic prices of commodities could increase in this case. Japan: The trade deficit widened to -JPY839bn in April (vs -JPY412.4bn in March), recording the 9th consecutive month of deficit. Exports grew 12.5% YoY while imports rose by 28.2%. Import growth remained rapid, but probably peaked last November (+ 43.8%). Meanwhile, March core machinery orders rebounded by 7.1%MoM (vs 3.9% market consensus), partially offsetting the previous month’s loss of -9.8%.  Yesterday’s 1Q22 GDP was better than expected. But this means that the 2Q rebound will probably be weaker than we previously thought. Pent-up demand-driven consumer spending will lead growth in 2Q, but higher inflation will dampen household purchasing power and moderate any bounce. Today’s data suggest that trade will remain the main drag on 2Q growth, while investment spending will decelerate further. We are planning to revise down 2Q22 GDP soon. Philippines: Bangko Sentral ng Pilipinas (BSP) meets to decide on policy today.  Governor, Diokno, who previously vowed to keep rates untouched through to the second half of the year now indicates that the space to keep accommodation has “narrowed significantly”.  We expect BSP to hike policy rates by 25 bps and possibly hint at additional tightening at the 23 June meeting.  What to look out for: US initial jobless claims Japan trade balance (19 May) Australia unemployment (19 May) Philippines BSP policy meeting (19 May) Singapore 1Q GDP final (19 May) US initial jobless claims (19 May) Japan CPI inflation (20 May) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Complex Factors Influencing Gold Prices in 2023: From Interest Rates to China's Impact

Stronger Euro (EUR)? Rates Spark: Four ECB hikes and a bit more | ING Economics

ING Economics ING Economics 19.05.2022 09:08
Curves pivoting flatter fits a narrative further shifting towards growth concerns. As European Central Bank pricing gets more hawkish there is more than just the possibility of 50bp moves that could explain how 100bp in four meetings after June could come to pass, even if that is not our view    USD and EUR curves pivoting flatter around the belly of the curve amid weaker risk assets is a pattern that fits the narrative of market concerns having shifted toward rising risks to the growth outlook as central banks tighten policies amid high inflation. Continuing to lean more hawkish on the hawk-dove seesaw In EUR, markets have further ratcheted up their ECB rate hike expectations. By the end of the year they expect an overnight rate more than 100bp higher from now. If one assumes that the ECB will use the June meeting to prepare the grounds for rate hikes by announcing also the end of all net asset purchases, then this would imply an expectation of 25bp hikes at each of the other four remaining policy setting meetings in 2022 – and a bit more. 25bp hikes at the four ECB meetings starting with July – and a bit more Does that mean the possibility of a 50bp hike by the ECB is catching on?  After all it had been floated by the ECB’s Klaas Knot earlier this week, but his remarks may have been more about signaling a commitment to act forcefully. A sources article published yesterday outlined that a majority of the Council supported at least two 25bp hikes this year, but downplayed the notion of a 50bp move. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM Curve flattening fits a pattern of growth concerns and tightening central banks Source: Refinitiv, ING Other factors driving aggressive market pricing The aggressive market pricing will to a degree also reflect a higher risk premium amid volatile times, but we would also not exclude some uncertainty being reflected about the evolution of excess reserves in the banking system and how the ECB proceeds with the tiered deposit rate. The expectation is still that larger early repayments of banks’ targeted longer-term refinancing operations borrowings loom in the months ahead, although higher comparable market rates may have now made it more compelling for banks to hold on to the funds beyond June until the September repayment date. On the forwards strip for the ECB meeting periods markets see c.4bp higher overnight rates for the upcoming June meeting, though it may also include outside chances for an immediate ECB rate hike. It is conspicuous that the market prices the largest increase for September, a rise of noticeably more than 30bp while it is below 25bp for the other meetings this year save July. More than 100bp from the ECB in the four 2022 meetings after June Source: Refinitiv, ING   For September the market prices an increase of more than 30bp Perhaps the ECB minutes to be released today will shed more light on the ECB’s internal deliberations on what needs to be done in the face of rising inflation and the balance of risks tilting less favourably. But given how far official communication has already evolved since the April meeting to converge with the market view, the minutes should look dovish, not to say outdated. It was a meeting that still signaled a very gradual move. To be sure, our own expectation is also that aggressive market pricing will likely not be realised with our economists looking for three ECB hikes by the turn of the year. Today's events and market view In the Eurozone the ECB minutes of the 14 April meeting will take the spotlight amid an otherwise quiet data calendar. The minutes have seldomly been market moving, and they should appear especially outdated this time around as ECB communication has evolved quickly since then. We will also hear from the ECB's de Guindos and de Cos today. The other market focus will be today’s busy supply slate. France sells up to €13bn across shorter dated bond lines, including a new 6Y, and linkers. Spain reopens four bond lines including its 20Y green bond for up to €6bn in total.   The US sees publication of initial jobless claims and existing home sales. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Australian CPI Expected to Rise to 5.2%: Impact on AUD/USD and RBA's Rate Hike Dilemma

Rates Spark: The rates upside remains real | ING Economics

ING Economics ING Economics 20.05.2022 08:41
Completing the shift of the market narrative towards growth concerns, bonds are reasserting their role as safe havens. The European Central Bank minutes confirmed the Council's desire to act faster, also with an eye on still ultra low real yields  Risks remain to the upside for rates Bonds' negative correlations with risk assets consolidates amid growth concerns As markets continue to trade in a risk-off fashion, bonds have managed to reassert their role as safe havens. The pattern of bond curves consistently rallying flatter as risk assets sell off has only reestablished itself over the past few sessions. In a way this dynamic completes the transition of the market narrative toward growth concerns, away from being dominated by central banks' prospective tightening lifting market rates out the entire curves. bonds have managed to reassert their role as safe havens This does not mean that data releases couldn't shift the focus again. Next week will offer some opportunities with the release of the flash PMI surveys for instance. And if the Fed deems inflation (expectations) are not coming down fast enough, it may well use the FOMC minutes next week to signal more hawkish moves. The 75bp-hike discussion is not entirely off the table. Unlike the ECB, the Fed has used its meeting minutes as a more active communications tool, such as outlining its plans for the balance sheet run-off. We will also watch the PCE deflator, the Fed's preferred inflation gauge at the end of next week. Risk-off drives curves flatter Source: Refinitiv, ING ECB minutes, outdated but also highlighting the upside in rates The ECB minutes have been overtaken by the quick evolution of ECB communication since the last meeting. The indication now is that a majority of the Council is backing ending net asset purchases in June and hiking for a first time in July is already common place. And markets are attaching some probability to hikes larger than 25bp. The ECB has to increasingly grapple with potential de-anchoring of inflation expectations That does not mean that the known objections of the Council’s doves are invalid: too fast tightening being counterproductive, weighing on growth without being able to do anything about inflation driven by supply shocks. The line of reasoning still holds and explains market concerns reflected in current curve flattening. But the ECB has to increasingly grapple with potential de-anchoring of inflation expectations with some of the related measures already displaying notable shifts. This shift in some inflation expectation measures had been outlined by Isabel Schnabel in one of her more recent speeches. She had also highlighted the still very low level of real yields. This hawkish argument was also found in yesterday’s minutes, with real yields remaining low while the rise in nominal yields was not enough to dampen aggregate demand and bring down inflation in the medium term. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM EUR real rates have a long way to go Source: Refinitiv, ING   It is worth noting that back around the April ECB meeting the 10Y swap rate was just below 1.6% versus a current level of 1.65%, although following a decent rally after a brief excursion above 2% earlier this month. Real rates remain deeply negative regardless of the maturity, and if this is a measure considered instrumental at reining in inflation over the medium term, then we may have to reckon with more upside to rates. The important question is whether the ECB will have enough time to realize its goals.   The ECB's "separation principle" is still lacking detail The "separation principle" referenced in the ECB accounts states the idea that monetary policy could be set independently from any measures designed to avoid disruptions triggered by any such policy tightening. More specifically to the current situation, Eurozone sovereign bond spreads could be managed while the ECB starts hiking. However, as of now the ECB has still not provided any details on how such a tool could look in practice. Beyond stating the need to keep flexibility and pointing to the potential use of pandemic emergency purchase programme reinvestments, it appears there is no desire to have a broader discussion on the topic just yet. With ECB plans still vague, Italian bonds especially remain vulnerable With ECB plans still vague, Italian government bonds especially remain vulnerable. In the current risk-off environment Italian bonds are still positively correlated with Bunds, ie, they do not trade as risk assets, but the spreads have started to rewiden towards 195bp in 10-year maturities. We still think the market could test out widening this spread towards 250bp before the ECB steps in. ECB plans remain vague, leaving Italian bond spreads vulnerable to further widening Source: Refinitiv, ING Today's events and market views In terms of data and events it will be a quieter session today. The main focus will be on central bank speakers with the ECB's Muller, Kazaks Lane, and Centeno all scheduled for the day. In the UK we will hear from the Bank of England's Chief Economist Huw Pill. Main data of note is the Eurozone consumer confidence. In this shaky risk environment, we expect bonds to retain their poise. It would take a lot of good news for yield upside to resume at the long-end, but central bankers should keep the heat on shorter rates. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Follow FXMAG.COM on Google News
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

FX Daily: Dollar rally pauses for breath | ING Economics

ING Economics ING Economics 20.05.2022 10:57
Some support measures for the Chinese economy and some stability in the Chinese renminbi have helped usher in a period of consolidation in FX markets. This may well last into next week, although we would consider this a pause not a reversal in the dollar's bull trend. The stronger dollar is also exporting Fed hikes around the world Not until the Fed pours cold water on tightening expectations should the dollar build a top USD: Some consolidation is in order The dollar is now about 2% off its highs seen late last week. Driving that move has probably been some position liquidation and a preference for currencies like the Japanese yen (JPY) and the Swiss franc (CHF) during turbulent times in global equity markets. In fact, yesterday's FX activity looked like the big sell-off in EUR/CHF on Swiss National Bank (SNB) comments which triggered downside stops in USD/CHF and prompted a slightly broader dollar adjustment. Also helping this period of consolidation has been this week's stability in the Chinese renminbi (CNY). The overnight 15bp cut in the 5-year Loan Prime Rate – aimed at supporting the property sector – has instilled a little more confidence in Chinese assets markets. However, we cannot see USD/CNY heading straight back to 6.50. Instead, a 6.65-6.80 trading range may be developing after the recent CNY devaluation.  However, the emerging market environment still looks challenged given that the stronger dollar is effectively exporting tighter Fed policy around the world. Yesterday we saw rate hikes in Egypt, South Africa, and the Philippines. After devaluing the Egyptian pound by 15% in March, authorities there are very much struggling with the external environment. This has seen Egypt's 5-year Sovereign Credit Default swap rise to news highs of 940bp and is a reminder of the challenge North Africa faces from surging food prices. For today, the data calendar is relatively quiet and there may be some interest in what G7 finance ministers and central bank governors have to say after their meeting in Bonn. Reports suggest Japan would like some tweaks to the final G7 communique, but we very much doubt there will be any change in the core FX language that FX rates be market-determined and that excessive volatility and disorderly moves be avoided. DXY could correct a little lower to 102.30, but we see this as bull market consolidation, rather than top-building activity. Not until the Fed pours cold water on tightening expectations should the dollar build a top. And yesterday Fed hawk, Esther George, said that even this 'rough week' in equity markets would not blow the Fed off course.  EUR: ECB hawks in control Minutes of the April ECB meeting released yesterday show that the hawks are calling the shots. The market now prices a 31/32bp ECB rate hike at the 21 July ECB meeting – pricing which has plenty of scope to bounce between +25bp and +50bp over the next two months. This could drag EUR/USD back to the 1.0650/70 area over the coming days – helped by brief periods of calm in the external environment – but as above we would see this as a bear market bounce. Our core EUR/USD view for 2H22 is one of heightened volatility and probably EUR/USD getting close to parity in 3Q22 when expectations of the Fed tightening cycle could be at their zenith. Read next: Altcoins: What Is PancakeSwap (CAKE)? A Deeper Look Into The PancakeSwap Platform| FXMAG.COM GBP: April retail sales provide a reprieve UK retail sales have come in a little better than expected and break/suspend the narrative that the cost of living squeeze is large enough to derail the Bank of England tightening cycle. We would not get carried away with the sterling recovery, however. Sterling is showing a high correlation with risk assets – trading as a growth currency – and the outlook for risk assets will remain challenging for the next three to six months probably. Here's what our credit strategy team thinks of the European outlook.  Cable may struggle to breach the 1.2500/2550 area and 1.20 levels are very possible over the coming months. New-found hawkishness at the ECB means that EUR/GBP may struggle to sustain a move below 0.8450 before returning to 0.8600. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM CHF: SNB policy makes the case for EUR/CHF sub 1.00 next year As we discuss in an article released yesterday, it looks like the SNB is targeting a stable real exchange rate to fight inflation. Given that Switzerland's inflation is roughly 4% lower than key trading partners, a stable real exchange rate means that the nominal exchange rate needs to be 4% stronger. This will be an added factor supporting the CHF over the coming months and may start to generate interest in trades positioning for a lower GBP/CHF. 1.2080 is a big support level but 1.1860 looks like the near-term target. Read this article on THINK TagsGBP FX Daily ECB CHF Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
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British Pound (GBP) yawns on mixed retail sales | Oanda

Kenny Fisher Kenny Fisher 20.05.2022 12:03
The British pound is drifting on Friday, after showing unusually strong volatility this week. The pound rebounded on Thursday, racking up gains of 1.06% and briefly breaking above the symbolic 1.25 line. UK retail sales showed a strong gain in April, with a gain of 1.4% MoM. This followed a decline of 1.2% in March. However, on a yearly basis, sales volumes were 4.9% lower, as the broader picture looks grim. The monthly gain for March may have been a blip, as consumers were hit with higher household energy costs as well as an increase in taxes. Add into the mix inflation at 9.0% and possibly heading into double-digits, and it’s difficult to envision retail sales moving higher. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Consumer confidence hits record low The GfK consumer confidence index remains deep in negative territory. The index dropped to -40 in May, down from -38 in April. How pessimistic are consumers about the economy? The previous record of -39 was set in July 2008, at the height of the global financial crisis.  Consumer confidence is considered an early, reliable signal of economic activity, and these massively poor numbers could well indicate that the UK economy is falling into recession. A GfK note summed up the grim situation, saying that the BoE is pessimistic about inflation, consumer confidence is gloomy, and there aren’t any reasons for optimism anytime soon. This certainly does not bode well for the British pound, which has plunged over 7% since the start of the year. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM The BoE finds itself playing catch-up with the inflation curve. There have been voices calling for more aggressive rate hikes than the 25-bps increments we’ve seen over the past three meetings, especially with inflation hitting 9%. The central bank has a daunting challenge, as it must raise rates to curb inflation but also needs to be mindful that the economy is still recovering from Covid and could tip into a recession due to high interest rates. GBP/USD Technical 1.2393 has switched back to support. Below, there is support at 1.2275 There is resistance at 1.2525 and 1.2643   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
US dollar pares gains in Asia | Oanda

(USD) US Dollar Pares Gains In Asia | Oanda

Jeffrey Halley Jeffrey Halley 23.05.2022 14:31
US dollar eases in Asia after firm CNY fixing The US dollar posted modest gains on Friday, despite weaker US bond yields, as traders reduced US dollar shorts into the weekend. The dollar index rose 0.15% to 103.05. A firm CNY fixing by the PBOC seems to have been the catalyst for more US dollar weakening today, along with a slow newsreel over the weekend. That has allowed risk sentiment to reassert itself modestly, pushing the dollar index 0.33% lower to 102.69 today. It seems US recession fears are weighing on sentiment ever more heavily for now, and the technical picture suggests the US dollar correction has more to go. A close below support at 102.50 could see the dollar index test 101.00 before the reality of a hawkish Fed reasserts itself. GBP/USD has traced out a low at 1.2155 last week and has risen 0.40% to 1.2545 in Asia EUR/USD has risen by 0.35% to 1.0590 today, continuing its recovery from its 1.0350 lows last week. A test of 1.0650 and possibly even the 1.0800 37-year breakout line remain possible, but this is a weak US dollar story and I believe that any rally above 1.0700 will be hard to sustain in the medium-term. In a similar vein, GBP/USD has traced out a low at 1.2155 last week and has risen 0.40% to 1.2545 in Asia. A test of 1.2650 is possible this week but like Europe, the United Kingdom’s structural headwinds leave the longer-term picture still bearish. The fall in US long-dated yields on Friday has pushed USD/JPY down to 127.35 this morning. Given the weight of long USD/JPY positioning, failure of support at 127.00 could trigger a capitulation trade potentially targeting the 125.00 support area. At those levels though, given the trajectory of US and Japan interest rates, being short becomes a dangerous game. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Beware of a dovishly hawkish RBNZ statement on Wednesday though AUD/USD and NZD/USD have resumed their recoveries after a quiet weekend news-wise green-lighted the sentimentalists to resume buying. AUD/USD has risen 0.60% to 0.7090, and NZD/USD has risen 0.70% to 0.6455. ​ Any rally above 0.7200 or 0.6500 will be challenging though as both currencies remain at the mercy of sudden negative swings in investor sentiment, especially from China. An RBNZ rate hike on Wednesday should allow the NZD to outperform AUD in the earlier part of the week. Beware of a dovishly hawkish RBNZ statement on Wednesday though. If US yields resume their move higher, I expect Asian currency weakness to reassert itself The PBOC has helped the recovery in risk sentiment rally by Asian currencies along today, setting the CNY at a much stronger than expected 6.6756. Most of USD/Asia is lower by around 0.25% today, although USD/MYR and USD/IDR are unchanged. It seems that USD/CNY above 6.8000 is a bridge too far now for the PBOC. But overall, they are probably more concerned about how fast it moved there, and not the overall direction of travel. In the short term, the PBOC’s actions will be supportive of Asian currencies in general. USD/INR and USD/KRW have put in decent tops at 77.80 and 1290.00 respectively. If US yields resume their move higher, I expect Asian currency weakness to reassert itself, although with regional central banks starting to hike now, we should see a slow grind and not an abrupt sell-off. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Learn more on Oanda Follow FXMAG.COM on Google News
Crucial Upcoming PMI Data and High-Stake Meetings Shape China's Economic Landscape

How Is Euro Performing Against US Dollar? Check Out EUR/USD Chart! | Euro surges to 1-month high | Oanda

Kenny Fisher Kenny Fisher 23.05.2022 14:32
The euro has jumped out of the gates on Monday with sharp gains. In the European session, EUR/USD is trading at 1.0673, up 1.12% on the day. Euro rebounds The euro looked hopelessly lost earlier this month, when it dropped to 1.0349, its lowest level since January 2017. There was increasing speculation that the euro was heading to parity with the US dollar. EUR/USD has rebounded back in impressive style, gaining 1.42% last week and extending the rally today. However, the upswing will be difficult to sustain above the 1.07 line, as the euro’s rally is more a story of US dollar weakness rather than euro strength. The dollar has fallen out of favour as fears of a US recession are weighing on sentiment towards the dollar. US yields were above the lofty 3% threshold just two weeks ago, but nervous investors have snapped up US Treasury bonds, sending yields lower. In turn, the US dollar has also retreated. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Despite the euro’s turnaround, the medium and long-term picture is bearish for the currency. The ECB remains in dovish mode, and upcoming Fed rate hikes will widen the US/Europe rate differential and weigh on the US dollar. The ECB might raise rates in July, but will clearly lag behind an aggressive Fed, which is likely to deliver 50-bps hikes at the July and August meetings. The euro faces a persistent headwind coming out of Ukraine, as the war between Russia and Ukraine continues. Heavy fighting has been reported in the east of the country, and a ceasefire, let alone an end to the fighting, appears unlikely anytime soon. That means oil and wheat prices will remain elevated, contributing to high global inflation and weighing on risk appetite, which is bearish for the euro. Follow FXMAG.COM on Google News EUR/USD Technical EUR/USD is testing resistance at 1.0648. Above, there is resistance at 1.0736 There is support at 1.0519 and 1.0431 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Learn more on Oanda
Selling opportunity? Why GBP/USD's rally is unjustified and could lead to a downfall

Selling opportunity? Why GBP/USD's rally is unjustified and could lead to a downfall

FXStreet News FXStreet News 23.05.2022 16:44
ECB President Lagarde's hawkish comments have dragged the pound higher. BOE's Bailey is set to cool expectations with potential recession warnings. The four-hour chart shows that GBP/USD is entering overbought territory. GBP/USD’s short-term bullishness looks like a selling opportunity – the currency pair has been extending its gains, somewhat influenced by the strengthening euro, which got a boost from ECB President Christine Lagarde. She said that the bank could raise rates by 50 bps by September, a relatively aggressive timeline. There is a feeling that central banks are catching up with the hawkish US Federal Reserve and raising rates quickly. The ECB's determination is boosting the euro and also dragging the pound higher on the way. But is it justified? Recession warnings Later in the day, Bank of England Governor Andrew Bailey is set to speak about monetary policy, and he will likely reiterate his stance that the BOE is ready to tighten its policy to curb inflation. We know that another 50 bps or so of rate hikes are coming. On the other hand, Bailey warned that price shocks could already send the British economy into recession, The cost-of-living crisis is, therefore, self–correcting. Higher prices curb expenditure, lower growth, raise unemployment and eventually push inflation lower. That means the scope for the BOE to further hike rates is limited. My analysis above implies that if Bailey merely repeats his warnings – if so the current upside move of the pound could be reversed. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM GBP/USD Technical Analysis The technicals back it up. Initially, they give GBP/USD scope to rise toward 1.2640, May's high, but not to the next big round level at 1.27. The 4h-RSI is almost at 70, and moving some 100 pips from current levels would put it in overbought territory. There is a greater chance of a climb down to support at 1.2545 than an upside move. Follow FXMAG.COM on Google News
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Forex Pairs - Buy Or Sell? Having A Look At EUR/USD, AUD/USD And NZD/USD With Jason Sen (DayTradeIdeas) - 24/05/2022

Jason Sen Jason Sen 24.05.2022 09:58
EURUSD longs at support at 1.0560/40 worked perfectly & so did buying a break above 1.0600 as we hit the 1.0670/80 target, reaching 1.0697. This week we could reach as far as 1.0800. I think the downside should be limited with minor support at 1.0650/40 & strong support at 1.0620/00. AUDUSD rallied from 7036 targeting 7095/99, with a high for the day just 8 pips from very strong resistance at 7135/55. Shorts need stops above 7175. Minor support at 7050/45, strong support at 7030/20. Longs need stops below Holding below 7000. A break lower however targets 6940/30. NZDUSD broke higher for a buy signal targeting 6490/6500, with a high for the day here. First support at 6420/00 on this dip. Longs need stops below 6385. Longs at 6420/00 target 6470 & 6490. Above 6500 look for 6520/30. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk
End Of US Dollar (USD) Rally!? How Is The Dollar Index? Is S&P 500 (SPX) Going To Recover? (EUR/USD) Euro Seems To Be Stronger Recently! EUR/GBP Keeps Fluctuating | Luke Suddards (Pepperstone)

End Of US Dollar (USD) Rally!? How Is The Dollar Index? Is S&P 500 (SPX) Going To Recover? (EUR/USD) Euro Seems To Be Stronger Recently! EUR/GBP Keeps Fluctuating | Luke Suddards (Pepperstone)

Luke Suddards Luke Suddards 24.05.2022 12:07
Every Tuesday our Global Macro Strategist Luke Suddards will be analysing the charts of key global asset classes such as FX, commodities and more. Catch him on Twitter - @lukesuddards Also, he produces The Weekly Close Out every Friday, which provides key insights into the main catalysts for all the major global macro assets throughout the week. The analysis takes a hybrid approach - combining fundamental and technical analysis with charts to enhance your trading experience. Sign up here to receive it directly in your inbox: https://cloud.go.pepperstone.com/week ➡️ Follow us on Telegram for daily market news and insights: https://t.me/s/PepperstoneFX Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Follow FXMAG.COM on Google News
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

Euro To US Dollar (EUR/USD) Has Gone Up! | Hawkish Lagarde Sends (USD) US Dollar Lower! | Oanda

Jeffrey Halley Jeffrey Halley 24.05.2022 12:53
Hawkish Lagarde sends dollar lower EUR/USD leapt 1.30% higher to 1.0690 overnight after the Lagarde comments The US dollar slumped overnight, losing ground against both the G-10 and EM space. That contrasted with a rise in US yields, but equities, bonds and currencies seem to be running their own separate races now. ​ The catalyst was a hawkish blog post by ECB head Christine Lagarde who said rate hikes were on the way in the next few months. That prompted a massive rally by EUR/USD which spread to other currencies. The dollar index slumped 0.90% to 102.09, closing below support at 102.50. That should see the dollar index test 101.00 before the reality of a hawkish Fed reasserts itself. In Asia, China concerns have seen equities fall and some short-covering come into the US dollar, pushing the index back up to 102.25. EUR/USD leapt 1.30% higher to 1.0690 overnight after the Lagarde comments. It has eased back to 1.0665 in Asia but has nearby support now at 1.0650. Initial resistance lies at 1.0700 and then 1.0750 followed by 1.0820, the multi-decade breakout line. A weekly close above the latter is needed to suggest a medium-term low is in place. I believe sustaining rallies above 1.0700 will be challenging though. GBP/USD coat-tailed EUR/USD higher by 0.77% to 1.2585 overnight, easing to 1.2865 in Asia. It now has support at 1.2500, with resistance at 1.2600 and then 1.2650. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM AUD/USD and NZD/USD booked another night of gains, rising the sentiment wave 0.90% higher overnight Higher US yields have kept USD/JPY steady at 127.60 today with initial resistance at 128.00. We would need a large rise in US yields now to offset the weight of long USD/JPY positioning in the nearer term. Failure of support at 127.00 could trigger a capitulation trade potentially targeting the 125.00 support area. Once again, at those levels though, given the trajectory of US and Japan interest rates, being short becomes a dangerous game. AUD/USD and NZD/USD booked another night of gains, rising the sentiment wave 0.90% higher overnight. In Asia, China’s nerves have seen AUD/USD fall 0.40% to 0.7080, and NZD/USD fall by 0.50% to 0.6435. Any rally above 0.7200 or 0.6500 will be challenging though as both currencies remain at the mercy of sudden negative swings in investor sentiment, especially from China. Asian currencies have rallied powerfully overnight, led by a 1.25% gain by the KRW, and 0.75% gains by the THB and TWD. Both USD/CNH and USD/CNY have fallen by 0.50% also overnight. Notably, the MYR and IDR had little to show for the US dollar sell-off. China nerves have already reversed some of those overnight gains by Asia FX, highlighting the low risk appetite and fragile sentiment typifying currency markets and others now. USD/KRW has risen by 0.50% to 1264.50, making the won the worst performer in Asia today. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM The recovery in Asian currencies has been led by stronger CNY fixings from China but is overall, a weak US dollar story. A reassertion of risk aversion, or a jump in US yields, will have the recovery back to square one as quickly as it began. I believe Asian central banks will need to accelerate tightening to stave off medium-term weakness. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
What Is Going On Financial Markets Today? Russia Will Not Resume Deliveries Of Gas

(EUR) Euro Rises To 1-Month High On Christine Lagarde (ECB) | Oanda

Kenny Fisher Kenny Fisher 24.05.2022 19:53
The euro has extended its gains on Tuesday. EUR/USD has broken above the 1.07 line for the first time since April 26th. ECB’s Lagarde sends euro soaring The euro was red hot on Monday, as EUR/USD jumped 1.29%, its best one-day showing this year. The upswing was courtesy of ECB President Christine Lagarde, who detailed the Bank’s rate plans in a blog post. This unusual move certainly caught the attention of the markets, who gave the euro a massive thumbs-up. Lagarde has been a strong supporter of an accommodative policy and rather dismissive about inflationary pressures. However, Lagarde has had to recalibrate as eurozone inflation continues to accelerate. The war in Ukraine has resulted in soaring oil and food prices, and there are no indications that the conflict will end anytime soon. The ECB has been sending signals that it planned to tighten policy, and Lagarde’s post confirms the shift in policy. The ECB will embark on its rate-tightening cycle in July and will exit negative rates in September. Interestingly, the Bank will continue its QE programme, which raises the question of whether the ECB’s moves are really that aggressive. Perhaps the new stance is mostly symbolic until we see a significant increase in rates. Judging by the euro’s sharp climb, however, the markets sense that Lagarde is signalling a significant shift from the ECB. The euro is flexing some muscle, but I would maintain that risk is tilted to the downside in the medium term. The US dollar has lost ground against most of the majors over the past few days, as fears of a US recession have escalated. Still, the Fed is committed to significant tightening in the next few months, and higher US rates should provide a boost for the greenback. . EUR/USD Technical The euro is putting pressure on resistance at 1.0736. Above, 1.0820 is a multi-decade breakout line There is support at 1.0648 and 1.0519 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
China's Deflationary Descent: Implications for Global Markets

(USD) US Dollar’s Orderly Retreat Continues | Having A Look At EUR/USD, GBP/USD And AUD/USD | Oanda

Jeffrey Halley Jeffrey Halley 25.05.2022 14:09
Recession jitters send US dollar lower The US dollar eased once again overnight, as US recession fears continue to lead to a repricing lower of Fed tightening expectations. With quantitative tightening starting next week and no signs of inflation falling, that may be more hope than reality. Nevertheless, one must respect the momentum in the short term, and the US dollar bull market correction still looks to have legs in it. ​ The dollar index fell by 0.32% to 101.77 overnight, but Asia is doing its usual countertrend moves today, pushing the dollar index back up to 101.95. The multi-year breakout line is at 102.40 today, forming initial resistance, while 101.50 and 101.00 loom as immediate supports. EUR/USD continued edging higher overnight, rising 0.42% to 1.0735 before falling by 0.28% to 1.0705 in Asia. Momentum already appears to be waning for EUR/USD, but I do not rule out at least a test of 1.0750 and 1.0825, the multi-decade breakout line. A weekly close above the latter is needed to suggest a medium-term low is in place. GBP/USD fell overnight, crushed by EUR/GBP buying, poor data and tax and political risk. It finished 0.42% lower at 1.2535 where it remains in Asia today. Sterling faces political risks, outlined above, today, and these will limit gains. It now has support at 1.2470, with a double top now at 1.2600. Even if the US dollar sell-off continues, sterling will remain euro’s poor cousin. AUD/USD remains steady at 0.7100 today, having probed the downside overnight Lower US yields saw USD/JPY fall 0.85% to 126.85 overnight where it remains in Asia, just below support, now resistance, at 127.00. A deeper selloff, potentially targeting the 125.00 support area, remains entirely possible given the market is still clearly very long USD/JPY. Once again, at those levels though, given the trajectory of US and Japan interest rates, being short becomes a dangerous game. AUD/USD remains steady at 0.7100 today, having probed the downside overnight. AUD/NZD buying is capping gains for now. A hawkish RBNZ today has sent the Kiwi dollar flying, NZD/USD jumping 0.65% to 0.6500. The rally is already showing signs of fatigue and a weekly close above 0.6550 is required to signal a potential medium-term low. Support is distant at 0.6420. Asian FX continued gaining against the US dollar overnight, but a stronger greenback in Asian time has erased those gains. A neutral USD/CNY fixing by the PBOC has given Asian markets little to go on today, with USD/CNY, USD/CNH and USD/THB rising by around 0.30%, while USD/KRW has risen by 0.10%. An impending Bank of Korea hike on Friday should limit the won’s weakness. The Malaysian ringgit looks like the most vulnerable regional currency right now, USD/MYR trading near 4.4000 today. With policy tightening gaining momentum among other Asian central banks, today’s benign inflation data reinforced that outlook. USD/MYR could potentially test 4.4500 by early next week. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
GBP Inflation Surprise: Pound Faces Downward Pressure as Rate Hike Expectations Shift

(EUR) Euro Rally Hits A Wall! | Is EUR/USD Going To Decline Again!? | Oanda

Kenny Fisher Kenny Fisher 25.05.2022 16:09
Euro falls sharply The euro has reversed directions on Wednesday and is sharply lower. In the European session, EUR/USD is trading at 1.0663, down 0.67% on the day. The euro was up 1.29% on Monday and extended its gains on Tuesday, hitting a 4-week high, after ECB President Lagarde announced that the ECB would raise interest rates in July. On the data front, there weren’t any surprises out of Germany. GDP in Q1 rose by 0.2% QoQ, as expected. Compared to Q4 of 2019, the quarter prior to the Covid-19 pandemic, growth was 0.9% smaller, which means that the economy is yet to fully recover from the Covid crisis. The war in Ukraine and Covid-19 have resulted in supply chain disruptions and accelerating inflation, which has hampered economic growth. German confidence remains in deep-freeze German GfK Consumer Sentiment came in at -26.0 in May, a slight improvement from the April reading of -26.6, which marked a record low. Not surprisingly, consumers put the blame for their deep pessimism on two key factors – the conflict in Ukraine and spiralling inflation. The GfK survey also found that consumer spending has weakened, as high costs for food and energy have reduced spending on non-essential items. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The ECB Financial Stability Review, published twice a year, echoed what German consumers are saying. The report bluntly stated that financial stability conditions have deteriorated in the eurozone, as the post-Covid recovery has been tested by higher inflation and Russia’s invasion of Ukraine. The report noted that the economic outlook for the eurozone had weakened, with inflation and supply disruptions representing significant headwinds for the eurozone economy. Given this challenging economic landscape, the euro will be hard-pressed to keep pace with the US dollar. EUR/USD Technical There is resistance at 1.0736 and 1.0865 EUR/USD is testing support at 1.0648. The next support line is at 1.0519 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Eurozone Bank Lending Under Strain as Higher Rates Bite

What's The Future Of British Pound (GBP)? Stocks: Snap Has Fallen! How Far Will New Zealand Dollar Go!? | Least worst choices | Oanda

Jeffrey Halley Jeffrey Halley 25.05.2022 11:05
RBNZ hikes by 50-bps The Reserve Bank of New Zealand has raised policy rates by 0.50% to 2.0% this morning, with Governor Orr setting a hawkish tone in the press conference afterwards. In the statement itself, the RBNZ’s “least worst choices” policy seemed to imply that although external risks remained, the domestic economy was strong and could tolerate tighter monetary conditions. Mr Orr seemed to be saying much the same, suggesting that terminal rates could go above 3.0% and would get there sooner, rather than later. We’ll see just how strong the New Zealand economy is in due course, but a hawkish RBNZ has seen the New Zealand dollar rally by 0.70% to 0.6505 today, making it the biggest currency gainer in Asia today. Elsewhere, Singapore’s GDP growth came in tight on expectations, rising by 3.70% YoY for Q1. With inflation data yesterday also less worse than expected, expectations for another unscheduled tightening by the Monetary Authority of Singapore have receded for now. That may bring some relief to the Malaysian ringgit, which has fallen to 3.20 against the Singapore dollar. Snap Has Fallen In Malaysia itself, Inflation data for April continues to remain benign as domestic demand stays subdued. Inflation YoY rose by just 2.30% and will leave Bank Negara, like Bank Indonesia yesterday, in no hurry to tighten monetary policy. Ominously though, the Malaysian ringgit has shown no strength versus the US dollar. USD/MYR remains at recent highs at 4.4000 even as the greenback is experiencing an extended bull market correction versus the G-10 and EMFX elsewhere. If the US dollar turns higher once again, and the MYR resumes its sell-off, Bank Negara’s hand might be forced. Overnight, the recession word weighed on stock markets once again. European PMI data was a mixed bag. Manufacturing PMIs held steady, while Services PMIs fell as consumer demand takes a hit from the rise in the cost of living. That wasn’t enough to stop the euro rally, powered by suddenly hawkish ECB heavyweights. Bank of England, has already signalled a white flag on bringing down inflation The picture was rather grimmer in the United Kingdom where the most honest central bank in the world, the Bank of England, has already signalled a white flag on bringing down inflation and pencilled in a recession next year. UK Manufacturing PMI held steady at 54.6, but Services PMIs plummeted to 51.8. The UK is facing a winter of discontent as the cost of living soars, with the railways RMT union voting to strike over pay negotiations. Expect more of this going forward. Additionally, the Chancellor is apparently preparing to widen the scope of the windfall tax on energy companies, probably to help pay for his cost of living mini-budget. UK stock markets didn’t like that. Finally, the “party gate” report on those lockdown wine frenzies in the No 10 garden is due for release today, potentially putting more pressure on PM Johnson’s leadership. ​ Little surprise that the sterling slumped versus the euro and the US dollar overnight. In the United States, the recession world hit particularly hard after the Snap Inc. induced meltdown by Nasdaq stocks overnight. US New Home Sales plummeted to 591,000 in April, while Richmond Fed Manufacturing slumped to -9 in May. The S&P Global Services Flash PMI for May fell to 53.5, with Flash Manufacturing easing to 57.5. It was the new home sales that really frightened the street, though, as house building, and its ancillary services and suppliers are a good chunk of US domestic GDP. Soaring mortgage interest rates and petrol prices appear to be doing a lot of the Fed’s work for it before it even gets started. Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM If there is one takeout from all of this for me, it is that rising inflation and borrowing rates are already crimping the demand side of the equation. Unfortunately, we are seeing very little sign of price pressures reducing due to a combination of factors, all of which have been thrashed to death here and in research everywhere. The uncomfortable reality is that central banks are going to be forced to continue the tightening path, even as growth slows around the world, because inflation has proven sticky and not transitory. That is the least worst choice central banks need to make in a stagflationary environment. I am asked every day if we have seen the low in the equity market sell-off. Hopefully, I have answered the question. US President Joe Biden’s trip around Asia continues Finally, US President Joe Biden’s trip around Asia continues. Unfortunately, with its emphasis on containing China and hawking a trade agreement empty of potential access to the US domestic market (Congress needs to approve that), the trip is not going to make much headway in re-establishing US leadership in the region. Asia really needs to see the colour of America’s money. Furthermore, the reliability of the US as a partner has taken a further hit today, with White House officials explicitly refusing to rule out the possibility that the US could enact crude oil export restrictions to help cap energy prices domestically. The US doesn’t have a crude oil problem, it has a refining and transportation problem, but let’s not let facts get in the way. I have warned about food nationalism previously, but if President Biden prioritises November’s mid-term elections over the economic war with Russia, and supporting Europe, it really is every man for himself globally. I can’t see that being positive for equities anywhere, or European asset markets full stop, or for Ukraine. Only the Kremlin is likely to be popping champagne as the US does Russia’s divide and conquer for them. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
RBA Pauses Rates as Australian Dollar Slides; ISM Manufacturing PMI in Focus

Forex (FX) Daily: Dollar’s (USD) downside risks are shrinking | What About (EUR) Euro, (GBP) British Pound And (HUF) Hungarian Forint? | ING Economics

ING Economics ING Economics 27.05.2022 10:16
We think that the combination of a material improvement in the global risk environment and further USD-adverse widening of short-term rate differentials is unlikely, and therefore expect the (now less overbought) dollar to find a floor soon. This means that a EUR/USD return below 1.0700 in the coming days looks more plausible than another rally USD: Bearish arguments are not very strong The dollar is set to face a second consecutive week of losses against all G10 currencies, as yesterday’s very positive session in US equities helped Asian equities trade in the green along with most European stock index futures. While the risk sentiment channel has, by and large, remained the primary driver of FX moves, the market’s tentative speculation about a pause in the Fed’s tightening cycle in September is surely contributing to keeping the dollar soft. In the past week, we have seen around 10bp of tightening being priced out of the Fed’s rate expectations for this year, while the likes of the ECB have seen all but a consolidation of expected tightening plans. In our view, however, it's hard to see a much calmer risk environment amid global monetary tightening and multiple downside risks (China, Russia/Ukraine), and a further shrinking of the USD’s short-term rate advantage over other G10 currencies, given that the FOMC rhetoric is still very hawkish. We see a higher chance of recovery in US rate expectations, which should put a floor under the greenback. When adding a more balanced positioning picture following the latest moves, we think that the dollar’s downside risk is now looking less pronounced, and we favour instead a recovery to the 103.00 level in DXY. Today, risk-sentiment dynamics are still set to drive the vast majority of dollar moves, although markets will keep an eye on any drop in the US personal spending figures for April and in the Fed’s preferred inflation measure – the PCE deflator. There are no scheduled Fed speakers. EUR: Upside potential more limited now EUR/USD is making a fresh attempt at breaking significantly above 1.0750 (the 50-day moving average) this morning, continuing to benefit from the soft dollar environment and some recent eurozone data having left markets more comfortable with pricing in front-loaded tightening (100bp) by the ECB this year. As discussed above, we see a higher chance of some recovery in the dollar from the current levels rather than an extension of the drop, and with a lot of ECB tightening now in the price, the room for the euro to benefit further from the monetary-policy factor appears limited. We expect a return below 1.0700 in the coming days. Today, we’ll hear from the ECB Chief Economist Philip Lane, whose recent comments have however merely backed President Christine Lagarde’s recent guidance. GBP: Bar to trigger a hawkish repricing is set high The pound received only some modest support yesterday as British Chancellor Rishi Sunak announced a £15bn support package to fight the rising cost of living. The fiscal measures should in theory allow the Bank of England to fully focus on fighting inflation and feel more comfortable hiking interest rates – ultimately, a GBP positive. However, markets had previously been quite reluctant to price out the bigger chunk of the BoE tightening cycle, and were already pricing in a policy rate in the 2.00-2.25% area for year-end before Sunak’s fiscal package. This helps explain the pound’s somewhat muted reaction yesterday, and also suggests the bar to trigger further hawkish repricing in the BoE rate expectation curve is quite elevated. In the longer run, as we expect the BoE to underdeliver compared to rate expectations, the pound is still looking likely to face some pressure from the short-term rate differential side. For now, swings in risk sentiment should continue to drive most day-to-day moves. A consolidation around 0.8450-0.8500 in EUR/GBP seems plausible. HUF: Another blow for the forint but let's not throw it overboard Wednesday's decision by the Hungarian government regarding the state of emergency found the forint unguarded and suddenly we are at the weakest levels since the beginning of March. Yesterday's announcement of the tax package, which is expected to bring in more than HUF800bn this year and next, did not help the forint much. For now, the HUF has settled in the 390-395 range. With such FX weakening, markets are raising bets on an emergency rate hike next week. However, in our view, this is far from certain. Thus, market disappointment may lead to further forint weakening to the 400 level, which would be the weakest in history. On the other hand, it is necessary to keep in mind that the market has already priced in a lot of negative news, led by the Ukrainian conflict and the halt of EU money inflows. In addition, the central bank's dovish tone may quickly revert back to aggressive rate hikes after the next inflation print. Thus, we are negative on the forint in the short term, but we continue to monitor headlines that should unlock the hidden potential of the forint in the second half of the year. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Video: A Wide Range Of Forex Pairs AUD/USD, USD/JPY, EUR/JPY, EUR/USD And GBP/USD Analysed By Jason Sen (DayTradeIdeas)

Video: A Wide Range Of Forex Pairs AUD/USD, USD/JPY, EUR/JPY, EUR/USD And GBP/USD Analysed By Jason Sen (DayTradeIdeas)

Jason Sen Jason Sen 30.05.2022 07:45
AUDUSD finally tests very strong resistance at 7135/55. Shorts need stops above 7175. A break higher this week is a buy signal targeting 7230/50. Shorts need stops above 7275. Shorts at 7135/55 target 7090 then 7060/50. Further losses test support at 7020/10. Longs need stops below 7000. USDJPY shorts at resistance is at 127.50/70 need stops above 127.80. A break higher is a buy signal targeting 128.20/30, perhaps as far as strong resistance at 128.70/90. Holding resistance is at 127.50/70 targets 127.20/00. A break below 126.80 targets 126.30/20 & eventually 125.80. EURJPY holding strong resistance at 136.50/70 (perfectly on Thursday & Friday) targets 135.60/50 for profit taking on shorts. Further losses target 135.35/25. If we continue lower look for 134.65/55 then strong support at 134.20/00 for profit taking on any shorts. We should have strong resistance again at 136.50/70. Shorts need stops above 136.95. A break higher targets 137.20/30 then 138.00/20. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM EURUSD longs at support at 1.0670/50 start to work on the bounce towards strong resistance at 1.0800/20 for profit taking. Shorts need stops above 1.0835. Support again at 1.0670/55. Longs need stops below 1.0640. Strong support at 1.0600/1.0590. GBPUSD made a high for the day 6 pips above strong resistance at 1.2640/60. Shorts need stops above 1.2680. A break higher this week is a buy signal initially targeting 1.2725/45. Shorts at 1.2640/60 target 1.2590, perhaps as far as 1.2555/45 for profit taking. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk Follow FXMAG.COM on Google News
PLN Soars to Record Highs Ahead of NBP Decision

(USD) US Dollar - First Days Of June May Bring A New Stimulus, Forex Traders Keep An Eye On Mexican Peso (MXN), Hawkish ECB May Turn EUR/USD Upside Down! Looking Forward To Changes In PLN And HUF Exchange Rates | ING Economics

ING Economics ING Economics 30.05.2022 09:47
A holiday-shortened week starts with risk assets in demand as China marginally softens lockdown curbs and the pricing of a Fed pause allows interest to return to FX carry trades. That could see the dollar hand back a little more of its recent strength, although strong US data later in the week should limit the extent of the dollar's downside Source: Shutterstock USD: Interest in dollar-funded carry emerges The dollar is now about 3% off its highs in early May. Driving that correction has certainly been the view that the Fed could pause its tightening cycle after hiking 50bp in both June and July. The Fed funds rate for the 21 September meeting is now priced at 2.15%. At the start of May, it was priced at 2.35%. Clearly, US data and Fed speak will have a big say in the pricing of that Fed cycle. Today US markets are closed for the US Memorial Day public holiday, but the big data point of the week, Friday's release of May nonfarm payrolls, will have an important say for the Fed. Here James Knightley looks for another strong set of numbers, which should prove supportive for both US yields and the dollar. Until then, the dollar remains subject to corrective forces on the back of renewed interest in carry trades. Here, one month USD/JPY implied volatility has sunk back below 10% to signal calmer market conditions and for us, Friday's standout move was the huge rally in the Mexican peso. The peso is the big beast in the emerging market FX space and the USD/MXN drop to 19.50, the lowest level since early 2020, represents some confidence returning to the emerging market FX space. Indeed, some brave investors may be making the play that the dollar has topped and that putting money to work in EM local currency bonds can help cement the top in EM local rate cycles and trigger a virtuous cycle of gains in both the currency and the bond. For example, Mexican 10-year local currency bond yields have recently topped out at 9% and now trade at 8.50%. We think it is too early for those trades since both US yields and the dollar may well have another leg higher later this year, but this is a trend that certainly bears watching. US holiday-thinned trading should keep FX subdued today, but some modest reopening in China and some healthy equity gains should maintain the slightly softer dollar bias for the next few days. DXY is undertaking a slightly deeper correction than we thought and can continue to drift down to the 101.00 area. EUR: Another high German CPI to keep hawks in the ascendancy EUR/USD continues to nudge higher as the Fed pause, marginally better risk environment and ECB hawkishness all combine. Recent reports suggest the speculative community has been cutting its short euro positions. Yet we do not think there are strong arguments for EUR/USD to move back to and above 1.10. After all, the surge in energy prices is being more keenly felt in Europe and the deterioration in Europe's terms of trade has damaged the euro's medium-term fair value. Our preference would be for this EUR/USD correction to top out near 1.08. But for the short term, the external environment will keep EUR/USD supported. For today, we will get the first look at German inflation data for May. This is expected to push up to a new cycle high at 7.6% year-on-year and keep the hawks in the ascendancy at the ECB. That said, the recent narrowing in the two-year Germany-US sovereign spread seems to have run its course and unless one expects the ECB to sound even more hawkish (four to five ECB hikes are already priced this year) or the Fed to turn decisively less hawkish, EUR/USD looks unlikely to get too much more support from the yield spread side. GBP: Quiet week for the sterling story The UK data calendar is quite light this week. That leaves sterling mildly bid after last week's £15bn fiscal stimulus provided some support to otherwise fragile pricing of the BoE tightening cycle. The GBP/USD bounce has certainly been slightly stronger than we thought (we had thought 1.2600/2650 would be the corrective top) and a slightly negative dollar environment at the start of this week could see GBP/USD extend to 1.2730/2770. Longer term, we can still see GBP/USD heading back to the low 1.20s later this summer. EUR/GBP looks set to gravitate around 0.8500 for a while. CEE: Return of a hawkish tone to tame inflation In central and eastern Europe, the main event this week will be the Hungarian central bank meeting. This, in our view, will bring a 60bp hike in the base rate to 6% and a 30bp increase in the deposit rate to 6.75%. However, the weak forint may force the central bank to make a bolder move. Across the region, a breakdown of 1Q GDP growth will be released, which surprised positively in the flash estimate, so the market will be watching the reason behind this and indications for the second quarter. A piece to the puzzle will also come from the PMI for May, which like the eurozone should stagnate or fall just slightly. As always, Poland will be the first in the region to show the way for inflation. We expect it to rise from 11% to above 12.5% YoY, which should reignite the hawkish tone from the central bank, supporting higher rates and prompting the FX market to erase the losses of recent days. Of course, the biggest focus this week will be on forint, which is within reach of all-time lows following recent government decisions. A possible market disappointment would thus bring a move towards the magic level of 400 EUR/HUF, but we assume that this is not the central bank's intention. The zloty reached its strongest levels since the start of the Ukrainian conflict at the end of the last week and a strong CPI number and higher rates should ensure that it holds onto its gains at least. The koruna remains under central bank control and despite the currency's weakening last week, we do not expect the Czech National Bank to allow a move towards EUR 25/CZK territory. Read this article on THINK
GBP: Softer Ahead of CPI Risk Event

EUR/USD Performs Quite Well, Euro Is Supported By ECB. US Jobless Data Incoming, So Does NFP- How Will They Affect (USD) US Dollar Index (DXY)? Bank Of Canada (BoC) May Boost Canadian Dollar (CAD)! Is It Time To Buy (AMZN) Amazon Stock? | Swissquote

Swissquote Bank Swissquote Bank 30.05.2022 10:03
The week starts on a positive note after the rally we saw in the US stocks before last week’s closing bell. European futures hint at a positive open. The US 10-year yield stabilized around the 2.75% mark, and the US dollar index is now back to its 50-DMA level, giving some sigh of relief to the FX markets overall. Bonds and Equities One interesting thing is that we observe that the equities and bonds stopped moving together since the 10-year yield hit 3% threshold, suggesting that investors started moving capital to less risky bonds if they quit equities, instead of selling everything and sitting on cash. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM US Jobs Data, Expensive Crude Oil   That’s one positive sign in terms of broader risk appetite and should help assessing a bottom near the actual levels. But the end of the equity selloff depends on economic data. Released on Friday, the US PCE index fell from 6.6 to 6.3% in April. Due this week, the US jobs data, and the wages growth will take the center stage in the Fed talk. Weak dollar pushes the major peers higher, but the rising oil prices preoccupy investors this Monday. The barrel of US crude is above $117, and the news flow suggests further positive pressure. But till where?   Watch the full episode to find out more! 0:00 Intro 0:24 Market update 1:04 Equity, bond correlation is down since US 10-yield hit 3%! 2:58 Economic data is key: what to watch this week? 4:22 BoC to raise rates 5:09 EURUSD pushes higher 6:10 Oil under positive pressure: OPEC, UK windfall tax 9:19 Corporate calendar: GME, HP earnings, Amazon stock split Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. Follow FXMAG.COM on Google News
Fed And US Dollar (USD) Are All About Mixed Feelings, Christine Lagarde And ECB In General May Support Euro Even In July. BoE's Bailey Also Teases A Rate Hike. XAU, XAG And Crude Oil Went Higher As USD Weakened | OneRoyal

Fed And US Dollar (USD) Are All About Mixed Feelings, Christine Lagarde And ECB In General May Support Euro Even In July. BoE's Bailey Also Teases A Rate Hike. XAU, XAG And Crude Oil Went Higher As USD Weakened | OneRoyal

OneRoyal Market Updates OneRoyal Market Updates 30.05.2022 10:14
Weekly Recap It was another bearish week for the US Dollar as the greenback continued to sell off from YTD highs. The FOMC meeting minutes, released mid-week, did little to inspire a fresh rally in the Dollar. While the minutes confirmed the Fed’s hawkish stance and reinforced expectations for further 50bps hikes in June and July, there was little in the way of exciting details to get bulls reinvigorated. Additionally, with the Fed having seemingly turned more hawkish since that meeting, the minutes felt a little outdated. Christine Lagarde, ECB And Rate Hikes On the data front, a string of weaker-than-expected indicators out of the eurozone heightened growth concerns. With ECB’s Lagarde essentially confirming a July rate-hike, recession fears weighed on European asset markets though EUR itself remained well bid. Elsewhere, equities markets generally saw a choppy week though most indices ended the week in the green, benefitting from the weaker US Dollar. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM BOE’s Bailey warned that further rate hikes will likely be necessary in the face of rising inflation. The new fiscal package announced by the UK government this week, aimed at helping households fight rising energy bills, has further increased the likelihood of BOE rate hikes in the near-term. Weaker Dollar, Stronger Crude, Gold And Silver Commodities prices were higher over the week also. Gold, silver and oil all rallied on the back of a weaker US Dollar. With monetary policy divergence between the Fed and other central banks drying up, USD pressure has helped commodities stay afloat recently. Coming Up This Week Australian GDP Australian GDP will be closely watched this week on the back of the recent RBA rate hike. With the bank lifting rates and sounding firmly hawkish in its outlook and assessment, this week’s data might further support growing RBA rate hike expectations. With the country having emerged from one of the longest lockdowns of the pandemic, the economy has been on the bounce-back. However, as we have seen elsewhere, the economy has still been rocked by rising inflation and supply constraints. Traders will be keen to see the extent to which these factors weighed on the economy over the last quarter. BOC Rate Decision The BOC is widely expected to raise rates when it convenes for this month’s meeting mid-week. All 30 economists polled by Reuters ahead of the event are looking for a .5% hike. With this in mind, the focus will be on the bank’s forward guidance. If the BOC gives a clear signal that further hikes are coming in the near future, this should drive CAD higher near-term. However, if there is any indication that the BOC might look to hold off on any further rate hikes near-term, this will likely see cad dragged lower. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM US Non-Farm Payrolls The latest set of US labour market indicators this week will be closely watched as we head to the June meeting. Recent Fed commentary has been decidedly hawkish and it would likely take a major downside shock to change this narrative. Even then, it certainly wouldn’t impact the June rate hike and would likely only factor in forward guidance issued by the Fed. Still, with slowdown fears building, any weakness would no doubt act as a headwind to risk sentiment in the short-term. Forex Heat Map Technical Analysis Our favourite chart this week is the Dollar Index (DXY) The DYX has pulled back from recent multi-year highs and is now sitting on a make-or-break level at 101.94. This level was the 2020 closing high price. While the level holds as support, DXY is likely to recover and continue the longer-term bull trend. Below here, however, there is room for the correction to develop further towards next support at 100.37 Economic Calendar Plenty of key data releases to keep an eye on this week including Australian GDP, BOC rate decision and US Non-Farm Payrolls to name a few. Please see full calendar below for the complete schedule . Follow FXMAG.COM on Google News
UK Inflation Shows Promising Decline, Signaling a Path to More Sustainable Levels

In Times Of Hawkish ECB, This Week's Eurozone Inflation Plays A Vital Role, As Euro (EUR) May Need Some Boosting, So Does Hungarian Forint (HUF)... On Tuesday We Meet HP Earnings, So Better Let's Watch HP Stock Price Closely! | Saxo Bank

Saxo Bank Saxo Bank 30.05.2022 11:01
What is going on US core PCE prices.  US core PCE data was out on Friday, and it came in as expected at 4.9% y/y and 0.3% m/m. This was slower than last month's 5.2% y/y and may prompt more talk of inflation peaking out. While PCE is the preferred Fed metric, what cannot be ignored right now is that food and energy prices still have more room to run on the upside suggesting that inflation will remain higher for longer. The May CPI print is due on June 10, so that will be the next one on the radar for further cues in terms of Fed's rate hike trajectory but for this week, the focus will be on the jobs report due on Friday Goldman predicts end of battery metal bull market – saying that the prices for key battery metals cobalt, lithium and nickel will fall over the next two years after an over-eager speculation phase. Goldman predicts that lithium prices could drop slightly this year to $54k from recent spot prices near $60k and fall to near $16k in 2023 before rising again further down the road. There’s been “a surge in investor capital into supply investment tied to the long-term EV demand story, essentially trading a spot driven commodity as a forward-looking equity,” the analysts said. “That fundamental mispricing has in turn generated an outsized supply response well ahead of the demand trend.” Oil prices are becoming an important cross-asset driver.  Brent crude oil closed last week just shy of the $120/barrel level (see above) and also just shy of the highest weekly close for the front month contract since the outbreak of war in Ukraine. As the $120 area was often a resistance area during the high oil price period during 2011-14 (although at that time, the US dollar was far weaker), any further significant advance from here will likely dominate market attention and work against further strong improvements in risk sentiment as high energy prices cloud the growth outlook and would erode corporate profit margins. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Benchmark Capital and Sequoia Capital put out a dim outlook for technology.  Both venture capital firms were around during the dot-com bubble run-up and burst, and they have both put out perspective and action plans for the companies they have invested in. Those presentations talk about a much dimmer outlook and investors are shifting focus from revenue growth and revenue multiples to that of free cash flow here and now. Cost-cutting and focus on profitable unit metrics are now paramount to survive the coming years. What are we watching next? US Memorial Day Holiday today. This is a major national holiday, so all US markets are closed today. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM Eurozone inflation prints out this week.  The energy price shock has been bigger for Europe, and May prints are due for Spain, Germany, France, Italy and the Euro-area in the week ahead. Food price pressures continue to build up amid the supply shortages and protectionist measures, and further gains in May will add more weight to the ECB’s resolve to exit negative rates from Q3 with more aggressive tightening. Special meeting of the European Council today and tomorrow.  Talks will focus on the implementation of a proposed embargo on oil imports from Russia (from 2024 onwards according to the latest draft). Hungary is the only EU country against it. The problem is that any new sanctions against Russia require the unanimous agreement of the 27 member states in order to pass. Expect tough negotiations. Hungary’s Prime minister Viktor Orban has recently passed on a “wish list” of demands he wants met to support oil sanctions. This includes a swap line with the European Central Bank and end to the rule of law Article 7 and “conditionality mechanism” procedures, amongst other things. Australian GPD and balance of trade on watch and could disappoint.  Australian GPD data due Wednesday is expected to show economic growth fell from 4.2% YoY to 3% YoY in Q1. Quarterly GPD is expected to grow just 0.7%, following the 3.4% rise in Q4. If data is stronger than what consensus expects, the RBA has more ammunition to rise rates more than forecast, so the AUDUSD might rally. If GPD is weaker, then, the AUD will likely fall. For equities, Australian financials could rally if data is stronger than expected. Secondly, Australian Export and Import data is released Thursday. The market expects Australia’s surplus income (Export income minus imports payments) to rise from $9.4b to $9.5b in April. But given the iron ore price fell 13% in April, the trade data could miss expectations. Follow FXMAG.COM on Google News Several central banks in focus this week.  Tomorrow, the National Bank of Hungary (NBH) will likely deliver a hike of 50 basis points to 5.9 %. The NBH has recently flagged a slowdown in the pace of rate hikes which had a detrimental impact on the Hungarian currency. What the central bank needs to do now is to define more explicitly the risks to growth, the effect that it would have on inflation this year but especially in 2023, the pace of rate hike and how financing conditions could evolve in the next 12-18 months. On Wednesday, the Bank of Canada is expected to increase interest rates by 50 basis points, from 1% to 1.5% (it has downplayed the possibility of a 75-basis-point hike in the short term). The move has already been priced in the market. Further interest hikes will come in the coming months in order to fight inflation which is running at a 31-year high of 6.8% YoY in April. Last week, former Bank of Canada governor Stephen Poloz mentioned the risk that the country will fall into stagflation this year. Earnings Watch.  This week’s earnings releases are weak in terms of impact expect from earnings from Salesforce, Lululemon and Meituan. Analysts are expecting Salesforce to report FY23 Q1 revenue (ending 30 April) growth of 24% y/y on top of a significant operating margin expansion expected to boost free cash flow generation substantially. Monday: Sino Biopharmaceutical, Huazhu Group Tuesday: DiDi Global, Salesforce, HP, KE Holdings Wednesday: Acciona Energias Renovables, China Resources Power, Veeva Systems, HP Enterprise, MongoDB, NetApp, Chewy, GameStop, UiPath, SentinelOne, Elastic, Weibo Thursday: Trip.com, Pagseguro Digital, Remy Cointreau, Toro, Cooper Cos, Meituan, Crowdstrike, Lululemon, Okta, RH, Asana, Hormel Foods Economic calendar highlights for today (times GMT) 0900 – Euro zone Economic, Industrial, Services Confidence surveys 1200 – Germany May Flash CPI 1500 – US Fed’s Waller (Voter) to speak 1700 – ECB's Nagel to speak 2030 – New Zealand RBNZ’s Hawkesby to speak 2300 – South Korea Apr. Industrial Production 2330 – Japan Apr. Jobless Rate 2350 – Japan Apr. Jobless Rate 2350 – Japan Apr. Industrial Production 0030 – New Zealand May ANZ Business Confidence survey 0130 – China May Manufacturing/Non-manufacturing PMI 0130 – Australia Apr. Building Approvals 0130 – Australia Apr. Private Sector Credit Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Saxo Bank
The Commodities Feed: OPEC+ meeting ahead

Crude Oil Is Said To Shape Euro To US Dollar (EUR/USD). Forex Cable (GBP/USD) May Be Supported By BoE Sooner Than Later. (USD/JPY) - Can Japanese Yen Rise? | Oanda

Jeffrey Halley Jeffrey Halley 30.05.2022 13:22
Still improving risk sentiment sends US dollar lower The US dollar declined once again on Friday as improving risk sentiment continues to unwind the 2022 US dollar rally. That has spilt over into Asian markets today, with regional currencies booking some decent gains versus the greenback this morning. On Friday, the dollar index edged 0.12% lower to 101.64, losing another 0.13% to 101.50 in Asia. Support remains at 101.00, with resistance at 102.50. EUR/USD EUR/USD held steady on Friday, closing almost unchanged at 1.0735, with US dollar weakness being reflected in EMFX and the commonwealth currencies. It has gained 0.20% to 1.0755 in Asia, but overall, seems locked in a 1.0700 to 1.0800 range. Oil’s rally may temper single currency gains, with the multi-decade breakout line, today at 1.0830, still a formidable barrier. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM GBP/USD GBP/USD closed 0.20% higher at 1.2630 on Friday, adding another 0.14% to 1.2640 in Asia. GBP/USD looks set to trade in a noisy 1.2600 to 1.2700 range as the week gets underway. The government’s cost of living package may prompt faster BOE tightening, supporting the downside, while the economic slowdown continues to slow upside progress. USD/JPY USD/JPY is trading sideways, ranging each side of 127.00 as US yields trade in narrow ranges. That is likely to continue with US bond markets closed today. The chart suggests USD/JPY has further downside potential that could target 125.00. Only a move through trendline resistance at 127.80 changes the picture. AUD/USD & NZD/USD AUD/USD and NZD/USD continue to be driven entirely by swings in global risk sentiment. Another strong performance by Wall Street on Friday maintained that upward momentum and both AUD and NZD were prime beneficiaries. AUD/USD rallied by 0.85% to 0.7160, adding another 0.20% to 0.7175 today. It has resistance at 0.7260, and support at 0.7100. NZD/USD rose by 0.86% to 0.6536 on Friday, rising another 0.17% to 0.6547 today. Resistance nearby at 0.6570 opens a larger rally to 0.6650, with support at 0.6475. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM Asian FX rode improving investor risk sentiment higher on Friday, moves reflected throughout the EM space. Gains were led by the Chinese yuan, Korean won, and New Taiwan dollar, all gaining around 0.70%, while even the beleaguered Malaysian ringgit out in a good show, USD/MYR falling to 4.3770. Both the Indonesian rupiah and the Malaysian ringgit should find further strength on higher oil prices, even though it increases their domestic subsidy bills. Oil’s strength is likely the reason the Indian rupee has remained unchanged from Friday through today. CNY, KRW and NTD are rallying strongly today, likely boosted by China’s reopening hopes. USD/CNY, USD/KRW, and USD/NTD have fallen by around 0.80% today. However, if oil prices continue to rise this week, the rally in energy-importing Asian currencies may run out of steam. Follow FXMAG.COM on Google News This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Record-Breaking German Inflation Affects Euro To Dollar (EUR/USD) And Reminds European Central Bank (ECB) Of Potentially Needed Rate Hike | FxPro

Record-Breaking German Inflation Affects Euro To Dollar (EUR/USD) And Reminds European Central Bank (ECB) Of Potentially Needed Rate Hike | FxPro

Alex Kuptsikevich Alex Kuptsikevich 30.05.2022 15:30
A preliminary estimate showed that German inflation continues to pick up, reaching 7.9 y/y in May. This is a new inflation record since 1951, and the reading was also above the forecast of 7.6%. Energy, Food Prices, EUR/USD A separate release of import prices noted an acceleration of this type of inflation from 31.2% to 31.7%. Although it was slightly lower than the expected 32.0%, this extreme reading was not only due to a jump in energy and food prices but also to a 15% fall in EURUSD over the past 12 months. Euro Is Falling When It's Not Expected to... Historically, EURUSD has fallen in this way, with even more amplitude several times, but as a rule, it was during times of economic recession. Now we are seeing one of the rare instances of the single currency failing in a growing economy, which further inflates the sails of inflation. With such inputs, there remains pressure on the ECB for more dramatic monetary policy tightening measures. Hawkish ECB Perhaps a hawkish U-turn by the European Central Bank is now the most plausible way to halt the weakening of the EURO and contain inflation. And it seems that the ECB is just in the process of this turn, forming the basis for buying the euro against the dollar and pound after touching multi-year lows earlier in April and May.
EUR: Testing 1.0700 Support Ahead of ECB Meeting

It's Time For Markets To Discount EU Ban On Russian Oil! EUR/USD And AUD/USD Have Gone Up. How Will Euro Exchange Rate Change In The Following Days? Let's Watch Eurozone Inflation! | ING Economics

ING Economics ING Economics 31.05.2022 08:01
EU partial ban on oil and hawkish commentary from Fed's Waller were the headlines with the US out on holiday. Indian GDP for 1Q22 out later.  Source: shutterstock Macro outlook Global: With the US out on vacation yesterday, there isn’t too much overnight catch-up to do for Asia, though commodity markets are responding to the partial EU ban on Russian oil agreed upon yesterday. FX markets continued their recent gains against the USD though. EURUSD  has now risen to 1.0787, bringing it close to resistance levels just above 1.08. The AUD also continued to make gains, and is currently flirting with 0.72. Within the Asia FX pack, the KRW led the charge, shooting lower to 1238, with the CNY close behind in terms of gains at 6.66. Despite the holidays, the Fed’s Waller struck a more hawkish tone at a speaking engagement than his colleague, Raphael  Bostic, who had recently advocated a possible September pause in hikes. Waller, in contrast, suggested that 50bp hikes should remain on the table until inflation was closer to 2%. Newswires continue to run with stories looking for the trough in the equity sell-off, but also suggesting that the bond sell off is also over. One of those views is likely to be wrong. But whichever is the case, it is a good reflection of the current market sentiment which is looking for turning points. More choppiness ahead seems likely as a result. It is a relatively light day for G-7 macro data today. The EU’s May inflation should show a rise from 7.5% to 7.8%. But ECB rate hike intentions have been clearly flagged for now, so this shouldn’t make too many ripples. And in the US, we have house price figures and consumer confidence numbers. Consumer confidence has barely any correlation with consumer spending, so we can probably give it only a cursory examination. House prices appear to be reaching a peak in year on year growth, but until or unless they show a marked reversal in direction, can probably also be glossed over. India: 1Q22 GDP, which is released at 8pm SGT tonight, should come in at about 4.0%YoY (consensus is 3.9%YoY). That should bring the annual fiscal-year GDP growth for 2021/22 to 8.7%. For the 2022/23 fiscal year, we are forecasting 7.2% GDP growth. Rising prices and tighter monetary policy as well as global disruptions and a less helpful base comparison account for the apparent slowdown.  China: Official PMIs will be released this morning. We expect both the manufacturing and non-manufacturing PMIs will come in under 50, i.e. signalling monthly contraction. That result will mainly reflect the fact that Beijing was in lockdown for most of May, adding extra pressure on activity while Shanghai was also still in lockdown. Unemployment should remain high and will add uncertainty to the non-manufacturing PMI even if Shanghai residents resume work and production starting from 1st June.   Korea:  April monthly activity data signals that China’s lockdown dragged down Korean manufacturing production while local reopening supported services, construction, and consumption activity. Manufacturing production plunged -3.3%MoM (vs -1.3% market consensus), the first monthly drop in seven months. Meanwhile, the construction and services sectors rose modestly for the second straight month, with notable rises in hotels & restaurants and personal services (11.5% and 8.7%) respectively. Consumption fell -0.2% but mainly due to a decline in pharmaceutical consumption, while durable goods, including automobiles, rose slightly. Overall, the April data was on weak side, yet the recent approval of a supplementary budget (62 trillion KRW) and the reopening of China should boost the recovery in the coming months.  Japan: April Industrial production fell -1.3% MoM sa (vs -0.2% market consensus) the first fall in three months, with China’s lockdown hampering supply chains and production activity. However, consumer sales were relatively sound with retail sales and department store sales up by 2.9% YoY and 4.0% respectively. Meanwhile, labour conditions also improved. The jobless rate in April dropped to 2.5% (vs 2.6% market consensus and March) and the job-to-application ratio ticked up to 1.23 (vs 1.22 in March). We ought to be on the watch for tighter labour market conditions leading to wage growth, which is the key that the Bank of Japan has been looking for to gauge a sustainable inflation trend. What to look out for: EU inflation and US non-farm payrolls South Korea industrial production (31 May) Japan retail sales and job-applicant ratio (31 May) China PMI manufacturing (31 May) Thailand trade balance (31 May) Eurozone CPI inflation (31 May  US Conference board expectations (31 May) South Korea trade (1 June) Regional PMI manufacturing (1 June) Australia 1Q GDP (1 June) US ISM manufacturing (1 June) Indonesia CPI inflation (2 June) Australia trade balance (2 June) US ADP jobs, initial jobless claims, durable goods orders (2 June) South Korea CPI inflation (3 June) US non-farm payrolls and ISM services (3 June) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Dollar Could Gain Momentum from Hawkish Fed Stance

USD - Waiting For NFP! Check How Are EUR/USD & AUD/USD Doing Ahead Of The US Data Release!| Oanda

Jeffrey Halley Jeffrey Halley 03.06.2022 12:25
US dollar eyes nonfarm payrolls There was a wax on, wax off feel to currency markets overnight. Soft ADP Employment data spurring a risk-on rally across asset classes as the Fed hiking outlook was tempered. The US dollar staged a broad retreat, unwinding all its gains from the day before in the major space except for USD/JPY. Asian market volatility is being dampened by holidays across the region today, including mainland China and Hong Kong, and the UK later today.  US dollar loses all of its previous gains - MarketPulseMarketPulse The dollar index tumbled by 0.78% to 101.75 overnight, an exact reversal of the rally from the day before. It is unmoved in Asia and support/resistance lies at 101.40 and 102.70. Its fate will be decided by this evening’s US Non-Farm Payrolls.   EUR/USD reversed all its previous day’s losses, rising 0.91% to 1.0750 where it remains in Asia. Resistance between 1.0770 and 1.0830 remains a formidable barrier, with support at 1.0650. Sterling reversed all its previous day’s losses, rising 0.75% to 1.2575 where it remains in Asia. It has support/resistance at 1.2460 and 1.2670. USD/JPY was almost unchanged at 129.85 as US bond yields barely moved. It remains unchanged in Asia. It has support/resistance at 129.00 and 131.30. Their fate will be decided by this evening’s US Non-Farm Payrolls.   AUD/USD staged a bullish outside reversal day overnight, making a new low before closing higher than the high of the day before, thanks to the broad-based risk-on rally after the US data. It leapt 1.27% higher to 0.7260 overnight where it remains today. AUD/USD has support at 0.7150, and the overnight rally took it above its 50/100/200-day moving averages (DMAs) between 0.7230 and 0.7255 as well. A soft Non-Farm print tonight could see AUD/USD rise to test 0.7350, with a weekly close at these levels being a bullish signal technically. Its fate will be decided by this evening’s US Non-Farm Payrolls.   Asian FX currencies booked modest gains overnight, with the rise in oil prices tempering the fast money inflows. Both the Malaysian ringgit and Philippine peso actually fell overnight, a result I suspect, of rising subsidy bills as oil prices climb higher. The Indonesian rupiah has rallied 0.70% to 14,420.00 today, while the KRW and MYR have risen by 0.10%. With a swathe of holidays across the region today, and no PBOC USD/CNY fixing, Asian markets look content to watch from the sidelines as we head into US data this evening and the weekend. Their fate will be decided by this evening’s US Non-Farm Payrolls. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. https://www.marketpulse.com/20220603/us-dollar-loses-all-of-its-previous-gains/
Market Update: UK Inflation Softens, US Stocks Rally, Bank Earnings, and AI Dominate Headlines

Shocking Forex Rates!? EUR/USD Decreased A Little Bit, So Does British Pound (GBP) And AUD/USD. USD/JPY (US Dollar To Japanese Yen) Showed Decent Performance | Oanda

Jeffrey Halley Jeffrey Halley 06.06.2022 16:23
US dollar pares gains from NFP report Friday’s higher Non-Farm Payroll data saw the US dollar reverse much of its losses from Thursday, characterising a very choppy back-and-forth week last week. The dollar index rose by 0.40% to 1.0217, leaving the index slightly higher for the week. Notably, the rally was not enough to lift the index above its 102.35 pivot point, suggesting that the downside remains the path of least resistance still. Support/resistance lies at 101.30 and 102.70. In Asia, the China reopening trade has pushed the index slightly lower to 102.11.  US dollar eases lower in Asia - MarketPulseMarketPulse EUR/USD fell only slightly by 0.27% to 1.0720 on Friday post-data, where it remains in Asia. ​ Resistance between 1.0770 and 1.0830 remains a formidable barrier, with support at 1.0650. However, the single currency continues to show resilience at these levels, and resistance could be seriously tested if China’s reopening trade continues to support risk sentiment. Volumes will be impacted by European holidays today.   Sterling tumbled by 0.70% to 1.2490 on Friday in yet another whipsaw session. It remains there in Asia today. It has support/resistance at 1.2460 and 1.2670. A UK leadership challenge this week may serve to limit gains but a clean break of 1.2670 opens a potentially larger rally to 1.2800 and 1.3000, while the failure of 1.2460 could see sterling fall to 1.2400.   USD/JPY rose 0.73% to 130.85 on Friday, accounting for most of the dollar index gains post US data as US bond yields firmed slightly. USD/JPY has edged 0.15% lower to 130.65 today despite dovish BOJ comments, but the US/Japan rate differential should continue to support the downside unless US yields suddenly fall sharply. It has support at 129.00 and resistance at 131.00, a double top, and 131.30.   AUD/USD fell post US data as risk sentiment turned south. It finished 0.80% lower at 0.7205, easing another 0.20% to 0.7195 in Asia. AUD/USD has nearby support at 0.7180, an ascending one-month trendline, with resistance between its 50/100/200-day moving averages (DMAs) between 0.7225 and 0.7255. RBA hiking concerns ahead of tomorrow’s RBA meeting look set to limit gains in the short term.   USD/Asia moved higher on Friday on firm US data, with the Korean won, New Taiwan dollar, Singapore dollar, and India rupee the main losers, being favourites by fast-money to express risk sentiment of late. Yuan trading was impacted by a China holiday. Markets are quiet in Asia today, with Asian currencies booking only small gains versus the greenback. The sharp rise in oil prices on Friday, which continues in Asian trading today, is likely limiting Asia FX gains. The double-edged sword of China’s reopening is that oil prices are likely to remain firm as well as demand returns. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Euro May Attempt To Resume An Upward Movement

Fluctuations Or Stability? FX: What To Do With Euro To Dollar (EUR/USD)? - 06/06/22 | InstaForex

InstaForex Analysis InstaForex Analysis 06.06.2022 16:11
Relevance up to 13:00 2022-06-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/278935 Technical analysis: EUR./USD has been trading sideways in last couple of days but I still see further downside movement. There is the breakout of the upper channel in the background. Trading recommendation: Due to the breakout rising channel in the background and the mid and long term down trend I see potential for further downside movement. Watch for potential selling opportunities with the downside objectives at 1.0640 and 1.0540. Confirmation for the downside movement can be if the price breaks the support at 1.0700. Key resistance is set at the price of 1.0775  
US Dollar Soaring Again!? High US CPI Can Affect Stock Markets, But Also Help US Dollar (USD) To Go Even Higher! | FxPro

US Dollar Soaring Again!? High US CPI Can Affect Stock Markets, But Also Help US Dollar (USD) To Go Even Higher! | FxPro

Alex Kuptsikevich Alex Kuptsikevich 10.06.2022 16:20
The US consumer price index accelerated by 8.6% in May from 8.3% a month earlier. The new data exceeded expectations, rebutting hopes that US inflation is already slowing. Today's inflation report is the last big release before the Fed meeting next Wednesday. A renewal of inflation to 40-year highs will surely attract the public's attention at the weekend and will pressure the Fed. Potentially, such high reading could trigger a tougher FOMC stance in the accompanying commentary. Recently, the Fed has been expected to raise rates by 50 points next week and hints of another such move in late July. However, with a strong labour market and persistently high inflation, there are increasing chances that more such double-sized rate hikes are required, which is speculatively good news for the dollar in the coming weeks. A separate issue is quantitative tightening. The Fed could also adjust its plans to sell assets off the balance sheet to tighten financial conditions in the country further. Proponents of such an approach point to the record amounts of excess liquidity that commercial banks are parking on central bank balance sheets. High inflation is bad news for the stock market because it will force the Fed to tighten the monetary policy screws even further. The Fed's open intention to suppress inflation creates risk-off market sentiment when the price growth remains high. In this environment, dollar-denominated money market assets become attractive because of higher yields. This is in stark contrast to last year when the Fed reassured us that everything would pass by itself, so investors preferred to sell dollars that were losing value.
ECB (European Central Bank) is two steps behind the Fed (Federal Reserve), digging a hole under the euro (EUR) | FxPro

ECB (European Central Bank) is two steps behind the Fed (Federal Reserve), digging a hole under the euro (EUR) | FxPro

Alex Kuptsikevich Alex Kuptsikevich 10.06.2022 13:09
As expected, euro buyers' optimism faded immediately after the ECB press conference began, returning EURUSD to a repeat of 1.0600. Shortly after the initial surge in reports of an actual reversal in ECB policy, investors and traders delved into assessments of how slower the policy reversal in Europe was. The ECB will only stop buying assets on its balance sheet later this month - two steps behind the US, where purchases were curtailed months ago and active sales are already due to begin in June. The Fed raised its rate by 25 points in March and 50 points at the start of May, promising two more 50-point hikes in June and July. From the ECB, we see a conditional promise to consider a rate hike of more than 25 points in September in case of high inflation forecasts for 2023. That said, inflation in the eurozone is comparable to the US, and economic growth is just as, if not more, vulnerable to logistical failures and energy prices. Not only has the ECB started its policy turnaround later, but it is also doing so more slowly than the Fed so that the interest rate differential only widens over time. Such differences are a fundamental reason to sell the euro against the dollar. Moreover, the EURUSD bounce in the second half of May erased the pair's oversold conditions, clearing the way for another step down. Yesterday's comments from the ECB convinced us not to expect any hawkish surprises from Lagarde and Co, triggering a new sell-off impulse. It won't be surprising if EURUSD makes another test of the May low at 1.0350 or if it makes a new 20-year low below that level during the next couple of weeks.
FX Talking - Summer of discontent keeps dollar in demand | EUR/USD | USD/JPY | GBP/USD | ING Economics

FX Talking - Summer of discontent keeps dollar in demand | EUR/USD | USD/JPY | GBP/USD | ING Economics

ING Economics ING Economics 14.06.2022 10:04
The global economy can now be characterised as one in which many central bankers are poised to hike rates more forcefully, even as growth prospects are being revised lower. Investors are now having to ask which economies can best withstand these tighter monetary conditions and which currency to back? During this summer of discontent the answer to these questions largely remains the US economy and the dollar. Unlike the supply-driven inflation suffered in Europe, price rises in the US are far more a function of demand-side factors and suggest stagflation is less of a likelihood in the US than in Europe. And with no end in sight to tight energy markets, the US remains better positioned here too. We expect the Fed to deliver at least another 175bp of hikes this year as the Fed drives real US interest rates into restrictive territory. This is not good news for global growth – but that is the point, the Fed needs to slow demand. Flatter yield curves consistent with the latter stages of the US business cycle are normally good news for the dollar. In all this means that the dollar should stay bid this summer (1.00/1.02 is possible in EUR/USD), while USD/JPY in the 135/140 region looks ready to trigger Japanese intervention. GBP/USD can move to the low 1.20s as the BoE cycle is repriced lower and the CHF should start to outperform in Europe as the SNB guides it higher. CEE FX has become more mixed. We still favour the PLN, but HUF and now CZK look more vulnerable. This will be a fragile environment for most EMFX – especially those most exposed to China. Here USD/CNY can still push higher taking most of $/Asia with it. Developed markets EUR/USD A long, hot summer for the euro Current spot: 1.0476 Both the Fed and the ECB are in hawkish mode – both battling inflation near 8%. Both are probably happy with stronger currencies. The difference is the stagflationary shock from the war in Ukraine which makes the ECB unlikely to deliver on the 150bp of tightening priced in. There is also the issue of growth differentials and what they mean for international equity flows. These could start generating some euro under-performance. EUR/USD looks biased towards the lower end of a 1.02-1.08 range this summer. It looks far too early to pick the top in the Fed cycle. Higher US real rates also spell trouble for risk assets, including EM in general. This will also lend further support to the dollar USD/JPY Official concern and stretched valuations may help JPY Current spot: 134.43 The combination of aggressive Fed tightening (we look for at least another 175bp of Fed rate hikes this year), high energy prices and BoJ dovishness has sent USD/JPY to 135. Japanese officials are now officially unhappy with the rapid pace of JPY weakness. Sensible arguments go that the BoJ cannot intervene to sell $/JPY since: a) markets are not disorderly and b) BoJ is still printing money with QQE. Yet intervention is political & one never knows whether deals get cut behind the scenes We cannot rule out USD/JPY marching towards 140 given that this is a fundamentally driven, but intervention signals are flashing amber/red. Traded USD/JPY volatility can rise further. GBP/USD Bank of England tightening expectations are extreme Current spot: 134.43 GBP/USD looks as though it can trade back down to the 1.21/22 levels – largely on the back of dollar strength. But certainly an Unexploded Bomb (UXB) for sterling is the incredibly aggressive 175bp of tightening priced into the BoE cycle for year-end. This seems very extreme given that not all the MPC were on board with May’s 25bp hike. The 16 June BoE meeting is an event risk. UK growth will struggle in 2Q, although there is increasing speculation over tax cuts coming through this Autumn – in a bid to shore up Conservative support ahead of a possible ‘23 election. We doubt a Tory leadership change or Brexit tension has too much impact on sterling – a lot of bad news is already priced. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more This article is a part of the report by ING: Source
Forex: What to expect from British pound against US dollar - January 17th

How Much Is 1 EUR To USD? FX: Bristish Pound To US Dollar. Tips for beginner traders in EUR/USD and GBP/USD on June 15, 2022 | InstaForex

InstaForex Analysis InstaForex Analysis 15.06.2022 11:13
Relevance up to 09:00 2022-06-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Details of the economic calendar from June 14 Data on the UK labor market came out worse than expected. The unemployment rate increased from 3.7% to 3.8%, while the forecast assumed a decline to 3.6%. Employment in the country rose by 177,000, while jobless claims fell less than expected. In general terms, the indicators for the UK labor market are not the best. Analysis of trading charts from June 14 The EURUSD currency pair has slowed down its downward movement in the area of 1.0400. This move has led to variable turmoil, with the downside sentiment remaining among market participants. On the trading chart of the daily period, there is a gradual recovery of the downward trend relative to the recent correction. The GBPUSD currency pair has accelerated the decline after the prolongation of the medium-term downward trend. The increase in the volume of short positions led to the weakening of the pound sterling towards the psychologically important level of 1.2000. The scale of decline for three trading days amounted to about 550 points.     Economic calendar for June 15 The results of the Fed meeting are at the center of everyone's attention, where, due to a sharp increase in the inflation rate, experts are revising forecasts for the interest rate hike. Based on the last meeting, the regulator planned to continue hanging the rate by 50 basis points. The market, in turn, is concerned about rising inflation and lays down a rate increase of 75 basis points at once, which has already affected the US dollar exchange rate. Time targeting Results of the Fed meeting - 18:00 UTC Fed press conference - 18:30 UTC Trading plan for EUR/USD on June 15 Price stagnation within 1.0400/1.0500 keeps speculators on itself for a while. It can be assumed that the current stop plays the role of the accumulation of trading forces in the forthcoming acceleration in the market. Based on the above range, the best trading tactic is the outgoing momentum method, which will indicate the subsequent price move. We concretize the above into trading signals: Buy positions on the currency pair are taken into account after holding the price above the value of 1.0500 in a four-hour period. Sell positions should be considered after holding the price below 1.0400 in a four-hour period.     Trading plan for GBP/USD on June 15 The area of psychological level 1.1950/1.2000/1.2050 puts pressure on sellers. This led to a reduction in the volume of short positions and, as a result, a local pullback. Taking into account the oversold status of the pound sterling, we can assume further formation of a correction if the price holds above 1.2050 in a four-hour period. At the same time, the high interest of traders in speculative positions allows blocking the technical signal about the pound being oversold. In this case, holding the price below the value of 1.1950 in a four-hour period will lead to the subsequent inertial movement. What is reflected in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future. Read more: https://www.instaforex.eu/forex_analysis/313480
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Euro To US Dollar - EUR/USD Intraday technical analysis and trading plan

InstaForex Analysis InstaForex Analysis 15.06.2022 22:34
Relevance up to 20:00 2022-06-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. In late September, Re-closure below the price level of 1.1700 has initiated downside-movement towards 1.1500 where some bullish recovery was witnessed. Shortly after, another price decline took place towards 1.1200. Then the EURUSD has temporarily moved-up within the depicted movement channel until downside breakout occurred. The EURUSD looked oversold while approaching the price levels of 1.0800. That's when an upside movement was initiated towards 1.1200. This recent movement towards 1.1200 was suggested for another SELL opportunity which already reached its targets. The previous ascending movement above 1.0600 enabled further advancement towards 1.0800 where evident bearish rejection could be applied. On the other hand, the pair remains under selling pressure to re-visit the new daily low around 1.0350 where price action should be watched.   Read more: https://www.instaforex.eu/forex_analysis/280273
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

FX: Euro To US Dollar Trading! Technical analysis recommendations on EUR/USD and GBP/USD for June 17, 2022

InstaForex Analysis InstaForex Analysis 17.06.2022 14:58
Relevance up to 11:00 2022-06-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher timeframes Bulls are still trying to limit the current decline, so they continue to insist on the continuation of the rise and the restoration of positions. For this event to be a success and further prospects in the near future, it is necessary to overcome the resistance of the daily Ichimoku cross (1.0516 – 1.0568 – 1.0620 ), two resistances of the higher timeframes (1.0539 – 1.0643) and gain a foothold in the Ichimoku cloud (1.0568). The failure of the bulls may let bears resume the downward trend (1.0339–49).     H4 – H1 Yesterday's corrective movement managed to overcome the resistance of key levels. As a result, the advantage in the lower timeframes shifted to the side of the bulls. The key levels, located at the boundaries of 1.0510 (the central pivot point of the day) and 1.0466 (the weekly long-term trend), serve as supports and are currently trying to defend the interests of the bulls. If this succeeds, then the reference points for the rise from the higher timeframes will be added to the reference points of the lower timeframes at 1.0639 – 1.0730 – 1.0859 (resistances of classic pivot points). In case of loss of key levels (1.0510 – 1.0466), the balance of power will once again be changed and the prospects for movement will again be aimed at restoring the downward trend, first on the lower timeframes (1.0359) and then on the higher ones (1.0349–39). Additional reference points will be the support of classic pivot points (1.0419 – 1.0290 – 1.0199 ). *** GBP/USD     Higher timeframes Bulls continued to rise, as a result, the resistance of the daily Ichimoku death cross (1.2213 – 1.2266 – 1.2300 – 1.2386) is now being tested for strength. Breakdown and reliable consolidation above will open new horizons, which will be weekly levels (1.2511 – 1.2626) and entry into the daily and monthly Ichimoku cloud (1.2523 – 1.2678).     H4 – H1 At the moment, the advantage in the lower timeframes belongs to the bulls. The pair is now testing key levels—the central pivot point of the day (1.2264) and the weekly long-term trend (1.2184). Keeping them as supports will provide opportunities for bullish sentiment to develop. The next reference points for the continuation of the rise will be 1.2489 – 1.2629 – 1.2854. The loss of key levels will deprive the bulls of an advantage, which can contribute to increased activity and performance on the part of the opponent. Downward references today can be noted at 1.2124 – 1.1899 – 1.1759 (support of the classic pivot points). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/313780
JPY: Assessing the FX Intervention Zone and Market Conditions

EURUSD: Euro Has Rallied Recently, What Will Be US Dollar's Answer? Technical analysis of EUR/USD for June 17, 2022 | InstaForex

InstaForex Analysis InstaForex Analysis 17.06.2022 16:06
Relevance up to 15:00 2022-06-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Overview : The EUR/USD pair continues to move upwards from the level of 1.0435. Today, the first support level is currently seen at 1.0435, the price is moving in a bullish channel now. Furthermore, the price has been set above the strong support at the level of 1.0435, which coincides with the 23.6% Fibonacci retracement level. This support has been rejected three times confirming the veracity of an uptrend. According to the previous events, we expect the EUR/USD pair to trade between 1.0435 and 1.0602. Also, the daily resistance and support are seen at the levels of 1.0602 and 1.0435 respectively. Therefore, it is recommended to be cautious while placing orders in this area. The support stands at 1.0435, while daily resistance is found at 1.0602. Therefore, the market is likely to show signs of a bullish trend around the spot of 1.0435. The market is likely to show signs of a bullish trend around the spot of 1.0435. Moreover, the major support is also coinciding with the major support today. Additionally, the RSI is still calling for a strong bullish market as well as the current price is also above the moving average 100. Therefore, it will be advantageous to buy above the support area of 1.0435. In other words, buy orders are recommended above the spot of 1.0435 with the first target at the level of 1.0554; and continue towards 1.0602. However, if the EUR/USD pair fails to break through the resistance level of 1.0602 today, the market will decline further to 1.0383 so as to test the weekly bottom - the last bearish wave. Read more: https://www.instaforex.eu/forex_analysis/280651
JPY: Assessing the FX Intervention Zone and Market Conditions

EUR/USD Intraday technical analysis and trading plan

InstaForex Analysis InstaForex Analysis 17.06.2022 23:03
Relevance up to 22:00 2022-06-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The EURUSD looked oversold while approaching the price levels of 1.0800. That's when a temporary upside movement was approaching the price levels around 1.1200. This recent movement towards 1.1200 was suggested for another SELL opportunity which already reached its targets beyond the price level of 1.0400. The previous ascending movement above 1.0600 enabled further advancement towards 1.0800 where evident bearish rejection arises again. On the other hand, the pair remains trapped under selling pressure to challenge the recent daily low around 1.0350 where price action should be watched.   Read more: https://www.instaforex.eu/forex_analysis/280671
GBP: Softer Ahead of CPI Risk Event

EUR/USD daily technical review and trading opportunities | InstaForex

InstaForex Analysis InstaForex Analysis 17.06.2022 23:07
Relevance up to 22:00 2022-06-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   In late September, Re-closure below the price level of 1.1700 has initiated downside-movement towards 1.1500 where some recovery was witnessed. Shortly after, Price levels around 1.1700 managed to hold prices for a short period of time before another price decline took place towards 1.1200. Then the EURUSD has temporarily moved-up within the depicted movement channel until downside breakout occurred recently. Since then, the price zone around 1.1500 has applied significant SELLING pressure when a valid SELL Entry was offered upon the previous ascending movement towards it. Shortly after, the EURUSD looked oversold while approaching the price levels of 1.0800 few weeks ago. That's where the recent upside movement was previously initiated. However, the recent movement towards 1.1200 was considered for another SELL Trade which is already running in profits now. The previous ascending movement above 1.0600 enabled further advancement towards 1.0800 where bearish rejection could be applied again.   Read more: https://www.instaforex.eu/forex_analysis/280673
Markets May Shock You Today! FX: EUR/USD & USDCAD, DAX (GER 40) And FTSE (UK 100) - Daily analysis by DayTradeIdeas - 20/06/2022

Markets May Shock You Today! FX: EUR/USD & USDCAD, DAX (GER 40) And FTSE (UK 100) - Daily analysis by DayTradeIdeas - 20/06/2022

Jason Sen Jason Sen 20.06.2022 08:05
EURUSD recovery from the May low of 1.0360/50 leaves a potential double bottom buy signal although on Friday we made a high for the day at 1.0545/55. Above here today retests Thursday's high at 1.0660/62 then last week's high at 1.0640/42. Minor support at 1.0460/50. Below 1.0330 risks a retest of the double bottom low at 1.0360/50. Longs need stops below 1.0325. USDCAD clearly at the upper end of the 1 year range as we retest the May high at 1.3060/80. This will be key to direction for this week. Probably worth trying a short with stop above 1.3100. A break higher however targets 1.3160/70 & 1.3240/60. Shorts at 1.3060/80 target 1.3030/20 & 1.3000/1.2990. Expected good support at 1.2955/35 for today. Dax looks likely we can hold important longer term support at 13250/150 for a bounce to 13360/380 then 13500 & resistance at 13600/650. We have a gap to fill at 13730/750. A break above here is anther buy signal. A break below 12950 is a very important medium term sell signal initially targeting 12700/600 before a retest of the March low at 12450/425. FTSE broke lower to the next target of 7000/6990 last week, holding just 56 ticks above very strong support at 6940/10. Longs here this week need stops below 6870. The bounce on Friday held 8 ticks from strong resistance at 7120/40. Shorts need stops above 7160. A break higher is a buy signal targeting 7240/50, perhaps as far as strong resistance at 7300/20. To receive this report every morning please subscribe at our website www.daytradeideas.co.uk or email jason@daytradeideas.co.uk
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

Is USD Going To Outperform Euro And JPY!? Let's Take A Look At EUR/USD & USD/JPY. | Oanda

Jeffrey Halley Jeffrey Halley 20.06.2022 16:34
Dollar in choppy waters The US dollar held onto its intraday gains on Friday, as US bond inflows seemed to support it as investors preferred safety over risk into the weekend and today’s US holiday. With the weekend being relatively uneventful, the US dollar has eased in Asia, but overall continues a pattern of choppy range trading. The dollar index rose 0.82% to 104.65 on Friday, thanks mostly to a weak yen. In Asia, it has eased 0.26% to 104.38. The dollar index has support at 1.0350 with resistance now distant at 1.0570.   EUR/USD eased by 0.56% to 1.0495 on Friday in another 100-point session, climbing by 0.31% to 1.0525 in Asia as weekend hedges are taken off. Dutch natural gas futures prices remain elevated, so the single currency is not receiving much of a boost from last Friday’s oil retreat. It has initial resistance at 1.0600, with challenging resistance at 1.0650. Support is at 1.0450 and 1.0400 now although I note that EUR/USD has based twice at 1.0350. That leaves the door open slightly to a corrective recovery this week.   Sterling has another awful day as its economic picture darkens, falling by 1.10% to 1.2215 on Friday, edging 0.22% higher to 1.2240 in Asia. ​ GBP/USD has initial resistance at 1.2400 and 1.2500, with support at 1.2200 and then 1.1950.   USD/JPY powered higher on Friday as the Bank of Japan left monetary policy unchanged and continues to heavily intervene to cap ultra-low JGB yields. With Japan’s inflation only expected to hit 2.50% this Friday, I can’t really blame them, but with the US, Switzerland, the United Kingdom, et al hiking, the interest rate differential continues to power USD/JPY higher. USD/JPY leapt 2.10% higher to 135.00 on Friday, with last week’s 131.50 low a distant memory and a bargain for somebody. Having probed 135.45 today, USD/JPY has eased back to 134.85 this morning, as commodity prices fell. It is likely to be only a respite though unless US yields move sharply lower this week. USD/JPY has resistance at 135.60 with support distant at 132.20.   Swings in investor sentiment continue to generate all the two-way volatility in the Australian and New Zealand dollars. AUD/USD fell 1.60% on Friday to 0.6935 before rising to 0.6955 in Asia. NZD/USD fell 0.80% to 0.6315 on Friday before rising to 0.6330 in Asia. A US holiday is dampening volumes but both Australasians have traced out bottoming patterns on the charts. As long as 0.6850 and 0.6200 hold respectively, further gains to 0.7150 and 0.6450 cannot be ruled out.   On a 24-hour basis, Asian currencies are mostly unchanged today after the losses on Friday and were mostly unwound this morning. The main reason has been a rally by China’s CNY and CNH after the PBOC left both the 1 and 5-year LPRs unchanged. USD/CNY has fallen 0.60% to 6.6760, while USD/CNH has fallen by 0.50% to 6.6745, dragging USD/Asia lower. Although the KRW, INR, MYR, THB, and IDR look the most vulnerable and remain near last week’s lows, a US holiday today should mean range-trading continues into Wednesday. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US dollar remains firm but choppy - MarketPulseMarketPulse
The EUR/AUD Pair May Have The Potential To Continue Its Decline

Ichimoku cloud indicator analysis on EURUSD for June 20th, 2022 | InstaForex

InstaForex Analysis InstaForex Analysis 20.06.2022 17:51
Relevance up to 15:00 2022-06-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   EURUSD is trading above 1.05. Even in the 4 hour chart price remains below the 4 hour Kumo (cloud). This indicates that trend remains bearish. Price is above the tenkan-sen (red line indicator) and the kijun-sen (yellow line indicator). This is supportive for the short-term. But bulls need to show more signs of strength and push price above the cloud. Support by the tenkan-sen is at 1.0495 and by the kijun-sen at 1.0480. Bulls need to defend these support levels. Failure to hold above these support levels will lead EURUSD back towards 1.03. Bulls are challenging the lower cloud boundary. They will need to break inside the cloud to change trend to neutral.   Read more: https://www.instaforex.eu/forex_analysis/280897
FX Daily: Testing the easing pushback

EUR/USD Technical Analysis and Trading Tips on June 20, 2022 | InstaForex

InstaForex Analysis InstaForex Analysis 20.06.2022 17:58
Relevance up to 12:00 2022-06-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   As of this writing, EUR/USD is trading near 1.0535, testing an important short-term resistance level at 1.0527 (200 EMA on the 1-hour chart). In case of its breakout, the upward correction may continue to the resistance level of 1.0616 (200 EMA on the 4-hour chart).     EUR/USD is in the zone of a long-term bearish market below the key resistance levels 1.0955 (144 EMA on the daily chart) and 1.1085 (200 EMA on the daily chart). Therefore, for now, its further corrective growth will most likely be limited by the resistance level of 1.0670 (50 EMA on the daily chart), and in the main scenario, there will be a rebound from the resistance level of 1.0527.     A breakdown of the local support level 1.0485 will return downside risks to 1.0300, and further towards parity with the euro against the dollar against the backdrop of a steady strengthening of the dollar and a deterioration in the prospects for the Eurozone. In an alternative scenario, the price will break through the resistance levels of 1.0527, 1.0616, and 1.0670 and grow to the local resistance levels of 1.0780, 1.0800, and 1.0810. Further movements will largely depend on the dynamics of the dollar and the actions of the Fed and the ECB regarding their monetary policies.     Support levels: 1.0500, 1.0485, 1.0400, 1.0355, 1.0300, 1.0200, 1.0100, 1.0000 Resistance levels: 1.0527, 1.0616, 1.0670, 1.0780, 1.0800, 1.0810, 1.0955, 1.1000, 1.1085 Trading Tips Sell Stop 1.0470. Stop-Loss 1.0565. Take-Profit 1.0400, 1.0355, 1.0300, 1.0200, 1.0100, 1.0000 Buy Stop 1.0565. Stop-Loss 1.0470. Take-Profit 1.0616, 1.0670, 1.0780, 1.0800, 1.0810, 1.0955, 1.1000, 1.1085   Read more: https://www.instaforex.eu/forex_analysis/313948
GBP: Softer Ahead of CPI Risk Event

FX: Euro To US Dollar: Technical Analysis of EUR/USD for June 21, 2022

InstaForex Analysis InstaForex Analysis 21.06.2022 10:15
Relevance up to 09:00 2022-06-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The EUR/USD bulls keep trying to continue the bounce, Currently, the market is consolidating the recent gains in a narrow zone located between the levels of 1.0489 - 1.0545 that looks like a Bullish Pennant pattern. The nearest technical support is seen at 1.0469 - 1.0448, so as long as the market trades above this zone, the outlook remains bullish. Please notice, that despite the recent efforts, the bulls are still trading inside the bearish zone, the level of 1.0615 is still unreachable for them, and they need to break above the level of 1.0678 to enter the bullish zone.     Weekly Pivot Points: WR3 - 1.0840 WR2 - 1.0724 WR1 - 1.0600 Weekly Pivot - 1.0479 WS1 - 1.0363 WS2 - 1.0238 WS3 - 1.0113 Trading Outlook: The up trend can be continued towards the next long-term target located at the level of 1.1186 only if the complex corrective structure will terminate soon (above 1.0335) and the market breaks above 1.0678 level. The bullish cycle scenario is confirmed by breakout above the level of 1.0726, otherwise the bears will push the price lower towards the next long-term target at the level of 1.0335 or below.   Read more: https://www.instaforex.eu/forex_analysis/281013
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

Analysis and trading tips for GBP/USD on June 21

InstaForex Analysis InstaForex Analysis 21.06.2022 13:14
Relevance up to 08:00 2022-06-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Analysis of transactions in the GBP / USD pair GBP/USD reaching 1.2220 prompted a sell signal in the market, however, having the MACD line far from zero limited the downside potential of the pair. Shortly after that, pound jerked up and hit 1.2265, forming a buy signal. At that time, the MACD line was far from zero, limiting the upside potential of the pair. When the pair tested the level again, the MACD line was in the overbought area, so the signal to sell triggered a decrease of around 30 pips. No other signal appeared for the rest of the day.     Although the lack of statistics helped pound, there was no upward correction in GBP/USD yesterday. But today there is every chance for further growth as the absence of statistics will play on the side of buyers, allowing them to push the pair above 1.2274. Furthermore, in the afternoon, US data may harm dollar as the US housing market has not been in the best shape lately due to higher interest rates. This, however, may be offset by the speech of Fed member Loretta Mester. For long positions: Buy pound when the quote reaches 1.2274 (green line on the chart) and take profit at the price of 1.2331 (thicker green line on the chart). There is a chance for a rally today, but only in the morning. Nevertheless, remember that when buying, the MACD line should be above zero, or is starting to rise from it. It is also possible to buy at 1.2231, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2274 and 1.2331. For short positions: Sell pound when the quote reaches 1.2231 (red line on the chart) and take profit at the price of 1.2178. Pressure will return if there are no active purchases above 1.2274. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2274, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2231 and 1.2178.     What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Read more: https://www.instaforex.eu/forex_analysis/314031
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Ichimoku cloud indicator analysis on EURUSD for June 21st, 2022

InstaForex Analysis InstaForex Analysis 21.06.2022 15:28
Relevance up to 15:00 2022-06-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   In the Daily chart EURUSD is challenging the lower cloud boundary and both the tenkan-sen (red line indicator) and the kijun-sen (yellow line indicator). Resistance is important at 1.0570. Traders need to be cautious in case we see a rejection at resistance. We have a confluence of resistance levels around 1.0570. So a break above this level could be big news for bulls. If this happen, then I will be expecting price to move even higher towards the upper cloud boundary at 1.0770.   Read more: https://www.instaforex.eu/forex_analysis/281109
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

Technical Analysis of EUR/USD for June 22, 2022

InstaForex Analysis InstaForex Analysis 22.06.2022 08:57
Relevance up to 07:00 2022-06-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The EUR/USD pair had broken out from a narrow zone located between the levels of 1.0489 - 1.0545 that looked like a Bullish Pennant pattern. Nevertheless, the rally was short-lived as it was capped at the level of 1.0582 after a Piercing Pattern was made. The nearest technical support is seen at 1.0469 - 1.0448, so as long as the market trades above this zone, the outlook remains bullish. Please notice, that despite the recent efforts, the bulls are still trading inside the bearish zone, the level of 1.0615 is still unreachable for them, and they need to break above the level of 1.0678 to enter the bullish zone.     Weekly Pivot Points: WR3 - 1.0840 WR2 - 1.0724 WR1 - 1.0600 Weekly Pivot - 1.0479 WS1 - 1.0363 WS2 - 1.0238 WS3 - 1.0113 Trading Outlook: The up trend can be continued towards the next long-term target located at the level of 1.1186 only if the complex corrective structure will terminate soon (above 1.0335) and the market breaks above 1.0678 level. The bullish cycle scenario is confirmed by breakout above the level of 1.0726, otherwise the bears will push the price lower towards the next long-term target at the level of 1.0335 or below.   Read more: https://www.instaforex.eu/forex_analysis/281203
ECB's Knot: July Rate Hike Necessary, Beyond July Uncertain; Canadian CPI Supports Rates on Hold; Global Crypto Market at $1.2 Trillion; Oil Market Tightens with Russian Shipments Drop and China's Support Measures

Will GBP/JPY Go Higher? CAD/CHF Resembles A Lake! FX: EUR/USD Looks Stable, How Will Today's Powell's (FED) Testimony Affect It?

Jing Ren Jing Ren 22.06.2022 09:21
EURUSD attempts to rebound The US dollar finds support from higher Treasury yields. The pair saw strong support near May’s lows (1.0380). A surge above 1.0500 prompted short-term sellers to cover and paved the way for a rebound. This is a sign of robust interest in keeping last month’s rally intact. 1.0660 is a former support that has turned into a resistance. Its breach would bring the single currency to the recent peak near 1.0770, which is the last hurdle before a meaningful recovery. On the downside, 1.0460 is a fresh support in case of a pullback. GBPJPY to test peak The Japanese yen weakens as the BoJ’s meeting minutes confirm its ultra-loose stand. The sell-off came to a halt at the psychological level of 160.00 where the pair first broke out in late May. The latest rally above 166.00 further trimmed the downward pressure. A break above 168.60 would put the rally back on track. The uptrend remains intact in the medium-term and the bulls may see pullbacks as an opportunity to jump in. 165.50 is the first support as buyers may wait for the RSI to drop back into the neutral area. CADCHF grinds demand zone The Canadian dollar recoups losses as April’s retail sales beat market expectations. The price action is hovering above the origin of a mid-April rally around 0.7400. A bullish RSI divergence indicates a slowdown in the liquidation momentum, and in conjunction with a demand zone, sellers could be taking some chips off the table. A rebound will need to clear 0.7580 before it could gain traction. Otherwise, a fall below 0.7400 may trigger a new round of sell-off towards 0.7300.
FX Daily: Testing the easing pushback

Powell's report to the US Senate Banking Committee will drive the markets (expect EUR/USD and AUD/USD to decline) | InstaForex

InstaForex Analysis InstaForex Analysis 22.06.2022 13:45
Relevance up to 09:00 2022-06-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Markets await the report of Fed Chairman Jerome Powell to the US Senate Banking Committee as it would contain hints on the future of monetary policy. The US central bank already raised interest rates by 0.75% last week, the first time in decades. But Powell made it clear that rates might not rise further at such a pace, making markets relieved. Surprisingly, although there was another collapse last Thursday, many still hope that rates will rise by about 0.50%, then stop as inflationary pressure decreases. Powell may talk about this during his report to the Senate Banking Committee, in relation to high inflation and its impact on the economy. Powell may also mention the disruption of transport links, which has already led to a drop in imports and the like. But investors will be more interested on how exactly the Fed will act in July and beyond. There are two opinions on the market right now. The first has already been described above, which is a kind of soft option. But there is another, tougher one. According to Reuters, many market participants expect the Fed to increase the rate again by 0.75% in July, then raise it by 0.50% in September. Under these conditions, the market may again experience sharp sell-offs, while dollar and Treasury yields will see further growth. In this case, the ICE dollar index may again test the recent local high of 105.56. Which option will be implemented is difficult to determine as both have a high potential. This is why traders should wait for Powell's speech before making any move in the market.. Forecasts for today:     EUR/USD The pair has overcome 1.0500. A consolidation below may lead to its further decline to 1.0400.     AUD/USD The pair broke through 0.6900, which may lead to a further decrease to 0.6800. The driver will be the declining commodity prices and negative sentiment in the stock markets.   Read more: https://www.instaforex.eu/forex_analysis/314179
The EUR/AUD Pair May Have The Potential To Continue Its Decline

Technical analysis of EUR/USD for June 23, 2022

InstaForex Analysis InstaForex Analysis 23.06.2022 12:03
Relevance up to 11:00 2022-06-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Overview : The EUR/USD pair has broken support at the level of 1.0567 which acts as a resistance now. According to the previous events, the EUR/USD pair is still moving between the levels of 1.0567 and 1.0360. Therefore, we expect a range of 207 pips in coming two days or three. The trend is still below the 100 EMA for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. Hence, the price spot of 1.0567 remains a significant resistance zone. Consequently, there is a possibility that the EUR/USD pair will move downside. The structure of a fall does not look corrective. In order to indicate a bearish opportunity below 1.0567, sell below 1.0567 with the first target at 1.0458. Besides, the weekly support 2 is seen at the level of 1.0360. If the pair fails to pass through the level of 1.0458, the market will indicate a bearish opportunity below the level of 1.0458 . So, the market will decline further to 0.6604 in order to return to the daily bottom point (1.0360 - S2). However, traders should watch for any sign of a bullish rejection that occurs around 1.0616. The level of 1.0616 coincides with 61.8% of Fibonacci, which is expected to act as a major resistance today. Since the trend is below the 61.8% Fibonacci level, the market is still in a downtrend. Overall, we still prefer the bearish scenario.   Read more: https://www.instaforex.eu/forex_analysis/281501
Top 10 Stocks to Watch: August 2023 - BY: RYAN SULLIVAN

FX: Euro To US Dollar - Trading tips for EUR/USD

InstaForex Analysis InstaForex Analysis 23.06.2022 13:32
Relevance up to 10:00 2022-06-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Active growth was noted in EUR/USD during the European trading session. However, the pair fell and closed lower during the US trading session, showing the strength of dollar in the market. The bearish trend has not changed since June 17.     In this situation, the best action is to abandon long positions, focusing on short positions with targets at yearly lows. And given that there is a three-wave pattern (ABC), where wave A represents the selling pressure last week, traders can sell up to the 50% retracement level, with stop loss at 1.07. Take profit on the breakdown of 1.03300. This strategy is based on the Price Action and Stop Hunting methods. Good luck and have a nice day!   Read more: https://www.instaforex.eu/forex_analysis/314323
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Euro slips on weak PMIs EUR/USD May Be Surprising! | Oanda

Kenny Fisher Kenny Fisher 23.06.2022 13:40
The euro is in negative territory on Thursday and has pared most of this week’s gains. EUR/USD is trading just above the 1.05 line in the European session, down 0.58% on the day. German, eurozone PMIs soften Today’s German and eurozone PMIs indicated slower activity in May, which reflects weaker economic activity. Manufacturing and Services PMIs in both Germany and the eurozone weakened, although they still pointed to expansion, with readings above the neutral 50.0 level. Nevertheless, the releases are a cause for concern. As the largest economy in the eurozone, Germany is a bellwether for the bloc. With the outlook for the German economy looking gloomier, it’s a bad sign for the rest of the eurozone. The German economy has been hit by a fall in exports, and high inflation and economic uncertainty have hurt domestic demand. Businesses are more pessimistic about the economic outlook, pointing to the war in Ukraine, supply disruptions in China and higher prices. The latest setback is that Russia is decreasing its supply of natural gas to Germany, raising fears that Germany may run short of natural gas in the winter. This has prompted German to enter Phase 2 of its three-stage emergency gas plan. The euro has taken a tumble and EUR/USD is down over 550 points since April 1st. The slow response of the ECB to spiralling inflation hasn’t helped, as the ECB is yet to embark on a rate-tightening cycle, while the Fed has been raising rates and delivered a mammoth 75-bps hike last week. This has widened the US/Europe rate differential and sent the euro lower. Unless US yields fall, the euro is likely to continue losing ground. . EUR/USD Technical EUR/USD has initial resistance at 1.0612, followed by resistance at 1.0727 EUR/USD tested support at 1.0485 in the Asian session. Below, there is support at 1.0370   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

Watch: What’s next for EUR/USD?

ING Economics ING Economics 24.06.2022 13:35
The outlook for EUR/USD over the next 18 months is clouded by uncertain growth prospects, uneven policy responses, and unpredictable geopolitical events. In this video, ING's Francesco Pesole outlines four potential scenarios for the currency pair, including our base case for a weak rally through 2023   EUR/USD: Sizing up the scenarios   Read this article on THINK TagsUS FX Federal Reserve Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
GBP: Softer Ahead of CPI Risk Event

EUR/USD | Euro drifting as German confidence dips

Kenny Fisher Kenny Fisher 24.06.2022 15:08
It has been a relatively quiet week in the currency markets, and the limited activity has continued today, with the euro unchanged. German consumer confidence drops Germany, the bellwether for the eurozone, continues to churn out weak numbers, raising concerns that the bloc could be headed toward a recession. German ifo Business Climate dipped to 92.3 in June, down from 93.0 in May (92.8 est.) Germany and the rest of the eurozone remain vulnerable to negative economic factors which, unfortunately, do not show signs of improving anytime soon. These are the war in Ukraine, supply chain disruptions due to lockdowns in China, and spiralling inflation. The ECB has been slow to respond to higher inflation and the danger of stagflation is a serious risk. Germany has been slowly trying to wean itself off of Russian energy exports, but Moscow has decided to retaliate by decreasing its natural gas exports to Germany. This prompted Berlin to implement phase two of its emergency energy plan earlier this week. The energy crisis is getting worse and could result in the euro losing ground. The currency slipped below the 1.0500 line last week, and the risk is tilted to the downside for the euro due to the deteriorating situation with regard to Russian energy exports. Fed Chair Powell’s appearance on Capitol Hill this week was keenly watched by nervous markets. Powell didn’t hold back any punches, acknowledging that a recession was possible and a soft landing for the economy would be a challenge. At the same time, Powell sounded relatively optimistic about the strength of the US economy, and this message appeared to calm the financial markets, for the time being at least. . EUR/USD Technical EUR/USD has initial resistance at 1.0612, followed by resistance at 1.0727 EUR/USD has support at 1.0485 and 1.0370 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro drifting as German confidence dips - MarketPulseMarketPulse
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

FX: EUR To USD - Tips for beginner traders in EUR/USD and GBP/USD on June 27, 2022

InstaForex Analysis InstaForex Analysis 27.06.2022 11:02
Relevance up to 09:00 2022-06-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Details of the economic calendar from June 24 UK retail sales data showed a slowdown in the decline from -5.7% to -4.7%. This is a positive factor, if not for the revision of the previous indicators for the worse from -4.9% to 5.7%, as well as the forecast of a stronger slowdown to -4.1%. The bottom line shows bad statistics, which negatively affects the British currency. Analysis of trading charts from June 24 The EURUSD currency pair is moving within the range of 1.0500/1.0600, having local breaks, from time to time, that did not lead to violation of the set amplitude. The GBPUSD currency pair has formed a stagnation within the stagnation. For the second week, the quote has been moving within the flat 1.2150/1.2320, where a stagnation was formed within its upper border. Price fluctuations in a closed corridor indicate a characteristic uncertainty among market participants, which can lead to the accumulation of trading forces.     Economic calendar for June 27 Today, during the American trading session, data on orders for durable goods in the United States will be published, where May figures may decrease by 0.3%. If the data is confirmed, this is a negative factor, which can negatively affect the US dollar. Trading plan for EUR/USD on June 27 The flat is still relevant in the market, for this reason, traders are considering a scenario of a price rebound from the upper limit. If expectations coincide, the quote may slow down the growth rate, showing downward interest. At the same time, market participants are considering a flat breakout scenario. An increase in the volume of long positions may occur when the price holds above the value of 1.0600 in a four-hour period.     Trading plan for GBP/USD on June 27 In this situation, a short-term stagnation within the upper limit can become a lever in the subsequent acceleration in the market. Buy positions are taken into account after holding the price above the value of 1.2325 in a four-hour period. This step will indicate the completion of the flat. Sell positions should be considered after holding the price below 1.2250 in a four–hour period with the prospect of a move to 1.2200-1.2150.     What is reflected in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.   Read more: https://www.instaforex.eu/forex_analysis/314575
The Upside Of The EUR/USD Pair Remains Limited

FX: EURUSD & GBPUSD Technical analysis recommendations on EUR/USD and GBP/USD for June 27, 2022

InstaForex Analysis InstaForex Analysis 27.06.2022 13:00
Relevance up to 11:00 2022-06-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher timeframes The weekly short-term trend went down and now the main zone of attraction, where the levels of different timeframes have united, is located in the area of 1.0568 – 1.0539. The exit from the zone of the current consolidation, and the liquidation of the daily Ichimoku cross (1.0624) will open up prospects for a rise to the important resistance level of 1.0767 – 1.0787 (the upper limit of the daily cloud + weekly Fibo Kijun). The preservation of consolidation and further activity of the bears will allow considering plans to return to the supports of 1.0339 – 1.0349 (local low). Consolidation below will restore the downward trend on all higher timeframes.     H4 – H1 The uncertainty of the higher timeframes has led to the pair spinning around the key levels in the lower timeframes, consolidating in their zone of attraction. At the moment, key levels are located at 1.0538–46 (central pivot point of the day + weekly long-term trend). Finding and working above the levels gives preference to the development of bullish sentiments, their further reference points for the rise today can be noted at 1.0581 – 1.0605 – 1.0640 (resistance of the classic pivot points). Consolidation below key levels will support a shift in priorities in favor of the bears. The downward reference points within the day will be the support of the classic pivot points (1.0522 – 1.0487 – 1.0463). *** GBP/USD     Higher timeframes The center of attraction is now the weekly short-term trend (1.2300). If the pair leaves the consolidation zone and liquidates the daily death cross (1.2386), then the resistance of the daily cloud (1.2500 – 1.2727), reinforced by weekly (1.2626) and monthly (1.2678) levels, will wait for it. If the bears manage to maintain their ability to decline, coming out of this confrontation, then the support area of 1.2000 – 1.1933 is waiting for them. Consolidation below will allow us to consider new downward prospects.     H4 – H1 On the lower timeframes, the pair has been in the zone of influence and attraction of key levels for a long time (1.2277 central pivot point of the day + 1.2261 weekly long-term trend). At the same time, on H4, bullish players managed to enter the bullish zone relative to the Ichimoku cloud. As a result, resistance and reference points for the rise in the lower timeframes can now be noted at 1.2313 – 1.2357 – 1.2393 (resistance of classic pivot points) and at 1.2532 – 1.2598 (H4 target). If the priorities change and the activity will be inherent in bears, then their reference points for a decline within the day can be noted at the supports of 1.2233 – 1.2197 – 1.2153 (classic pivot points). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/314602
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

EURUSD rejected at Kumo (cloud) resistance

InstaForex Analysis InstaForex Analysis 28.06.2022 15:25
Relevance up to 15:00 2022-06-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   EURUSD bulls made another attempt to enter the Daily Kumo (cloud). Yesterday the daily candle closed above the kijun-sen (yellow line indicator) and inside the Kumo (cloud). Today price is getting rejected. If things stay like this, price action will be bearish. Support by the tenkan-sen (red line indicator) is at 1.05. The cloud rejection today if combined with a close below 1.0573 (kijun-sen), will be a bearish signal. Failure to stay above 1.05 will also be a bearish signal. Bulls need to react now and recapture 1.0590. As long as price is below the Kumo we remain bearish.   Read more: https://www.instaforex.eu/forex_analysis/282263
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Rates Spark: The hawks are circling | ING Economics

ING Economics ING Economics 29.06.2022 09:40
Central banks have proven their ability to move rates higher once again, trumping recession fears for now. We expect no let-up at the ECB’s Sintra forum today, but any further rise in yields is subject to risk sentiment holding up. The EUR curve structure is at odds with the worsening macroeconomic backdrop All eyes will be on the European Central Bank's forum in Sintra, Portugal The ECB out-hawks the market At the start of this week, one could reasonably have doubted central bankers’ ability to push market pricing into an even more hawkish territory. After all, recession fears boiling over in the eurozone, and elsewhere, cast a long shadow on policy tightening forecasts. In addition, the European Central Bank’s (ECB) Sintra forum promised to be a hawk-fest where officials try to regain control of the narrative, and inject some much needed confidence in the market. ECB comments have rekindled EUR rates upside Source: Refinitiv, ING   Today’s line-up promises even more hawkish comments The ECB has delivered on hawkish expectations, and then some. Martin Kazaks broke ranks with the 25bp July hike consensus, and President Christine Lagarde repeated ad nauseum that inflation-fighting remains the ECB’s utmost priority. The latter was expected, and the former was a risk at least partially priced by the market going into the event. And yet, this was enough for the market to add to Monday’s double-digit rise in EUR yields. It is difficult to extrapolate this into a third day of a bonds sell-off but, if anything, today’s line-up (see events section) promises even more hawkish comments. The EUR curve structure anomaly Once again, the policy-sensitive part of the curve finds itself in the firing line. Traditionally, this has meant 5Y and maturities around it. As central banks scramble to catch up with high inflation, effectively front-loading hikes, shorter maturities have seen the most volatility. This week’s underperformance of the 5Y point may be an accident, perhaps due to supply in the sector from Germany and KFW. If it isn’t, it would signal a greater confidence into this tightening cycle being a more protracted affair than previously thought. In light of growing recession fears, we have our doubts and would expect the 5Y sector to come in on the curve, for instance with the 2s5s10s butterfly in EUR swaps converging towards zero. The EUR forward OIS curve is the only one that isn't inverted Source: Refinitiv, ING   We expect the 5Y sector to come in on the curve Similarly, a more hawkish re-pricing should in our view come with an inversion of the near-dated forwards, effectively pricing the possibility of a subsequent cut. This has long since been the case in USD and GBP rates, but the EUR swaps term structure has so far remained flat. Should the terminal deposit rate climb above the 2% line, we expect inversion to occur… provided recession doesn’t become the market’s central scenario before then. Today's events and market view Spain and Germany kick off this round of June CPI releases today. A slight acceleration in the annual EU-harmonised measures would give weight to the barrage of hawkish ECB comments we’re sure to get from and around the Sintra forum. This being said, regional Germany inflation indices available at the time of writing suggest further inflation acceleration is not a given in June. Talking of which, no less than ECB President Christine Lagarde, Fed Chair Jerome Powell, BoE Governor Andrew Bailey are taking part of a policy panel early in the European afternoon. Recent comments suggest that central bankers will look to out-hawk each other to project an aura of confidence to markets roiled by inflation risk. They will be joined by Augustin Carstens of the Bank of International Settlements who, judging by his foreword to its annual report, will lean heavily in the hawkish direction. US data consists of mortgage applications and the third read of the now dated 1Q GDP report. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Maintains The Bullish Sentiment

EUR/USD In Focus! ECB Meeting In Sintra Is Like A Blockbuster Starring Lagarde, Powell And Bailey

Kenny Fisher Kenny Fisher 29.06.2022 13:15
The euro remains under pressure and briefly fell below the symbolic 1.0500 level in the Asian session before recovering. Lagarde says ECB ready to act if needed The ECB forum in Sintra, Portugal this week is a chance for the heads of central banks to hobnob and provide encouragement in these challenging times. ECB President Lagarde, Federal Reserve Chair Powell and BoE Governor Bailey are all in attendance. Inflation has become public enemy number one, and the BoE and the Federal Reserve have responded with an aggressive rate-hike campaign as inflation nears double-digits in the US and UK. Inflation has not spared the eurozone and accelerated to 8.1% in May. It wasn’t that long ago that Lagarde was dismissive of inflation, stating that it was temporary. Lagarde has been forced to change her tune, and the ECB has finally joined the tightening bandwagon, saying earlier this month that it would raise rates in July and again later in the year. Lagarde admitted on Tuesday that the ECB had revised downwards its growth forecasts, but downplayed concerns about a recession. Many market players would disagree, with Russia cutting energy supplies to the bloc and a very real possibility of the US economy tipping into recession. Lagarde’s hawkish comments at the ECB forum didn’t help the euro, which lost ground on Tuesday. Investors will be listening closely as Lagarde and Federal Reserve Chair Powell address the forum later today. Market jitters over a US recession are rising, which has boosted US equity markets of late, the logic being that the Fed will have to ease up on its hawkish bias. Powell may opt to play it safe on his visit to scenic Sintra, but any hints of dialing back on rate hikes could send the US dollar lower. . EUR/USD Technical 1.0544 is a weak resistance line, followed by resistance at 1.0618 There is support at 1.0482 and 1.0408 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Lagarde talks tough, Powell next at ECB - MarketPulseMarketPulse
Steel majors invest in green steel, but change might be driven by contenders

FX Update: USD jolted higher on fitful safe haven bid. JPY risks mount.

John Hardy John Hardy 29.06.2022 14:16
Summary:  The US dollar has generally risen in recent months on the increasingly rapid pace of Fed tightening and perceived changes to that pace, so it was interesting yesterday to note that the US dollar rose purely as a function of weak risk sentiment in the wake of an ugly US Consumer Confidence number for June, as treasury yields and Fed expectations actually dropped modestly on the day. Elsewhere, the JPY is looking nervous again for testing the BoJ. FX Trading focus: Hard to find any path to sustained US dollar weakening. The equity market lurched suddenly into risk-off mode yesterday, just two days after one of the strongest rallies this year, showing an unsettling volatility of volatility. In Q1, the market rallied steeply in March, but rolled over starting on the second to last day of the quarter. This quarter, we found a bottom in sentiment right around the FOMC meeting and rallied steeply, only to roll over (so far) on the third to last day of the quarter. Are these portfolio rebalancing effects and are they already fading ahead of the new quarter? In any case, the jolt weaker in risk sentiment offered traditional safe-haven support for the US dollar, which has generally traded since late last year as a function of Fed tightening anticipation. The USD won’t roll over durably, I argue in our upcoming Q3 outlook, until the Fed is seen as launching into a sustained easing again. So, although yesterday saw a modest apparent safe-haven bid into treasuries, we also had Fed officials out staying on message for further tightening (Cleveland Fed’s Mester: Fed is “just at the beginning” of raising rates) and we have a QT that is on autopilot to continue tightening financial conditions. One key data point that spooked the market yesterday was the huge drop in expectations component of the US Consumer Confidence reading for June, which fell to 66.4 from the revised 73.7 in May (revised down from 77.5!). This is the worst for that data point since 2013 and further inverts the Expectations-Present Situation spread. But we’re not really “there yet” in terms of clear recession unfolding until the Present Situation is moving clearly negative. Technically, nothing has broken down among USD pairs – the EURUSD has merely shied away from the key 1.0600 resistance and traded back toward the pivotal 1.0500 area, the AUDUSD is having a look at a minor consolidation triangle support, but is still above the 0.6829 cycle low and GBPUSD finally halted its string of days of nearly unchanged daily closing levels at six and lurched lower yesterday, but traded nearly two figures above the cycle lows below 1.2000 this morning. So let’s wait and see for the next round of data to test USD direction and whether it has potential higher again. The easiest upside path would be US data that proves less bad than expected or even distinctly inflationary on earnings next week (the Citi economic data surprise index for the US is about as negative as it ever has been over the last several years, if we remove the pandemic outbreak months from consideration), together with a fresh leg higher in crude oil, all of which supports the USD from the Fed policy outlook side and safe-haven angle, if risk deleveraging continues . Good data is likely bad for risk and good for the US dollar, while very very bad for the JPY, as discussed below. Chart: USDJPYA decent little retreat in US treasury yields, and yet here we are pegged near the highs in USDJPY – possibly ready for an aggravated ascent in coming days if the US data fails to confirm the “recession incoming!” scenario and US yields tick back up higher toward the 3.50% level for the US 10-year treasury yield benchmark, for example. While US yields have remained rangebound recently, we also have to consider the relative balance sheet situation of the two central banks as the BoJ has added to its balance sheet at a record pace recently to defend the yield-curve-control policy and has effectively lost control of its balance sheet in a rising yield environment, while the Fed is set to accelerate the shrinking of its balance sheet (QT) from here. We have a potentially explosive situation on our hands that could lead to a spike higher in USDJPY to well above 140 and possibly even 150, which could then lead to the Bank of Japan to finally capitulate and driving a 10% or greater boomerang move in the opposite direction. Beware volatility potential in both directions! Source: Saxo Group Table: FX Board of G10 and CNH trend evolution and strength.JPY fading to the weak side again – will BoJ be forced to capitulate before other central banks change direction/yields in general roll over? USD comeback nothing to write home about just yet – watching through next US data points as noted above. But sterling weakness is picking up again, while CHF is riding highest and EURCHF is pushing on parity. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Interesting to note the USDCNH poking back into an “uptrend”, although really there was just the one-off move from the base there and then a subsequent period of range-trading. Elsewhere, note more sterling pushing to negative in more place - yesterday on the close versus SEK and NOK. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1200 – Germany Flash Jun. CPI  1300 – Central Banks speakers at ECB Conference: Fed Chair Powell, BoE Governor Bailey, ECB President Lagarde  1500 – ECB President Lagarde to speak  1530 – US Fed’s Mester (voter) to speak  1705 – US Fed’s Bullard (voter) to speak  2350 – Japan May Industrial Production  0100 – New Zealand Jun. ANZ Business Survey  0130 – China Jun. Manufacturing and Non-manufacturing PMI Source: FX Update: USD jolted higher on fitful safe haven bid. JPY risks mount. | Saxo Group (home.saxo)
EUR/USD In Times Of Possible Parity, USD/JPY And GBP/USD – Detailed Analysis And Forecast By ING Economics

EUR/USD In Times Of Possible Parity, USD/JPY And GBP/USD – Detailed Analysis And Forecast By ING Economics

ING Economics ING Economics 11.07.2022 13:04
How low can you go? Given fears of a global recession, ‘How low can you go?’ is now a pressing question being asked of many risk assets and of key FX pairs like EUR/USD. Investors hold out little hope for improvement in energy supplies anytime soon and central bankers are showing no signs of being distracted from forceful monetary tightening cycles. That all points to equity markets perhaps another 10% lower and a worst case for EUR/USD near 0.95. The ECB in particular faces the conundrum of trying to address inflation fears, while at the same time trying to avoid driving the Eurozone economy into recession. While it may only deliver 100bp of the 175bp tightening currently priced by the market, our team now look for a Eurozone technical recession in 4Q22/1Q23. This will weigh on pro-cyclical currencies like the euro, sterling, the Swedish krona, and many currencies in CEE. Outperformers in what will be a difficult summer for risk will likely remain the dollar, the yen and the Swiss franc. In fact, the Swiss National Bank is now using its huge war chest of FX reserves to ensure the Swiss franc does just that – strengthen. Peak pain this summer and the focus on demand destruction will keep commodity currencies on the back foot. Most vulnerable may well be the likes of the South African rand and the Brazilian real – the latter shaping up for contentious elections in October. And in Asia, high beta currencies like the Korean won will remain soft as will the Philippine peso and Indonesian rupiah, the latter pair left vulnerable by dovish central banks. USD/CNY set to remain range-bound while Covid policy and geopolitics dominate. Developed markets EUR/USD How low can you go? Current spot: 1.0133 • As we put pen to paper, EUR/USD is within striking distance of parity. The stagflationary effects of the war in Ukraine are being felt far more in Europe than in N. America. Thus, short term rate spreads continue to move against EUR/USD as does the risk environment, where equities could have another 10% leg lower. • Based on recent correlations, a 10% fall in equities and a 25bp widening in spreads this summer would put EUR/USD somewhere near 0.98. A 50bp widening in spreads, were the Fed to move more aggressively or ECB hawks to soften, would be worth 0.95. • Don’t look for a substantial turn higher in EUR/USD this summer, since it seems far too early for Fed hawks to back down. USD/JPY Deteriorating risk sentiment to support the JPY Current spot: 136.97 • One of the core challenges faced by central banks the world over is to get inflation lower. The only tool they have at their disposal is to tighten monetary conditions and try to slow demand. Slowing demand is taking its toll on equity markets, which look vulnerable as central banks tighten further even as growth slows. The JPY, like the USD and CHF, should out-perform this summer. • The big USD/JPY rally looks to have stalled near 135 and certainly the going above here will be harder. US 10-year yields, a key driver of USD/JPY, have probably peaked at 3.50%. • The BoJ meeting of July 21st is unlikely to see the BoJ turn hawkish. A lower USD/JPY will be driven by equities & US yields. GBP/USD Bank of England keeping a close eye on sterling Current spot: 1.1971 • Away from the political circus in Westminster, sterling has been hit by the super-strong dollar, but is outperforming the euro. Here the BoE has started to highlight sterling’s role in monetary conditions. With UK CPI expected to push up to 11% in October, expect the BoE to stay hawkish and to hike 50bp on August 4th. • Yet, as a growth-sensitive currency, sterling will be in a for a tough summer and Cable looks set to trade down to 1.17 and possibly 1.14/15 again. We tentatively think these could again prove the lows for the year if, as we expect the $ turns by yr-end. • UK politics mean we won’t have a working government until September, but looser fiscal policy this Autumn can help GBP. This article is a part of the report by ING Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

FX: Volatility May Be The Keyword! Let's Look At EUR/USD, GBP/USD (British Pound Against US Dollar) And Other Forex Pairs! | Oanda

Jeffrey Halley Jeffrey Halley 12.07.2022 12:40
Flight to safety boosts US dollar The US dollar caught another flight-to-safety boost overnight, running rampant over DM currencies with the euro, sterling, yen, and Australian dollar coming in for particular attention. In Asia today, EUR/USD continues to flirt with parity, while the US dollar has strengthened broadly across the Asia FX space. US Dollar Index (DXY) The dollar index soared 1.23% higher to 108.21 overnight, gaining another 0.16% to 108.38 in Asia as the euro and sterling losses continued. Overall, the technical picture remains constructive for the dollar index, although the daily relative strength index (RSI) is now in overbought territory, suggesting a temporary downward correction is possible. Having broken out of a 5-year triangle at 102.50 in April, its longer-term target remains in the 1.1700 area. More immediate resistance is at 108.45 and 110.00. Support is at the 1.0585 breakout point, and then 1.0500, followed by 1.0350 and 102.50. ​ EUR/USD EUR/USD tumbled by 1.43% to 1.0040 overnight, edging 0.17% lower to 1.022 today, having traded as low as 1.0006 earlier in the session. I expect there to be plenty of bids into parity initially, likely option and exporter-related. A break of 1.0000 is likely to trigger a sharp move lower as stop-losses and algos kick in. Since breaking a multi-year support line at 1.0850 in April, the euro has looked consistently weak, the recovery rally failing ahead of 1.0850 in a technical analysis nirvana. An oversold RSI allows for short-term recovery, with resistance at 1.0200 and 1.0270. Support is at 1.0000, and failure targets the 0.9900/25 area. British Pound To US Dollar GBP/USD fell by 1.19%% to 1.1890 overnight, dragged lower by the euro and a rampant US dollar. With a new Prime Minister not due to be announced until early September, this uncertainty will continue to weigh on the sterling. In Asia GBP/USD has edged 0.20% lower to 1.1867. Immediate support is nearby at 1.1860 and 1.1800, with 1.1400 the medium-term target. Resistance is well defined at 1.2060 and 1.2200. US Dollar To Japanese Yen USD/JPY rallied by 0.98% to 137.40 overnight despite US yields easing. In Asia, it is steady at 137.30 as Finance Minister Suzuki’s comments add some two-way risk into being long USD/JPY at these levels, at least temporarily. USD/JPY has resistance at 138.00 and 140.00, with support at 136.00, 134.25 and 132.00. Only a sharp fall in US yields seems likely to turn USD/JPY lower. Australian Dollar To US Dollar AUD/USD slumped by 1.70% overnight to 0.6735 on a combination of haven-based US dollar buying, a reversal in global investor sentiment, and China lockdown concerns. In Asia, it has eased 0.17% lower to 0.6725. A correction above resistance at 0.6900 looks unlikely for now, with risks skewed towards the downside and a test of 0.6600. NZD/USD also plummeted overnight and is facing a test of 0.6100 today. Asia Asian currencies fell overnight as investors moved into risk-aversion mode and bought US dollars across the board. The won, baht and yuan led losses, and today USD/Asia is higher by around 0.30%, with the Philippines peso falling 0.60% after poor trade data, while USD/IDR is testing 15,000.00 and USD/MYR looks set to test 4.4500. USD/INR and USD/PHP are trading at record lows although the price action in USD/INR, USD/IDR, USD/KRW, USD/PHP and USD/THB suggests that local central banks are offering US dollars at these levels. That is likely to be smoothing rather than lines in the sand, and US inflation above 7.0% this Thursday will probably spur more selling. USD/CNH has also moved sharply higher in the last 24 hours, and any indication that China is enacting lockdowns again in major urban centres will see it and the rest of the Asia FX space move sharply lower. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

Forecast For EUR/USD - There Are Chances Of Going Below Parity! Could CPI Move This FX Pair Towards Such Levels?

ING Economics ING Economics 13.07.2022 12:30
It's inflation day in the US, and consensus is centred around a further acceleration in the headline rate and modest slowdown in the core. A 75bp hike by the Fed in July is almost certain. This is also the case in Canada today after New Zealand delivered 50bp this morning. Elsewhere, EUR/USD remains at risk of a break below parity  USD: Another acceleration in headline inflation The dollar gave up a portion of its recent gains yesterday against a pool of currencies which are generally driven by diverging factors. The high-beta Swedish krona, and Australian and New Zealand dollars rose along with the safe-haven yen, in what might have been a position-squaring dynamic. Oil-sensitive currencies (Norway's krone and the Canadian dollar) came under pressure as crude prices plunged. Yesterday's price action in the oil market was peculiar, as the news that OPEC sees crude demand exceeding supply by one million barrels per day seemed to be completely overshadowed by growing recession fears, which pushed Brent back below the $100/bbl mark.   China’s growth concerns likely played a role in the oil slump – although surprisingly did not hit AUD and NZD – as a new rise in Covid cases in Shanghai is fuelling speculation that more restrictive measures will be put in place. The implications of another re-rating lower of China’s economic outlook may end up offering even more support to the dollar across the board. Today, the focus will shift back to US data, as June’s headline inflation is widely expected to have accelerated again. Our economics team expects an 8.7% year-on-year reading, as prices of gasoline, food, shelter and airline fares have all continued to rise. The core rate may instead decelerate to 5.8% from 6.0% YoY. Barring a sizeable contraction in inflation measures, it appears likely that today’s numbers will do very little to dent the market expectations of a 75bp Fed hike in July. Later today, the Fed’s Beige Book will be released. We think the dollar could remain mostly a function of global dynamics today. With China’s Covid numbers rising again, we suspect markets will stay mostly on the defensive side, and the dollar may consolidate around current levels. But if we see a break below parity in EUR/USD (a very big CPI figure could be the trigger), then we should see a ripple effect (dollar positive) across many USD crosses.   EUR: Risks of a break below parity still high EUR/USD heavily tested the parity level yesterday, but to the best of our knowledge, the 1.00000 (unrounded) level did not print. Now, we are back where we were yesterday morning, around 40 pips above parity. After the final release of German inflation numbers this morning, which were in line with the previous reading, we should expect something similar for France and Spain later today, and no market impact. There are no other releases to highlight in the eurozone today, except for the rarely market-moving industrial production figures from the eurozone for May. To be sure, the region’s growth sentiment has remained quite weak after yesterday’s grim ZEW figures. The dollar should remain largely supported today around the US CPI release, and a big jump in inflation (not our base case, but possible) may actually be the trigger for another round of USD appreciation and potentially for a break below parity in EUR/USD. On the European front, the lingering uncertainty around a potential reduction in gas supply from Russia may continue to prevent a recovery in the euro for now. We continue to think that the chances of a break below parity are higher than a material rebound in EUR/USD. If we do see a break lower, we suspect that a further technical drop to the 0.9800-0.9900 area is possible. Elsewhere in Europe, EUR/GBP has traded on the soft side as the euro remains in a fragile position, and UK industrial production figures for May beat expectations this morning. Yesterday, Bank of England Governor Andrew Bailey sounded quite hawkish as he suggested bigger rate hikes will be used if necessary to curb inflation. When it comes to the Tory leadership contest, Rishi Sunak appears to be consolidating his role as the front-runner, although the implications for FX markets appear quite limited for now. EUR/GBP could stay around 0.8400-0.84500 today, but downside risks would be magnified if EUR/USD breaks parity. CAD: 75bp hike by the BoC today The Bank of Canada will announce monetary policy today, and we expect a 75bp rate hike, in line with what is now widely expected to be the next Fed move. Here is our full preview of today’s announcement. The rate decision will be accompanied by the release of updated economic projections, and a press conference by Governor Tiff Macklem. Given the still good economic backdrop – a correction in employment figures last week did not dent the notion of a tight labour market – and the fastest inflation rate in three decades, we see no reason for the BoC to scale down the hawkishness of its policy message today. Indeed, markets are fully pricing in a 75bp move today, and expect around 120bp of additional tightening for the rest of the year. Such rate expectations are definitely not too hawkish, in our view, as we believe that two more 50bp rate hikes in September and October, followed by 25bp in December are warranted. As today’s policy message by the BoC may not dent such rate expectations, we believe the overall impact on CAD should be rather limited or – if anything – slightly positive. At the moment, the prevalence of external factors is not boding too well for CAD as oil prices have come under fresh pressure, even though we expect the loonie to perform better than other oil currencies thanks to a still good domestic backdrop and aggressive BoC tightening. Spikes to the 1.31-1.33 area in the near term are possible in USD/CAD, but we still expect sub-1.25 levels by year-end. Elsewhere in the commodity FX space, the Kiwi dollar was very little impacted by the RBNZ 50bp rate hike. Despite the Bank reiterating its hawkish message about more aggressive rate hikes, we see rising risks of a recalibration in the hawkish tone at the August meeting (or anyway before the end of the year) due to a falling housing market and worsening economic outlook. In any event, NZD/USD should remain driven by external factors for now, and 0.6000 might be tested in the coming weeks. CEE: The region defies the strengthening dollar Currencies in the Czech Republic, Hungary and Poland have now reached our levels for this week. What else will the rest of the week bring for the region? The koruna has stepped out of the shadows and become the star of the week. As we expected, the Czech National Bank likely moved its levels a bit lower and combined with the liquidation of short positions, the koruna reached EUR/CZK 24.40, the strongest level since late April. Today's release of June inflation leaves us hopeful that the koruna still has room to strengthen further towards 24.30. However, early data shows that in last week's FX intervention, the CNB spent as much as in May and June combined. In addition, we think the August CNB meeting will renew the pressure on the koruna to weaken. Thus, it is only a matter of time before intervention becomes too costly. Meanwhile, the National Bank of Hungry delivered an interest rate hike yesterday as promised, which helped the forint for a while. Although the interest rate differential has reached new record levels and the NBH is the most open central bank in the region to further rate hikes, we believe the forint will soon return closer to the 410 EUR/HUF level and it remains our least favourite currency in the region. On the other hand, in Poland, the market has restored some of its hawkish expectations after misreading Governor Adam Glapinski's speech. In our view, this opens up room for the zloty to erase some of its current losses and return closer to 4.70. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
UK Budget: Short-term positives to be met with medium-term caution

Euro To US Dollar (EUR/USD) And GBP/USD - What Do We Learn From Technical Analysis

InstaForex Analysis InstaForex Analysis 14.07.2022 13:03
Relevance up to 10:00 2022-07-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher timeframes Interaction with 1.0000 support continues. The emerging inhibition has formed. As a result, the situation in its conclusions and expectations has not changed significantly. Bears are interested in passing the level and consolidating below. At the same time, it is desirable for the opponent that the deceleration becomes not just a pause before the next stage of decline but leads to more significant results and the beginning of a new corrective rise. The nearest resistance today is located at 1.0231 (daily short-term trend).     H4 – H1 The pair continues to trade in the correction zone on the lower timeframes, limited by key levels. Key levels are bearish today, consolidating around 1.0059–92 (central pivot of the day + weekly long-term trend). Consolidation above will change the current balance of power in favor of a possible increase in bullish sentiment. The succeeding upward reference points within the day will be the resistance of the classic pivot points (1.0121 – 1.0184 – 1.0246). The exit from the correction zone and the continuation of the downward trend will return the relevance to the downward benchmarks of the current day—the support of the classic pivot points (0.9996 – 0.9934 – 0.9871). *** GBP/USD     Higher timeframes The pair traded in the daily correction zone for the past day. The nearest boundaries of the current movement are Tuesday's low (1.1807) and the resistance area of 1.1986 – 1.2000 (daily short-term trend + weekly long-term trend). Consolidation above or below these boundaries will allow us to consider new perspectives.     H4 – H1 At the moment, the pair remains in the correction zone. The correction has been supported for a long time by the first classic pivot point of the day—S1 (1.1819). Further, S2 (1.1752) and S3 (1.1678) can serve as reference points for the decline. The key levels of the lower timeframes are now holding back the development of the correction and are located today at 1.1893 (central pivot point of the day) and 1.1932 (weekly long-term trend). Consolidation above will change the current balance of power in favor of strengthening bullish sentiment. Further reference points for the rise within the day today will be the resistance of the classic pivot points (1.1960 – 1.2034 – 1.2101). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/316180
Eurozone Bank Lending Under Strain as Higher Rates Bite

Is FX Market Turbulent!? Let's Look At Headline-Topping EUR/USD, GBP/USD, USD/JPY And Other Pairs

Jeffrey Halley Jeffrey Halley 14.07.2022 13:35
US dollar in choppy waters Currency markets had another choppy overnight session, which ultimately ended up sideways again, despite US inflation unexpectedly rising. EUR/USD traded to parity but managed to finish higher at 1.0040, a pattern repeated across most major currencies. With the US dollar looking overbought on short-term indicators as well, I suspect that the odds of a US dollar correction lower have risen sharply, especially as Asian central banks and others have rushed to tighten monetary policy this week. I could see the correction persisting in some shape or form until the FOMC meeting later this month. The dollar index traded in a 100-point 107.50 to 108.50 range overnight but ultimately finished just 0.13% lower at 108.02. It has risen by 0.23% to 108.27 in Asia, led by a much weaker Japanese yen. Resistance is at 108.50 and 110.00. Support is at 107.50 and then the 1.0585 breakout point, followed by 1.0500. ​ The relative strength index indicator (RSI) is overbought, signalling a potential correction lower by the US dollar. EUR/USD traded through 1.0000 to 0.9998 overnight, but held this level once again, and rose back to finish the day 0.21% higher at 1.0058. In Asia, it has eased to 1.0035. A clean break of 1.0000 is likely to trigger a sharp move lower as stop-losses and algos kick in, but it is significant that it has held this level for two days in a row, although its rallies have been limited. ​ The oversold RSI and underwhelming post-inflation performance by the US dollar suggests the euro could be tracing out a low for now and a correction back towards 1.0200 is possible. EUR/USD has support at 1.0000 and then 9900/25. It has resistance at 1.1020, the overnight high, and then 1.0200. GBP/USD traded as high as 1.1965 overnight before closing unchanged at 1.1890. It has fallen to 1.1870 in Asia but looks to be trying to trace out a temporary low at 1.1800, which is initial support. Resistance is at 1.1965 and then 1.2060 and 1.2200. USD/JPY continued rallying overnight as US short-dated yields rose, finishing 0.41% higher at 137.45. In Asia, USD/JPY has continued rallying quite aggressively, rising 0.44% to 138.05. With a procession of central banks capitulating and hiking rates aggressively in the past 24 hours, Japan’s super-easy policy leaves it an outlier and that seems to be weighing on the yen. ​ USD/JPY’s next resistance is at 140.00, with support at 136.00, 134.25 and 132.00. I expect the “watching markets closely” noise to increase from Tokyo today and being long above 138.00 could be a dangerous trade in the shorter term. AUD/USD was unchanged at 0.6755 overnight, quite the surprise, given the US inflation data and another reason to think a greenback correction lower is imminent. ​ In Asia, super-strong employment data had lifted rate hike expectations and pushed AUD/USD 0.30% higher to 0.6775. It also looks like some decent AUD/JPY buying is going through. It has resistance at 0.6800 and 0.6850, with support between 0.6700 and 0.6730. NZD/USD is unchanged at 0.6130 again today, suggesting increased downside risks post the RBNZ yesterday. AUD/NZD buying post the Australian data is also capping NZD/USD gains. Asian currencies ranged overnight once again and have edged lower in Asia as some US dollar strength had returned. Overall, though, the response by Asian FX has been relatively muted post the US data and the moves seen by the MAS and BSP this morning. That said, USD/MYR continues to creep closer to 4.4500, USD/IDR to 15,000.00 and USD/INR and USD/KRW remain close to recent highs. The SGD and PHP have outperformed today as both central banks sprung unscheduled monetary tightening on markets. With South Korea, Singapore and the Philippines tightening this week, the pressure will be increasing on other regional currencies to follow suit as Asian central banks break ranks on inflation. Most notably, the INR, IDR and MYR look the most vulnerable and the recent slump in commodity prices will be another headwind for Indonesia and Malaysia. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US dollar consolidates - MarketPulseMarketPulse
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

FX: EUR/USD - Sailing In "Uncharted" Waters. Fed Is Expected To Choose 100bp Variant

InstaForex Analysis InstaForex Analysis 15.07.2022 14:31
Relevance up to 10:00 2022-07-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The euro-dollar pair yesterday updated another price low, reaching 0.9953. In general, new lows in the foreseeable future will be limited to 20 years ago, since in 2002, the EUR/USD pair traded in the range of 0.85–1.05. Therefore, one and a half thousand points down from the parity level, so to speak, were "staked out" in 2002. However, at the moment, these circumstances are symbolic. In practical terms, the more pressing question is: can the EUR/USD bears settle below parity, and if so, how far will they go from the 1.0000 mark? Today, we can say that the sellers are cautiously probing the "uncharted" price territory, not risking staying within the 99th figure. And although each new attempt to go below 1.0000 looks more confident than the previous one, it is still risky to open short positions below the parity level. Figuratively speaking, traders make a circle, "capturing" the area of the 99th figure, and then come back, closing the trading day above the parity zone. We see this circle gradually expanding: at first, sellers reversed a step away from parity, then at 0.9998. Yesterday, the price low was fixed at 0.9953. And yet, it is still premature to announce the development of a downward movement: for this, the bears need at least to gain a foothold below the key support level.     Here it is necessary to highlight an important point: the downward trend for the pair is still in force—the only question is how far sellers can go down from the 1.0000 target. Traders are justifiably afraid of "catching the price bottom," so they act extremely cautiously within the 99th figure. But in general, there are no prerequisites for a large-scale price reversal today and are not expected. The fundamental picture clearly favors the dollar, while the euro is under the yoke of economic and geopolitical problems. Therefore, EUR/USD buyers can now only count on corrective upward waves. It is noteworthy that EUR/USD buyers actually ignored Bloomberg's information published today that the ECB will present an unlimited bond buying tool next week, which will help markets "adjust to sharper and faster interest rate hikes than previously thought." Despite the hawkish nature of this message, the euro remained under pressure. Rumors have been circulating on the market for several weeks that the ECB may raise rates by 50 basis points in July. But, firstly, such assumptions are still the subject of discussion, and secondly, even if the members of the European regulator decide to take this step, they will still be behind—at least with respect to the Fed. The fact is that after the release of data on the growth of the consumer price index in the United States and the producer price index, hawkish expectations regarding the Fed's further actions have significantly increased in the market. Market participants estimate the probability of a 100-point increase following the results of the July meeting at 88%. Such a step would be unprecedented. Therefore, the very fact that this scenario is being discussed in a practical plane allows the dollar to stay afloat and dominate. Moreover, most economists surveyed by Bloomberg still doubt that the European Central Bank will deviate from the previous plan. In their opinion, the deposit rate, which currently stands at -0.5%, will be increased by 25 basis points in July and 50 points in September. After that, according to general forecasts, at each subsequent meeting, until the March meeting in 2023, the ECB will increase the rate in 25-point increments until it reaches 1.25%. All this suggests that the dollar in the foreseeable future will retain its attractiveness in tandem with the euro. Here we do not even consider other fundamental factors that support the US currency against increased anti-risk sentiment. And yet the main question, in my opinion, remains unanswered—to what "depth" are EUR/USD sellers able to descend within the framework of the development of the downward trend? Indeed, it is necessary to be careful when opening short positions on the pair. On the one hand, corrective pullbacks do not allow you to enter sales with an optimal price gap. On the other hand, the bears of the pair feel insecure under the 1.0000 mark. It may be necessary to "follow the beaten path" here. For example, yesterday, traders identified themselves at 0.9953, impulsively declining and bouncing back. Therefore, this target is now the main downward target and the support level, which coincides with the lower line of the Bollinger Bands indicator on the D1 timeframe. Therefore, the following targets can be determined on corrective upward pullbacks: 1.0050, 1.0000, 0.9955. Longs in any case look risky, given the prevailing fundamental background and the widespread dominance of the US currency.   Read more: https://www.instaforex.eu/forex_analysis/316278
Steel majors invest in green steel, but change might be driven by contenders

Forex Trading: Euro To US Dollar - Technical Analysis - 25/07/22

InstaForex Analysis InstaForex Analysis 25.07.2022 12:03
Relevance up to 09:00 2022-07-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis EUR/USD will increase this week, from 1.0213 (closing of the last weekly candle) to 1.0213, which is the 38.2% retracement level (yellow dotted line). Then, it will continue moving up to the 50% retracement level at 1.0367 (yellow dotted line), before returning to 1.0278, which is the upper fractal (weekly candle from 07/17/2022).     Fig. 1 (weekly chart) Comprehensive analysis: Indicator analysis - uptrend Fibonacci levels - uptrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - uptrend Monthly chart - uptrend All this points to an upward movement in EUR/USD. Conclusion: The pair will have an upward trend, with no first lower shadow on the weekly white candle (Monday - up) and no second upper shadow (Friday - up). During the week, euro will climb from 1.0213 (closing of the last weekly candle) to the 38.2% retracement level at 1.0213 (yellow dotted line), move to the 50% retracement level at 1.0367 (yellow dotted line), then return to the upper fractal at 1.0278 (weekly candle from 07/17/2022). Alternatively, the pair could decrease from 1.0213 (closing of the last weekly candle) to the 161.8% retracement level at 1.0078 (red dotted line), then bounce up to the 23.6% retracement level at 1.0146 (yellow dotted line).   Read more: https://www.instaforex.eu/forex_analysis/317034
The EUR/USD Pair Is Still In A High Position On The 1H Chart

EUR/USD - Possible Scenarios For Euro To US Dollar - 05/08/22

InstaForex Analysis InstaForex Analysis 05.08.2022 12:03
Relevance up to 03:00 2022-08-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1). The euro-dollar pair may move upward from the level of 1.0245 (close of yesterday's daily candle) to 1.0281, the 50.0% retracement level (red dotted line). After testing this level, the price may continue to move upward with the target of 1.0351, the historical resistance level (blue dotted line). Upon reaching this level, a downward pullback is possible.     Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today, the price may move upward from the level of 1.0245 (close of yesterday's daily candle) to 1.0281, the 50.0% retracement level (red dotted line). After testing this level, the price may continue to move upward with the target of 1.0351, the historical resistance level (blue dotted line). Upon reaching this level, a downward pullback is possible. Alternative scenario: from the level of 1.0245 (close of yesterday's daily candle), the price may move upward to 1.0281, the 50.0% retracement level (red dotted line). After testing this level, a downward movement is possible with the target of 1.0163, the 38.2% retracement level (blue dotted line). When testing this level, the price may move up.   Read more: https://www.instaforex.eu/forex_analysis/318125
USD Outlook: Fed's Push for Higher Rates and Powell's Speech at Jackson Hole Symposium

Forex Pairs: EUR/USD, AUD/USD, GBP/USD And Asian Currencies Commented By Jeffrey Halley (Oanda)

Jeffrey Halley Jeffrey Halley 05.08.2022 13:44
US dollar has had an uneven sell-off overnight The US dollar fell overnight, led by losses against the euro for unknown reasons, with the Japanese yen also gaining as US yields slid slightly. Sterling and the Australasians hardly moved, while Asian currencies remain stubbornly anchored near to recent lows.   The dollar index fell 0.59% lower at 105.75 overnight, retracing slightly higher by 0.11% to 105.87 in Asia. The dollar index breakout lower at 106.45 has continued to cap rallies this week on a closing basis, suggesting downside risks are still the path of least resistance. Beyond that, 106.75 is the next resistance. Support is at 105.65, and then the more important 1.0500 level. Failure signals a deeper move lower to 1.0350 and, potentially, the 102.50 longer-term breakout.   EUR/USD rallied by 0.76% overnight to 1.0245, easing slightly to 1.0235 in Asian trading. Given stubbornly high European gas prices and the recessionary risks from its Eastern border, the single currencies environment remains challenging, even if 0.9950 is now looking like a medium-term low. EUR/USD had solid resistance nearby at 1.0250 and then 1.0300. A close above 1.0300 this even would signal further gains to 1.0500, however. Meanwhile, EUR/USD has support at 1.0150 and then a series of daily lows between 1.0100 and 1.0125.   GBP/USD traded in a choppy 150+ point Bank of England range overnight but ultimately finished nearly unchanged at 1.2160. In Asia, it has edged lower to 1.2145. When your central bank has forecast a recession and inflation rising to 13.0% but has only hiked rates to 1.75%, it is reasonable to assume they are behind the curve. That stagflationary reality could be limiting sterling’s gains. Support is at 1.2065, the overnight low, with resistance at 1.2215, the overnight high, followed by 1.2300.   Four days in Bali saw me miss the long-awaited capitulation sell-off by USD/JPY as the US/Japan rate differential narrowed. Much will depend on the US Non-Farm Payroll data this evening and the reaction by US bonds. The sell-off this week went further than I expected but held the 100-day moving average (DMA), which today is at 130.70. Resistance is clearly denoted at 134.65 now. Expect plenty of noise in between.   AUD/USD rose 0.25% to 0.6965 overnight, and NZD/USD rose by 0.40% to 0.6295. Both are almost unchanged in Asia as risk sentiment holds up into the Asian session. The technical picture for both remains constructive as both currencies staged upside breakouts higher a fortnight ago. They remain well above their breakout lines at 0.6790 and 0.6145, and a daily close above either 0.7050 or 0.6350 signals the next stage of the recovery rally.   Asian currencies were steady overnight, booking an uneven session of mixed gains against the greenback. In Asia, surging inflation numbers from the Philippines and Thailand have sparked 0.75% rallies by THB and PHP to 35.620 and 55.17 as markets price in faster monetary tightening. That has had a knock-on impact across the Asian FX space, with the Korean won gaining 0.40% to 1297.20. The Indonesian rupiah and Malaysian ringgit remain near recent lows, however, as both central banks remain very reluctant rate hikers. With inflation rising in Asia, lifting rate hike expectations, Asian currencies could finally be starting also to gain some benefits from recent US dollar strength elsewhere. USD/INR has eased to 89.976 today. With the RBI rate decision this afternoon, I expect volatility ahead. Further INR strength from here probably relies on the RBI statement being hawkish; otherwise, I suspect INR weakness will resume. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US dollar retreat continues - MarketPulseMarketPulse
FX Daily: Testing the easing pushback

Fasten Your Seat Belts! It May Be A Turbulent Day For Euro! The US Labour Market Data Shocked, This Week We Meet Inflation Figures! Euro To US Dollar Forecast

InstaForex Analysis InstaForex Analysis 08.08.2022 09:01
Relevance up to 04:00 2022-08-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The euro fell by 60 points on Friday due to good data on employment in the US. The lower shadow of the daily candle touched the target support at 1.0150. In the non-agricultural sector, 528,000 new jobs were created in July. This morning the price approached the support at 1.0150 again and shows the intention to overcome it.     If this plan succeeds, then the price will open the way to the target bearish level of 1.0020. This is our main scenario. The signal line of the Marlin Oscillator is also close to overcoming the zero neutral line and moving into the downward trend zone. The main plan may be disrupted by the price's exit above Friday's high at 1.0252, which will also correspond to overcoming the resistance of the MACD indicator line on a daily scale. In this case, the target would be 1.0360 (15 June low).     On the four-hour chart, the price develops under both indicator lines - balance and MACD. The Marlin Oscillator is in a downward position. We are waiting for the price to leave the area below 1.0150 and settle under the level. If the situation develops according to an alternative scenario, the price moving above the MACD line (1.0220) will not be enough to develop movement to 1.0360, such a transition above the indicator line may turn out to be false. The working signal will be overcoming the MACD line of the daily scale, which is near Friday's high at 1.0252.   Read more: https://www.instaforex.eu/forex_analysis/318258
GBPUSD Testing Key Support at 1.2175: Will Oversold Conditions Trigger a Correction?

US Recession Cried Off!? Shocking Forex News! Could (EUR/USD) Euro To US Dollar Hit Levels Above 1.200!?

InstaForex Analysis InstaForex Analysis 08.08.2022 09:41
Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The content of the report of the United States Department of Labor came as a complete surprise, and eventually led to a noticeable strengthening of the dollar. And the fact is that all the main indicators turned out to be much better than forecasts. Thus, the unemployment rate, instead of remaining unchanged, fell from 3.6% to 3.5%. Moreover, 528,000 new jobs were created outside of agriculture. Although, according to forecasts, the creation of 290,000 new jobs was expected. In fact, they were about twice as many. And do not forget that in order to maintain the stability of the labor market, a little more than 200,000 new jobs should be created outside of agriculture. And since they turned out to be more than twice as many, the unemployment rate will continue to decline. Which somewhat contradicts the idea that the US economy is sliding into recession. Number of new non-agricultural jobs (United States):     Today the macroeconomic calendar is absolutely empty, and apparently, the market will consolidate around the values reached on Friday. Despite everything, the EURUSD currency pair is moving within the 1.0150/1.0270 horizontal channel, consistently working out the set boundaries. Last Friday, the quote rebounded from the area of the upper border and rushed to the area of the lower one, where the volume of short positions decreased. A consistent cycle of fluctuations is essential in the market, which makes it possible for traders to work based on the natural basis of the past. The technical instrument RSI H4, following the price rebound from the upper border of the flat, crossed the middle line 50 from top to bottom. This signal only indicates the bounce method, but not the end of the flat. In general terms, the indicator is still centered on the middle line. The moving MA lines on the Alligator H4 have a lot of interlacing, this indicates a variable signal that corresponds to the flat stage.     Expectations and prospects The flat stage is still relevant in the market, which is indicated by the current price rebound from the lower border. In this situation, the subsequent increase in the volume of long positions is expected after the price stays above the value of 1.0200. In this scenario, it is possible to consider movement towards 1.2150/1.2170. The main strategy, as before, is the method of breaking through one of the control levels: 1.0300 - when considering the upward development of the market; 1.0100 - if market participants are oriented towards a hike towards the parity level. It is worth noting that the signal must be confirmed in a four-hour period. Complex indicator analysis has a variable signal in the short-term and intraday periods due to the current flat. At the moment, the indicators point to long positions on the euro, due to the price rebound from the lower border of the outset.   Read more: https://www.instaforex.eu/forex_analysis/318280
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Euro (EUR) Is Expected To Stay Strong, But EUR/USD Reaching Parity Isn't That Impossible! US Dollar Index (USDX) - Surprising Sentiment!

InstaForex Analysis InstaForex Analysis 08.08.2022 10:38
Relevance up to 07:00 2022-08-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results.   The US currency started the week quite cheerfully, trying to maintain the positive momentum received after the release of the Nonfarm Payrolls data. At the same time, the euro cannot boast of similar dynamics, demonstrating pendulum dynamics. The euro is once again teetering on the brink of falling, while trying to settle in the positions it has won. However, these actions are not always successful as the USD continues to dominate the market. At the same time, according to reports on the dollar index (USDX), investors are showing bearish sentiment against the US currency. Over the past two weeks, market participants have reduced their positions on USD growth after a long build-up. A continuation of the current trend can lead to a short-term drawdown of the greenback. Currently, the greenback is trying to gain a foothold in the upward trend, and not without success. Its rise was catalyzed by impressive US employment data. Against this backdrop, markets expect more decisive action from the Federal Reserve in terms of tightening monetary policy. Recall that, according to reports, 528,000 jobs appeared last month in the US economy, and the unemployment rate fell to 3.5%. According to economists, positive data on US employment revived the hopes of traders and investors about a significant increase in the key rate (by 75 bps) at the Fed's September meeting. Note that strong data on employment growth in America came as a surprise to the markets. Most experts expected opposite results, referring to recent studies on the onset of a recession in the US economy and to a slowdown in economic growth in the country. For the time being, however, fortune favors the greenback. After the release of Nonfarm Payrolls, the dollar confidently overtook the euro. The EUR/USD was trading near 1.0186 on Monday morning, August 8, trying to return to last week's highs near 1.0200.     Note that after the release of the US employment report, the EUR/USD pair plunged sharply to the critical 1.0170, but later managed to recover. Against this background, some experts are optimistic about the immediate prospects for the euro. According to preliminary calculations, in the coming months, the euro may be in an upward trend, despite the threat of a recession in the European economy. The reason is the increased risk appetite in global markets. Against this background, experts believe that the fair rate of the EUR/USD pair is close to 1.1400. Analysts' conclusions are based on the difference in rates in the US and Germany. At the same time, experts do not exclude another fall of the euro to parity with the dollar. This week, investors are focusing on US inflation data. The release of the July consumer price index is scheduled (the preliminary forecast provides for an increase of 0.2% in monthly terms) on Wednesday, August 10. The markets will get acquainted with the US producer price index on Thursday, August 11. This indicator is crucial for the further dynamics of the interest rate. Recall that the positive report on employment in the US opened the way for the Fed to aggressively tighten monetary policy. According to experts, having received confirmation of the strengthening of the US economy, investors will return to long positions on the dollar. This will give an additional impetus to the latter and set up traders for an extreme tightening of monetary policy by the Fed.   Read more: https://www.instaforex.eu/forex_analysis/318270
ECB's Dovish Shift: Markets Anticipate Softer Policy Guidance

Turbulent Time For GBP (British Pound)! What's Possibly Ahead Of US Dollar (USD)?

ING Economics ING Economics 08.08.2022 10:19
The dollar starts the new week on the firm side after some impressive US July jobs figures on Friday. US money markets now price around 125bp of further Fed tightening and then a softer Fed profile from next summer onwards - pretty much now in line with our house view. Firm US July CPI data this week can see the dollar continue to trade near its highs Source: Shutterstock USD: Dollar to hold near highs, but interest in carry could emerge An unequivocally strong US July jobs report released on Friday has gone a little way to assuaging recession fears and given credence to last week's pushback from the Fed that it was nowhere near done in terms of tightening. Pricing in the US money markets now sees a further 125bp of Fed hikes this year (we see hikes of 50bp, 50bp, and 25bp in September, November and December). And those money markets price in around 50bp of cuts from summer '23 onwards. Current pricing is consistent with our house view and perhaps could usher in a period of calm for Fed pricing and the dollar. That pricing looks unlikely to be altered much this week with a strong US July CPI, where the core rate should stay near 6% year-on-year and keep the Fed concerned. There should also be focus this week on the Senate's approval of what is now called the Inflation Reduction Act - legislation focused on bringing down prescription drug prices and targeting spending on the climate emergency. At $437bn it is a far cry from the $1-1.5trn initial plans for the Build Back Better legislation and thus seems unlikely to be read as any kind of major fiscal stimulus. It will be interesting to see, however, whether new taxation on stock buybacks next year triggers a rush of stock buybacks this year - potentially supporting US equities (and probably the dollar) into year-end. Expect DXY to hold near its recent highs of 107. But if the dollar is not going anywhere in a hurry, there could be renewed interest in the carry trade. Of the available carry, we think the near 10% levels offered through the 3-month Mexican peso implied yields look attractive. Here Banxico does a good job of keeping USD/MXN stable and is expected to hike rates 75bp to 8.50% this Thursday. Chris Turner We see the dollar holding near its highs after Friday's strong jobs reporthttps://t.co/WwxUhzptEZ — ING Economics (@ING_Economics) August 8, 2022   EUR: Italy's ratings outlook change won't help the euro On Friday evening, the ratings agency Moodys shifted its rating outlook on Italy's sovereign debt from stable to negative. Given that Moodys' Italian rating is just one notch above junk - that has raised some eyebrows and no doubt will call the European Central Bank into further supportive action, be it through the more aggressive re-investment of the Pandemic Emergency Purchase Programme or potentially even using its new support instrument - the Transmission Protection Instrument (TPI). None of this will help the beleaguered euro, where the ECB's trade-weighted measure remains glued to the lows of the year. Indeed, if quiet summer markets prompt renewed interest in the carry trade, the euro will probably be one of the preferred funding currencies.  EUR/USD was understandably hit by Friday's strong US jobs release data and looks like it can stay offered in a 1.0100-1.0300 trading range. Elsewhere, EUR/CHF will be monitoring the performance of Italian bonds today and can probably edge back towards the lower end of a 0.97-0.98 range - a move that will not be unwelcome to the newly hawkish Swiss National Bank. Chris Turner GBP: Week culminates in a 2Q GDP contraction Following last week's pretty bleak Bank of England meeting, the focus this week will be Friday's release of 2Q22 UK GDP data. The market is expecting a 0.2% quarter-on-quarter contraction, we are looking for -0.1% QoQ.  A contraction is widely priced because of the extra bank holiday in June, but weaker activity will highlight the BoE's call of the UK entering a recession in 4Q22 and contracting 2% over the five subsequent quarters. Sterling probably has not sold off more since investors do not quite know what to do with a reserve currency that will be backed by rates at 2.25% if we are correct with our BoE call for the September meeting. Given that the euro should remain soft, we are sticking with our original call from last Thursday that EUR/GBP may struggle to break above the 0.8450 area this week. Chris Turner CEE: Inflation strikes back, again A heavy calendar in the Central and Eastern Europe region is again led by inflation numbers. On Monday, we will see data from the labour market, foreign trade and industrial production in the Czech Republic. The monthly numbers show a slowdown in the economy, but we have also seen some positive surprises that reduce the risk of a technical recession in the second half of the year. Inflation in Hungary will be published on Tuesday. Peter Virovacz expects a further increase from 11.7% to 13.3% year-on-year, slightly above market expectations, also supported by tax changes. In the Czech Republic, inflation will be published on Wednesday. Again, we expect a new record at 18.5% YoY, well above market expectations, mainly due to the announced energy price hikes. On Thursday, we will see inflation in Romania. Valentin Tataru forecasts a drop in YoY terms from 15.1% to 14.6%, which would mark the first decline from the peak. On Friday, the current account in Poland and the Czech Republic will be published, we will see the final estimate of Polish inflation and the Czech National Bank will publish minutes. In the FX market, on the floating side of the CEE region, the Polish zloty and Hungarian forint have strengthened significantly in the past week and, as we mentioned on Wednesday, it is a bit too much for our liking. In both countries, market interest rate expectations have since fallen further, driving rate differentials to their lowest levels since mid-June in Hungary, and April in Poland. Moreover, Friday's US jobs report supported the dollar, which is also not playing into the region's hands. Thus, in our view, the only thing that saved the zloty and forint from losses at the end of last week was the positive market sentiment and risk-on mode. However, we expect both currencies to be weaker this week. We see the forint as more vulnerable, with our target at 399 EUR/HUF and the zloty at 4.75 EUR/PLN for the days ahead. The koruna is still liquidating short positions after Thursday's CNB meeting which made it clear that the end of FX intervention is not on the table. However, we expect the koruna to return to 24.60 EUR/CZK soon. The Romanian leu remained untouched after Friday's central bank meeting and is still enjoying its trip to stronger levels around 4.925 EUR/RON - a move that we think is temporary. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
JPY: Assessing the FX Intervention Zone and Market Conditions

Forex: EUR/USD And GBP/USD - What Do We Learn From Technical Analysis?

InstaForex Analysis InstaForex Analysis 09.08.2022 15:21
Relevance up to 10:00 2022-08-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher timeframes The situation has not changed significantly over the past day, so the conclusions and expectations voiced earlier remain relevant today. The center of attraction now is the daily cross (Kijun 1.0200 + Tenkan 1.0204). Bullish targets remain at 1.0259–85 (closing daily cross + weekly short-term trend). The benchmarks, which will allow bears to build new prospects, remain today at 1.0000 – 0.9952 (psychological level + minimum extremum).     H4 – H1 On the lower timeframes, the key levels joined forces at the level of 1.0193 (central pivot point of the day + weekly long-term trend). At the same time, the pair is in the zone of attraction of key levels, which confirms the absence of a clear preponderance of forces between the parties. The reference points for bulls within the day, in the case of an upward trend, are the resistance of the classic pivot points at 1.0225 – 1.0255 – 1.0287. In the case of a decline, then the reference points for bears are 1.0163 – 1.0131 – 1.0101 (support of the classic pivot points). *** GBP/USD     Higher timeframes For the last working day, the pound could not change anything. It remains in the attraction zone of the weekly short-term trend (1.2082). Due to the fact that the situation has not changed, the location of all the main reference points has remained the same. For bears, it is important to overcome the support (1.2026 - 1.2000) and liquidate the daily golden cross (1.1963) in the near future. For bulls, the following reference points are important: 1.2148 (daily short-term trend) - 1.2227 (lower limit of the daily cloud) - 1.2293 (maximum extremum).     H4 – H1 The lower timeframes are currently busy testing the key levels, which are at 1.2087 (central pivot point) and 1.2131 (weekly long-term trend), as well as interacting with the resistance of the H4 cloud (1.2091 - 1.2187). Bullish targets, in the case of continued rise within the day, are 1.2177 - 1.2216 (resistance of the classic pivot points). For bears, the support is at 1.2036 - 1.1997 - 1.1946 (support of the classic pivot points). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/318438
Bitcoin Stagnates at $30,000 Level, Awaits US Bitcoin ETF Update and Fed Meeting

A Crucial Day For US Dollar (USD)! Today's US Inflation Reading May Shake EUR/USD And The Forex Market In General!

ING Economics ING Economics 10.08.2022 10:34
While the US is sticking to good old inflation spotting, Europe is preparing for the next round of the gas story. EUR/USD will remain under US domination, but the Central and Eastern European region is more likely to dance according to geopolitical squabbles USD: CPI to cement the cycle It has been a trendless week for the dollar so far, with very little follow-through from Friday’s jobs-inspired rally. Today sees the biggest data event risk of the week – and probably of the month. US July CPI is expected to soften a little on a headline basis but nudge up on a core basis to just above 6% year-on-year. Stubbornly high core inflation should support the Federal Reserve’s position that its work is far from done. It should also support pricing in the US money market curve that sees the policy rate taken around 125bp higher in this cycle. Barring a massive upside surprise that can demand an extra 25-50bp or so priced into the back end of the curve (and sending the dollar a leg higher), we expect the inflation data to cement current tightening expectations and keep the dollar bid near the high. Yet it is a long time until the next FOMC meeting on 21 September and barring any shocks, we feel that the dollar holding gains against the low yielders such as the euro and yen should not preclude a little more interest in some emerging high yield currencies. 105.70-107.00 are now the short-term parameters for DXY. Chris Turner EUR: Too many challenges EUR/USD continues to languish near the lows and there does not seem a compelling case to buy it. As we discussed recently, medium valuation considerations do not show it as particularly undervalued. And the larger geopolitical event risks leave Europe more exposed than North America. There is no European data of note today and EUR/USD will therefore be bounced around by the US CPI print. Declining levels of implied volatility suggest investors may be in no mood to chase EUR/USD out of a 1.0100-1.0300 range near term. Chris Turner CEE: The European gas story has reached the next level Yesterday's news about the halt of gas supplies from Russia to Central and Eastern Europe has not caused much damage so far. Of course, further developments, especially the length of the supply stoppage, will be key. Purely in terms of energy dependence, Hungary is the most exposed to problems with supplies from Russia, followed by the Czech Republic. At the same time, the statistics on gas in storage are negative for Hungary. For the time being, both countries report that they have enough gas in reserve to last several weeks and keep the economy running as normal. However, no one will want to test what the reality is. In the FX market, so far, the only visible reaction within CEE has been in the Hungarian forint, which we previously identified as the most vulnerable. Of course, in the coming days, this story will be in focus and drive the direction of FX markets. We see strong potential here to trigger difficult times for the region. Frantisek Taborsky CZK: Tricky inflation print to test CNB pain threshold After Poland and Hungary, July inflation will be published today in the Czech Republic, and we think it will be the trickiest reading so far this year. July will bring a third round of energy price hikes and this time, the month-on-month jump should be a record. However, the problem is the uncertain ratio of fix/float contracts and the approach of the statistical office to such a massive jump in energy suppliers' price lists. Overall, we feel comfortable on the high side of estimates and believe the market may be underestimating these price changes. Thus, we expect inflation to jump from 17.2% to 18.5% today, while the market is expecting 17.9%. The central bank expects 18.8% in its new forecast, but even a higher number cannot be ruled out at this point. For the Czech National Bank, however, we believe the pain threshold is high given that any surprise will come from energy prices, which the new board places on the cost side, thus out of the central bank's reach. From a market perspective, just a few days ago, we would have expected the news to fuel hawkish expectations that the central bank might react anyway. However, yesterday's 20bp jump in the short end of the curve, presumably in preparation for today's inflation, and profit-taking, should limit that market reaction. On the FX front, the market remains safely away from the 24.60-24.70 level after last week's CNB meeting and for now is vainly gathering strength for another stage of attack against the central bank, which has been defending the koruna. Frantisek Taborsky Read this article on THINK TagsFX Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Euro May Gradually Climb To The Target Level

Forex: Euro To US Dollar - Technical Update - 11/08/22

Kim Cramer Larsson Kim Cramer Larsson 11.08.2022 15:51
EURUSD has broken bullish out of its sideways range on back of the CPI numbers released yesterday. EURUSD hasn’t moved far after the breakout however, being rejected at the 0.618 Fibonacci retracement at 1.0360, coinciding with the medium-term falling trend line and 55 SMA. A strong resistance area.RSI is still showing negative sentiment and needs to close above 60 to reverse that. Today EURUSD seems to have another go at the resistance. If EURUSD can push through those resistances, there is room up till around 1.06. Possibly 1.0790. If it fails once again and is pushed back below 1.0280 it could be range bound in past few weeks range for a couple of more weeks. Source: Saxo Group Source: Saxo Group The longer-term picture on EURUSD outlined in previous analysis remains intact. EURUSD trend is down and parity is likely to be tested later in 2022. To reverse that a close above 1.15 is needed.   Source: Saxo Group Source: Technical Update - EURUSD having another go at strong resistance at 1.0360. It might succeed this time | Saxo Group (home.saxo)
Tokyo Raises Concerns Over Yen's Depreciation, Considers Intervention

USA: Fuel Is Cheaper! Forex: Get Ready! US Dollar May Skyrocket Shortly! Could Euro To British Pound (EUR/GBP) Reach 0.85!?

ING Economics ING Economics 12.08.2022 09:41
Softer-than-expected US price data this week has lifted risk assets around the world, especially in the emerging market space. The highlight of today's relatively quiet session will be US August consumer sentiment data, which is expected to pick up after the big drop in gasoline prices. This should be good for US growth and the dollar US gasoline has fallen from $5/gallon to $4 over the last month USD: Rising consumer confidence should be good news all round Softer-than-expected US July price data this week (both CPI and PPI) have been good news for risk assets around the world. Investors have read it as reducing the Fed's urgency to tighten policy. That said, Fed rhetoric has been consistent all week. Namely, the policy rate is heading toward 3.25/3.50% later this year (roughly priced by the markets) and then possibly 4% next year (not priced).   The latest US consumer sentiment readings from the University of Michigan – out today – will feed into this story. James Knightley looks for an upside surprise in consumer sentiment after US gasoline's fall to $4 from $5/gallon over the last month. We also get fresh inflation expectations data. Here the 5-10 year expectations peaked at 3.10% earlier this summer, were 2.9% in July and today are expected to fall to 2.8%.  How will markets read the data? A drop in inflation expectations may suggest the Fed can be more relaxed on inflation. But there are no signs of that coming through in its rhetoric. Instead, the bigger impact may be the bounce in consumer sentiment, reduced fears of a 2023 recession, and the pricing out of some of the 50bp of easing expected in 2H23. This should be a dollar-positive development. As we discussed yesterday, we like the dollar against the low yielders (euro and yen), but feel that declining levels of volatility will see renewed interest in the carry trade. Yesterday, we picked out long MXN/JPY as a pair that could rally in this environment. Mexico's central bank Banxico did hike 75bp yesterday to 8.50% and even though it omitted language talking about 'more forceful' rate hikes in the future, we think Banxico will match the Fed hike-for-hike. 6.80 remains our target for MXN/JPY. Heavily weighted to the low yielders, DXY should be able to edge a little higher today. A break above 105.50 would go a long way to stabilising it after the heavy losses suffered on Wednesday's US CPI release. Chris Turner EUR: Gas developments remain worrying European industry must be watching with growing concern as European natural gas prices continue to edge higher. Higher costs are a given, but winter rationing probably remains the bigger threat. For FX markets, 2022 has been the year of watching terms of trade developments – the price of exports over imports. These have moved very negatively for the eurozone this year and delivered a negative income shock. This week's move in gas prices has sent eurozone terms of trade towards the worst levels of the year and is a clean euro negative. Given that we are slightly bullish on the dollar today, we think that the recent EUR/USD correction has stalled in the 1.0350/0400 resistance area and would favour a move back to 1.0275 today. Elsewhere, some softer-than-expected July Swedish CPI data released today may pour cold water on calls for a massive Riksbank rate hike in September. After a good run in July, we doubt the Swedish krona pushes on too much further against the euro. Chris Turner GBP: 2Q22 UK GDP data not quite as bad as expected UK 2Q22 GDP data came in marginally better than expected, where the extra bank holiday in June did not have quite as large a negative impact as analysts thought. The data can probably keep expectations alive that the Bank of England (BoE) will hike 50bp on 15 September. And ever-rising expectations for how much higher the UK energy price cap will be adjusted (and what it means for the peak of UK inflation) will probably mean the BoE stays hawkish all year. EUR/GBP is slightly stronger than we thought and could edge up to the 0.8485 area. But given the challenges faced on the continent, we would not chase EUR/GBP higher. Chris Turner CEE: Hungary rating review tonight In the Central and Eastern Europe (CEE) region, industrial production in Romania, the final estimate of inflation in Poland, Czech National Bank (CNB) minutes, and current account data across the region will close the busy calendar this week. The final CPI reading in Poland is unlikely to differ markedly from the flash estimate of 15.5% year-on-year. However, given that gas prices at the pump continued to decline in the final week of July, we do not rule out a downward revision to 15.4% YoY. In the long term, we expect the summer months to be marked by relatively stable, albeit very high, inflation. Inflationary pressure is projected to re-emerge with the beginning of the heating season in autumn and at the beginning of 2023 due to the upswing in regulated prices. CNB minutes should reveal the details of the new board's discussion from the last meeting when the central bank left rates unchanged for the first time since May 2021. In addition to the minutes, the full forecast will be released, including alternative scenarios. Hungary's rating review by S&P will also be published later today. We do not expect a change in the rating outlook (BBB, stable), but a downgrade is in play, mainly due to energy dependence and uncertain access to EU money. For today, we do not see many impulses from the regional calendar and the main issue remains the current level of EUR/USD, which is playing positively into the hands of the CEE currencies for now. We see the Polish zloty and Hungarian forint fairly priced, but it is hard to be bullish in this part of the region given the energy risks and the escalating conflict with the European Commission over access to EU money. The koruna shook off another batch of short positions yesterday and we believe EUR/CZK should gradually start to return to higher levels, given that with the region's most dovish central bank on its back, it is hard to find justification for the current EUR/CZK levels. Frantisek Taborsky Read this article on THINK TagsGasoline FX Daily FX Dollar CEE region Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Showed Local Speculative Interest In Short Positions Yesterday

Forex Market May Surprise Us Today! EUR/GBP May Rally, What GBP/USD Traders Have To Do To Make The Pair Increase?

InstaForex Analysis InstaForex Analysis 12.08.2022 12:17
Relevance up to 09:00 2022-08-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Although the US inflation data has been very encouraging lately, Fed officials said the central bank is unlikely to change its stance on interest rates this year and the next. Minneapolis Fed President Neil Kashkari noted that the benchmark rate could reach 3.9% by the end of this year and rise to 4.4% by the end of 2023.   Chicago Fed President Charles Evans had the same view, mentioning that although inflation eased, it is still unacceptably high. He said they will ensure that inflation returns to 2%. At the moment, inflation has fallen below estimates, prompting investors to lower bets that the Fed will go for another three-quarters of a percentage point rate hike in September. But San Francisco Fed President Mary Daly said in a recent speech that it is too early to declare victory in the central bank's fight against inflation, so it is likely that the Fed will still implement another 75 basis point hike in the next policy meeting.     In another note, the US released the latest data on jobless claims, which showed an increase for the second week in a row. It remained at the highest level since November, indicating continued moderation in the labor market, which is what the Federal Reserve is trying to achieve. Initial jobless claims rose by 14,000 to 262,000, slightly lower than the expected 265,000. The reason why jobless claims is on the rise is the layoffs and suspended hiring in companies, especially in the technology sector. Demand for new workers is also declining as the Federal Reserve raises interest rates. The four-week moving average, smoothing out the fluctuations, rose to 252,000. Another important report was the US producer price data, which unexpectedly fell in July due to lower energy prices. It dipped 0.5% from the previous month, but rose 9.8% from last year. There was also data on producer prices, which rose 0.2% from June and 7.6% from a year earlier. The numbers suggest that inflationary pressures are beginning to ease, which could eventually lead to a slowdown in consumer price growth.     In terms of the forex market, EUR/USD is trading above 1.0300 and has good chances for further growth. Consolidating beyond 1.0320 will give buyers an excellent chance to return to 1.0370, then go to 1.0430 and 1.0500. But if pressure returns around 1.0270, the pair could fall to 1.0230 and 1.0200. In GBP/USD, buyers need to stay above 1.2180 because only that can push the quote to 1.2220, 1.2260 and 1.2345. If pressure return around 1.280, the pair will fall to 1.2130 and 1.2100.   Read more: https://www.instaforex.eu/forex_analysis/318788
The EUR/USD Pair Is Still In A High Position On The 1H Chart

Forex: Technical Look At Euro To US Dollar (EUR/USD) - 12/08/22

InstaForex Analysis InstaForex Analysis 12.08.2022 15:45
Relevance up to 13:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Technical outlook: EURUSD slipped through 1.0290 intraday on Friday after reversing from the 1.0360 highs earlier this week. Looking into the price action in the past two trading sessions, the single currency pair has been consolidating between 1.0280 and 1.0370. If we assume that a triangle is unfolding, the sideways movement will continue for a while before prices breakout towards 1.0450. EURUSD had been in a downtrend since January 2021 after hitting highs at 1.2350. The bears managed to produce a series of lower lows and lower highs and carve a potential bottom at around 0.9952 in July 2022. Since then, a larger-degree counter-trend rally is unfolding with potential targets towards 1.0450 and 1.0800 in the next few trading sessions. On the flip side, if prices continue to slide from current levels breaking consistently below 1.0270, the bears might take control and drag the pair lower towards the 1.0075-1.0100 area. The currency pair is expected to produce a bullish bounce thereafter and resume higher towards 1.0800 and 1.0900 at least. Trading plan: Potential rally towards 1.0800-1.0900 against 0.9952 Good luck!   Read more: https://www.instaforex.eu/forex_analysis/288344
What's ahead of Euro against greenback today? Let's look at Stefan Doll's review

Forex: Technical Analysis - Euro To US Dollar (EUR/USD) And GBP/USD (British Pound To US Dollar) - 12/08/22

InstaForex Analysis InstaForex Analysis 12.08.2022 16:13
Relevance up to 14:00 2022-08-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher time frames Yesterday, the pair managed to stay above the weekly short-term trend (1.0285). It is the last trading day of the week, so the focus is on the closing level today. Bullish sentiment is likely to increase if the price closes above the weekly short-term trend (1.0285) today. The nearest bullish target is seen in the 1.0419 – 1.0465 range of the Ichimoku cloud. Support is still standing at the daily golden cross levels (1.0246 – 1.0210 – 1.0160 – 1.0111).     H4 – H1 In lower time frames, the pair is still in the zone of uncertainty and correction. The key target is at the central daily Pivot level of 1.0320. Bearish power is likely to increase after a breakout through the MA and its reversal. Another bullish intraday target is at classic Pivot levels of 1.0364 – 1.0409 – 1.0453, in line with resistance. Additional bearish targets stand at 1.0231 – 1.0186 support (classic Pivot). *** GBP/USD     Higher time frames The pair entered the range of the daily cloud but failed to extend growth yesterday. Since it is the last trading day of the week, the focus is on the closing level today. If the price closes below this week's tested 1.2082 resistance (daily cloud + weekly short-term trend), a pullback will occur and bearish sentiment will grow. Alternatively, in case of a breakout through the daily cloud (1.2270) and consolidation in the bullish zone, bullish sentiment is likely to increase.     H4 – H1 In lower time frames, moving down, the pair tested the weekly long-term trend at 1.2131. Once the pair breaks and consolidates below the level, bearish sentiment is likely to rise. In such a case, support is seen at 1.2082 and 1.2000 in the higher time frames. *** Indicators used in technical analysis: higher time frames – Ichimoku Kinko Hyo (9.26.52); Fibo Kijun H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/318831
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

Plunging Below Parity Isn't That Impossible! FX: EUR/USD (Euro To US Dollar) Possible Variants Of The Price

InstaForex Analysis InstaForex Analysis 16.08.2022 08:53
Relevance up to 04:00 2022-08-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The euro moved down with all determination on Monday, finally accepting a plan for a medium-term decline. The fall was 100 points and at the moment the price is testing the strength of the target support level of 1.0150. The Marlin Oscillator has come close to the border with the downward trend territory on the daily chart.     Simultaneous crossing of support by the price and the zero line by the oscillator can give an additional impetus to the price and the next target at 1.0020 will be reached fairly quickly. The third target is 0.9950. There may also be a second option for the development of a downward movement: the price will work out their support with the oscillator, then they will correct and with fresh forces, on the second attempt, they will overcome them. The correction limit is the MACD line on the daily chart – 1.0218.     The oscillator fell quite deeply on the H4 chart, although it is not yet in the oversold zone. The signal line turns up, relieving tension and accumulating strength for a new downward shot. From such positions, the option of a decline with a preliminary correction looks the most possible.   Read more: https://www.instaforex.eu/forex_analysis/318975
Crypto Market Buzzes with Potential Launch of US Bitcoin ETFs

Watch Out Forex Traders! EUR/USD May See Parity, US Dollar Stays Strong Amid Energy Market Realities, Canadian Dollar May Be Affected By CPI Release

ING Economics ING Economics 16.08.2022 11:17
The rise in gas prices around the world and how policymakers handle them is very much back in focus as terms of trade indices for the big importers hit new lows. Combining this theme with both the weakness in the Chinese renminbi and what should be a positive set of US events over the next 48 hours favours continued dollar strength Germany continues to suffer both with low water levels on the Rhine and now a gas levy for German consumers USD: All systems are go We see three factors that can keep the dollar strong near term and probably send it a little stronger. The first is the ongoing energy shock primarily being felt through natural gas prices. These prices continue to rise as importers compete for cargoes ahead of the northern hemisphere winter and the very uncertain supply situation. In financial markets, the cost of higher gas prices is born out in terms of trade indices. Energy importers such as Europe and large parts of Asia are seeing their terms of trade indices (export versus import prices) continuing to dive. These effectively represent a large negative income shock. The energy independence of the US leaves the dollar relatively insulated on this score. The second factor is the one we highlighted yesterday – the uncertainty as to whether the People's Bank of China (PBoC) will engineer another mini-devaluation in the renminbi as it searches for growth. The PBoC overnight fixed USD/CNY in line with model-based estimates. This is being read rather equivocally by markets as the PBoC is not actively encouraging speculation of a weaker renminbi, nor delivering a stern warning against yesterday's renminbi sell-off. USD/CNH is now trading through 6.80 and a move through 6.82/84 will certainly raise speculation of something larger afoot akin to the April/May 6% renminbi devaluation. That period saw the DXY dollar index up around 6% too. The final factor is the US economy and the Fed story. Today sees the release of July industrial production and tomorrow the release of retail sales. Our team sees better figures for both – largely helped by lower gasoline prices. The figures should temporarily allay US recession fears and prepare the markets for what could be a hawkish set of FOMC minutes tomorrow night. We agree with Padhraic Garvey's opinion piece that the Fed probably wants tighter financial conditions now – which implicitly include a firmer dollar. In all, we continue to prefer north American currencies, where last week we picked out the Mexican peso for some carry. The Canadian dollar also should remain supported on dips and today sees some July CPI data. This can shed light on whether the Bank of Canada hikes 50bp or 75bp on 7 September (59bp currently priced). Of the three, we would probably prefer slightly overweight US dollar positions since the risk environment could easily deteriorate again. 106.95/107.00 looks like the near-term target for DXY. In addition, please find the August edition of FX talking here and also some thoughts on where ESG issues interact with the FX market.  Chris Turner EUR: Grim As Carsten Brzeski noted yesterday, Germany continues to suffer both with low water levels on the Rhine and now a gas levy for German consumers. The gas levy could keep German inflation higher for longer and cause more headaches for the European Central Bank (ECB). The trade-weighted euro is a whisker away from the lows of the year and a slightly stronger dollar over the next 48 hours could easily see EUR/USD retesting parity. 1.0200 should now prove short-term resistance. In terms of data today, look out for German and eurozone investor expectations for August. These should remain near the lows despite a decent last month for European equities. Chris Turner GBP: You are not alone News that Germany will impose a gas levy – confirming that the government cannot fully shield households from the spike in gas prices – leaves the UK less of an outlier in Europe. This will be one of the factors helping to limit EUR/GBP gains and could actually favour a drift back to the 0.8390/8400 area. Today's July UK employment data is somewhat of a mixed bag for sterling. This showed a slight slowing in hiring but strong average earnings – the latter pointing to hoarding of staff. We think the data supports a 50bp Bank of England hike on 15 September (45bp currently priced). In all, EUR/GBP can soften a little, but a stronger dollar means that Cable can go sub 1.20 again. Chris Turner   CEE: Another painful day under the reign of the US dollar The strong US dollar quickly took back almost all of the CEE region's recent currency gains. However, the invisible hand of the market intervened in a different order than we had anticipated yesterday. While the Polish zloty lost the least and narrowly avoided 4.700 EUR/PLN, the Hungarian forint came under heavy sell-off, hit by the rating outlook downgrade from S&P. And the koruna returned halfway to CNB's intervention levels. In all three cases, we can expect more losses today, in our view. The regional calendar is almost empty and global conditions for CEE currencies have deteriorated again, led by a stronger US dollar. We continue to believe the zloty should head above 4.700 EUR/PLN, while the forint has lost too much in our view. It can be expected to remain out of the market's favour for some time due to the rating decision, but market conditions remain most favourable for the forint. This is the only currency in the region that can rely on a rising interest rate differential. Once the jitters over the rating outlook change subside, the forint could return to 396 EUR/HUF. Frantisek Taborsky Read this article on THINK TagsFX Daily Dollar CEE region Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
China's Deflationary Descent: Implications for Global Markets

Dollar (USD) Comes Back? Latin America's Currencies Perfomance

Marc Chandler Marc Chandler 16.08.2022 10:58
The bullish dollar narrative was fairly straightforward  Yes, the US main challengers, China and Russia, have been hobbled in different ways by self-inflicted injuries. Still, the driver of the dollar was the expected aggressive tightening by the Federal Reserve. The market accepted that after being a bit slower than ideal (though faster and before many other large central banks), the Fed would move forcefully against inflation, even if it diminished the chances of an economic soft-landing.   However, now the market seems to have a different reaction function  The euro was impressively resilient after the job growth of more than twice expectations. However, the softer than expected US CPI sent the dollar broadly lower, inflicting some apparent technical damage to the charts.  We are reluctant to chase the dollar lower and impressed in a week that the US reported a decline in CPI and PPI that the 10-year bond yield closed a few basis points higher and the first back-to-back weekly increase in two months Technically, it seems that the dollar's pullback, nearly a month-old, move is getting maybe getting stretched. We will try to identify levels that could confirm another leg lower and what would suggest the US dollar may snap back.   Dollar Index:   After reaching almost 107.00 after the stronger than expected jobs data, the Dollar Index fell to almost 104.65 in response to the softer than expected CPI. It was the lowest level since the end of June. The MACD is still falling but oversold. The Slow Stochastic looks poised to turn lower from the middle of the range. Nevertheless, we like it higher in the coming days. We target 106.30 and then 107.00. A move above 107.50 could signal a return to the highs near 109.30 from mid-July. That said, a close below 105.00 would boost the risk of another leg lower.  Euro:  The euro rallied strongly after the softer US CPI, but a key trendline drawn off the February, March, and June highs begins the new week near $1.0375 remains unchallenged. Although the momentum indicators allow for additional gains, we look for the euro to push lower in the coming days. Only a move above the trendline would give it new life. We think the greater likelihood is for the single currency to initially ease toward $1.0180-$1.0200. It may take a break of $1.01 to signal a return to the 20-year low set in mid-July near $0.9950. The US two-year premium over Germany narrowed every day last week for a cumulative 11 bp to near 2.66%. Italy's premium over Germany was trimmed by six basis points. It was the third week of convergence, but at 0.75%, it is still nearly twice what it was in June. Japanese Yen:  The greenback was pushed away from JPY135 by the decline in US rates after the CPI figures. It was sold to about JPY131.75, holding above the month's low set on August 2 near JPY130.40. However, US rates closed firmer on the week despite three softer-than-expected price reports (CPI, PPI, and import/export prices). As a result, the greenback looks poised to test the JPY135.00-50 ceiling. A move above JPY136 would target the JPY137.50 area. We have emphasized the strong correlation between changes in the exchange rate and the US 10-year yield. That correlation is off its highs though still above 0.50, while the correlation with the US two-year yield has risen toward 0.65, the highest in five months.  British Pound:   Sterling rose to $1.2275 in the broad US dollar sell-off in the middle of last week. It stalled in front of the high set on August 2, a little shy of $1.23. This sets up a potential double top formation with a neckline at $1.20. A break would re-target the two-year low set in July near $1.1760. The MACD is set to turn down. The Slow Stochastic is going sideways in the middle of the range after pulling back earlier this month. Sentiment seems poor, and in the week ahead, the UK is expected to report some easing in the labor market, accelerating consumer prices, and another decline in retail sales. Canadian Dollar:   The US dollar fell to near a two-month low last week slightly below CAD1.2730, and slipped through the 200-day moving average on an intraday basis for the first time since June 9. The test of the (61.8%) retracement of this year's rally (early April low ~CAD1.2400 and the mid-July high ~CAD1.3225) found near CAD1.2715 was successful. The US dollar recovered ahead of the weekend back to the CAD1.2800 area. Although the momentum indicators give room for further US dollar losses, we suspect a near-term low is in place and look for an upside correction toward CAD1.2850-CAD1.2900. The Canadian dollar remains sensitive to the immediate risk environment reflected in the change in the S&P 500. The correlation over the past 30 sessions is a little better than 0.60. The correlation reached a two-year high in June near 0.80. The exchange rate's correlation (30 sessions) with oil prices (WTI) set this year's high in early August near 0.60. It is now slightly below 0.50.  Australian Dollar:   Although our bias is for the US dollar to correct higher, the Aussie does not line up quite as well. It broke above the high set at the start of the month near $0.7050 and has held above it. However, its surge stalled slightly above $0.7135, and it consolidated in a narrow range around $0.7100 ahead of the weekend. The momentum indicators are constructive. The main hurdle is the 200-day moving average near $0.7150 and the (50%) retracement of this year's decline (~$0.7660 in early April and ~$6680 in mid-July) found near $0.7170. A break of this area could see a return to the June high by $0.7285.   Mexican Peso:   Latin American currencies had a good week, except for the Argentine peso, which fell by more than 1%, for the dubious honor of being the poorest performer in the emerging markets. Led by Chile (+3.9%) and the Colombian peso (3.8%), Latam currencies accounted for half of the top five performers last week. The peso's 2.7% gain was its best in five months, and the dollar was sold a little through MXN19.85, its lowest level since late June when it reached almost MXN19.82.There seems little to prevent a move toward MXN19.50. Any worries that AMLO's appointments to the central bank would block aggressive tightening of monetary policy must have evaporated as Banxico demonstrated a resolve to hike rates and shadow the US.  Chinese Yuan:   The yuan took a step lower from mid-April until mid-May. Since then, it has been trading within the range more or less seen in the second half of May. That dollar range is roughly CNY6.650 to CNY6.77. For the past month, the dollar has traded between CNY6.72 and CNY6.78, fraying the upper end of the broader range after the greenback surged broadly after the US employment data. Policymakers have signaled concern about inflation and its reluctance to ease monetary policy. It would seem the domestic policy efforts might favor a firm yuan.     Disclaimer   Source: Is the Dollar's Month-Long Pullback Over?
USA: People Are Not Interested In Buying New Houses! Equities Are Still Trading High As The Hopes For Iran Nuclear Deal Are Still Alive

USA: People Are Not Interested In Buying New Houses! Equities Are Still Trading High As The Hopes For Iran Nuclear Deal Are Still Alive

Saxo Strategy Team Saxo Strategy Team 16.08.2022 14:00
Summary:  Equities traded higher still yesterday as treasury yields fell further back into the recent range and on hopes that an Iran nuclear deal will cement yesterday’s steep drop in oil prices. The latest data out of the US was certainly nothing to celebrate as the July US Homebuilder survey showed a further sharp drop in new housing interest and a collapse in the first regional US manufacturing survey for August, the New York Fed’s Empire Manufacturing.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures extended their gains yesterday getting closer to the 200-day moving average sitting around the 4,322 level. The US 10-year yield seems well anchored below 3% and financial conditions indicate that S&P 500 futures could in theory trade around 4,350. The news flow is light but earnings from Walmart later today could impact US equities should the largest US retailer lower their outlook for the US consumer. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hong Kong and mainland Chinese equities were mixed. CSI300 was flat, with electric equipment, wind power, solar and auto names gained. Hang Seng Index declined 0.5%. Energy stocks fell on lower oil price. Technology names were weak overall, Hang Seng TECH Index (HSTECH.I) declined 0.9%. Sunny Optical (02382:xhkg) reported worse than expected 1H22 results, revenues -14.4% YoY, net profits -49.5%, citing weakening component demand from the smartphone industry globally. The company’s gross margin plunged to 20.8% from 24.9%. Li Auto’s (02015:xhkg/LI:xnas) Q2 results were in line with expectations but Q3 guidance disappointed. The launch L9 seems cannibalizing Li ONE sales. USD: strength despite weak US data and falling treasury yields and strong risk sentiment Yesterday, the JPY tried to make hay on China cutting rates and as global yields eased back lower, with crude oil marked several dollars lower on hopes for an Iran nuclear deal. But the move didn’t stick well in USDJPY, which shrugged off these developments as the USD firmed further across the board, despite treasury yields easing lower, weak data and still strong risk sentiment/easy financial conditions. A strong US dollar is in and of itself is a tightening of financial conditions, however, and yesterday’s action has cemented a bullish reversal in some pairs, especially EURUSD and GBPUSD, where the next important levels pointing to a test of the cycle lows are 1.0100 and 1.2000, respectively. Elsewhere, USDJPY remains in limbo (strong surge above 135.00 needed to suggest upside threat), USDCAD has posted a bullish reversal but needs 1.3000 for confirmation, and AUDUSD is teetering, but needs a close back below 0.7000 to suggest a resurgent US dollar and perhaps widening concerns that a Chinese recession will temper interest in the Aussie. Crude oil Crude oil (CLU2 & LCOV2) trades lower following Monday’s sharp drop that was driven by a combination softer economic data from China and the US, the world’s top consumers of oil, and after Iran signaled a nuclear deal could be reached soon, raising the prospect of more Iranian crude reaching the market. The latest developments potentially reducing demand while adding supply forced recently established longs to bail and short sellers are once again in control. Brent needs to hold support at $93 in order to avoid further weakness towards $90. Focus on Iran news. Copper Copper (COPPERUSSEP22) led the metals pack lower, without breaking any key technical levels to the downside, after China’s domestic activity weakened in July. Meanwhile, supply side issues in Europe also cannot be ignored with surging power prices putting economic pressure on smelters, and many of them running at a loss. HG copper jumped 19% during the past month and yesterday’s setback did not challenge any key support level with the first being around $3.50/lb. BHP, the world’s top miner meanwhile hit record profits while saying that China is likely to offer a “tail wind” to global growth (see below). EU power prices hit record high on continued surge in gas prices ... threatening a deeper plunge into recession. The latest surge being driven by low water levels on Europe’s rivers obstructing the normal passage for diesel, coal, and other fuel products, thereby forcing utilities to use more gas European Dutch TTF benchmark gas futures (TTFMU2) has opened 5% higher at €231/MWh, around 15 times higher than the long-term average, suggesting more pain ahead for European utility companies. Next-year electricity rates in Germany (DEBYF3) closed 3.7% higher to 477.50 euros ($487) a megawatt-hour on the European Energy Exchange AG. That is almost six times as much as this time last year, with the price doubling in the past two months alone. UK power prices were also seen touching record highs. US Treasuries (IEF, TLT) see long-end yields surging. Yields dipped back lower on weak US economic data, including a very weak Empire Manufacturing Survey (more below) and another sharp plunge in the NAHB survey of US home builders, suggesting a rapid slowdown in the housing market. The survey has historically proven a leading indicator on prices as well. The 10-year benchmark dipped back further into the range after threatening to break up higher last week. The choppy range extends down to 2.50% before a drop in yields becomes a more notable development, but tomorrow’s US Retail Sales and FOMC minutes offer the next test of sentiment. What is going on? Weak Empire State manufacturing survey and NAHB Index Although a niche and volatile measure, the United States NY Empire State Manufacturing Index, compiled by the New York Federal Reserve, fell to -31.3 from 11.1 in July, its lowest level since May 2020 and its sharpest monthly drop since the early days of the pandemic. New orders and shipments plunged, and unfilled orders also declined, albeit less sharply. Other key areas of concern were the rise in inventories and a decline in average hours worked. This further weighed on the sentiment after weak China data had already cast concerns of a global growth slowdown earlier. Meanwhile, the US NAHB housing market index also saw its eighth consecutive monthly decline as it slid 6 points to 49 in August. July housing starts and building permits are scheduled to be reported later today, and these will likely continue to signal a cooling demand amid the rising mortgage rates as well as overbuilding. China's CATL plans to build its second battery factory in Europe CATL unveiled plans to build a renewable energy-powered factory for car battery cells and modules in Hungary. It will invest EUR 7.34 billion (USD 7.5bn) on the 100-GWh facility, which will be its second one in Europe. To power the facility CATL will use electricity from renewable energy source, such as solar power. At present, CATL is in the process of commissioning its German battery production plant, which is expected to roll out its first cells and modules by the end of 2022. Disney (DIS) shares rise on activist investor interest Daniel Loeb of Third Point announced a significant new stake in Disney yesterday, helping to send the shares some 2.2% higher in yesterday’s session. The activist investor recommended that the company spin off its ESPN business to reduce debt and take full ownership of the Hulu streaming service, among other moves. Elliott exits SoftBank Group The US activist fund sold its stake in SoftBank earlier this year in a sign that large investors are scaling back on their investments in technology growth companies with long time to break-even. In a recent comment, SoftBank’s founder Masayoshi Son used more cautious words regarding the investment company’s future investments in growth companies. BHP reports its highest ever profit, bolstered by coal BHP posted a record profit of $21.3bn supported by considerable gains in coal, nickel and copper prices during the fiscal year ending 30 June 2022. Profits jumped 26% compared to last year’s result. The biggest driver was a 271% jump in the thermal coal price, and a 43% spike in the nickel price. The world’s biggest miner sees commodity demand improving in 2023, while it also sees China emerging as a source of stable commodity demand in the year ahead. BHP sees supply covering demand in the near-term for copper and nickel. According to the company iron ore will likely remain in surplus through 2023. In an interview Chief Executive Officer Mike Henry said: Long-term outlook for copper, nickel and potash is really strong because of “unstoppable global trends: decarbonization, electrification, population growth, increasing standards of living,” What are we watching next? Australia Q2 Wage Index tonight to determine future RBA rate hike size? The RBA Minutes out overnight showed a central bank that is trying to navigate a “narrow path” for keeping the Australian economy on an “even keel”. The RBA has often singled out wages as an important risk for whether inflation risks becoming more embedded and on that note, tonight sees the release of the Q2 Wage Index, expected to come in at 2.7% year-on-year after 2.4% in Q1. A softer data point may have the market pulling back expectations for another 50 basis point rate hike at the next RBA meeting after the three consecutive moves of that size. The market is about 50-50 on the size of the RBA hike in September, pricing a 35 bps move. RBNZ set to decelerate its guidance after another 50 basis point move tonight? The Reserve Bank of New Zealand is expected to hike its official cash rate another 50 basis points tonight, taking the policy rate to 3.00%. With business and consumer sentiment surveys in the dumps in New Zealand and oil prices retreating sharply the RBNZ, one of the earliest among developed economies to tighten monetary policy starting late last year, may be set for more cautious forward guidance and a wait and see attitude, although wages did rise in Q2 at their second fastest pace (+2.3% QoQ) in decades. The market is uncertain on the future course of RBNZ policy, pricing 44 bps for the October meeting after tonight’s 50 bps hike and another 36 bps for the November meeting. US retailer earnings eyed After disappointing results last quarter, focus is on Walmart and Home Depot earnings later today. These will put the focus entirely on the US consumer after the jobs data this month highlighted a still-tight labor market while the inflation picture saw price pressures may have peaked. It would also be interesting to look at the inventory situation at these retailers, and any updated reports on the status of the global supply chains.   Earnings to watch Today’s US earnings focus is Walmart and Home Depot with analysts expecting Walmart to report 7% revenue growth y/y and 8% decline y/y in EPS as the US retailer is facing difficulties passing on rising input costs. Home Depot is expected to report 6% growth y/y in revenue and 10% growth y/y in EPS as the US housing market is still robust driving demand for home improvement products. Sea Ltd, the fast-growing e-commerce and gaming company, is expected to report revenue growth of 30% y/y in Q2 but worsening EBITDA margin at -16.2%. The previous winning company is facing headwinds in its gaming division and cash flow from operations have gone from positive $318mn in Q1 2021 to negative $724mn in Q1 2022. Today: China Telecom, Walmart, Agilent Technologies, Home Depot, Sea Ltd Wednesday: Tencent, Hong Kong Exchanges & Clearing, Analog Devices, Cisco Systems, Synopsys, Lowe’s, CSL, Target, TJX, Coloplast, Carlsberg, Wolfspeed Thursday: Applied Materials, Estee Lauder, NetEase, Adyen, Nibe Industrier, Geberit Friday: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Economic calendar highlights for today (times GMT) 0900 – Germany Aug. ZEW Survey 0900 – Eurozone Jun. Trade Balance 1200 – Poland Jul. Core CPI 1215 – Canada Jul. Housing Starts 1230 – US Jul. Housing Starts and Building Permits 1230 – Canada Jul. CPI 2030 – API Weekly Report on US Oil Inventories 2350 – Japan Jul. Trade Balance 0130 – Australia Q2 Wage Index 0200 – New Zealand RBNZ Official Cash Rate announcement 0300 – New Zealand RBNZ Governor Orr Press Conference  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – August 16, 2022
German Business Confidence Dips, ECB's Lagarde Hosts Central Banking Conference in Portugal, EUR/USD Drifts Higher

FOMC Minutes And Retail Sales Are Released Today! US Dollar (USD) May Be Trading Sideways!

ING Economics ING Economics 17.08.2022 09:14
Bonds quickly reversed their gains and look under further pressure from the goldilocks state of play across financial markets. There are risks to these not too hot nor too cold markets, however. A more hawkish Fed in today’s minutes is one. Hard US economic data point to a healthy 3Q but things should worsen in 4Q Source: Shutterstock Banking on a dovish Fed carries risks Bunds have tested the 1% yield level again after a 9bp round trip in two days. This is the proof that market moves in illiquid summer months, even more so due to bank holidays in some parts of Europe on Monday, should be taken with a pinch of salt. Bonds more broadly continue to trade weak with a bias toward higher yields evident since the start of the month. We attribute some of the move to better risk sentiment across developed markets, but risks to these goldilocks, neither too hot that central banks need to keep hiking nor too cold that the economy falls off a cliff, state of play abound. Hawkish FOMC minutes and strong retail sales could bump up the US yield curve Source: Refinitiv, ING   Tonight’s Fed minutes might well jar with the upbeat tone evident in financial markets The first and most obvious challenge is that central banks can ill afford a loosening of financial conditions as they still grapple with record high inflation. The Fed is clearly one example but by no means an isolated one. Tonight’s Fed minutes might well jar with the upbeat tone evident in many financial markets. Even if investors might be tempted to discount any hawkish concerns as ‘pre-CPI peak’, the tone of Fed comments since the July FOMC meeting leaves no doubt about their mood. This in turn should result in higher treasury yields, reaching above 3% again, and a softer tone in risk assets. Both economic optimism and tighter spread look at risk The discrepancy between soft and hard data in the US continues to drive some of the whipsaw in bond yields. Industrial production yesterday cemented our expectations for a solid 3Q GDP growth, and July retail sales, to be published today, should look equally solid. The contrast with sentiment indicators might only be a matter of timing however, with 4Q growth prospects looking a lot less healthy. It is difficult to imagine markets extrapolating this good stint of positive US numbers for long, with other corners of the economy, most notably housing, heading south. Risk of profit-taking in fixed income into the September supply window are rising Source: Refinitiv, ING   There is a looming risk of a profit-taking into the September/October supply window Another risk is coming from the rise in government bonds themselves. Independent of the tone of central banks, rising core yields bring about wider sovereign spreads. This has been evident in the underperformance of peripheral bond markets this week with greater volatility in core yields also affecting demand for spread products. There is also a looming risk of a profit-taking into the September/October supply window after the gains registered over the summer months. This may not be the case yet but, in the case of sovereign spreads, some investors may well decide that they do not want to go into the last month of Italian election campaign with too much exposure. Today's events and market view Eurozone 2Q GDP sees its preliminary release today. Consensus is for a print in line with the advanced 0.7% MoM/4% YoY first reading but the focus in financial markets is much more on the energy crunch facing the eurozone economy over the winter months. The main item on the economic calendar in the US is the July retail sales report. A fall in gasoline prices will depress the headline figure but this should free up cash for other goods and services according to our economics team. This could add to upward pressure on bond yields into the FOMC minutes. The US Treasury will also sell $8bn worth of 20Y T-bonds. The main potential market-mover will be later in the session however, in the form of the July FOMC minutes. The majority view is that the Fed can ill afford a further easing of financial conditions if it is to get inflation under control. This argues in favour of an overall hawkish tone coming out of the minutes. Michelle Bowman will also be on the wires. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Navigating the European Landscape: Assessing the Significance and Variations of Non-Bank Financial Institutions

Forex: Plunge Of AUD/USD!? Is It Possible? EUR/USD Is Trading Close To 1.00 Level! EUR/GBP - Gas Prices In The Driver's Seat. Pound Battles With Euro!

ING Economics ING Economics 17.08.2022 09:27
FOMC minutes as a communication tool against easing expectations should keep the US dollar supported. German recession is becoming inevitable. Sterling strikes back at the euro, backed by a hawkish Bank of England. And GDP data in Central and Eastern Europe will show how close we are to recession USD: Dollar to stay supported into FOMC minutes The dollar goes into today’s release of the 27 July FOMC minutes about 2% off the highs of the year. This particular meeting had triggered a sell-off in the dollar on the view that the Fed might have already taken the policy rate to some kind of neutral level and that future rate hikes would be undertaken on a meeting-by-meeting basis. The question is whether the Fed wants to use these minutes as a communication tool to push back against the view of a 2023 easing cycle. Post-meeting rhetoric from the Fed suggests that this is more likely to be the case – especially since the Fed funds futures price the policy rate being cut from 3.60% to 3.20% in the second half of next year. A further rejection of this market pricing should help the dollar. And bearish flattening of the US Treasury curve could pressure the commodity currencies. Here, currencies like AUD/USD could come under pressure again – hit by the Fed applying the brakes to growth at the same time as Chinese growth prospects are being revised even lower.  Favour DXY pushing up the 107.00 area. Chris Turner EUR: Consolidating near the lows The European Central Bank's nominal euro trade-weighted index (weighted against 19 major trading partners) is now at the lows of the year. The gas crisis and what it means for eurozone growth prospects this winter is clearly taking a toll on the euro. As Carsten Brzeski wrote yesterday in reaction to a near record low German ZEW sentiment reading, a German recession is almost inevitable in the second half of the year. Perhaps the ECB, rather like the People’s Bank of China earlier this year, will embrace a weaker currency? After a month of consolidation, EUR/USD does not look particularly oversold on technical indicators, and we continue to favour support at 1.0100 giving way to a move to parity.Chris Turner GBP: Sterling enjoys the Bank of England re-pricing This week, sterling has been fighting back against the weaker euro. In addition to euro weakness on the back of higher gas prices, the move in gas has also helped to re-price the Bank of England cycle again. Look at OIS pricing for the BoE policy rate in March 2023, market pricing has shifted from 2.72% in late July to close to 3.40% yesterday. And on top of that, UK inflation quickened to 10.1% year-on-year in July, faster than expected and a new 40-year high. These moves are providing sterling with some insulation and any further extension in the gas price surge could send EUR/GBP all the way back to 0.8350. As an exporter of natural gas, the US does not face these challenges and our bias in GBP/USD remains sub 1.20. Chris Turner CEE: Poland most at risk of recession signals Today's GDP numbers will show the state of the economy in the CEE region in the second quarter, what we can expect from the third quarter and what the chances of a recession are. Two weeks ago, the Czech Republic released GDP data, which positively surprised with 0.2% quarter-on-quarter growth and narrowly avoided a downturn. Today, we will see data in the rest of the region. In Poland, we expect a 1.2% QoQ decline, worse than the market expects. But on a YoY basis, that still gives a solid 6.5%. For Hungary and Romania, we expect 0.4% growth, which is more or less in line with expectations, but in all cases the surveys are quite broad, reflecting the uncertainty associated with 2Q. We believe that Hungary was able to avoid a drop in GDP versus the previous quarter, as industry was able to shake off the supply-side issues by the end of the quarter. In the meantime, retail sales suggest that consumption has embarked on a soft landing, but we are not ready to call a drop yet in the second quarter. In Romania, after a very strong first quarter, the economy seems to have entered a phase of quasi-stagnation. Industrial production has probably contracted in the second quarter, but retail sales remain solid. In the FX space, the Polish zloty has resisted any significant upward movement as part of the sell-off in recent days, which today's data, supporting the National Bank of Poland's dovish narrative, should change. Moreover, the zloty so far has ignored rising gas prices and regional movements in recent days, which we believe makes it vulnerable. On the other hand, the Hungarian forint is already at the end of its sell-off unless we see another jump in gas prices or a strengthening US dollar, which could be the case after the Fed minutes today. On the other hand, the weaker forint has supported market expectations of a more decisive National Bank of Hungary rate hike, which has pushed the interest rate differential higher and should dampen any pressure on the forint to weaken further. The Czech koruna is almost within reach of Czech National Bank intervention levels and the scope for further depreciation is shrinking. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

This Forex Pair May Catch You By Surprise! Euro To US Dollar (EUR/USD) - Foreacast - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 10:34
Relevance up to 04:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The euro spent the entire Tuesday at the support level of 1.0150. There was no qualitative breakthrough under this level (with consolidation), we are waiting for it today or tomorrow. The correction limit is the daily MACD line (1.0206).     The euro spent the entire Tuesday at the support level of 1.0150. There was no qualitative breakthrough under this level (with consolidation), we are waiting for it today or tomorrow. The correction limit is the daily MACD line (1.0206).     The price is slowly developing a correction on the four-hour chart. The option with the price reaching the MACD line of the daily scale (1.0206) while the Marlin Oscillator works out the zero line and the subsequent synchronous downward turn seems to be the main scenario. In any case, after consolidating under 1.0150, we are waiting for further price decline to the level of 1.0020.   Read more: https://www.instaforex.eu/forex_analysis/319102
FX: Euro To US Dollar (EUR To USD) - Plan And Technical Look - 17/08/22

FX: Euro To US Dollar (EUR To USD) - Plan And Technical Look - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 12:05
Relevance up to 05:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Technical outlook: EURUSD dropped throgh the 1.0125 lows during early New York session on Tuesday, remaining shy by just a few pips from the projected 1.0100-1.0110 range. The single Europen currency raised throgh the 1.0194 highs thereafter and is now seen to be trading close to the 1.0175 mark. Prices are expected to push towards the 1.0200-20 range in the immediate short term. EURUSD is working on a larger degree corrective wave towards the 1.0950 levels, revised from earlier projections, seen on the daily chart now. After having carved a meaningful downswing between the 1.2350 and 0.9952 levels, bulls are now looking poised to push through the Fibonacci 0.382 level towards the 1.0900 levels projected on the above chart. EURUSD has now retraced almost through the Fibonacci 0.618 level of its recent upswing between 0.9952 and 1.0368, which is close to the 1.0100-10 zone. If the above structure holds well, bulls will be determined to come back in control from here and push through at least the 1.0900 level, holding prices above the 0.9952 mark. Trading plan: Potential rally towards 1.0900 against 0.9950 Good luck!   Read more: https://www.instaforex.eu/forex_analysis/288770
The EUR/USD Price May Fall Under 1.0660

EUR/USD | FX: Euro To US Dollar - Technical Outlook And COT Report - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 12:14
EUR/USD 5M     The EUR/USD pair continued to fall quietly until it hit the level of 1.0123 on Tuesday, which was the last local low, the level from which the last round of the upward movement began. Yesterday this level was 1.0120, but by the end of the day we moved it 3 points higher. A rebound from this level provoked the euro's growth by 70 points, and we would like to note right away that such a strong and sharp growth was purely technical. Because no important macroeconomic statistics or "fundamentals" were available yesterday either in the US or in the European Union. Traders again had nothing to react to during the day. And after the completion of the current upward correction, we expect the pair to resume falling with targets near 20-year lows, which were updated a month ago. Correction may take several days. Everything in regards to Tuesday's trading signals was just fine. Or almost perfect. The fact is that the only trading signal was formed near the level of 1.0120, and the price did not reach it by 3 points. This is an acceptable error, but traders had to decide for themselves whether to open a long position at this moment or not. If they did this, they could make a profit of about 40 points. The nearest target line Senkou Span B was located very far away, so the deal had to be closed manually in the late afternoon anyway. COT report:     The Commitment of Traders (COT) reports on the euro over the past six months have raised a huge number of questions. The chart above clearly shows that for most of 2022 they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation has changed, but NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 8,400, and the number of shorts - by 4,100. Accordingly, the net position increased by about 4,000 contracts, which is a negligible change for the euro. The mood of major players remains bearish. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 35,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. The euro has not been able to show even a tangible correction over the past six months or a year, not to mention something more. The highest upward movement was about 400 points. The pair has just managed to correct by 400 points over the past four weeks. Has the plan been completed? We recommend to familiarize yourself with: Overview of the EUR/USD pair. August 17. The first two trading days of the week showed which way traders are looking. Overview of the GBP/USD pair. August 17. The pound is stuck. The first part of the statistics package this week was left without attention. Forecast and trading signals for GBP/USD on August 17. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H     The pair completed the upward trend and now rushed down again on the hourly timeframe. We believe that globally everything is going according to plan, as the euro corrected up by 400 points, so now there are sufficient technical reasons for the resumption of the downward trend. Macroeconomic statistics are now of little importance to traders, and they were not available either on Monday or Tuesday. And those reports that are scheduled for this week are unlikely to lead traders astray. We allocate the following levels for trading on Wednesday - 1.0000, 1.0072, 1.0123, 1.0269, 1.0340-1.0366, 1.0485, as well as Senkou Span B (1.0245) and Kijun-sen lines (1.0245). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect against possible losses if the signal turns out to be false. The European Union will publish the second estimate of GDP for the second quarter, and in the US - a report on retail sales. Both reports are not super important, so we do not expect a strong market reaction to them. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.
The Price Of EUR/USD Pair Will Develop Sideways Movement

Forex: EUR/USD - What To Look Out For? - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 12:40
Relevance up to 08:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Several interesting market entry signals were formed yesterday. Let's take a look at the 5-minute chart and figure out what happened. I paid attention to the 1.0144 level in my morning forecast and advised that you make decisions on entering the market from it. The pair's decline in the area of 1.0144 in the first half of the day after receiving disappointing data on Germany and the eurozone resulted in forming a false breakout and an excellent entry point into long positions. But to my regret, I did not see any active growth from the pair, and after moving up by 20 points, the euro returned to 1.0144. A repeated test of this range took place with a breakdown and a reverse test from the bottom up, which resulted in a sell signal. But even after that, the pair went down only about 15 points, after which the demand for the euro returned as a result of weak data on the US real estate market.     When to go long on EUR/USD: The euro has every chance for a further upward correction, but much will depend on the statistics that we will see in the first half of the day. Reports are expected on the change in the volume of eurozone GDP for the 2nd quarter of this year, and the change in the level of employment in the eurozone. Clearly, the eurozone economy has fared quite well in the first half of this year, as the energy crisis and high inflation have not yet taken a toll. However, trading is conducted on expectations, not on facts, so even if we receive good indicators, it is unlikely that it would help the euro much. If we see negative data worse than economists' forecasts, the pressure on the pair will return. If EUR/USD falls to the nearest support area of 1.0159, where the average moving averages playing on the bulls' side pass, forming a false breakout at this level will provide the first signal to open long positions in hopes of continuing to build an upward trend with the prospect of a return to 1.0193. A breakthrough and test from top to bottom of this range creates another signal for entering long positions with the possibility of moving up to 1.0221, a breakthrough above which will not be as easy as it seems, since it was from this level that large players sold the euro at the beginning of this week. If the EUR/USD declines and there are no bulls at 1.0159, the pressure on the pair will increase again. This will open the way to 1.0127, and further support at 1.0099, where I recommend taking profits. A test of this level will bring EUR/USD back into the descending channel observed since August 11. I advise you to buy EUR/USD immediately on a rebound only from 1.0073, or even lower - in the area of 1.0045, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears' main task is to protect the resistance at 1.0193, formed on the basis of yesterday's results. Weak statistics on the euro area will help to cope with this task, so forming a false breakout there will provide an excellent entry point for selling the euro. An equally important task is to take control of the nearest support at 1.0159, just below which the moving averages go. A breakthrough and consolidation below this range, as well as a reverse test from the bottom up - all this creates another sell signal with the removal of bulls' stops and a larger movement of the pair to the 1.0127 area - this month's low, a retest of which will erase all of the bulls' hopes for building an upward corrections. Consolidating below 1.0127 is a direct road to 1.0099, where I recommend completely leaving short positions. A more distant target will be the area of 1.0073. If EUR/USD moves up during the European session, as well as the absence of bears at 1.0193, it will be possible to observe a further upward correction with building the lower border of a new ascending channel. In this case, I advise you to postpone short positions to a new weekly high of 1.0221. Forming a false breakout at 1.0221 will be a new starting point for entering short positions. You can sell EUR/USD immediately for a rebound in the area of 1.0243, or even higher - from 1.0267, counting on a downward correction of 30-35 points.     COT report: The Commitment of Traders (COT) report for August 9 logged a sharp increase in both short and long positions, but the former turned out to be more, which continues to indicate the gradual end of the bear market and an attempt to find a market bottom after reaching euro parity against the US dollar. Statistics on inflation in the US came out last week, which turned everything upside down. The first slowdown in inflationary pressure in recent times since reaching a peak of 10.0% has brought back demand for risky assets. But, as you can see on the chart, it didn't last long. The risk of deterioration of the situation associated with the recession of the global economy discourages traders and investors from any desire to build up long positions in the euro. There are no important reports this week that can help the euro regain lost ground, so I would recommend betting more on trading on the horizontal channel. Definitely, before the fall of this year, we can hardly expect serious market shocks. The COT report shows that long non-commercial positions rose by 8,396 to 200,088, while short non-commercial positions jumped by 4,121 to 234,624. At the end of the week, the overall non-commercial net position remained negative, but slightly increased from -39,811 to -34,536, which indicates a continuation of the market turning towards euro bulls. The weekly closing price increased and amounted to 1.0233 against 1.0206.     Indicator signals: Moving averages Trading is above the 30 and 50-day moving averages, which indicates the euro's succeeding growth. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of a decline, the lower border of the indicator around 1.0140 will act as support. In case of growth, the upper border of the indicator in the area of 1.0193 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Read more: https://www.instaforex.eu/forex_analysis/319116
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

Forex: EUR/USD - Analysis Of Transactions And Trading Tips - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 12:56
Relevance up to 08:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Analysis of transactions in the EUR / USD pair The test of 1.0144 took place at the moment when the MACD went down quite a lot from zero, limiting the downside potential of the pair. Some time later, another test happened, but this time the MACD line was already recovering from the oversold area. This seemed to be a good signal to buy, however, it only led to losses as the euro turned up only in the afternoon. The test of 1.0170, which occurred when the MACD line was far from zero, did not allow further purchases in the market.     EUR/USD was under pressure because of yesterday's report on business sentiment and present situation in Germany. But by afternoon, there was a bullish correction in the pair, thanks to the data on the US real estate market, which lowered demand for dollar. Ahead is the report on Q2 GDP of the Euro area, which, if not revised for the worse, will raise the price of euro. The unemployment report, meanwhile, will be of little interest to the market. No less important data is the report on retail sales in the US as a decrease in it will not only indicate an impending recession, but also harm dollar in the short term. There will also be the minutes of the Fed meeting, which will shed light on how the central bank plans to further raise interest rates. A less aggressive approach will play in the favor of risky assets. The speech of FOMC member Michelle Bowman will not be of great interest. For long positions: Buy euro when the quote reaches 1.0185 (green line on the chart) and take profit at the price of 1.0219. Although there is little chance for a large rally today, good data on the eurozone economy could prompt a rise to new highs. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0152, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0185 and 1.0219. For short positions: Sell euro when the quote reaches 1.0152 (red line on the chart) and take profit at the price of 1.0107. Pressure will return if the upcoming statistics in the Euro area fell short of forecasts. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0185, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0152 and 1.0107.     What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Read more: https://www.instaforex.eu/forex_analysis/319126
The EUR/USD Pair Is Still In A High Position On The 1H Chart

Forex: Euro To US Dollar (EUR/USD) Short And Long Positions - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 16:18
Relevance up to 12:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. In the morning article, I highlighted the level of 1.0159 and recommended making decisions with this level in focus. Now, let's look at the 5-minute chart and try to figure out what actually happened. A sell signal appeared after a decline of the pair to 1.0159 in the first half of the day and an upward test. Unfortunately, this signal brought losses as I did not expect the pair to fall further. Closer to the middle of the day, the bulls pushed the price above 1.0159. Therefore, I had to revise the technical outlook.     What is needed to open long positions on EUR/USD Traders paid zero attention to the Eurozone's GDP data even though the second-quarter GDP reading was slashed. Apparently, nobody expects the economy to accelerate in the third quarter as it is gradually sliding into a recession due to soaring inflation and rate hikes. In the autumn, the situation could worsen significantly when energy prices go up again. Today, traders are anticipating the FOMC meeting minutes for July. They may provide more hints about the Fed's future plans for monetary policy. It may also reveal whether the Fed is going to hike the key rate in the autumn. If the minutes are less hawkish than expected, the euro may assert strength. If the pair drops, only a false breakout of 1.0154 will give a buy with the prospect of a rise to the nearest resistance level of 1.0192. Yesterday, the bulls failed to push the pair above this level. A breakout and a downward test of this level along with a dovish tone of the minutes will force the bears to close their Stop Loss orders. As a result, an additional buy signal may appear with the possibility of an increase to 1.0221. A more distant target will be a new high of 1.0243 where I recommend locking in profits. If EUR/USD slides and buyers show no activity at 1.0154, the pressure on the pair will escalate. Notably, the price has already tried to break through this level today. In this case, the bullish sentiment may lose steam. The best option for opening long positions will be a false breakout of 1.0127. You can buy EUR/USD immediately at a bounce from 1.0099 or a low of 1.0045, keeping in mind an upward intraday correction of 30-35 pips. What is needed to open short positions on EUR/USD Apart from the FOMC meeting minutes, investors are sure to take notice of US retail sales data. If the reading drops in July, it may undermine a rally of the US dollar. It will be rather bullish for the euro. So, it could grow to 1.0192. If big sellers are present in the market, they will easily defend this level. The optimal scenario for opening short positions will be a false breakout of the resistance level of 1.0192. If so, the euro could decline to 1.0154. A decrease below this level and an upward test will provide an additional sell signal. The bulls will have to close their Stop Loss orders, pushing it to 1.0127. After a slide below this level, the likelihood of an uptrend will be low. Therefore, the price could touch 1.0099 and 1.0073 where I recommend closing all short positions. A more distant target will be the 1.0045 level. If EUR/USD rises during the US session and bears show no energy at 1.0192, the bulls are likely to regain ground. Weak retail sales data could also help the euro climb higher. In this case, I would advise you to postpone short positions to 1.0221 but only if a false breakout occurs. You can sell EUR/USD immediately at a bounce from a high of 1.0243 or 1.0267, keeping in mind a downward correction of 30-35 pips.     COT report The COT report (Commitment of Traders) for August 9 logged a sharp increase in both short and long positions. However, the number of short positions turned out to be bigger, which indicated the gradual end of the bear market and an attempt to find the bottom after reaching the parity level. Last week, US fresh macro stats were released, which turned everything upside down. The CPI report showed the first slowdown in inflation after reaching a peak of 10.0%. It fueled demand for risky assets. As seen on the chart, risk aversion soon returned to the market. Traders are unwilling to increase long positions due to the risks of a global recession. No crucial economic reports are expected this week that could facilitate the growth of the euro. Therefore, the euro is likely to stay in the sideways channel. There could hardly be sharp trend reversals before the fall of this year. The COT report revealed that the number of long non-commercial positions rose by 8,396 to 200,088, while the number of short non-commercial positions jumped by 4,121 to 234,624. At the end of the week, the total non-commercial net position, although it remained negative, climbed slightly to -34,536 from -39,811, signaling a shift to the bull market. The weekly closing price climbed to 1.0233 against 1.0206.     Signals of technical indicators Moving averages EUR/USD is trading near 30- and 50-period moving averages, which signals market uncertainty. Remark. The author is analyzing the period and prices of moving averages on the 1-hour chart. So, it differs from the common definition of classic daily moving averages on the daily chart. Bollinger Bands In case of a rise, the upper border of 1.0180 will act as resistance. Definitions of technical indicators Moving average recognizes an ongoing trend through leveling out volatility and market noise. A 50-period moving average is plotted yellow on the chart. Moving average identifies an ongoing trend through leveling out volatility and market noise. A 30-period moving average is displayed as the green line. MACD indicator represents a relationship between two moving averages that is a ratio of Moving Average Convergence/Divergence. The MACD is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12-period EMA. A 9-day EMA of the MACD called the "signal line". Bollinger Bands is a momentum indicator. The upper and lower bands are typically 2 standard deviations +/- from a 20-day simple moving average. Non-commercial traders - speculators such as retail traders, hedge funds and large institutions who use the futures market for speculative purposes and meet certain requirements. Non-commercial long positions represent the total long open position of non-commercial traders. Non-commercial short positions represent the total short open position of non-commercial traders. The overall non-commercial net position balance is the difference between short and long positions of non-commercial traders.   Read more: https://www.instaforex.eu/forex_analysis/319173
Hold On Tight! Look How Much Has (EUR) Euro Weakened Against USD (US Dollar) Since The Beginning Of 2021!

Hold On Tight! Look How Much Has (EUR) Euro Weakened Against USD (US Dollar) Since The Beginning Of 2021!

ING Economics ING Economics 18.08.2022 10:27
The euro's depreciation has helped to improve the competitiveness of eurozone businesses but in contrast to previous episodes of euro weakness, exports are hardly benefiting. Remarkably, structurally weaker eurozone economies have gained relative competitiveness since the start of the pandemic Does parity bring relief for eurozone exporters? Euro-dollar reached parity for the first time since 2002 - a milestone that is largely symbolic. However, the weakening of the euro, in general, deserves attention. The euro has been falling against the dollar since mid-2021, which seems to be largely related to diverging central bank expectations and a sudden decline in the eurozone's trade balance. The latter is mainly related to the energy crisis, which has turned a solid trade surplus into a large trade deficit. The high energy prices paid in international markets have played an important role in the weakening of the currency. Because the energy element is so important in the slide of the euro, the euro has weakened most significantly against the dollar. Against other important trade partners, the eurozone has seen its currency weaken less. While the euro has lost 16.2% vis-à-vis the US dollar since 1 January 2021, the trade-weighted exchange rate has only depreciated by 6.9%. The euro's slide has resulted in a lot of imported inflation because we pay for global commodities in dollars. At the same time, gains in competitiveness have been modest. This is far from the best of both worlds. The euro weakening is closely linked to higher energy prices Source: Macrobond, ING Research Competitiveness is improving, but businesses aren't noticing it The competitiveness improvement does require a deeper look, though, as relative inflation between trade partners plays a role. Taking this into account, the real effective exchange rate (REER) for a country is considered to be a key indicator measuring competitiveness. This is an exchange rate which is weighted by local cost developments. In this case, we use unit labour costs. As chart 3 shows, the REER for the eurozone has been sliding, which boosts the competitive position of eurozone companies. This means that despite a limited drop in the nominal effective exchange rate, businesses do seem to be profiting from relatively better price competitiveness. So while the main impact of the weakening euro is definitely negative through higher imported inflation, there is at least some improvement in export competitiveness to be seen, which could cushion the recessionary effects in the domestic market. Competitiveness is improving, but businesses aren't noticing it Source: European Commission, Eurostat, ING Research   The problem is that businesses are far from feeling this though. The Economic Sentiment Indicator has a subindex which reveals how businesses perceive their competitiveness to have changed in their home markets and abroad. This indicates that competitiveness has dropped significantly within the EU and outside. While exports have recovered to the pre-pandemic trend in recent quarters, it looks like the weaker euro has not given an extra push. The question is whether this relates to price competitiveness or whether weakening global demand is causing this. Regardless, it does not look like businesses are profiting from the improved REER at this point, highlighting the fact that the eurozone is currently mainly feeling the burden from the weak euro and is reaping little benefit from it. How has relative competitiveness within the eurozone evolved since the pandemic started? Reflecting on the euro crisis, we noticed a severe deterioration in competitiveness among the ‘periphery’ countries ahead of the crisis. The big question was if the weaker economies could make structural adjustments to become more attractive exporters again and with that, run surpluses. Painful wage adjustments were modestly successful in regaining competitiveness at that point. While competitiveness is not the primary economic problem right now, it is interesting to see if any divergence in competitiveness is emerging again. When looking at the developments in the real effective exchange rate based on unit labour costs against other eurozone economies in recent years, we see interesting differences in performance. Germany, the Netherlands and Belgium have seen their competitiveness deteriorate, while Italy, France and Greece have seen strong improvements. Spanish competitiveness has been stable over recent years, while Portugal has experienced a sizable deterioration. The export powerhouses of the past decade have seen their competitive position slip a little compared to other eurozone countries. This is mainly due to stronger wage growth while productivity growth did not improve in tandem. Overall, this development is a small step towards making the monetary union more coherent and reducing the risk of a new euro crisis triggered by differences in competitiveness. Internal eurozone competitiveness gains are made by France and Italy Source: European Commission, ING Research   A shift in relative competitiveness had already started prior to the pandemic. However, some of the large moves at the start of the pandemic were likely related to how furlough schemes are included in the statistics and so are not necessarily an accurate reflection of underlying competitiveness developments. This seems to be the case for the Netherlands and Greece for example, but in the Dutch case, we still notice a break from the pre-pandemic trend as cost competitiveness ended up at a weaker level in the second quarter. Since energy prices have become a dominant factor and labour cost competitiveness is muddied by government support, a look at a different measure of cost competitiveness is useful. Taking the GDP deflator, a broad price index across the economy, we see that a roughly similar picture emerges. Also here, the Netherlands and Germany have seen cost competitiveness deteriorate compared to other eurozone economies, while Italy and France have seen improvements. Compared to a broader basket of trade partners, the weaker euro dominates but still, we see that Germany and the Netherlands have experienced smaller gains compared to France and Italy. Competitiveness gains have been modest and smallest in the north The euro's depreciation has helped to improve the traditional cost competitiveness of eurozone businesses but in contrast to previous episodes of euro weakness, exports are hardly benefiting. As energy prices are probably a much larger cost concern for eurozone businesses, traditional cost competitiveness indicators have to be taken with a pinch of salt. Still, looking at competitiveness shifts within the eurozone, remarkably, structurally weaker eurozone economies have become relatively more competitive since the start of the pandemic, reducing the risk of a new euro crisis being triggered by stark differences in competitiveness. Read this article on THINK TagsGDP Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Brent Crude – Bounces back after Saudi warning

Euro To US Dollar Is Like A Cup Of Coffee! EUR/USD - Technical Analysis | 18/08/22

InstaForex Analysis InstaForex Analysis 18.08.2022 11:46
Relevance up to 10:00 2022-08-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The EUR/USD pair awaits the Eurozone CPI data that might trigger a bigger move. The bulls are still under the pressure as the recent bounce from the oversold market conditions was very shallow and hit only the level of 1.0203. The nearest technical resistance is located at the level of 1.0256. The last biggest bounce had been capped at the supply zone seen between the levels of 1.0470 - 1.0490, since then all the bounces are shallower and used by market participants to short the EUR. Please notice the weak and negative momentum on the H4 time frame chart supports the short-term bearish outlook for EUR with a potential target seen at the level of 1.0097 and below.     Weekly Pivot Points: WR3 - 1.0308 WR2 - 1.0280 WR1 - 1.0263 Weekly Pivot - 1.0252 WS1 - 1.0234 WS2 - 1.0222 WS3 - 1.0194 Trading Outlook: The monetary parity level as the first target for bears in the long term had been hit and the Euro is still being under the bearish pressure. There is no sign of relief for the EUR as the down trend should continue lower after the 61% Fibonacci retracement still has not been violated. The up trend can be continued towards the next long-term target located at the level of 1.1186 only if the complex corrective structure will terminate soon (above 1.0000) and the level of 1.0726 is clearly violated.   Read more: https://www.instaforex.eu/forex_analysis/289040
The EUR/USD Price May Fall Under 1.0660

Forex: Shocking Moves And Surprising Performance!? EUR/USD - What Can We Expect From Euro To US Dollar (18/08/22)

InstaForex Analysis InstaForex Analysis 18.08.2022 12:18
Relevance up to 08:00 2022-08-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1) On Thursday, from the level of 1.0179 (closing of yesterday's daily candle), EUR/USD will attempt to continue moving down in order to test the support line of 1.0136 (thick blue line). Then, it will go to the 38.2% retracement level at 1.0203 (red dotted line), before going up to the 50.0% retracement level at 1.0282 (red dotted line).     Fig. 1 (daily chart) Comprehensive analysis: Indicator analysis - downtrend Fibonacci levels - downtrend Volumes - downtrend Candlestick analysis - downtrend Trend analysis - downtrend Bollinger bands - downtrend Weekly chart - uptrend Conclusion: EUR/USD will continue moving down from 1.0179 (closing of yesterday's daily candle) in order to test the support line of 1.0136 (thick blue line). Upon reaching it, the quote will bounce to the 38.2% retracement level at 1.0203 (red dotted line), then go up to the 50.0% retracement level at 1.0282 (red dotted line). Alternatively, the pair could fall from 1.0179 (closing of yesterday's daily candle) and test the 61.8% retracement level at 1.0107 dashed blue line. Then, it will climb to the 38.2% retracement level at 1.0203 (red dotted line) and higher price levels.   Read more: https://www.instaforex.eu/forex_analysis/319251
The US PCE Data Is Expected To Confirm Another Modest Slowdown

Fed Reptesentatives Are Committed To Holding Back Price Growing And Control The Inflation According To Expectations

Conotoxia Comments Conotoxia Comments 18.08.2022 13:17
Last night's publication of the minutes of the last Fed meeting, which took place at the end of July, may have affected the US dollar's trading. The policymakers touched on the regulation of the digital asset market for the first time at such a meeting. According to the published minutes, Fed officials remain very attentive to inflation risks and are committed to lowering price growth and keeping inflation expectations under control. A commitment to tightening monetary policy can take place, even if it comes at the expense of economic growth, the FOMC minutes show. The July discussion touched on the possible risks of too many and too large interest rate hikes. There was also talk that the Fed may be pursuing too much restrictive monetary policy than is necessary to restore price stability in the economy. The Fed, for the moment, seems unconcerned about GDP data and the risk of a sustained slowdown or official recession, as officials said the economy is stable for now, pointing to strong job growth, a low unemployment rate and elevated wage growth. Moreover, there was also discussion of the possibility of a later upward revision of earlier GDP readings, which are revised over time. There was also a statement regarding possible further action by the Federal Reserve. Policymakers discussed the possibility of slowing the pace of interest rate hikes at some point, but this will require data readings that can be considered satisfactory in terms of the impact of current hikes on slowing inflation. Meanwhile, for the moment, it may be crucial to maintain a restrictive stance to avoid a loosening of inflation expectations. Initially, after the release of the minutes, the EUR/USD exchange rate rose to 1.0200, before retreating to the region of 1.0150 this morning. The reaction thus appears to be mixed, without leading to a major impulse, and the exchange rate of the main currency pair has remained in consolidation since the morning of August 16. On Wall Street, on the other hand, indexes were down after the publication. The S&P500 fell 0.3 percent and the Nasdaq 100 fell 0.6 percent. The committee also turned its attention to the world of digital assets. Participants recognized the growing importance of digital assets and their increasing interconnectedness with other segments of the financial system, underscoring the need to establish a robust supervisory and regulatory framework for the sector to adequately mitigate potential systemic risks. Several participants mentioned the need to strengthen supervision and regulation of certain types of non-bank financial institutions, according to published minutes. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Highlights from the Fed minutes
Rates Surge: US Service Sector Strengthens Yields

Sterling (GBP) And Euro (EUR) Can Barely Stand On Their Feet. Strong Dollar (USD)

Kim Cramer Larsson Kim Cramer Larsson 19.08.2022 09:12
EURUSD was rejected at key resistance at around 1.0360 and the falling upper trendline and is now close to test key support at around 1.01. If EURUSD closes below the support, parity is likely to be tested shortly after.RSI is still showing negative sentiment after failing to break above 60 threshold supporting the bearish picture. If RSI closes below 40 threshold combined with a EURUSD close below 1.01 down trend is confirmed., At the time of writing Bollinger bands are expanding indicating the initial stage of a (down)trend. IF EURUSD closes outside of the lower Bollinger band it is further a strong indication of a down trend.   Source: Saxo Group GBPUSD has formed a Double Top like pattern on the very short term. If GBPUSD closes below 1.20 it is confirmed and GBPUSD is likely to test July lows at around 1.1760 . If GBPUSD is to move the same distance as the difference between the peak and low of the Double Top formation after breaking 1.20 it could reach 1.1729 illustrated by the two vertical arrows. However, there could be more downside in store for GBPUSD. If it takes out 1.1760 there is not support before around 1.14. See weekly chart Source: Saxo Group     Source: Saxo Group Source: Technical Update - EURUSD and GBPUSD testing key supports. Will they hold or will EURUSD test parity again and GBPUSD drop to 1.14?
The Euro To US Dollar Instrument Did Not Change In Value

The Peak Of Inflation May Be Yet To Come? ECB Takes Steps

Conotoxia Comments Conotoxia Comments 19.08.2022 12:38
Inflation in the Eurozone appears to be rising steadily, which may be influenced by the rising cost of electricity and energy carriers. Today's release of producer prices in Germany suggests that the peak of inflation in the Eurozone may be yet to come. Germany is the eurozone's largest economy, so published readings for that economy could heavily influence data for the community as a whole. Energy for businesses rose by 105 percent. Today we learned that in July producer prices (PPI inflation) rose in Germany at the fastest pace on record. PPI inflation on an annualized basis was as high as 37.2 percent. A month earlier, price growth stood at 32.7 percent, while the market consensus was for inflation of 32 percent. Energy prices still seem to remain the main driver of producer costs. The cost of the aforementioned energy for businesses rose 105 percent compared to July 2021. Had it not been for this factor, producer prices could have risen much more slowly, by only 14.6 percent. - according to the published data. Entrepreneurs could translate such a significant increase in costs into their products, which could also raise consumer CPI inflation as a result. Hence, it is not impossible that a possible peak in inflation in the eurozone is yet to come. It could fall in the last quarter of this year, or early next year, assuming that energy prices begin to stabilize or fall. Otherwise, the eurozone economy could plunge into a deep crisis. EUR/USD near parity again The rate of the EUR/USD pair fell today to 1.0084 (yesterday it was around 1.0200) and again approached parity at 1.0000. Concerns about the eurozone economy may be reflected in the exchange rate. However, it seems that the reaction to negative data is becoming less and less, as if the market has to some extent already discounted some of the bad news that may come in the near future. The European Central Bank's forthcoming actions may put the brakes on the euro's sell-off. According to the interest rate market, the ECB may opt for two rate hikes of 50 basis points each this fall. The market assumes that the ECB will raise the main interest rate to 1.5 percent throughout the cycle. Unlike the Fed, which may reduce the pace of hikes at the end of the year, the ECB may only move with a rapid increase in interest rates. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Source: PPI inflation in Germany highest on record. Euro under pressure
USD/JPY Eyes Psychological Level of 150.00 Amidst BoJ's Monetary Policy and Fed's Rate Hike Expectations

The Bank Of England (BoE) Chasing The Inflation. Forex: GBPUSD, CNHJPY, EURUSD And Others

John Hardy John Hardy 19.08.2022 13:41
Summary:  The USD is breaking higher still, with important levels falling versus the Euro and yen yesterday. But the pain in sterling is most intense as presaged by the lack of a response to surging UK rates. Can the Bank of England do anything but continue to chase inflation from behind, caught between the Scylla of inflation and the Charybdis of a vicious recession? Also, USDCNH lurks at the top of the range ahead of another PBOC rate announcement on Monday. FX Trading focus: USD wrecking ball swinging again. UK faced with classic ugly choice between taking the pain via inflation or a severe recession The US dollar strength has picked up further after yesterday saw the breakdown in EURUSD below 1.0100 and a shot through 135.50 in USDJPY as longer US yields pushed to local highs. GBPUSD has been a bigger move on sterling weakness as discussed below.  A bit of resilient US data (especially the lower jobless claims than expected and a sharp revision lower of the prior week’s data taking the momentum out of the rising trend) has helped support the USD higher as longer US yields rose a bit further, taking the 10-year US treasury yield benchmark to new local highs, although we really need to see 3.00% achieved there after a few recent teases higher with no follow through higher. Looking forward to next week, the market will have to mull whether it has been too aggressive in pricing the Fed to pivot policy next year on disinflation and an easy-landing for the economy. The steady drumbeat of Fed pushback against the market’s complacency, together with a few of the recent data points (ISM Services, nonfarm payrolls, yesterday’s claims, etc.) has seen some of the conviction easing. But the key test will come next Friday, when Fed Chair Powell is set to speak on the same day we get the July PCE inflation data. Keep USDCNH on the radar through the end of today on the risk of an upside break above the range and Monday as the PBOC is set for a rate announcement (consensus expectations or another 10 bps of easing).   Chart: GBPUSD Lots at stake for sterling as discussed below, as it is a bit scary to see a currency weaken sharply despite a massive ratcheting higher in rate expectations from the central bank. The fall of 1.2000 has set in motion a focus on the 1.1760 cycle low, with an aggravated USD rise here and tightening of global financial conditions possibly quickly bringing the spike low toward 1.1500 from the early 2020 pandemic outbreak panic into focus. It is worth noting that the lowest monthly closing level for GBPUSD since the mid-1980’s is 1.2156. Without something dramatic to push back against USD strength next week from Jackson Hole, it is hard to see how this month may set the new low water mark for monthly closes. Source: Saxo Group GBPUSD slipped below 1.1900 this morning after breaking below the psychologically important 1.2000 level yesterday. As noted in the prior update, it’s remarkable to see the marked weakness in sterling despite the marking taking UK short rates sharply higher – with 2-year UK swaps over 100 basis points higher from the lows early this month. The Bank of England has expressed a determination to get ahead of the inflation spike and the market has priced in a bit more than a 50-basis-points-per-meeting pace for the three remaining BoE meetings of 2022. But is that sufficient given the UK’s structural short-comings and external deficits? Currency weakness risks adding further to spike in inflation this year. The BoE can take a couple of approaches in response: continue with the 50 bps hikes while bemoaning the backdrop and trotting out the expectation that eventually, economic weakness and easing commodity prices will feed through to drop inflation back into the range. Or, the BoE can actually get serious and super-size hikes even beyond the acceleration the market has priced, at the risk of bringing forward and increasing the severity of the coming recession. Until this week, the BoE’s anticipated tightening trajectory had prevented an aggravated weakness in sterling in broader terms, but the currency’s weakness despite a massive mark-up of BoE expectations has ratcheted the pressure on sterling and the BoE’s response to an entirely new level. Turkey shocked with a fresh rate cut yesterday of 100 basis points to take the policy rate to 13.00%. This with year-on-year inflation in Turkey at 79.6% and PPI at 144.6%, and housing measured at 160.6%. The move took USDTRY above 18.00, though it was a modest move relative to the size of the surprise. Turkish central bank chief Kavcioglu said that the bank would also look to “further strengthen macroprudential policy” by addressing the yawning difference between the policy rate and the rate commercial banks are charging for loans (more than double the official policy rate), as the push is to continue a credit-stimulated approach, inflation-be-darned.   Table: FX Board of G10 and CNH trend evolution and strength Note: a new color scheme for the FX Board! Besides changing the green for positive readings to a more pleasant blue, I have altered the settings such that trend readings don’t receive a more intense red or blue coloring until they have reached more significant levels – starting at an absolute value of 4 or higher. So far, most of the drama in sterling is the lack of a response to shifts in the UK yield curve, the broad negative momentum has only shifted a bit here, but watching for the risk of more. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs AUDNZD is crossing back higher, AUDCAD back lower, so NZDCAD….yep. Note the CNHJPY – if CNH is to make more waves, need to see more CNH weakness in an isolated sense, not just v. a strong USD. And speaking of a strong USD, the last holdouts in reversing, USDNOK and USDCHF, are on the cusp of a reversal. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – Canada Jun. Retail Sales 1300 – US Fed’s Barkin (Non-voter) to speak   Source: FX Update: USD surging again, GBP spinning into abyss
Technical analysis recommendations on EUR/USD and GBP/USD for August 19, 2022

Technical analysis recommendations on EUR/USD and GBP/USD for August 19, 2022

InstaForex Analysis InstaForex Analysis 19.08.2022 17:51
Relevance up to 12:00 2022-08-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher timeframes After two days of deceleration and uncertainty, bears again showed activity and continued to decline, closing the previous day below the golden cross on the daily chart (1.0111). The current task is to eliminate the daily cross, then the bears' attention will be to overcome the important historical support of 1.0000 and restore the downward trend of most higher timeframes (0.9952 minimum extreme). If bullish sentiment returns to the market, the next important resistances have accumulated now in the area of 1.0188 - 1.0219 (daily cross).     H4 – H1 The main advantage on the lower timeframes now belongs to the bears. However, there has been a slight corrective deceleration in recent hours. The main reference points for the development of an upward correction today are the key levels, located at 1.0120 (central pivot point of the day) and 1.0172 (weekly long-term trend). If the decline continues, classical pivot points (1.0046 – 1.0007 – 0.9933) can provide support. In addition, the target for the breakout of the H4 cloud (1.0055 – 1.0020) also belongs to intraday targets. *** GBP/USD     Higher timeframes Sellers yesterday managed to cope with the supports that held back the development of the movement 1.2000 (psychological level) - 1.2026 (daily medium-term trend) - 1.2046 (weekly short-term trend) and closed the day much lower. The current benchmark in this direction is the minimum extremum (1.1759), its update will allow restoring the downward trend of the higher timeframes.     H4 – H1 On lower timeframes, we observe the development of a downward trend. The first support for classic pivot points (1.1873) is currently being tested. The next supports are at 1.1819 (S2) and 1.1716 (S3). The key levels are now acting as resistance, therefore, in the event of a correction, they will meet bulls at the levels of 1.1976 (the central pivot point) – 1.2052 (weekly long-term trend). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/319405
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

Forex: What's Going To Affect EUR/USD? US Fed Monetary Policy, Energy Realities And Potential Recession In Europe

InstaForex Analysis InstaForex Analysis 21.08.2022 15:26
Relevance up to 13:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Resistance is futile! Amid the energy crisis raging in Europe, EURUSD bulls are forced to flee the battlefield. The main currency pair is steadily moving towards parity, knowing full well that it is unlikely that it will be possible to find the bottom at its level for the second time in 1.5 months. The euro was helped by slowing US inflation, but as soon as investors realized that the Federal Reserve would continue to raise rates, their attention switched to the US and eurozone economies. And the second is still hopelessly losing. The August business data releases should highlight the divergence in GDP growth. Bloomberg expects European purchasing managers' indexes to continue their plunge, while the US services PMI rally will prove that American exceptionalism is not an empty phrase. These statistics and the release of data on the index of personal consumption expenditures, the key indicator of inflation monitored by the Fed, will be the main events of the third week of August in the economic calendar. However, all of them will surely be eclipsed by Fed Chairman Jerome Powell's speech at Jackson Hole. The market behaved like a child in relation to the minutes of the July FOMC meeting: it did not understand anything. The Fed continues to throw all its efforts into the fight against inflation, but fears that it will go too far. It declares the transition to a policy of dependence on data, which was already known after Powell's speech at a press conference. As a result, Powell had a great opportunity to chew everything up and explain, as Janet Yellen did in her time. Basically, there is not much to explain. A slowdown in US inflation reduces the Fed's need for more repression of its own economy and labor market, but there are good reasons for the central bank to keep raising the federal funds rate and keep it high for an extended period. No matter how much consumer price growth slows down, core inflation is unlikely to drop at the speed of a courier train. As, however, and salaries. Dynamics of inflation and labor costs in the United States         It is not certain that the core CPI in the US has reached its peak, and if it does pass, no one can guarantee that the current rate of monetary restriction by the Fed is enough to bring inflation back to the 2% target. Most likely, borrowing costs will have to increase to 4-4.5%, and not to 3.7%, as currently expected by the derivatives market. To celebrate the victory over high prices, a significant slowdown in the economy is required, and it most likely will not happen. So high rates in the United States are serious and for a long time. Together with the energy crisis in Europe and the proximity of the eurozone economy to recession, this does not paint a rosy scenario for EURUSD. Technically, the pair is trying to find a bottom on the weekly chart - to form point 5 of the Wolfe Wave pattern. Most likely, the euro will have to fall to $0.977-0.984, and possibly even to $0.95-0.96, before bouncing back up. Recommendation for EURUSD - sell.   Read more: https://www.instaforex.eu/forex_analysis/319419
US Dollar Index May Confirm A Potential Bullish Trend Reversal

EUR/USD. Preview of the week. Gas issue, Jackson Hole conference and release of the PCE index

InstaForex Analysis InstaForex Analysis 22.08.2022 07:43
Relevance up to 18:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The penultimate week of August promises to be "hot": an important economic symposium will be held in America, and the PCE index, an inflation indicator that is monitored with particular care by the Federal Reserve, will also be published. PMI and IFO indices will be released in Europe. In addition, traders are still focused on the "gas issue", given that Gazprom plans to shut down the only Nord Stream 1 turbine at the end of August. Such a busy agenda will surely provoke increased volatility in the foreign exchange market, including for the EUR/USD pair.     Let's start with US events. An economic symposium will begin in the small town of Jackson Hole on August 25, which acts as a kind of barometer of the mood of the central banks of the leading countries of the world. The forum is attended by the heads of the central bank (usually at the level of chairmen or their deputies) of the leading countries of the world, finance ministers, leading economists and analysts, heads of the world's largest conglomerates and banking giants. They discuss pressing topics, problems, crystallize certain signals and define roadmaps for further steps. As a rule, representatives of the financial world discuss the most pressing issues that are relevant at the moment. For example, in 2015, the number one topic was the collapse of the Shanghai Stock Exchange, in 2016 they talked about the possible consequences of Brexit, and in 2017, the expansion of bond spreads and further steps by the Fed and the European Central Bank. In 2018, the central topic of the meeting was the trade war between the US and China (or rather, its consequences), in 2019, they again discussed the global trade conflict, as well as the impending Brexit. Naturally, the main topic of 2020-2021 was the coronavirus and its consequences. And it is quite obvious that this week the participants of the meeting will focus on the fight against high inflation, because this problem, one might say, is relevant for everyone. During the three-day symposium, which starts next Thursday, the heads and representatives of many central banks will speak, who can talk about their further actions in the context of monetary policy prospects. In particular, Fed Chairman Jerome Powell is expected to speak on Friday. He can comment on the latest inflationary releases (CPI, Producer Price Index, Import Price Index), which came out in August in the red zone. If, contrary to the first signs of a slowdown in CPI growth, Powell again becomes concerned about the high level of inflation in the United States (and does not announce the "first victories" of the Fed in this direction), the US currency will receive another impetus for its growth throughout the market, including in pair with euro. However, the latest releases of US statistics still retain intrigue regarding the tone of the rhetoric of the head of the Fed. By the way, the main index of personal consumption expenditures (PCE) will be published on Friday. This is the most important inflationary indicator monitored by the Fed members and which can provoke increased volatility among dollar pairs - both in favor of the greenback and against it. According to preliminary forecasts, Friday's report will reflect a slowdown in the index. So, on an annualized basis, the indicator should reach 4.6%. Let me remind you that after a three-month decline, the core price index for personal consumption expenditure in July again "raised its head", being at around 4.8%. If the PCE reverses 180 degrees again, the dollar could come under significant pressure as the CPI and producer price index slow down. The growth or slowdown of this index will play an important role, especially amid Powell's hesitation regarding the further pace of tightening of the Fed's monetary policy.     At the same time, it should be emphasized that regardless of the greenback's health, long positions on the EUR/USD pair will look risky: it is advisable to use the upward surges in the pair as a reason to open short positions. Given the worsening energy crisis, the European currency will continue to be under background pressure. Let me remind you that on Friday, Gazprom announced that the only Nord Stream turbine would be shut down on August 31 for repair work. Against the background of this statement, stock prices for blue fuel in Europe have overcome the mark of $2,700 per thousand cubic meters (for the first time since March of this year). If the upward dynamics continue, the euro will be under additional pressure. By the way, Gazprom itself recently announced that, according to "the most conservative estimates", in winter the cost of blue fuel will exceed $4,000 per 1,000 cubic meters, "if the relevant trends continue." Macroeconomic reports, which will be published next week, may also put pressure on the single currency. For example, the IFO business environment indicator should show negative dynamics, once again updating the annual low. The indicator of economic expectations is likely to show a similar result. The PMI indices, which will be published on Tuesday, will only add to the negative (for the euro) fundamental picture - for example, German indicators should go below the key 50-point mark. Thus, there is no doubt that the upcoming week will be volatile. Considering the current fundamental background, any corrective rollbacks for the EUR/USD pair should be used to open short positions. Last week bears managed to break out of the price range of 1.0130-1.0280, within which they traded for almost four weeks. Most likely, bears will try to build on their success this week. But at the same time, traders are in close proximity to the parity level. This is a strong support level - so far, EUR/USD bears are not able to overcome it (with subsequent consolidation). Therefore, it is safest to enter shorts on the waves of corrective rollbacks. The main downward targets are 1.0050 and 1.0010.   Read more: https://www.instaforex.eu/forex_analysis/319467
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

FX: EUR/USD - This One May Catch You By Surprise! - 22/08/22

InstaForex Analysis InstaForex Analysis 22.08.2022 08:18
Relevance up to 04:00 2022-08-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. On Friday, the euro did not linger in the consolidation and decided to reach the target level of 1.0020 as soon as possible. This goal was achieved this morning. The probability of correction increases from this level, since it is the Fibonacci reaction level of 161.8% of the movement branch from the historical peak in July 2008 (1.6038) to the October 2008 low (1.2323), which is convenient to consider on a monthly scale.     After consolidating below the level of 1.0020, we expect the price to further decline to the July 14 low at 0.9950 and further decline to the target of 0.9850. The Marlin Oscillator has recently moved into a downward trend zone and is poised for a deep downward move. The formation of price convergence with the oscillator is likely at the level of 0.9850, the euro may turn up in the medium-term movement.     A price convergence with the Marlin Oscillator is forming on the H4 chart. If it is confirmed, then we are waiting for the lateral movement of the euro above 1.0020. Important economic releases will not be published today, so the potential of the euro correction can be realized. Neutral day.   Read more: https://www.instaforex.eu/forex_analysis/319477
Sebastian Seliga Comments On EUR/USD, Dollar Index, XAUUSD And S&P 500 - 29/08/22

Forex: EUR/USD May Be Plunging! US Dollar Is Supported By Soaring Energy Prices And More!

InstaForex Analysis InstaForex Analysis 22.08.2022 09:00
The dollar continues to perform very well. It remains buoyed by a hawkish Fed and also by the travails of major trading partners which are suffering more from high energy prices and weaker export markets. This trend looks set to continue this week which will culminate with a speech on Friday by Fed Chair, Jay Powell on the economic outlook USD: Travails overseas are keeping the dollar bid Catching our eye this European morning is news of Chinese banks cutting their loan prime rates to support the mortgage sector and also some pretty terrible Korean trade data, where the first 20 days of August produced an unprecedented US$10bn deficit. The news serves as a reminder (as did the PBOC policy rate cut this time last week) that the Chinese economy is slowing (USD/CNH now trading above 6.84) and producing very difficult trading conditions for a country such as Korea, trapped between higher imported energy costs on the one hand and slowing export markets on the other. Arguably a country like Germany faces similar challenges, where its economic model of importing cheap energy from Russia and exporting high-value goods around the world (especially to China) is facing challenges like never before. On higher energy prices, we note that natural gas costs continue to surge. And as drought conditions across Europe continue to disrupt coal shipments, similar problems in China's Sichuan province are impacting hydro-energy supplies and increasing demand for alternatives such as natural gas. These challenges to ex-US growth models continue to leave the dollar in the ascendance; we saw DXY surprisingly push above 108 on a quiet Friday. This week's focus should be on some mildly positive US data and culminate in Fed's Powell speech on the US economic outlook on Friday. The Fed is probably quite comfortable with what the market prices for its policy rate this year (around 125bp of hikes to a 3.50-3.75% target range.) What could be vulnerable to re-pricing higher would be the subsequent 40bp of easing priced in for the second half of next year. As we have seen recently, the Fed is quite keen to counter notions of a 2023 pivot. With European and Chinese data remaining soft this week - and no end in sight for the surge in gas prices - expect the dollar to hold its gains. The 109.30 July high in DXY looks like the direction of travel. Elsewhere, a couple of weeks ago we had felt that there was a window for carry trades and had picked out the MXN/JPY cross rate. That has moved up to 6.80. However, rising levels of volatility again (both in EUR/$ and $/JPY) suggests positions in high yield FX may be hard to hold and we would prefer more defensive long dollar positions now. Chris Turner  EUR: Will sub parity levels trigger an ECB response? EUR/USD remains very heavy and could sink below parity at any time. Adding to the sell-off may well be the portfolio adjustments of Asian central banks. Asian FX remains under heavy pressure and will prompt intervention to sell dollars and support local currencies. Asian FX reserve managers will then need to sell EUR/USD to re-balance FX portfolios to benchmark weightings. We also wonder whether we will see a more hawkish ECB this week. The market prices a 54bp rate hike for the September 8th meeting. Could the ECB start to discuss prospects of more aggressive rate increases if it wants to offer EUR/USD some support? Watch out for any speeches from the hawks in northern Europe this week. A retest of July's 0.9950 low looks to be the bias for EUR/USD this week. Customers are also asking us whether now is the time to increase hedge ratios on dollar receivables. As we discuss in our EUR/USD forecast revision piece, we think the euro's fair value has been damaged by the energy shock - meaning that EUR/USD is not especially cheap even at these levels. Chris Turner GBP: Does 1.15 beckon for Cable? The mighty dollar is causing problems for all and Cable could well retest July's 1.1760 low this week. Thereafter it is hard to rule out a move to 1.15 - a level seen in the March 2020 flash crash. We still have a preference that EUR/GBP does not need to rally too hard - given challenges faced in the eurozone - but acknowledge that sterling does look vulnerable. The UK calendar is pretty quiet this week.  Chris Turner   CEE: The main stage of the sell-off is over, but risks remain August is entering its final phase, which means only secondary data in the calendar for the CEE region. Today, we will see retail sales in Poland for July, which should show a further slowdown in YoY terms. On Wednesday, the Czech Republic will release confidence indicators, the first data for August. Consumer confidence is just a hair's breadth away from its all-time lows, and we cannot expect improvement this time either, thanks to the rising cost of living. In Hungary and Poland, labour market data will be published, in both cases confirming the severely tightened conditions. On Thursday, the NBH will again have a chance to intervene against the weakening forint by raising the 1-week deposit rate. For now, we do not expect a rate change this week either, but the level of the forint in the coming days will be crucial. For CEE currencies, EUR/USD attacking parity remains the main theme. Thus, we do not expect a trend reversal this week either. In our view, the Polish zloty remains the most vulnerable currency in the region. After Friday's data, it weakened the most in CEE and we see room for further losses towards 4.770 EUR/PLN. On the other hand, we continue to believe that the Hungarian forint should move to stronger levels around EUR/HUF 403, but negative sentiment is likely to keep the forint at weaker levels for a while longer. The koruna, unsurprisingly, remains stable after returning to CNB intervention levels and we cannot expect much this week. But we are watching the central bank balance sheet data to track FX intervention activity after weeks of silence. The Romanian leu continues to fluctuate around 4.88 EUR/RON and has maintained these levels despite a region-wide sell-off that has not escaped the ROMGB. Even though the CEE region should have seen the main part of the sell-off, EUR/USD near parity and rising gas prices remain the main risks. Of course, pressures from these directions would mean further losses for regional FX, so we remain bearish on CEE currencies this week. Frantisek Taborsky Read this article on THINK
Escalating Russia-Ukraine Tensions Amplify Oil Supply Risks: The Commodities Feed

Striking Performance Of EUR/USD! Let's See Euro To USD - Technical Analysis - 22/08/22

InstaForex Analysis InstaForex Analysis 22.08.2022 11:00
Relevance up to 09:00 2022-08-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The beginning of the trading week does not start good for the Euro bulls. The EUR/USD pair continues to move lower towards the parity level despite the extremely oversold market conditions seen on the H4 time frame chart. The nearest technical resistance is located at the level of 1.0097 and needs to be clearly violated for a solid bounce. Please notice the weak and negative momentum on the H4 time frame chart supports the short-term bearish outlook for EUR with a potential target seen at the level of 0.9955 or even lower. The US Dollar is being bought all across the board.     Weekly Pivot Points: WR3 - 1.0089 WR2 - 1.0057 WR1 - 1.0035 Weekly Pivot - 1.0025 WS1 - 1.0003 WS2 - 0.9992 WS3 - 0.09960 Trading Outlook: The monetary parity level as the first target for bears in the long term had been hit and the Euro is still being under the bearish pressure. There is no sign of relief for the EUR as the down trend should continue. The up trend can be continued towards the next long-term target located at the level of 1.1186 only if the complex corrective structure will terminate soon (above 1.0000) and the level of 1.0726 is clearly violated.   Read more: https://www.instaforex.eu/forex_analysis/289412
Forex: EUR/USD And GBP/USD - US Dollar (USD) Shows Its Teeth

Forex: EUR/USD And GBP/USD - US Dollar (USD) Shows Its Teeth

InstaForex Analysis InstaForex Analysis 22.08.2022 13:42
Relevance up to 11:00 2022-08-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The general atmosphere of global uncertainty, as a rule, contributes to the dollar's growth as the most liquid of safe havens. Today, the US currency index rose to 108.40, demonstrating a confident upward trend. Last week, it jumped 2.3%, showing the best performance since April 2020. The dollar's growth is due to the strengthening of hawkish sentiment in the markets after a number of speeches by Federal Reserve members on Friday. Among the most convincing at the moment is the statement of the president of the St. Louis Federal Reserve, James Bullard. He said he was considering supporting a third consecutive 75 basis point rate hike in September, and added that he was not ready to say that the economy had experienced the worst spike in inflation. The head of the Federal Reserve Bank of Richmond, Thomas Barkin, made a similar position, the emphasis was also placed on accelerated rate hikes. Market players are also waiting for Fed Chairman Jerome Powell to make a hawkish statement in the coming days, in line with recent comments by other central bank officials supporting the dollar. This week, the index may rise above 110.00 if the August preliminary PMIs for the major economies show a further slowdown in economic growth or a reduction in activity. In general, the new week is quite rich in macroeconomic events, so the end of the month and the summer period may be quite volatile. The focus of the traders is the Jackson Hole Symposium. This will be the main event of the week.     The euro briefly crossed the key parity level of $1 again, as the recession in Germany becomes more and more obvious. Natural gas prices are approaching 300 euros per megawatt hour after Gazprom announced the closure of the Nord Stream gas pipeline to Germany for three days of maintenance. In addition, the business activity index is expected to show in August that manufacturing activity in Europe's largest economy contracted at the fastest pace since May 2020, and the services sector contracted the most in 18 months. More optimistic traders believe that the report on the European Central Bank monetary policy meeting on Thursday will sound tough, which may save the euro from a more significant collapse. In July, the ECB surprised the markets and raised interest rates by 50 basis points, as inflation in the bloc continues to exceed record levels. However, Commerzbank believes that the ECB's rhetoric, no matter what it is, will not matter now. Actions are important, not conversations. The interest rate policy should show at least some signs of reducing the lag behind the Fed. Only in this case, the euro will feel some support. The EUR/USD pair is expected to be particularly susceptible to a revision of the Fed's baseline expectations, as the ECB has taken the second strongest possible dovish position among G10 central banks after the Bank of Japan.     EUR/USD, as well as GBP/USD, continue to remain under pressure from the pressing dollar. The euro cannot recover after a sharp drop last week and is trading below the 1.0050 mark. The GBP/USD pair continues to remain under pressure near 1.1800. In the short term, EUR/USD and GBP/USD quotes are likely to stabilize around 1.0000 and 1.1800, respectively. Given the dynamics and the situation inside Europe and in the world, the euro risks breaking down the level of 1.0000. Bears will aim for a further decline in the exchange rate to 0.9950. However, for such a scenario, stability below the 1.0105 level is important. If it is broken up, the pair will take a course for recovery. Support is located at 1.0000, 0.9980, 0.9945. Resistance is at 1.0070, 1.0115, 1.0140. The pound now remains without any internal support. It failed to take advantage of better-than-expected UK economic data and a sharp rise in market expectations for Bank of England interest rates last week.Stronger wage growth, the annual consumer price index, which exceeded 10% on Wednesday, and impressive retail sales data all contributed to the increase in rates. The pound's inability to get at least some support from this movement speaks volumes, more precisely about its weakness. The forecast for GBP/USD does not look favorable, the pair may fall in the near future beyond expectations. The quote risks falling to 1.1500.     Until Powell's speech at the symposium, which will take place on Friday, the markets will be in limbo. Uncertainty is on the side of dollar bulls. A number of US economic indicators will help determine market appetite, each of which is important in its own way. These include the second estimate of GDP for the last quarter and the July value of the preferred US inflation indicator from the Fed. The underlying PCE price index will be carefully studied by investors in search of anything confirming the signs of moderate inflationary pressure recently noted in official figures. Due to the fact that financial markets lowered earlier expectations of a Fed interest rate hike in September to 0.50%, the pound/dollar exchange rate will be at risk this week due to everything that pushes market prices back in favor of a greater tightening by 0.75%.   Read more: https://www.instaforex.eu/forex_analysis/319542
Euro (EUR) And British Pound (GBP) Losing The Race Against U.S. Dollar (USD)! 1 Year Statistics

Euro (EUR) And British Pound (GBP) Losing The Race Against U.S. Dollar (USD)! 1 Year Statistics

Conotoxia Comments Conotoxia Comments 22.08.2022 16:44
The recent behavior of the euro and the British pound and their potential weakness against the rest of the world's major currencies is beginning to bring concerns about a sustained deterioration in the prospects for these currencies. As Bloomberg commentators note, the behavior of the pound and the euro are worrisome. We have recently seen large shifts in the euro and pound's short-term market interest rates against the U.S. dollar, with a simultaneous weakening of the GBP/USD and EUR/USD exchange rates. Last week was the worst week for the pound in nearly two years, and at the same time, the yield on the UK's 2-year bond rose by 50 basis points. Typically, the opposite happens in developed markets. Expectations of a central bank rate hike and thus an increase in short-term market yields generally strengthen the currency. The collapse in the correlation between the exchange rate and interest rates is usually associated with emerging markets, which may have lost the battle for the credibility of keeping inflation within the inflation target. The energy dependence of the UK and Europe as a whole means that their balance sheets could deteriorate in the near future, while energy commodity inflation shows no signs of abating. Rate hikes in such a situation may not stem the tide of depreciation of the aforementioned currencies, Bloomberg reports. Thus, it seems that the winter months for the EUR and GBP may be a kind of test of the credibility of the economies in the eyes of investors. Their abandonment of investments in the EUR and GBP despite rising interest rates could be potentially worrying. Moreover, it could change the entire scene of the foreign exchange market. In the dollar index, the euro has a weighting of more than 57 percent, while the pound has a weighting of more than 11 percent. Together, these two currencies alone have a weighting of almost 70 percent. Since the beginning of the year, the euro against the U.S. dollar has lost almost 12 percent, and the British pound almost 13 percent. In contrast, since August 2021, the euro has lost almost 15 percent to the dollar, and the British pound less than 14 percent. Of the major currencies, only the Japanese yen has fared worse and has weakened by almost 20 percent against the U.S. dollar over the year. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Pound and euro similar to currencies of emerging markets?
Market Risk Sentiment Adjusts as Investors Eye US Inflation Data

US Equities Falling Down, EURUSD Is On The Topic

Saxo Strategy Team Saxo Strategy Team 23.08.2022 11:01
Summary:  US equities continued to push sharply lower yesterday as the strong US dollar is in focus as EURUSD dropped well below parity yesterday. US Treasury yields are playing their part in pressuring sentiment as the US 10-year yield benchmark rose above 3.00%. The next important event risk is this Friday’s Jackson Hole, Wyoming speech from Fed Chair Powell, as the Fed is expected to remind the market that it remains in full inflation-fighting mode, pushing back against the impression that it may be set to cut rates next year.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures extended their losses yesterday as the US 10-year yield moved above the 3% level and the Fed Funds futures curve moved lower across the whole curve (meaning less rate cuts expected next year). Markets are beginning to second-guess their aggressive bets in July on inflation cooling fast enough to warrant rate cuts next year as the galloping energy crisis makes it difficult for inflation to cool. Tangibles-driven themes such as commodities, logistics, energy storage and financials were the relative winners in yesterday’s session. S&P 500 futures are now in the support zone from before the last leg up that started on 10 August; we see the 4,100 level as the next level to watch on the downside and then the 100-day moving average at 4,085. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hang Seng Index and CSI300 were both down about 0.6%. A Bloomberg report yesterday, citing “people familiar with the matter”, suggested the size of the central bank and other authorities’ support lending program to developers could be as large as RMB 200bn. The reaction of the share prices of Chinese Property developers were mixed, Country Garden (02007:hkg) +3.1%, Longfor (00960:xhkg) -1.4%. Postal Savings Bank of China (01658:xhkg) plunged 5.5% after the Chinese bank reported net profit miss with a 10 bps y/y fall in net interest margin to 2.27% in H1. Gross loans grew 13% y/y in H1 but at a more tepid growth of 3% q/q.  Non-performing loans ratio overall was steady at 0.8% but mortgage NPL ratio climbed by 8 bps to 0.52%. US dollar rally following through The US dollar rally continued apace yesterday, as EURUSD traded well below parity and closed at its lowest level in nearly twenty years yesterday. GBPUSD has teased below 1.1760, its lowest level since a one-off pandemic-outbreak spike in early 2020, while other USD pairs are not yet at extremes of the cycle, including AUDUSD, still well above the sub-0.6700 lows of July, and USDJPY, which has not yet challenged the cycle high north of 139.00. There is clearly a reflexive situation at the moment in the US dollar, risk sentiment and US treasury yields. USDCNH Broad USD strength remains behind the weaker CNH in the USDCNH exchange rate as the CNH continues to rise versus, for example, the EUR, while the CNHJPY exchange rate trades near the important 20.00 area. Any more significant move in this critical exchange rate could quickly steal some of the focus away from the US dollar. The contrast between an easing PBOC (moving once again earlier this week) and tightening central banks nearly everywhere else is stark. The next important level for the pair is 7.00, with the range high of the last decade near 7.20. Crude oil prices (CLU2 & LCOV2) Crude oil prices made a sharp U-turn higher on Monday after the Saudi Energy Minister talked about a potential production cut after saying the futures market has become increasingly disconnected from underlying fundamental developments, a view that we share. His comment supported the market on a day where risk appetite generally took a knock from the stronger dollar and falling equity markets. A global shift from gas to oil, from Europe to Asia, has taken a deeper hold amid gas shortage fears accelerating in the wake of another upcoming maintenance of the Nord Stream 1 pipeline and heatwaves in China. Diesel prices trades higher supported by refinery margins, the so-called crack spread hitting seasonal highs around the world. Gold (XAUUSD) and Silver (XAGUSD) Gold broke below the key $1744 support on Monday before finding support at $1729, the 61.8% retracement of the July to August bounce. Dollar strength and a run higher in US yields weighed on the shine of the yellow metal, which has seen downside pressures since last week after touching the critical $1800-level. Hawkish Fed talk this week could further weigh on the short-term prospects for Gold. Silver also dipped below the key 19 handle, erasing most of the gains seen since late July. German year-ahead power prices hit a fresh record high German year-ahead power prices surged to EUR 700/MWh with Dutch TTF gas prices close to EUR 300/MWh. The surge came on the back of another leg higher in natural gas prices which rose over 13% in Europe amid concerns around the next scheduled 3-day maintenance of the Nord Stream 1 pipeline. It appears that demand destruction remains the most obvious but painful cure right now, along with a longer-term focus on ensuring a broad-based supply of energy from coal, gas, nuclear, solar, hydrogen, and more. US Treasuries (TLT, IEF) US treasury yields rose yesterday, with the 10-year benchmark closing above 3.00% for the first time in over a month yesterday. Rising yields are likely an important driver of weaker risk sentiment after the melt-up in the wake of the late July FOMC meeting, but practically, a move toward the cycle highs from June near 3.50% (in the lead-up to the FOMC meeting on June 16) is needed to seize the spotlight. The behavior of the treasury market in the wake of the Jackson Hole conference speech from fed Chair Powell this Friday is an important next step, particularly if Powell provides strong guidance on the pace or importance of the Fed’s balance sheet tightening (QT). What is going on? EURUSD falls below parity, eyes on 0.9500 The latest concerns on the European energy crisis weighed on the Euro which was seen sipping below parity to the US dollar. Higher US yields and gains in the US dollar also underpinned, taking EURUSD to lows in the low 0.9900’s this morning. The European recession is coming hard and fast, and the PMIs today will likely signal increasing pressure on the region. The next step for the US dollar is the Fed Chair Powell speech this Friday as discussed below. Australia and Japan services PMIs plunged into contraction Australia saw its services PMI drop to 49.6 in August in a flash print, from 50.9 in July. Manufacturing PMI, however, held up at 54.5, just weakening slightly from last month’s 55.7. The spate of rate hikes seen from Reserve Bank of Australia is likely taking its toll on demand and manufacturing. Meanwhile, prices remain elevated amid the persistent supply chain issues, and more rate hikes are still on the cards. Japan’s flash manufacturing PMI for August came in lower at 51.0 from 52.1 previously, nut stayed in expansion territory. Services PMI however plunged into the contraction zone below 50, coming in at 49.2 for a flash August print from 50.3 in July. The fresh COVID wave in Japan, although comes without any broad-based new restrictions, is impeding the services demand and will likely weigh on Q3 GDP growth. Palo Alto outlook remains strong The cyber security company reported last night Q4 revenue and EPS above estimates and Q1 outlook is slightly above estimates while the FY outlook is well above consensus estimates. Q4 networks billing growth was 44% vs est. 25% suggesting demand is accelerating and bolstering our view that the cyber security industry is a high growth and counter-cyclical industry in the years to come. Shares were up 9% in extended trading. Zoom shares were down 8% in extended trading The popular video conferencing software that rose to prominence during the pandemic is lowering its FY outlook relative to previous announcements. The slowdown in their business is due to slower enterprise growth which could be a function of Microsoft and other major technology companies that have entered the enterprise business for video conference. What are we watching next? Europe and UK PMIs may spell further caution. The Euro-area flash composite PMI and the UK flash PMI for August are both due to be released on Tuesday. Following a slide in ZEW and Sentix indicators for July, the stage is set for a weaker outcome on the PMIs too. July composite PMI for the Euro-area dipped into contractionary territory at 49.9, while the UK measure held up at 52.1. The surge in gas and electricity prices continue to weigh on GDP growth outlook, with recession likely to hit by the end of the year. USD and US Treasury yields as Jackson Hole Fed conference is the macro event risk of the week Friday The US dollar and yields are setting risk sentiment on edge as EURUSD has plunged well through parity. US Treasury yields have supported the USD rally with the entire curve lifting over the last couple of weeks and longer yields closing at new one-month highs. The Fed has pushed back consistently against the market’s pricing of a Fed turnaround to easing rates next year with partial success, as expectations for rate cuts have shifted farther out the curve and from higher levels. The next focus is this Friday’s Jackson Hole symposium speech from Fed Chair Powell, who is expected to stay on message and maintain credibility on fighting inflation after the two large 75 basis point hikes at the last two meetings. The Fed’s attitude toward quantitative tightening may be a focus in the speech as well, with the pace of QT supposedly set to pick up in coming weeks to $95B/month. So far, the QT has been slow out of the gates, with the balance sheet currently only some $115B smaller than at its mid-April peak. Earnings to watch Today’s earnings focus is on CATL and JD.com, with especially CATL being important as the world’s largest battery manufacturer to the car industry and thus pivotal for the electrification of the transportation sector. CATL is expected to report revenue growth of 126% y/y in Q2 as EV adoption is accelerating, but key risks ahead are rising input costs across lithium and energy. JD.com is expected to report 3% revenue growth in Q2 as growth is grinding to a halt on very weak consumer confidence in China. Today: CATL, Intuit, Medtronic, JD.com Wednesday: LONGi Green Energy, Royal Bank of Canada, PetroChina, Ping An Insurance Group, Nongfu Spring, Mowi, Nvidia, Salesforce, Pinduoduo, Snowflake, Autodesk Thursday: South32, Toronto-Dominion Bank, Fortum, Delivery Hero, AIA Group, China Life Insurance, CNOOC, CRH, Dollar General, Vmware, Marvell Technology, Workday, Dollar Tree, Dell Technologies, NIO Friday: Meituan, China Shenhua Energy, China Petroleum & Chemical Economic calendar highlights for today (times GMT) 0715-0800 – Eurozone Aug. Flash Manufacturing and Services PMI 0830 – UK Aug. Flash Manufacturing and Services PMI 1000 – UK Aug. CBI Trends in Total Orders and Selling Prices 1100 – ECB's Panetta to speak 1345 – US Aug. Flash Manufacturing and Services PMI 1400 – US Aug. Richmond Fed Manufacturing 1400 – Eurozone Aug. Flash Consumer Confidence 1400 – US Jul. New Home Sales 2300 – US Fed’s Kashkari (non-voter) to speak  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 23, 2022
Watch Ou! US Dollar (USD) May Be Starting Its Rocket Engines Soon! Markets Wondering If It's Going To Be 50 or 70bp Rate Hike

Watch Out! US Dollar (USD) May Be Starting Its Rocket Engines Soon! Markets Wondering If It's Going To Be 50 or 70bp Rate Hike

Matthew Ryan Matthew Ryan 23.08.2022 11:21
US bond yields have now retraced the fall that followed the positive inflation report from the week prior. Federal Reserve officials talked up the prospects of another jumbo interest rate hike in September, and markets are now equally split between a 50 basis point and a repeat of the previous meeting 75bp increase. Risk assets gave up some of their recent gains, and understandably the dollar bounced back strongly against every major peer worldwide. In this context, the Chinese yuan held up relatively well in spite of recent weakness in the Chinese economy, rising against every G10 currency, save the US dollar.   This week, the critical PMI advance indicators of business activity will be released in the US, the UK and Eurozone. Current levels mostly hover around the 50 line that separates expansion from contraction, so these numbers take on added importance. At the end of the week, markets await headlines and speeches from the annual meeting of the world’s central bankers in Jacksonhole, Wyoming. In particular, Chair Powell’s speech on Friday is expected to offer some clarity on the speed of coming hikes and, just as important, his expectations on how high rates will have to go before inflation is brought back under control. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 22/08/2022 GBP Bank of England policy makers received an unpleasant jolt last week, in the form of a significant upward surprise in the inflation numbers for July. Both the headline and the core rate soared to fresh record highs, the former now in double digits and expected to peak at 13% in the autumn. Markets rushed to price in more hikes from the Bank of England, but the threat of stagflation meant that sterling failed to benefit and fell against both the dollar and the euro. Figure 2: UK Inflation Rate (2016 – 2022)   Source: Refinitiv Datastream Date: 22/08/2022 The PMIs in the UK have held up better than in the Eurozone, suggesting a more resilient economy than is priced in at current pound levels, but this view will be tested this week when the advance August numbers are released on Tuesday. EUR Last week was a typically sluggish summer one in the Eurozone. With little macroeconomic or policy news, the euro mostly traded down as US rates soared and sentiment towards the Eurozone economy deteriorated on soaring energy prices. While macroeconomic news out of the bloc has held up reasonably well so far under the circumstances, the jump in energy prices continues to worsen the outlook, and has helped drive EUR/USD back through parity levels this morning. As elsewhere, the PMI advance indices on Tuesday will be key. However, given how far behind the curve the ECB is with respect to inflation, we do not think that it can afford to let up on policy normalisation, even if a mild recession materialises. USD Strong second tier data and a determined push back form Fed officials against any notion of a ‘dovish pivot’ drove US rates higher last week, and this in turn boosted the dollar. Last week’s FOMC meeting minutes were actually initially seen as dovish, although investors appeared to have a change of heart as focus shifted to the Fed’s comments on inflation, which indicated members saw no let up in price pressures. This week, the PMIs are released on Tuesday, as elsewhere. However, they typically make less of a splash in the US. Markets will look to the PCE inflation report later in the week to corroborate the good news from the CPI report. Regardless, it is unlikely that the Fed will be deterred from its hiking campaign and the main question for Chair POwell atr Jackson Hole will be whether 50 or 75 bp are coming in September. CHF The Swiss franc has rallied to fresh highs against the euro in the past few trading sessions, with the EUR/CHF pair currently trading below the levels seen following the removal of the trading peg in early-2015. Broad euro weakness has dragged the pair lower so far this morning, although the franc is also benefiting from rising risk aversion, as markets brace for a slowdown in global growth between now and year end. Investors continue to favour the franc over its fellow safe-haven, the Japanese yen, in light of the policy divergence between the SNB and Bank of Japan. Whether this outperformance continues may depend on SNB interventions. The bank actually appears to have been rather active in selling francs in the past few weeks, with total sight deposits, a proxy for interventions, increasing in every week since mid-July. This may be an indication that the EUR/CHF pair may be approaching a near-term low. There will be no major economic data releases out of Switzerland this week, so expect the franc to be driven largely by goings on elsewhere. AUD The Australian dollar was one of the worst performing currencies in the G10 last week, falling by almost 3% against the US dollar. Fears of an economic slowdown and a weaker than expected domestic jobs report hurt the Australian currency. While the unemployment rate fell to a more than 40-year low of 3.4% in July, net employment dropped by 40,900, contrary to what was expected (+25k). This mixed report raises question marks about the magnitude of the next interest rate hike from the Reserve Bank of Australia. Prior to the meeting, markets were pricing in another 50 basis point move in September, although we think that this is now in serious doubt. Markets also appear torn, with swaps indicating a 50/50 chance of such a move. Figure 3: Australia Net Employment Change(2017 – 2022) Source: Refinitiv Datastream Date: 22/08/2022 Advanced PMIs for August will be published tomorrow, and are expected to show an improvement on July’s data. Aside from that, AUD will be driven by market risk sentiment and expectations about rate hikes. CAD The Canadian dollar depreciated against the US dollar last week, although the sell-off was smaller than that of its G10 peers. In line with expectations, Canada’s inflation rate fell to 7.6% in July, after reaching a near four-decade high in June, mainly due to a fall in gasoline prices. However, core inflation surprised on the upside and remains at very high levels, suggesting that price pressures have broadened across more components. We believe that the Bank of Canada will continue its aggressive monetary tightening cycle, with a decent chance of a 75 basis point move at the next meeting in September. Markets are currency pricing in around a 50% chance of another bumper move, having seen very little chance of one this time last week. With no major domestic data to be released this week in Canada, we think that oil prices and market sentiment will be the main drivers of the Canadian dollar this week. CNY Somewhat uncharacteristically, the yuan underperformed most of its Asia counterparts last week, with the currency slumping to a near two-year low on the broadly stronger US dollar. A rather underwhelming set of macroeconomic figures released at the beginning of last week weighed on the yuan. Industrial production, fixed asset investment and retail sales data for July all fell short of expectations, as the prolonged COVID-19 restrictions in the country continue to worsen the growth outlook and sour sentiment towards Chinese assets. The ongoing property crisis in China, and policy easing from the People’s Bank of China, are also far from helping the currency’s cause. The PBoC trimmed its one-year loan prime rate, albeit only by 5 basis points, to 3.65% on Monday, while lowering its five-year lending rate by 15 basis points to 4.3%. As long as Chinese authorities continue to staunchly stick by their zero-covid approach, additional rate cuts and sluggish domestic data appear likely. Both present clear downside risks to the yuan in the coming months.Economic Calendar (22/08/2022 – 26/08/2022) To stay up to date with our publications, please choose one of the below: 📩 Click here to receive the latest market updates👉 Our LinkedIn page for the latest news✍️ Our Blog page for other FX market reports 🔊 Stay up to date with our podcast FXTalk Source: Dollar bounces on higher yield as euro breaks below parity | Ebury UK
The Euro To US Dollar (EUR/USD) Pair Moved Without Panic But Now No One Is Thinking About Buying The Euro

People Are Buying US Dollar So Much That EUR/USD Is Falling Off A Cliff!

InstaForex Analysis InstaForex Analysis 23.08.2022 11:40
Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The EUR/USD pair had broken below the parity level and made a new swing low at the level of 0.9916 (at the time of writing the analysis). The nearest technical resistance is located at the level of 0.9955 and needs to be clearly violated for a solid bounce. Please notice the weak and negative momentum on the H4 time frame chart supports the short-term bearish outlook for EUR with a potential target seen at the level of 0.9900 or even lower. The US Dollar is still being bought all across the board, so the bearish pressure on EUR is still strong.   Weekly Pivot Points: WR3 - 1.0089 WR2 - 1.0057 WR1 - 1.0035 Weekly Pivot - 1.0025 WS1 - 1.0003 WS2 - 0.9992 WS3 - 0.09960 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue lower towards the level or 0.9900 and below. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. Source: Forex Analysis & Reviews: Technical Analysis of EUR/USD for August 23, 2022
Shocking Forex Forecast! Check How EUR/USD, USD/JPY And GBP/USD May Develop In The Neatr Future!

Shocking Forex Forecast! Check How EUR/USD, USD/JPY And GBP/USD May Develop In The Neatr Future!

ING Economics ING Economics 23.08.2022 11:37
The dollar has corrected around 3% from its highs seen last month. This has prompted a few questions about whether the dollar has peaked? Many trading partners would hope that to be the case, but the reality is that the Fed is likely to stay on track with its tightening. We think the dollar is more likely to retest its highs than correct much lower. Driving this view has been consistent rhetoric from the Fed that it will not be blown off target by some softer activity or price data. In fact, it now looks like US activity is accelerating again as lower gasoline prices leave more dollars in the pockets of US consumers. The 2023 US recession narrative looks a tough one to sell near term. And rising energy prices should continue to drive a wedge between the exporters of North America and the importers of Europe, meaning a much greater conviction of a recession in Europe. The ECB’s second 50bp rate hike on 8 September may well conclude its tightening cycle. Rate spreads and the energy income shock make it a very tough environment for the euro. EUR/USD should therefore drift near parity for much of 2H22. Elsewhere in Europe, the Swiss franc continues to be guided higher by the Swiss National Bank. Sterling remains vulnerable on recession fears. Beyond some substantial fiscal stimulus, sterling’s best hope is that the Bank of England delivers on most of the aggressive tightening currently priced into markets. Surging gas prices also spell trouble for the CEE4 currencies. The Polish zloty in particular looks unlikely to hold recent gains. Emerging market currencies have enjoyed a mini-renaissance over the last month. But a difficult external environment makes it hard to sustain those rallies until the dollar turns.     EUR/USD Late cycle economies will keep the dollar bid Current spot: 1.0241 • Defining business cycles has been a hazardous job over recent years, but it looks pretty clear that the US is a late-cycle economy with high inflation and low growth. This stage of the cycle is synonymous with inverted yield curves – which we have today. The dollar typically stays bid in this part of the cycle until convictions grow that the Fed will ease, and US 2-year yields start dropping. That is probably a story for 1Q23 and not today. • We look for another 125bp of Fed hikes this year and just 50bp from the ECB (in Sep.). Risks look skewed to even higher US rates. • With Europe entering recession on the back of a looming energy crisis this winter, EUR/USD can stay near the lows for 2H22. USD/JPY Staying supported Current spot: 133.44 • USD/JPY has found some good support under 132 and should stay reasonably supported for 2H22. Expect surveys of the Japanese buy-side in September to show greater allocations towards unhedged foreign bond purchases. US Treasury yields pay 250bp+ over JGBs and it is too expensive to hedge those US bond investments – now 3% p.a. through the 3m JPY forwards. • The Fed Jackson Hole of Aug 25-27th looks a dollar positive event risk. It is far too early for the Fed to signal the all-clear on inflation. The bigger risk is that 2023 Fed easing is priced out. • Like the euro, the yen is suffering from the negative terms of trade shock. These indices are at the worst levels of the year. GBP/USD Slip-sliding away Current spot: 1.2098 • GBP/USD remains vulnerable on the back of continuing dollar strength and the UK economy trapped by slowing growth and a hawkish Bank of England. The only good news we have seen for sterling recently is that the Bank of Israel plans to double the pound’s weighting in its FX reserve portfolio! • A tricky environment for risk assets in 2H22 – slowing growth, tighter monetary conditions – suggests the growth sensitive pound will struggle. • The only thing helping it should be the BoE remaining hawkish all year – lifting rates 50bp to 2.25% in September – and at least  making sterling an expensive sell. No reprieve for Cable this year. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Back To The Future: EUR/USD Is Almost On 2002 Level!

Back To The Future: EUR/USD Is Almost On 2002 Level!

Conotoxia Comments Conotoxia Comments 23.08.2022 12:33
Selling pressure on the euro may lead the exchange rate of the main currency pair EUR/USD below the parity level. As a result, in the fourth week of August 2022, we may see levels from the end of 2002. The most significant risk factor for the euro appears to be fear of recession. These may increase with rising electricity and natural gas prices. The consequent deepening of the energy crisis and the dim prospects for its resolution may negatively affect the European currency in the eyes of global investors. The aforementioned natural gas prices seem to be approaching the record level of EUR 300 per megawatt hour. This could be a consequence of Russian energy giant Gazprom's announcement to shut down gas flow through Nord Stream 1 to Germany due to maintenance work at the end of August. Earlier, due to turbine problems, the gas flow was reduced to 20 percent. Electricity prices for next year's contracts are also breaking records. They have risen from €50 to €700 in just a few months. The eurozone's economic woes seem to be confirmed by macroeconomic data. The August Global S&P PMI showed that business activity in the eurozone declined for the second month in a row, albeit less than expected. The S&P Global Eurozone Composite PMI fell to 49.2 in August from 49.9 in July, above market expectations of 49, the preliminary reading showed. The latest data showed a second consecutive decline in business activity across the eurozone after a 16-month period of growth. The overall decline in output was again driven by a contraction in the manufacturing sector, where output fell for the third consecutive month, according to the published data. Germany posted its sharpest drop in output since June 2020, while activity in France fell for the first time in a year and a half. Investors are now awaiting the hawkish tone of Thursday's minutes from the European Central Bank's monetary policy meeting, as inflation in the eurozone still appears to be hitting record highs. Recall that the ECB surprised in July by raising interest rates by 50 basis points. The market can now expect two more increases of 50 basis points each at the September and October meetings. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.     Source: Euro below parity again. Black clouds over the European economy
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

(EUR) Euro Didn't Changed Its Mind As German PMI Leaves Us With Mixed Feelings

Kenny Fisher Kenny Fisher 23.08.2022 14:19
EUR/USD has stabilized after a rough start to the week. In the European session, EUR/USD is trading at 0.9931, down 0.10% on the day and its lowest level since November 2002. After weeks in retreat, the US dollar has rebounded and is showing broad strength. The euro has taken it on the chin, falling 2.12% last week and down another 1.07% this week. It looks like the euro has more room to fall and we could see EUR/USD gazing up at the parity line for some time to come. German business activity falls German PMIs for August were mixed and the euro shrugged in response. Services PMI fell to 48.2, down from 49.7. This missed the estimate of 49.0. Manufacturing was slightly better, rising from 49.3 to 49.8 and beating the forecast of 48.2. The readings are worrying, as they indicate that both manufacturing and services have been in contraction for two straight months, with readings below the neutral level of 50.0. The economic outlook for the eurozone’s number one economy remains bleak, as high inflation and rising interest rates threaten to tip the economy into recession. Unsurprisingly, confidence levels amongst manufacturers and businesses remain low. Germany’s labour market has been a bright spot in the economy, but there is room for concern here too. Employment in the private sector rose in August, but the pace of job creation fell to its lowest since March 2021. With the economy in a downturn, the downside risk to job creation will likely increase. The markets are anxiously awaiting Fed Chair Powell’s speech at Jackson Hole on Friday, but there are some key US releases that could have an impact on the direction of the US dollar. New Home Sales will be released later today, with a forecast of 575 thousand for July, following 590 thousand in June. Durable goods orders will be published on Wednesday, with the headline reading expected to fall to 0.6% in July, down sharply from 2.0% in June. With the Federal Reserve in data-dependent mode, investors are keeping a close eye on key US events and we could see some movement in the currency markets following these releases. EUR/USD Technical 0.9959 has switched to resistance. Above, there is resistance at 1.0113 There is support at 0.9877 and 0.9723 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro drops to new 20-year low - MarketPulseMarketPulse
ECB Inflation Projections: Euro Gains Support on Higher CPI Forecast

Euro Will Rebuild Itself? Recession In USA Can Help!

InstaForex Analysis InstaForex Analysis 23.08.2022 17:05
Company does not offer investment advice and the analysis performed does not guarantee results. The markets are in suspense in anticipation of the US central bank meeting in Jackson Hole. The main topic of the upcoming event is the further dynamics of the key rate, the rise of which will significantly affect the US economy and the national currency. According to a number of analysts, at the annual conference of heads of central banks and representatives of the financial world, which will be held on August 25-27, the topic of raising interest rates will be key. In terms of importance, it is equal to the issue of combating skyrocketing inflation, which is near a 40-year high. Federal Reserve Chairman Jerome Powell is expected to speak at the Jackson Hole symposium. Its outcome may be a revision of current decisions on the dynamics of the key rate. Most market participants are confident in its rise by 0.75 percentage points, while the rest - by 0.5 percentage points. At the same time, many analysts expect the Fed to continue the current course of monetary policy. Market participants are also confident that the central bank will leave its strategy unchanged until inflation returns to the 2% target. However, according to experts, this is a double-edged sword. Sooner or later, inflation will return to normal, but the core and median indicators will not reach their target either in 2022 or 2023. This process requires much more time, analysts are certain. According to economists, now it is useless to expect a reversal from the Fed. At present, all the efforts of the US and other central banks are aimed at fighting inflation, and this implies following the chosen course of monetary policy. Against this background, the US currency remains stable and tries to grow. These attempts are most often successful, which cannot be said about the European currency. Strengthening the greenback is facilitated by the influx of investor funds into safe assets. At the same time, the euro has reached a low of over 20 years. The reasons are explosive energy prices and difficulties with economic growth in the eurozone. Market participants are preparing for a harsh winter in Europe, which is complicated by problems with the region's energy supply. The euro fell against the greenback at the beginning of this week, again approaching parity. According to experts, the euro is at risk of slipping to the level of 0.9911 - a new 20-year low, if the yield of US government bonds recovers. In a similar situation, the EUR/USD pair will collapse to 0.9750 by the end of September. However, experts and market players hope to improve its dynamics, although these hopes are fading every day. The EUR/USD pair was trading near the low level of 0.9920 on Tuesday morning, August 23, throwing the markets into a gloom. By now, the euro has rushed downward and is within the boundaries of a five-week low. According to experts, the single currency plunged amid fears about a further reduction in gas supplies to Europe and the intensification of the energy crisis. Earlier, at the end of last week, the EUR quickly returned to parity with the USD after discussions by some Fed representatives about a possible rate hike in September (by 0.75%). The single currency briefly got a head start after statements by Isabelle Schnabel, a representative of the ECB's executive board, who allowed another rate hike in September (by 0.50%). Many analysts expect a short-term rise in the euro, which is able to regain lost ground if economic indicators in the US indicate that a recession is approaching. However, such a scenario is unlikely as recent months have seen inflationary pressures ease and economic confidence in the United States rise. According to US employment reports and other important macroeconomic indicators, the US economy is far from recession. At the same time, some FOMC representatives express concerns about economic growth in the country and are skeptical about the slowdown in the rate of monetary policy normalization. This week, the results of PMI in the manufacturing sector and the services sector of the euro area could add pressure on the EUR/USD pair. If these indicators worsen, the euro will again test the lows, experts are certain. An additional factor of pressure on the EUR will be the minutes of the European Central Bank's July meeting, which is expected to be published on Thursday, August 25. The euro's succeeding dynamics will depend on the greenback's reaction to economic data from the US, which will appear before the Fed's speech on Friday, August 26. At the moment, experts admit the strengthening of hawkish sentiments not only among the US, but also among European central banks. Market participants expect the ECB to raise the key rate, although this is now unlikely. In this situation, the dollar, as always, is able to rise at the expense of the euro. The implementation of such a scenario is possible if the Fed raises interest rates in September 2022. Against this background, many experts consider the EUR/USD pair to be a time bomb, which remains "very heavy" and can fall below the parity level at any moment.   Source: Forex Analysis & Reviews: Intrigue for the USD: Will the Fed reconsider is rate decision?  
USD/JPY Technical Analysis: Resistance at 147.80, Target Support at 145.90 Amid Uncertainty

EUR/USD Falling Shows Europe's Harmful Dependence On Russia

InstaForex Analysis InstaForex Analysis 23.08.2022 19:03
Relevance up to 14:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. January 2000. For the first time in its history, the euro falls below parity with the US dollar on expectations that the Fed will raise the federal funds rate. Borrowing costs are sure to rise both in the United States and the eurozone, but the hot American economy signals that the Fed will outpace the ECB. As a result, the EURUSD pair moved to a historical low of 0.824 and stayed below parity until the end of 2002. It took the bulls almost two years to win back the losses. How will it be this time? The Fed is already ahead of the European Central Bank. It raised the federal funds rate by 225 bps since the beginning of the monetary tightening cycle, to which Christine Lagarde and her colleagues responded by only 50 bps. Money markets are signaling that US borrowing costs will rise by 75 bps in September, and the euro area – by 50 bps. The speed of the American monetary restriction is still higher, and the European economy is clearly weaker, so the question of updating the historical bottom with the EURUSD pair remains open. Indeed, following the German economy, the French economy also faced a drop in business activity below the critical level of 50. As a result, the European Composite Purchasing Managers' Index hints at a contraction in the currency bloc's GDP in the third quarter. If the ECB continues to raise rates, as it no doubt will, the central bank will only make matters worse by deepening the recession. Dynamics of business activity in Germany and France The fall of the EURUSD below parity reflects not only strong demand for the US dollar but also the result of the EU's harmful dependence on Russia. Europe, sitting on the needle of Russian gas, is not able to get off it at one moment. The reduction of supplies via Nord Stream to 20% of its capacity, followed by the shutdown of the pipeline for maintenance, which can last indefinitely, pushed the prices of blue fuel to record peaks. The result was a combustible mixture of high inflation out of the control of the ECB and increased household spending preventing them from spending on other things. Stagflation, followed by a recession, is perceived extremely negatively by investors and pushes EURUSD to at least 0.95. Of course, not only the energy crisis is to blame for the collapse of the main currency pair, but also the US stock market, which stubbornly demanded that the Fed put on the brakes on monetary restriction, followed by a reduction in the federal funds rate in 2023. Even slowing inflation will not force the Fed to stop tightening monetary policy. The work of the Central Bank is far from over, stock indices finally realized this and began to fall, pulling the euro into the abyss. Technically, on the EURUSD daily chart, the AB=CD pattern was activated with a target at 161.8%, located near the 0.97 mark. We continue to sell the euro, at least until Jackson Hole. There, the hawkish rhetoric of Jerome Powell could lead to profit taking and a pullback. Source: Forex Analysis & Reviews: EU's dependence on Russian gas let EURUSD fall below parity
Global Markets Shaken as Yields Soar: Dollar Surges, Stocks Slump, and Gold Holds Ground Amid Debt Concerns and Rate Hike Expectations

Watch Out Forex! USD (US Dollar) Index May Reach 111! EUR/USD Plunging To 0.98 Is Probable!

ING Economics ING Economics 24.08.2022 08:57
The Jackson Hole Symposium kicks off tomorrow, and while PMIs sent grim signals on the economic outlook, markets are broadly holding on to their hawkish expectations. We think the post-PMI dollar correction may be fully reversed today, but a quiet calendar across major markets suggests a potentially calmer environment DXY can still reach 110.00 by the end of the week if Fed Chair Jerome Powell sticks to his hawkish message on Friday USD: Shrugging off the post-PMI correction Amid an abundance of rather dismal PMIs in major Western economies, the dollar suffered a correction yesterday as activity surveys showed a big slump in the service sector. The market reaction relates to markets pricing in a grimmer economic outlook in Europe than in the US, so that bad data tends to have an asymmetrically larger impact on US-growth-sensitive assets. In FX, the dollar’s overbought condition makes it naturally vulnerable to some position-squaring downside risks. That said, we are not surprised to see the post-PMI FX moves being quite short-lived (the dollar recovered overnight), as the macro picture and solidly hawkish expectations ahead of Jackson Hole should keep the dollar broadly in demand. The quintessential lack of attractive alternatives – especially in Europe – means that DXY can still reach 110.00 by the end of the week if Fed Chair Jerome Powell sounds convincing enough in sticking to his hawkish message on Friday. On the data side today, some focus will be on durable goods orders for July, which should however have limited market implications. There are no scheduled Fed speakers before the Jackson Hole Symposium kicks off tomorrow. Francesco Pesole EUR: Bearish bias persists Despite yesterday’s rebound, EUR/USD remains undervalued by around 5% according to our short-term fair value model. As we’ve highlighted on multiple occasions lately, the risk premium on the pair can linger for several months as it did in 2015 (Greek debt crisis) and 2018 (Italian political turmoil). In other words, while an improvement in the eurozone’s growth sentiment may trigger an asymmetrical upside reaction in EUR/USD, a prolonged short-term undervaluation is surely possible should gas prices remain elevated and the threat of supply shortages material. Indeed, yesterday’s PMIs all but confirmed the market’s concerns about the toxic combination of high energy prices and slowing global demand, and a full inversion of yesterday’s moves may be on the cards today. A drop to 0.9800 in our view is more likely than a sustained recovery above parity in the near term. The eurozone’s calendar is very quiet today and there are no scheduled ECB speakers. We think the ECB should turn more vocal on the weak euro, although the practical implications for the FX market may be quite small for now. Francesco Pesole GBP: Quiet calendar, same downside risks The UK’s August PMIs offered something for both the doves and the hawks at the Bank of England. The slump in the manufacturing sector appears mostly driven by slower demand, and the survey seems to suggest input prices are cooling. On the other hand, hiring demand has remained strong and the difficulty in finding staff remains quite elevated – all of which points to sustained upside wage pressure. The bottom line is that core inflationary pressures may have peaked, but there are indications that service inflation may prove more persistent. There are no events or data releases to highlight in the UK calendar today. We see downside risks for Cable as yesterday’s dollar drop may be unwound further, with 1.16/1.17 remaining the bias for this week. EUR/GBP may bottom out if it reaches 0.8400, as similar economic troubles for the UK and the eurozone argue against sustained deviations from its recent range. Francesco Pesole CEE: End of the sell-off not in sight Today in the CEE region, there are confidence indicators in the Czech Republic and labour market data in Poland and Hungary. Czech consumer confidence has slumped massively in recent months under pressure from rising inflation and fears about the future and was already at near all-time lows in July, and no improvement is expected for August either. On the other hand, labour market data from Poland and Hungary should confirm the tightened conditions. Hungarian wage growth, while slowing from June, remains well above 10%. Unemployment in Poland has fallen further and may see further record lows. For the CEE market, the conditions remain the same: EUR/USD near parity, gas prices slightly below their peak, risk-off sentiment and a sell-off in CEE bonds. The Hungarian forint continues to move higher, following the pattern of gas prices. However, Thursday's National Bank of Hungary meeting is approaching and, as we mentioned yesterday, this may bring further weakness for the forint. However, the Polish zloty could stabilise for the time being. After a few days, we saw the first rise in the interest rate differential which could keep the zloty around 4.770 EUR/PLN. However, the float FX side remains heavily dependent on global events which may trigger another sell-off. The koruna seems to remain under the safe wings of the Czech National Bank. While the central bank's balance sheet data confirms minimal FX intervention activity last week, we can expect the CNB to be more active this week. Frantisek Taborsky Read this article on THINK
Short-term analysis - Euro to US dollar by InstaForex - 31/10/22

EUR/USD: PMI Data Made US Dollar (USD) To Decrease, GBP/USD And Nasdaq Shock

Jing Ren Jing Ren 24.08.2022 08:30
EURUSD sees limited bounce The US dollar retreated after PMI data showed a slowdown in business activity. However, the euro’s fall below parity and July’s low indicates that sellers are in control. As last month’s rally turned out to be a dead cat bounce, the path of least resistance would be down. After the RSI sank into oversold territory, 0.9900 from December 2002 saw some bargain hunting. Though the former demand zone around 1.0040 could be a tough level to crack. Renewed selling would send the single currency towards 0.9700. GBPUSD breaks daily support The pound bounces over upbeat services PMI. The pair had previously failed to clear the supply zone (1.2300) on the daily chart. The bears’ latest push below 1.1770 has invalidated the mid-July rebound. This is a confirmation that the downtrend could resume in the weeks to come, and the price action might be heading towards March 2020’s lows around 1.1400. 1.1720 is an intermediate support in case of a brief consolidation. Stiff selling pressure could be expected at the support-turned-resistance at 1.1950. NAS 100 struggles for bids The Nasdaq 100 feels the pressure from signs of a slowing US economy. A break below the psychological tag of 13000 has put the bulls under pressure. 12800 on the 30-day moving average is another test of buyers’ resolve in the short-term. 13080 has become a fresh supply area, and as the RSI recovers into the neutral area, renewed selling interest could cap a potential rebound. The bulls will need to reclaim 13400 before the index could secure a foothold again. Otherwise, it could be vulnerable to another round of sell-off.
Forex: EUR/USD Drop Will Be Lasting And It Is Just The Beginning

Forex: EUR/USD Drop Will Be Lasting And It Is Just The Beginning

InstaForex Analysis InstaForex Analysis 24.08.2022 13:22
Relevance up to 12:00 2022-08-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical analysis: EUR/USD has been trading downside today and I see the breakout of the hourly bear flag pattern, which is good confirmation for further downside movement. Trading recommendation: Due to the breakout of the bear flag this morning, I see further drop in play. Watch for potential selling opportunities on the intraday rallies with the downside objectives at 0.9890 and 0.9715. Stochastic is showing fresh bear cross and potential for the downside rotation. Key resistance is set at the price of $1.0000   Source: Forex Analysis & Reviews: EUR/USD analysis for August 24 2022 - Breakout of the bear flag pattern  
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

FX: Euro (EUR) To US Dollar (USD) - Technical Analysis - 24/08/22

InstaForex Analysis InstaForex Analysis 24.08.2022 14:39
Relevance up to 09:00 2022-08-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The EUR/USD pair had made a new swing low at the level of 0.9901 and then bounced from the extremely oversold market conditions. The nearest technical resistance is located at the level of 1.0000 and needs to be clearly violated for a more solid bounce. Please notice the weak and negative momentum on the H4 time frame chart supports the short-term bearish outlook for EUR with a potential target seen at the level of 0.9900 or even lower. The US Dollar is still being bought all across the board, so the bearish pressure on EUR is still strong.     Weekly Pivot Points: WR3 - 1.0089 WR2 - 1.0057 WR1 - 1.0035 Weekly Pivot - 1.0025 WS1 - 1.0003 WS2 - 0.9992 WS3 - 0.09960 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue lower towards the level or 0.9900 and below. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue.   Read more: https://www.instaforex.eu/forex_analysis/289751
Escalating Russia-Ukraine Tensions Amplify Oil Supply Risks: The Commodities Feed

Forex: Dead Cat Bounce On The 4-hour Chart Of EURUSD

InstaForex Analysis InstaForex Analysis 24.08.2022 23:00
Relevance up to 14:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. If even aggressive rate hikes don't help the currency, can something save it? Money markets, looking at skyrocketing inflation in the euro area, expect the ECB to raise the deposit rate by 100 bps by October, which on paper should lend a helping hand to the EURUSD. Alas, theory is one thing, and practice is quite another. The more aggressively the European Central Bank tightens monetary policy, the worse the economy will be. The deeper the recession will be, and it is the divergence in US economic growth and the currency bloc that is pushing the major currency pair downward. Dynamics of the expected ECB rate changes by October According to JP Morgan, a large increase in borrowing costs does not help the currency if it is done in order to anchor inflationary expectations and hurt GDP. Indeed, many European currencies, including the euro and the pound, are not falling because their issuing central banks are extremely slow. On the contrary, their determination could seriously harm the economy. On the other hand, what is left for Christine Lagarde and her colleagues to do? If you do not raise rates, the fall of EURUSD can turn into a real nightmare. Europe, dependent on raw materials, is facing rising prices for it, exacerbated by the depreciation of the regional currency. Under such conditions, inflation is growing like mushrooms after rain, and the passivity of the ECB can only accelerate this process. Dynamics of EURUSD and European inflation The weakness of the euro is due, among other things, to expectations of a slowdown in the monetary restriction of the European Central Bank in 2023. The futures market predicts an increase in the deposit rate to a peak of 2% by September next year. That is, after a stormy start, the Governing Council will press the brakes. But by then, the federal funds rate may exceed 4%. The ECB is in an extremely difficult position. And this leaves its mark on the views of its representatives. If Fabio Panetta calls for caution, as an excessively rapid tightening of monetary policy will harm economic growth, Isabel Schnabel, on the contrary, notes the weakness of the euro as a factor contributing to the acceleration of inflation and suggests acting decisively. The Fed's position looks much simpler. Inflation in the US is slowing, allowing the central bank to slow down but remain determined to keep consumer prices from lingering at elevated levels for long. Fed Chairman Jerome Powell's rhetoric is expected to be hawkish at the Jackson Hole symposium, which is why both US stock indices and EURUSD are falling. Our task is to hold the previously formed shorts on the main currency pair until Powell's speech and then start taking profits on them. T echnically, there was a dead cat bounce on the 4-hour chart of EURUSD, and the rebound from dynamic resistance in the form of a moving average allowed us to build up short positions. At levels 0.984 and 0.972, it makes sense to close some of them. Source: Forex Analysis & Reviews: Euro sees no bottom  
Short-term analysis - Euro to US dollar by InstaForex - 31/10/22

EUR/USD Can Surprise Us Today! Forex Market Developments May Be Gripping! ECB Minutes Are Released This Afternoon!

ING Economics ING Economics 25.08.2022 09:52
The dollar is slightly softer today as the People's Bank of China (PBoC) seemed to issue a protest against recent renminbi weakness with a stronger fixing. Additional stimulus measures from China are also helping the commodity complex. Yet US yields remain at their highs and dollar dips should be limited before tomorrow's speech from Fed Chair Powell The People's Bank of China seems to have issued a protest against recent renminbi weakness with a stronger fixing USD: Watch out for initial claims and Fed speakers today The dollar is slightly softer today and risk sentiment is marginally better. Activities by Chinese authorities probably account for both of these developments but are not seen as game-changing. On the dollar side, the recent upside breakout in USD/CNY had hit emerging currencies and contributed to recent dollar strength. The fear was that the PBoC was going to allow another 6% fall in the renminbi, similar to April/May this year. However, for the first time in recent weeks, the PBoC has fixed the renminbi stronger than model-based estimates had suggested – fixing USD/CNY at 6.8536 versus 6.8635 from the models. The PBOC typically uses fixings to direct market sentiment and today's message seems to be that the renminbi might have fallen too far, too fast. Additionally, China has announced new fiscal stimulus measures (largely on the infrastructure side) worth around CNY1trn. Yet this is not particularly large and looks unlikely to turn around the sentiment on China which is currently weighed by its zero-Covid policy and unwinding the excesses of the property sector. News from China may be enough to slow dollar strength today but looks unlikely to reverse core trends of higher energy prices weighing on the importers in Europe and Asia, plus the Fed having unfinished business with inflation. On this latter subject, today sees a raft of Fed speakers before tomorrow's main event of the week – Fed Chair Jerome Powell's keynote speech on the economic outlook. What impact could he have on markets? Well, US yields have firmed back up this week and our colleagues in the rates strategy department have made the good point that market-based inflation expectations are rising even as rates are going higher – suggesting the Fed will be in no mood to soften its stance. The hawkish Fed should keep the dollar supported on dips. In addition to Fed speakers today, we should see a modest upward revision to US 2Q GDP data and the weekly initial claims data. Buy-side surveys have suggested that it would take initial jobless claims moving above 300k (now 250k) to spark a Fed pivot. Given heavy long dollar positioning, the FX market does seem very sensitive to any softer than expected US data, hence the need to watch initial claims today. What does this all mean for  DXY? 108.10/15 looks important intra-day support and should determine whether DXY needs a correction back to the 107.00 area. We remain bullish on the dollar on the back of the Fed and the energy story, but heavy positioning is probably the biggest risk to the dollar right now.  Chris Turner EUR: German IFO and ECB minutes in focus EUR/USD is enjoying the slightly softer dollar environment and re-challenging parity. 1.0015/20 looks key intra-day resistance. Above there, the risk is of a short squeeze all the way to 1.0135. Determining whether we get that short squeeze today will be the US data (above), the August German IFO, and the release of the minutes of the July ECB minutes in which it hiked 50bp. Typically the ECB minutes are not a market mover, but today could shed light on whether the central bank wanted to cram in some hikes while it could. The market currently prices 57bp hikes at the 8 September meeting and 125bp by year-end. Notably, yield spreads have been moving in favour of EUR/USD this week (as UK rates have dragged eurozone rates higher more quickly than those of the US). Conditions could be ripe for a short squeeze. But major challenges from the gas crisis and the Fed remaining hawkish suggest EUR/USD rallies may stall in the 1.01/1.02 area this month. Chris Turner GBP: Gas drags Bank of England pricing around Surging gas prices look to be dragging Bank of England (BoE) pricing around, where markets now price 170bp of BoE tightening by year-end. This gas story looks here to stay for the next few months, with one of the fresh risks being whether the US hurricane season disrupts US gas production and LNG exports. With the market long dollars, Cable is at risk of a short squeeze. We see 1.1880 as key intra-day resistance here above which we could be looking at a retest of 1.20. For EUR/GBP we would still favour the 0.8400 area as higher GBP rates force foreign holders of UK Gilts to lower rolling forward hedge ratios.  Chris Turner CEE: All eyes on the forint, again Regional currencies are showing the first signs of relief, but we think it is too early to announce the end of the sell-off. Although the Polish zloty has stabilised after a week of weakness and the forint has shown rapid appreciation, gas prices are testing new highs and Friday's Jackson Hole symposium may once again return support to the US dollar. For the Polish zloty, we see a sideways move at the moment and a wait-and-see approach for further global developments. Today, however, all attention will be back on the forint and the National Bank of Hungary (NBH). The central bank has its weekly meeting scheduled for today, but like last week, we expect the one-week deposit rate to remain unchanged. Yesterday's move has brought some calm to the FX market, plus the NBH is scheduled to hold a regular monetary policy meeting on Tuesday next week. Thus, in our view, the NBH is saving its ammunition for the full meeting and does not want to risk a shot without effect, taking a lesson from the July sell-off. On the other hand, the market may still have some expectations that we think will not be met today, which again might not bring good news for the forint. Elsewhere, we could see some positive headlines regarding the negotiations between the Hungarian government and the European Commission. However, only from the Hungarian side, which leaves us cautious about the further development of this story. So overall, a move back towards 415 EUR/HUF is not out of the question over the coming days and we will see what the NBH reaction will be next week. Still, the forint is the only currency in the region currently supported by a rising interest rate differential and we should see a HUF rally back below EUR/HUF 400 in the case of positive news from the European Commission. However, this is certainly not a matter for the next few days and the forint will still have a tough time. Frantisek Taborsky  Read this article on THINK TagsPeoples Bank of China Jerome Powell FX Daily FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Price May Fall Under 1.0660

Euro (EUR) To (US Dollar) - Technical Analysis - 25/08/22

InstaForex Analysis InstaForex Analysis 25.08.2022 09:56
Euro bounce continues towards the resistanceTechnical Market Outlook: The EUR/USD pair had made a new swing low at the level of 0.9901 and then bounced from the extremely oversold market conditions. The nearest technical resistance located at the level of 1.0000 had been violated and bulls are now targeting the level of 1.0099. Please notice the neutral momentum on the H4 time frame chart might evolve to positive momentum if the bulls break above the short-term trend line resistance soon. The US Dollar is still being bought all across the board, so the bearish pressure on EUR is still strong, however now it is time for a correction.     Weekly Pivot Points: WR3 - 1.0089 WR2 - 1.0057 WR1 - 1.0035 Weekly Pivot - 1.0025 WS1 - 1.0003 WS2 - 0.9992 WS3 - 0.09960 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue lower towards the level or 0.9900 and below. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue.   Relevance up to 08:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/289924
The EUR/USD Pair Is Still In A High Position On The 1H Chart

Forex: EUR/USD - Commitment Of Traders Shows Number Of Short Positions Increased!

InstaForex Analysis InstaForex Analysis 25.08.2022 10:58
Several interesting market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 0.9941 level in my morning forecast and advised you to make decisions on entering the market from it. A false breakout near 0.9941 made it possible for bulls to respond to what they thought was a downside correction. As a result, a buy signal was formed, but I did not see a major upswing. The most that could be expected was 20 points of profit. The bears achieved a breakdown of 0.9941 in the afternoon, and a reverse test from the bottom up led to a sell signal, which resulted in a fall of 30 points. The euro's sharp rise after the release of US data did not make it possible for us to see new entry points to the market.     When to go long on EUR/USD: Yesterday was similar to the day before, where another portion of weak data on the US led to a sharp decline in the US dollar against the euro. Today should be quite an interesting day, as a variety of eurozone statistics are expected to be released, as well as the start of a two-day symposium at Jackson Hole, which promises a major spike in volatility. The market direction during the European session will be set by data on German GDP, as well as on the index of business expectations, the current situation and the business climate in Germany from the IFO Institute. The decline in indicators will have a negative impact on the euro, which may lead to a fall in the area of the nearest support level of 0.9969. Forming a false breakout there will provide a new signal to open long positions in hopes that EUR/USD would recover further with the prospect of updating resistance at 1.0027. A breakthrough and test of this range from top to bottom will occur only after the release of the minutes of the European Central Bank meeting, in which traders will look for hints of more aggressive actions of the central bank in the future. All this will hit the bears' stop orders, creating another signal to enter long positions with the possibility of updating 1.0068, while the resistance at 1.0097 will be a more distant target, where I recommend taking profits. In case EUR/USD falls and the bulls are not active at 0.9969, the pressure on the pair will increase again. In this case, the best option for opening longs would be a false breakout in the intermediate support area of 0.9942. I advise you to buy EUR/USD immediately on a rebound only from 0.9911, or even lower - around the parity of 0.9861, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears' main task is to protect the very important resistance at 1.0027. Taking into account that after another major upsurge in the face of disappointing US data, there were still those willing to buy the euro, we can expect further upward movement from the pair. Therefore, the optimal scenario for opening short positions would be a false breakout at 1.0027 in the morning, which will lead to the euro sliding down to the 0.9969 area, where the moving averages play on the side of the bulls. A breakdown and consolidation below this range with a reverse test from the bottom up creates another sell signal with the removal of bulls' stop orders and a larger drop in the pair to the 0.9942 area, and there it is within easy reach to 0.9911, where I recommend taking profits. A more distant target will be the area of 0.9861. If EUR/USD jumps during the European session if we receive good statistics from IFO on Germany, as well as the absence of bears at 1.0027, there will be an opportunity to implement an option with further profit taking on short positions before an important meeting in Jackson Hole, which will change the situation in favor of the bulls. In this case, I advise you to postpone short positions until 1.0068, but only if a false breakout is formed there. You can sell EUR/USD immediately on a rebound from the high of 1.0097, or even higher - from 1.0127 counting on a downward correction of 30-35 points.     COT report: The Commitment of Traders (COT) report for August 16 logged a sharp growth in short positions and a decline in long positions, which confirms the euro's current position against the US dollar. The risk of a looming recession in the US is now combined with the risk of more serious problems in the eurozone, which will begin this autumn amid a sharp rise in energy prices and further inflation, which the European Central Bank is fighting at a fairly moderate pace so far. At the end of this month, American politicians will have a meeting at Jackson Hole, where the key word will be Federal Reserve Chairman Jerome Powell. The pair's succeeding direction will depend on this, as a strong dollar harms the American economy and further accelerates inflation, which the central bank is fighting against. The COT report indicated that long non-commercial positions decreased by 862 to 199,226, while short non-commercial positions jumped by 7,386 to 242,010. At the end of the week, the total non-commercial net position remained negative and fell to -42,784 against -34 536, which indicates that the euro could be under pressure again and may also fall further. The weekly closing price decreased and amounted to 1.0191 against 1.0233.     Indicator signals: Moving averages Trading is above the 30 and 50-day moving averages, indicating that the bulls are trying to maintain the correction. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of a decline, the lower border of the indicator around 0.9911 will act as support. In case of growth, the upper border of the indicator in the area of 1.0010 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders. Relevance up to 08:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/319849
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

Forex Trading: Euro To US Dollar - Longs - When To Buy Euro? Shorts - When To Sell EUR?

InstaForex Analysis InstaForex Analysis 25.08.2022 11:10
Analysis of transactions in the EUR / USD pair Euro tested 0.9926 at the time when the MACD was far from zero, which limited the downside potential of the pair. Sometime later, another test occurred, but this time the quote ended up rising by 13 pips. It then tested 0.9959 in the afternoon, but the MACD line was again far from zero, limiting the upside potential of the pair.     The lack of statistics in the Euro area led to a decline in EUR/USD yesterday morning, but it was offset by weak data on the US economy released in the afternoon. Most likely, another decrease will be seen today after the release of reports on Germany's GDP, business expectations, present situation and business climate. The minutes of the ECB meeting will not affect the market as no one expects serious discrepancies with the statements made by members during the meeting. In the afternoon, another set of important reports will be coming in the US, namely the GDP data and weekly jobless claims. But the start of the Jackson Hole symposium will be much more interesting as the meeting may determine the further direction of the pair. For long positions: Buy euro when the quote reaches 1.0037 (green line on the chart) and take profit at the price of 1.0094. Demand will rise if economic reports from Germany exceed expectations. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9987, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0037 and 1.0094. For short positions: Sell euro when the quote reaches 0.9987 (red line on the chart) and take profit at the price of 0.9916. Pressure will return if US statistics fell short of forecasts. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0037, but the MACD line should be in the overbought area, as only by that will the market reverse to 0.9987 and 0.9916.     What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 08:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/319857
The Price Of EUR/USD Pair Will Develop Sideways Movement

Wow! Look At EUR/USD Chart! What Can We Expect From Euro (EUR) To US Dollar (USD) - 25/08/22

InstaForex Analysis InstaForex Analysis 25.08.2022 11:18
Trend analysis (Fig. 1) On Thursday, from the level of 0.9963 (closing of yesterday's daily candle), EUR/USD will attempt to continue moving up in order to test 1.0079, which is the 38.2% retracement level (dotted white line). Upon reaching this level, the pair will go to the 76.4% retracement level at 1.0050 (dashed blue line), then continue rising up.     Fig. 1 (daily chart) Comprehensive analysis: Indicator analysis - uptrend Fibonacci levels - uptrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - uptrend Weekly chart - uptrend Conclusion: EUR/USD will rise from 0.9963 (closing of yesterday's daily candle) and test the 38.2% retracement level at 1.0079 (dotted white line). Then, it will go to the 76.4% retracement level at 1.0050 (dashed blue line), before bouncing further up. Alternatively, the pair could increase from 0.9963 (closing of yesterday's daily candle) to the historical resistance level of 1.0120 (blue dotted line), then fall down to the 76.4% retracement level at 1.0050 (dashed blue line). Quotes may continue to move up from this level.   Relevance up to 08:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/319859
The Markets Still Hope That The Fed May Consider Softer Decision

Forex: Could EUR/USD (Euro To US Dollar) Move Downward!?

InstaForex Analysis InstaForex Analysis 25.08.2022 11:39
Technical analysis: EUR/USD has been trading upside this morning but I see potential for the downside rotation due to lack for the buying power. Trading recommendation: Due to the rejection of the resistance at 1.0016 I see potential for further downside movement. Watch for potential selling opportunities on the rallies with the downside objectives at 0.9950 and 0.9910. Stochastic oscillator is showing fresh bear cross, which his sign that downside rotation is possible. Key resistance is set at the price of 1.0016 Read more: https://www.instaforex.eu/forex_analysis/289964   Relevance up to 10:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/289964
UAW Strike Impact and FX Market Implications Amid Ongoing Negotiations

China Counters The Negative Effects Of Covid Zero Policy?

Conotoxia Comments Conotoxia Comments 25.08.2022 12:40
The EUR/USD major currency pair's exchange rate is trying to return above the 1.0000 parity level for the second time in recent times. The first time the rise may have been a consequence of weaker US data, and now the market may have seen improved sentiment following China's actions. As reported by Bloomberg, risk sentiment may have improved in global financial markets after China announced that it will pump another 1 trillion yuan ($146 billion) into the economy to support GDP growth. China can thus counter both the negative effects of its zero COVID policy and counter the global economic slowdown. China, in effect, can save domestic demand. Nevertheless, today and tomorrow it seems that much more important news than that from China may hit the market. Today at 1:30 p.m., the minutes of the last meeting of the European Central Bank will be published, from which investors will be able to try to decipher what course the ECB will take this fall. According to the interest rate market, the central bank's borrowing cost could rise by 1 percentage point by October, which could mean two increases of 50 basis points each. It seems that the ECB's priority may be to fight inflation, even if this would be at the expense of economic growth - something that may be evident in today's minutes. This approach may also be borne out by recent statements by the ECB's Isabel Schnabel, pointing to the high risk of inflation and the lack of a decline since the central bank's last decision. In theory, the bigger and faster interest rate hikes in Europe, the more favorable it could be for the EUR (if there was no energy crisis). On the other hand, tomorrow at 16:00 Jerome Powell will open the symposium in Jackson Hole. The market seems to be discounting a more hawkish stance from the Federal Reserve chairman at this point. The rationale for this is probably the growing realization that central banks are ready to act to bring down core inflation as quickly as possible, even at the expense of macroeconomic weakness. According to the interest rate market, the scales for the next increase in the cost of borrowing may tip toward 75 basis points (60 percent probability for such a move on September 21). All of this could affect the EUR/USD main currency pair both today and tomorrow, and the struggle to break away from parity levels may only be beginning. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: ECB minutes and Jackson Hole key for EUR/USD
German labour market starts the year off strongly

Germany Is Going Down. Will Euro (EUR) Follow It?

Christopher Dembik Christopher Dembik 25.08.2022 13:13
Summary:  In today’s ‘Macro Chartmania’, we give an update on the German economy. Back in 2019, we wrote that the German economy was structurally doomed to decelerate due to China’s slowdown and severe underinvestment in the ICT (Information and Communication Technology) sector. This was before the 2020 pandemic outbreak and the 2022 energy crisis. Now, there is little doubt that Germany will enter into a recession this year. It is facing a perfect storm : high inflation for a prolonged period, failure of the multi-decade model growth based on cheap Russian energy and massive imbalance in R&D investment. This is not to say that Germany will become Europe’s new sick man. The country has everything in hand to overcome these challenges. But, in the short-term, it is without doubt a tough time for Germany and thus for the rest of the eurozone. Click here to download this week's full edition of Macro Chartmania composed of more than 100 charts to track the latest macroeconomic and market developments. All the data are collected from Macrobond and updated each week. The below chart partially explains why the German economy is not out of the woods anytime soon. So far, the country has avoided entering into a technical recession. This is explained by a rebound in external demand reflecting improved export growth to Turkey and a stabilization in export growth to the United Kingdom - two key trade partners. However, a recession is certainly only a matter of time. On Monday, the Bundesbank acknowledged that a recession is likely this year. The weak economic momentum in China is a source of concern. China is Germany’s most important trading partner with an average total trade volume in recent years of around €200bn. The latest data show that Germany export growth to China is close to its lowest level since the pandemic outbreak, at minus 8.3 % year-over-year in July. Based on preliminary trade data, the recent stabilization we can see in the below chart is likely to continue. But China’s weak growth is not Germany’s only problem. Inflation is here to stay. The Bundesbank forecasts it will peak around 10 % in the coming months versus 8.5 % year-over-year in July. This is likely. Contrary to the United States, the peak in eurozone inflation is ahead of us. Even if we pass the peak, inflation will remain elevated for long due to higher energy prices (lower reliance on Russian gas and oil will take years to materialize), weak euro exchange rate (a drop of the EUR/USD cross to 0.96 by year-end is highly possible) and the easing of government measures to cap prices (eurozone inflation is actually now artificially low). On top of that, Germany is also facing a structural challenge due to misallocation of investment. This is nothing new. But this is becoming an accurate problem nowadays as the economy is showing worrying signs of weakness. Looking at the global level, Germany is well-ranked in terms of R&D investment. Here comes the issue. A big chunk of it is attributable to the struggling automotive sector. It represents more than 50 % of total R&D investment over the recent years against only 6 % in the United States, for instance. The automotive sector is now in disarray. Supply chain disruptions, weaker demand and high energy bills are hurting carmakers. In the latest ZEW report for August 2022, the current conditions subindex for the car industry was out at minus 44.1. This is a better reading than a few months ago. It fell at minus 61.7 in April 2022 on the back of the Ukraine war, for instance. This is still close to its lowest annual levels, however. The oversized share of R&D investment coming from the car industry has an immediate negative impact : the ICT sector suffers from chronic underinvestment. This negatively impacts potential growth and leadership in key technological innovation. The pandemic outbreak and the following lockdowns showed that Germany is lagging behind in digitalization notably. Germany’s economy is now at a crossroads. For years, policymakers avoided tackling the issue of overdependence on cheap Russian energy (which was a key factor behind German industry’s high competitiveness) and massive imbalance in R&D investment. Hopefully, the upcoming recession will help to move forward on these two issues. There is no other choice but to find new energy alternatives.  The process has already started. This is also urgent to reduce economic dependence on the car industry and channel R&D investment in other sectors. This has yet to happen. In the meantime, if Germany sinks into a recession, expect the eurozone to follow immediately after.     Source: Chart of the Week : Weak Germany
The Market Expects Norges Bank To Keep Interest Rates Unchanged

Norwegian Krone (NOK) Is Ahead Of The Planet As Norway Will Earn Even More With Every Longer-term Delivery Contract Renewal

John Hardy John Hardy 25.08.2022 14:06
Summary:  The USD has backed off a bit from cycle highs this week in anticipation of the Fed Chair Powell speech Friday, which may be unlikely to bring much new to the table, now that the market has adjusted to the Fed’s pushback against the market’s interpretation of the July FOMC meeting. Elsewhere, we note the possible relative current account focus across FX as the Australian dollar is strong in the crosses and NOK likewise. FX Trading focus: Jackson Hole to not change the plot? Current account focus. After a feint higher yesterday, the US dollar pushed back lower yesterday and tested to new lows for the week this morning before flashing a bit of resilience. EURUSD parity was criss-crossed a few times this morning after China played its part in helping the USD lower overnight with a surprisingly strong fixing for USDCNY after it hit a two-year high yesterday amidst reports from Reuters (citing unnamed sources) that dealers in China were warned from official sources against aggressively selling the yuan. As I have noted in yesterday’s and today’s Saxo Market Call podcasts, the Jackson Hole speech from Fed Chair Powell is highly anticipated, but may not bring much new to the table, relative to expectations. There is some chance that the Powell speech focuses a bit more energy on quantitative tightening as an important factor from here rather than super-size rate hikes, which would be an interesting test for the bond market and whether longer treasury yields remain in the range established by the 3.50% high for the 10-year benchmark in mid-June, for example. The Fed is far from reaching its $95 billion/month pace of balance sheet tightening and its mortgage portfolio is unchanged over the last few months. But largely, the market may be simply left to its devices and default to look at where the cycle is taking us: toward a looming catastrophe in Europe and the UK this winter and into next year if energy prices stay anywhere within sight of current levels. It’s important to realize that the loony prices for natural gas and power in Europe are based on small transactions for the few that are willing to trade forward contracts at these prices, all while longer term contracts only set higher in ratcheting fashion – some a few months back and others not until the months ahead. Industrial users can’t continue full-scale operations at prices 6-8 times their historic ranges. In the US, a recession looms, but when? And before that recession is properly seeing the light of day, will the Fed have first turned the screws that much tighter on liquidity with far more forceful balance sheet reductions? It’s all important stuff as we have some compelling, unconfirmed setups in place for the USD peaking here (double top in broader USD indices and USDJPY, AUDUSD and USDCAD not needing much more USD weakness to suggest a reversal, etc.) but will need to get to the other side of Jackson Hole and then on to the US August jobs (and earnings!) report next Friday, the August CPI release on the 13th and the September FOMC decision on the 21st for a sense of whether this USD bull has legs. On a completely different note, another focus increasingly in evidence across FX is the one on relative current accounts, as the Aussie, CHF, CAD and NOK have performed well of late, possibly mostly on the current account fortunes more than due to any central bank signaling. EURNOK has seen quite the round trip from 9.60 o 10.50 and back to 9.60. We discuss the AUDNZD outlook below. By this metric, the Swedish krona should be doing better than it has of late, although it has clawed back some of the recent losses from the single currency. Fair or not, the krona has historically been very sensitive to the economic outlook for the Eurozone and risk sentiment generally. One issue certainly of concern for Sweden is its cratering housing market, where prices have fallen around 9% from the cycle peak, with the Riksbank looking for the risk of a 16% decline. This could hobble credit and sentiment. Chart: AUDNZDInteresting to watch AUDNZD here as it edges towards its highest levels in nearly five years and into the top of the range since all the way back in late 2013, when the pair was in a steep and steady descent from its prior range all the way north of 1.3500 (!). There is nothing in the relative yield spread perspective here to suggest the pair should jump into the old range above 1.12-1.13, but developments in relative current accounts over the last year do suggest upside pressure, as Australia’s complete portfolio of commodities has seen the country posting record surpluses this year while New Zealand’s trade deficits languish at new historic lows on the energy price crunch. On the lookout here for whether the pair can plow well back into that higher range if these current account dynamics extend – perhaps to at least 1.1500 but possibly even 1.2000 over the coming year. Source: Saxo Group Table: FX Board of G10 and CNH trend evolution and strength.Note the NOK leading the pack once again as record gas prices weigh in Europe and Norway is set to earn more with every longer-term delivery contract renewal. AUD is an interesting one to watch for broader strength after already significant moves against EUR and GBP, for example. 'Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Watching the challenge of the very long term AUDNZD range here, but also whether an AUDUSD upside reversal is in play (rally and close well north of 0.7000 begins to build the upside focus again). Elsewhere, NOK has been strong enough to challenge the greenback, even. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1130 – ECB Meeting Minutes 1230 – US Weekly Initial Jobless Claims 1230 – US Q2 GDP Revision 1500 – US Aug. Kansas City Fed Manufacturing survey 2200 – New Zealand Aug. ANZ Consumer Confidence 2230 – New Zealand RBNZ Governor Orr to speak 2330 – Japan Aug. Tokyo CPI   Source: FX Update: Jackson Hole may not change the plot.
The French Housing Market Is More Resilient | The Chance Of Republicans Winning The Senate Is Up

France: In August Business Climate Indicator Hit 103

ING Economics ING Economics 25.08.2022 14:44
France's business climate stabilised in August at 103, painting a more favourable picture than the PMI indices. However, the sub-indices do not give cause for optimism and there is little doubt that the autumn and winter will be more difficult. Shoppers at the Galeries Lafayette department store on the Champs-Elysees in Paris   The business climate indicator, published by INSEE, stabilised in August at 103, above the long-term average (100). The decline in industry (from 106 to 104) was offset by an improvement in retail trade (from 96 to 99). In the services sector, the indicator remained almost stable at 106. The economic situation depicted by the business climate indicators seems more favourable than the PMI indices for August published on Tuesday suggested. Both the composite PMI and the PMI for the manufacturing sector were below the 50 level, which signifies contraction. Although business sentiment is generally above its long-term average in most sectors, some components of the index are more worrying. In particular, in industry, the stock of finished goods is rising sharply and is back above its long-term average for the first time since July 2020. At the same time, both global and foreign order books are deteriorating. After months of supply difficulties, stocks are now high and will need to be cleared in the coming months, which, combined with a slowdown in global demand, is likely to have a negative impact on production. The fall in production could therefore be faster than the fall in demand, thus accentuating the contraction in activity. We see a similar pattern in the retail sector, where the assessment of expected sales is deteriorating sharply while inventories are rising. Moreover, while industrial managers remain relatively positive about expected production in the coming months, they have revised their production assessment downwards sharply in recent months. This indicates that industrial activity is weaker than expected already this quarter.  There's more optimism in the service sector There's more optimism in the service sector. This is particularly the case in the accommodation and catering sub-sector, thanks to an excellent tourist summer in France. The general and personal outlook of business leaders in the services sector has improved and the economic uncertainty felt has decreased. There is little doubt that the service sector will make a more positive contribution to economic growth in the third quarter than industry, although optimism in the tourism sector could diminish rapidly as the summer fades.  All in all, after a rather good spring, with second quarter GDP up 0.5% Quarter-on-Quarter after the first quarter's drop (-0.2%), and a summer boosted by tourism and good weather, all indicators are now pointing to a much more difficult autumn and winter. The global slowdown in demand, the deterioration in consumer and business confidence, the risks to energy supplies and inflation, which is reaching new heights and undermining purchasing power, are likely to push the European and French economies straight into recession. While French GDP this year could grow by around 2.2% thanks to the second quarter and the carry-over effect, growth will stall in 2023 and will probably be close to 0% for the whole of the year. Read this article on THINK TagsGDP France Eurozone Business climate Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Forex: Possibility Of Sharp Jump In Many Trading Instruments

ING Economics' Prediction Remain Unchanged - ECB Is Expected To Hike By 50bp

ING Economics ING Economics 25.08.2022 15:28
The minutes of the European Central Bank's July meeting underline its new approach to normalisation: we can do whatever we want, whenever we want ECB President, Christine Lagarde at a news conference after July's meeting   In these fast-moving times, it is always hard to extract any hints for future ECB decisions from a meeting that took place four weeks ago. Still, the just-released minutes of the bank's July meeting reveal some interesting insights. Here are our top picks: The discussion on the Transmission Protection Instrument (TPI) took actually place before the discussion on hiking interest rates. The TPI was agreed upon unanimously. Concerns about the weak euro came on top of the policy-relevant discussion, with “Members widely noted that the depreciation of the euro constituted an important change in the external environment and implied greater inflationary pressures for the euro area...” Recession is still a forbidden word in the ECB’s dictionary as it was only used nine times. However, there were many phrases like downturn or contraction, pointing to the same direction. Wage growth remains key for the ECB to identify second-round effects as “Members agreed that the persistence of inflation depended, to a large extent, on the behaviour of wages. Wage growth, also according to forward-looking indicators, had continued to increase gradually over the last few months but still remained contained overall.” The rate hikes by 50bp were broadly supported, with few ECB members calling for the initially almost pre-committed 25bp. The fact that many ECB officials, including ECB president Christine Lagarde, had publicly consistently repeated the intention to hike by 25bp since the June meeting was explained by “The Governing Council thereby took a larger first step on its policy rate normalisation path than signalled at its previous meeting, applying the stated principles of data-dependence and optionality. This was seen as providing a clear signal of its determination to act and to fulfil its mandate.” All in all, the minutes illustrate how the momentum within the European Central Bank changed between the June and the July meeting and also stress its determination to continue hiking rates as the minutes repeatedly underline that the ECB is on a path of normalisation. What to expect at the ECB's September meeting ECB officials are gradually returning from their holidays and are only gradually starting to become talkative again. Official comments which could hint at the next steps are still scarce. The discussion at the July meeting shows that growth concerns are mounting but that the ECB in our view is still too benign on the risk of an outright recession in the eurozone. Looking ahead, we still think that the ECB is currently pursuing two main goals: anchoring inflation expectations and normalising monetary policy. As for inflation expectations, only business inflation expectations have come down somewhat. The US example, however, shows that even more aggressive rate hikes are less potent in bringing down survey-based inflation expectations than global commodity prices. The latest drop in US inflation expectations seems to be the result of falling gasoline prices and not so much of the latest Fed rate hikes. This could be a hint for the ECB that a series of more aggressive rate hikes might be too much of a good thing. This leaves it with at least normalising monetary policy. And here, we know that any neutral level of a policy rate also depends on the state of the economy. In a robust growth environment, the neutral rate will be higher than in a low growth or even recessionary environment. Consequently, we still expect the ECB to take a less aggressive approach than the Fed and what markets are currently pricing in. We expect the bank to hike rates by another 50bp at the September meeting and then pause until spring next year. A recession, a winter energy crisis, and an ongoing war simply argue against overly aggressive rate hikes. Read this article on THINK TagsMonetary policy Inflation Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
What's ahead of Euro against greenback today? Let's look at Stefan Doll's review

European Central Bank (ECB) Is Expected To Hike The Interest Rate By 50bp

Craig Erlam Craig Erlam 25.08.2022 16:30
A slightly positive start to trading on Thursday as traders eye ECB minutes early afternoon and the start of the Jackson Hole Symposium. The minutes will likely provide further detail on the reasoning behind a more aggressive start to tightening than the central bank had communicated to the markets and perhaps provide further insight into what we can expect at the upcoming meeting as a result of that move. The issue with its decision was not that it was wrong to hike by so much – I’m sure most would agree that it wasn’t – rather it was just poorly communicated. And if the central bank wants to offer guidance, it needs to be reliable or it will become ineffective. Another 50 basis point hike is now expected in September. Is one trillion yuan enough? China announced a one trillion yuan stimulus plan overnight and investors were not particularly blown away. That may seem odd given the “trillion” number but that’s a reflection of the severity of the headwinds facing the economy at the moment and the consequences of a zero-Covid policy. The stimulus was largely targeted at infrastructure spending but the view seems to be that this will not be as effective as it has been in the past. The property sector is still experiencing distress and confidence has been very shaken. Lockdowns have further undermined confidence and made hitting the 5.5% growth target all but impossible. It’s going to take something much bolder to repair the damage and as it stands, a cautious approach to monetary and fiscal policy is all there is an appetite for. BoK continues tightening and signals more ahead The Bank of Korea continued raising interest rates today, hiking the base rate by 25 basis points to 2.5%, in line with the consensus. It’s unlikely to be the final action this year, with the central bank raising its inflation forecasts for this year and next to 5.2% and 3.7%, respectively, while revising down growth in the same period to 2.6% and 2.1%. Given the desire to avoid inflation becoming entrenched, another 25 basis point hike is expected to follow in October, although much could change in that time. Germany heading for a recession despite narrowly avoiding contraction Germany squeezed out a tiny amount of growth in the second quarter, the final Q2 reading showed today. The economy grew 0.1%, revised up from 0% previously. I’m trying to find a reason to be optimistic on the back of that but in reality, it just means the economy may take a little longer to fall into recession. The German IFO business climate didn’t make for much better reading, falling again to 88.5 – the lowest since mid-2020 – with both current assessment and expectations weak. With the energy crisis unlikely to improve, this likely means another quarter of flat growth at best before the economy falls into recession later this year. ​ Bitcoin missing out Bitcoin appears to be missing out on the risk rebound today, recording no gains so far in the session and instead treading water. There may still be some nerves after last week’s plunge, with $20,000 looking particularly vulnerable once more. A break below could quickly see sentiment turn against crypto after an encouraging recovery since mid-June. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Focus on central banks - MarketPulseMarketPulse
The Upside Of The EUR/USD Pair Remains Limited

Forex: How Little We Understand Inflation. EUR/USD Bulls

InstaForex Analysis InstaForex Analysis 25.08.2022 18:13
Relevance up to 14:00 2022-08-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Now we realize how little we understand inflation. This is how Jerome Powell argued in the Portuguese Sintra, admitting the mistake of the end of 2021. Then the Fed insisted that high prices were temporary. The time has come for Jackson Hole, and the American central bank can no longer afford to be wrong. It must throw all its strength into the fight against inflation, which puts the EURUSD bulls in a hopeless position. Markets are growing on expectations, and no one cares about what happened in the past. Yes, the United States faced a technical recession in the first half of the year, but the quotes of the main currency pair are based on expectations of a recession in the eurozone economy. According to UBS, it is already there. The bank forecasts a 0.1% contraction in the currency bloc's GDP in the third and 0.2% in the fourth quarter. It lowered the estimate of gross domestic product growth for 2023 from 1.2% to 0.8%. These projections are based on the assumption that gas prices will continue to rise, but there will be no major shortages. If Germany and other countries move towards rationing, the recession will be much deeper. UBS Eurozone GDP Forecasts The fact that not everything is in order in the leading economy of the eurozone is also evidenced by the drop in business expectations from the German IFO institute from 80.4 in July to 80.3 in August. Moreover, the fact that the indicator turned out to be better than the forecasts of Bloomberg experts, and Germany's GDP in the second quarter grew by 0.1% with the initial reading of zero expansion, inspired the EURUSD bulls to counterattack. Music did not play for them for long, the main currency pair could not gain a foothold above parity. It was hard to imagine a different outcome on the eve of Jackson Hole. Dynamics of the business climate and GDP in Germany There is a lot at stake. If not all. Obviously, Jerome Powell will continue to talk about the need to fight inflation, but will he talk about the possibility of going too far—overdoing it with tightening monetary policy? If yes, investors may take this as a "dovish" surprise, pushing up not only US stock indices but also EURUSD. Is the euro capable of a full-fledged correction? At first glance, no, because the downward trend in the main currency pair is based on such powerful drivers as the discrepancies in the economic growth of the US and the eurozone and in the monetary policy of the Fed and the ECB. However, more than 12% subsidence of the euro against the US dollar since the beginning of the year suggests that many negative factors are already in price. All you need is a signal to take profits on shorts and pull back. Technically, there is a risk of a pin bar forming on the EURUSD daily chart. If this is the case, traders will have an opportunity to enter a short position on a break of its low near the pivot level at 0.995. The further plan assumes building up shorts in case of storming the local minimum at 0.9895. The level of 0.97 acts as a target for the downward movement. Source: Forex Analysis & Reviews: EURUSD: Bulls' attempt to counterattack ahead of Jackson Hole turned into a fiasco
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

Forex: Euro To US Dollar - Technical Analysis - 26/08/22

InstaForex Analysis InstaForex Analysis 26.08.2022 10:22
Technical Market Outlook: The EUR/USD pair had made a new swing low at the level of 1.0034, however the attempt to break through the short-term trend line resistance has failed and the market returned lower towards the technical support seen at 0.9955. The nearest technical resistance located at the level of 1.0000 had been violated and bulls are now targeting the level of 1.0099 or 38% Fibonacci retracement level located at 1.0078. Please notice the neutral momentum on the H4 time frame chart might evolve to positive momentum if the bulls clearly break above the short-term trend line resistance soon. The US Dollar is still being bought all across the board, so the bearish pressure on EUR is still strong, however now it is time for a correction.     Weekly Pivot Points: WR3 - 1.0089 WR2 - 1.0057 WR1 - 1.0035 Weekly Pivot - 1.0025 WS1 - 1.0003 WS2 - 0.9992 WS3 - 0.09960 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue lower towards the level or 0.9900 and below. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue.   Relevance up to 08:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/290111
Oil Range-Bound, Gold Struggles Amid US Interest Rate Concerns

Forex: EUR/USD May Drive Us Crazy Today! Today's Powell's Speech At Jackson Hole Meeting Is Being Awaited As A Top-Class Blockbuster!

ING Economics ING Economics 26.08.2022 11:04
Today's speech by Jerome Powell in Jackson Hole has been regarded as a pivotal event for markets. However, Powell may refrain from deviating too much from market's expectations, and a reiteration of data dependency could put off part of the market reaction until next week's payrolls data. Still, a consolidation of the hawkish pricing can help the dollar Markets will be scanning Powell's speech today from a number of different perspectives   Monday 29 August is a national holiday in the UK, we'll resume publication of the FX Daily on Tuesday 30 August. USD: Powell may not want to shock the markets (in either direction) Fed Chair Jerome Powell will deliver his much-awaited keynote speech at the Jackson Hole Symposium at 1500 GMT today. Yesterday, comments by other Fed officials largely fell on the hawkish side of the spectrum. The arch-hawk James Bullard stressed once again the need for front-loading of rate hikes, suggesting rates should be raised to the 3.75-4.0% mark by the end of this year. The host of the Symposium, Kansas City Fed President Esther George, also said high inflation warrants more hikes, but highlighted the importance of incoming labour data (next week) to determine the size of September’s hike. Markets will be scanning Powell’s speech today from a number of different perspectives: inflation, growth outlook, front-loading, and any hint of easing in 2023. All these factors can play a different role in driving the reaction in the FX market, although we see a quite elevated risk that Powell may end up broadly matching the generally hawkish market expectations and avert any significant market shock. On the inflation side, the speech will take place shortly before the release of PCE inflation numbers for July, which are expected to have eased slightly but remain well above 6%. There’s simply not enough evidence or interest by the Fed to sound any less concerned on the inflation picture at this point, and a firm reiteration that additional forceful tightening to curb price pressures could remain at the core of Powell’s message today. Our suspicion is also that today’s speech will keep the notion of data dependency well intact, and potentially put off a big chunk of what could have been today’s market reaction until next week when US jobs figures are released. Looking at the implications for the dollar, we think that markets may find enough reason to push their peak rate pricing a bit closer to the 4.0% mark today and stir away from pricing back more than the current 1-2 rate cuts in 2023, which should ultimately offer some support to the dollar into next weeks’ payrolls release. We think DXY may touch 110.00 in the coming days, if not today.   Despite not being our baseline case, the downside risks to the dollar are non-negligible today. A more alarming tone on recession and any hints that the Fed will be more considerate when it comes to tightening to avert a major dampening impact on the economy would likely trigger an asymmetric negative reaction on the dollar, considering a rather stretched long positioning and short-term overvaluation, especially against European currencies.  Francesco Pesole EUR: Fair value converging to spot? Today’s price action in EUR/USD should be entirely driven by the dollar reaction to Powell’s speech, unless some further developments on the gas crisis story come to the fore. As we expect a moderately dollar-positive impact from Powell, we think EUR/USD may re-test the 0.9900 support. As discussed in recent research notes, the ongoing short-term undervaluation in EUR/USD is quite significant (around 5%), but a shrinking of the risk premium seems unlikely given the major threats to the eurozone’s economic outlook and may instead be triggered by a re-widening of the Fed-ECB rate expectations differential – i.e. with the fair value converging to spot and not the other way around. The minutes of the ECB’s July meeting released yesterday didn’t bring anything new to the table. Interestingly, concerns about a weak euro have become a very central theme within the Governing Council: expect to hear more on this topic from an intensifying ECB speakers activity next week, even though the ECB’s ability to offer a solid floor to the euro has proven blatantly limited given the persistence of high energy prices. Francesco Pesole GBP: Still driven by external factors The pound will lack any domestic drivers today, and Cable should move mostly in line with the dollar reaction to Jackson Hole. A break below the 1.1730 lows from earlier this week may well be on the cards on the back of USD strengthening, as 1.1500 (the 2020 flash crash bottom) is no longer looking like a remote possibility. It will be interesting to see EUR/GBP reaction to today’s speech by Powell. We could see a small recovery in the pair in a hawkish scenario where risk sentiment is hit, considering GBP is normally more sensitive to global risk moves, but the low appetite for EUR longs should keep a cap on the pair for now.    Francesco Pesole CEE: Zloty testing stronger levels Given the completely empty calendar in the region today, the market will wait for the next move at the global level, i.e. the outcome from Jackson Hole. In the meantime, the CEE floaters decided to test stronger levels for the first time in a while, but in the case of the Hungarian forint it was short-lived and we think that even the Polish zloty does not deserve yesterday's gains at this point. The forint, which has been heavily driven by gas prices, has been pulled back to weaker levels and this is negative news for the zloty as well. However, zloty was supported yesterday by a rise in market expectations for a rate hike and could thus benefit from a rising interest rate differential for the first time in a while. In our view, however, this is not enough and if bets on rate hikes do not increase further, the zloty will revert back to 4.770 EUR/PLN in our view. However, markets are already expecting more than a 50bp rate hike at the September National Bank of Poland meeting at this point, which we already think is a very aggressive expectation given the NBP's dovish rhetoric and worse-than-expected economic data. Therefore, we do not expect the interest rate differential to be supportive of the zloty. Thus, CEE floating currencies remain mainly driven by global influence. Frantisek Taborsky Read this article on THINK TagsJackson Hole FX Daily FX Dollar CEE Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Upside Of The EUR/USD Pair Remains Limited

Forex: EUR/USD - Price Can Grow Or Price Go Low!

InstaForex Analysis InstaForex Analysis 26.08.2022 11:33
Relevance up to 08:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1). The euro-dollar pair may move downward from the level of 0.9973 (close of yesterday's daily candle) to the support level of 0.9952 (thick blue line). After testing this level, an upward movement is possible with the target of 1.0011, the 23.6% retracement level (white dotted line). Upon reaching this level, the price may continue to move upward with the target of 1.0079, the 38.2% retracement level (white dotted line). Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today the price may move downward from the level of 0.9973 (close of yesterday's daily candle) to the support level of 0.9952 (thick blue line). After testing this level, an upward movement is possible with the target of 1.0011, the 23.6% retracement level (white dotted line). Upon reaching this level, the price may continue to move upward with the target of 1.0079, the 38.2% retracement level (white dotted line). Alternative scenario: from the level of 0.9973 (close of yesterday's daily candle), the price may move down to the lower fractal 0.9900 (white dotted line). After testing this level, work up with the target of 0.9968, the 14.6% retracement level (white dotted line). When testing this level, work up.   Source: Forex Analysis & Reviews: Indicator analysis: Daily review of EUR/USD on August 26, 2022
Forex: Possibility Of Sharp Jump In Many Trading Instruments

Forex: Possibility Of Sharp Jump In Many Trading Instruments

InstaForex Analysis InstaForex Analysis 26.08.2022 11:45
Relevance up to 08:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Euro and pound remains bearish ahead of Fed Chairman Jerome Powell's speech at the Jackson Hole symposium today. Most likely, investors are waiting for hints as to how and at what pace the US central bank is going to raise interest rates in the September monetary policy meeting. If Powell continues to be hawkish, dollar will strengthen further, while risky assets and the US stock market will fall down. But if he hints at a more restrained policy, risk appetite will surge and there will be a sharp jump in many trading instruments. In addition to Powell, the event will be attended by Fed Vice Chairman Lael Brainard and three other Governors: Lisa Cook, Philip Jefferson and Chris Waller, as well as all 12 regional Fed presidents. Some of them are planning to comment before the Fed chief, which could shed light on his final statement. The conference will also be attended by Bank of Japan Governor Haruhiko Kuroda and Bank of England Governor Andrew Bailey. European Central Bank President Christine Lagarde did not attend the meeting, but ECB executive board member Isabelle Schnabel did. A number of other ECB officials are also present, including the heads of the Bank of France and the Bundesbank, as well as policymakers from Africa, Latin America and elsewhere. In terms of the main points of the agenda, there will be four presentations on Friday and Saturday, and there will be discussions every day with the participation of the policymakers. Speakers will also cover topics such as maximum employment, potential output, fiscal constraints and central bank balance sheets. Talking about the forex market, the risk of a further decline in EUR/USD remains. Buyers need to cling to 1.0000 because without it, the pair will have a difficult time rising. Going beyond 1.0000 will open the path to 1.0030 and 1.0070, as well as to 1.0200. But if sellers were more active, the pair will fall to 0.9950, then to 0.9910, 0.9860 and 0.9820. In GBP/USD, buyers managed to push the quotes up, strengthening the chance of an upward correction. Staying above 1.1800 will open the path to 1.1840, 1.1880 and 1.1930, while falling below 1.1800 will push the quotes to 1.1750, 1.1720 and 1.1680. Source: Forex Analysis & Reviews: Euro and pound remains bearish ahead of Jerome Powell's speech at the Jackson Hole symposium  
The EUR/USD Price May Fall Under 1.0660

Breaking: ECB Has Another Reason To Be Hawkish! Non-financial Corporate Lending Rose!

ING Economics ING Economics 26.08.2022 12:53
Bank lending to non-financial corporates continued to be surprisingly strong at the start of summer despite higher rates and high economic uncertainty. A hawkish sign for the ECB Rising corporate bank lending in the eurozone is a hawkish sign for the ECB ahead of its September meeting   Credit to the private sector continued to grow strongly in July. This is somewhat surprising given higher interest rates, low confidence and banks indicating tighter credit standards and weaker demand for borrowing. Nevertheless, growth for non-financial corporate bank lending accelerated from 6.8% year-on-year to 7.7% YoY in July. This sounds dramatic but is mainly due to a large base effect. Nevertheless, month-on-month bank lending to non-financial corporates was still 0.9% in July, well above recent trend growth. Household credit growth slowed from 4.6 to 4.5%. The trend in household bank lending growth is slowing at the moment, which hints at a more immediate effect of higher interest rates. Money growth continues to slow rapidly as the ECB has stopped quantitative easing (QE) and increased interest rates. Broad money growth (M3) fell from 5.7 to 5.5% YoY in July. The narrower estimate M1, considered to be a better leading indicator of economic activity, dropped from 7.2% YoY to 6.7% YoY growth. The tightening of the monetary stance is adding to concerns about economic growth, as signs are becoming clearer that the economy could have already started a mild recession at this point. September ECB Meeting For the ECB, continued strong growth in corporate bank lending could be taken as a sign that the neutral rate is still a bit away. Sliding consumer borrowing points in the other direction, but overall this is a hawkish sign ahead of the September meeting. We expect the ECB to move by another 50 basis points now before signs of a recessionary economic environment become more widespread. Read this article on THINK TagsGDP Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Potentially Longer Lasting Inflation In The Europe May Cause British Pound (GBP) And Euro (EUR) Being Beaten By US Dollar (USD)

Potentially Longer Lasting Inflation In The Europe May Cause British Pound (GBP) And Euro (EUR) Being Beaten By US Dollar (USD)

Jing Ren Jing Ren 26.08.2022 09:43
As we all know, both the US and Europe (to include the UK along with the EU) are experiencing high inflation. However, how this impacts employees is very different. Employees constitute the bulk of consumers, and therefore drive the economy. The employment culture between these major economies has important implications of how the economy could react to inflation. That, combined with different monetary policy, could be a driving force of currency fluctuations. Last month, EU CPI rose above the US'. The UK's CPI pushed above the US' the month prior. With the Fed acting more aggressively to combat inflation than European central banks, this gap could widen. That could increase the difference in how labor practice and laws affect the economy and currencies. The main differences Generally, the US has "at will" employment, which is often understood that employees can be fired for any reason. But it also means that employees can be hired for any salary, and salary changes are much more flexible. In Europe, employees typically are hired for fixed contracts, often in the framework of collective negotiation. In the US it's rare to have inflation adjustment included in the contract, whereas in Europe (particularly in the periphery) it is almost standard practice. When the cost of living starts rising at an unprecedented rate, the reaction of the labor market is quite different. In the US, employees are more prone to change jobs, looking for better salaries. This has led the BLS to report the highest "churn" rate on record, with as many as 4.6M people changing jobs in a month. Despite this, however, average wages have been declining when adjusted for inflation. Employees who can change jobs are keeping up with inflation, those who cannot are seeing their income erode. Slow and deliberate vs fast and erratic With employees locked into collective contracts, discontent over lower wages translates instead towards industrial action. In recent months, there has been a spate of warnings or outright strikes. Most recently Lufthansa's pilots were unable to reach an agreement, and might go on strike at any time. SAS had to reschedule over 300K passengers because of strikes. One of the key sticking points of these discussions is the inclusion of automatic cost of living adjustments to wages. One of the phenomena most feared by central bankers is a price-wage spiral. That's when higher prices drive workers to demand higher pay, which increases costs to produce goods, causing higher prices, and workers demanding higher pay. An automatic inflation adjustment in labor contracts makes this price-wage spiral easier to develop, and increases the potential for runaway inflation. What does it mean for the future? The theoretical way to head off a wage-price spiral is to aggressively front load interest rates, to prevent inflation rising. However, European central banks have, relatively speaking, not done that. The Fed has acted a lot more aggressively. On the one hand, because of fixed contracts and collective bargaining, wages were likely to rise slower in Europe. On the other, those rises are likely to come along with strikes and be much broader than in the US, which increases inflationary pressure in the long term. Basically, inflation might be further entrenched in Europe than in the US, implying that in the long run, the dollar could outperform the pound and Euro.
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

EUR/USD Can't Catch Its Breath! The US Labour Market Data And Eurozone Inflation Prints To Be Released Next Week

ING Economics ING Economics 26.08.2022 15:00
US jobs numbers will help determine whether the Fed hikes by 50bp or 75bp in September – for now, we favour the former. Eurozone inflation data will also be closely scrutinised ahead of a fast-approaching ECB meeting In this article US payrolls number to help determine scale of September Fed hike Eurozone data to provide key input into September ECB decision Source: Shutterstock US payrolls number to help determine scale of September Fed hike The August jobs report is the focus of attention this week. Despite the US having been in technical recession through the first half of the year, the economy has created 3.2 million jobs year-to-date with 528k of them coming in July alone. We don’t expect anything like that for August though given vacancies have started to fall off and business surveys have suggested more caution on the economic outlook. Nonetheless, a 250k would still be very respectable and will certainly keep the Fed in hiking mode. With the unemployment rate set to remain at 3.5% and wages continuing to push higher we favour a 50bp hike on 21 September rather than 75bp. However, should the economy add substantially more jobs, say 350k+, and the wage number posts a second consecutive 0.5% month-on-month increase, or higher, then it could swing the argument in favour of 75bp. Other numbers will include the ISM manufacturing report and construction spending, while August auto sales numbers will give us an early indication of consumer spending. Also, watch out for a number of Federal Reserve speakers. Eurozone data to provide key input into September ECB decision It's a big week for eurozone data with the August inflation reading out on Wednesday and unemployment due on Thursday. With the September ECB meeting coming up, the debate between hawks and doves has become more heated again as governing council members are returning from their holidays. These figures will be key inputs for the meeting. While some supply-side factors are currently bringing relief as input costs fade, the gas crisis continues to push prices for consumers up at a fast pace. Expect another increase in the eurozone inflation reading for August. The unemployment rate will give a sense of whether the labour market is responding to the weaker economic circumstances. Key events in developed markets next week Source: Refinitiv, ING TagsUS Jobs report Inflation Eurozone
US Dollar (USD) Supported By Looming Hiking, Australian Dollar (AUD) Weakens, How Does Brent Crude Oil React To A Possible Cut By OPEC+?

US Dollar (USD) Supported By Looming Hiking, Australian Dollar (AUD) Weakens, How Does Brent Crude Oil React To A Possible Cut By OPEC+?

Jing Ren Jing Ren 26.08.2022 16:15
US Fed may not yield to market pressure EURUSD weakens over bleak outlook The US dollar remains strong over the prospect of sustained rate hikes. The euro’s failure to defend the parity level has revealed a lack of confidence in Europe’s outlook. An overwhelmingly pessimistic mood may continue to depress the single currency, and the latest consolidation could be a mere pause as dollar bulls search for catalysts to push back. On the other side of the pond, hopes that an economic slowdown might alter the Fed's tightening agenda have waned. Futures markets indicate that traders have raised their bets on a 75bp hike in September, which may send the pair to a 20-year low at 0.9700 with 1.0340 as resistance. AUDUSD struggles over Chinese uncertainty The Australian dollar retreats as markets go risk-off. Risk appetite took a backseat following hawkish comments from US Fed officials. Meanwhile, as a proxy to the Chinese economy, the commodity-linked currency is facing extra headwinds. Beijing is seeking to stabilise its ailing property market and its central bank has cut rates to shore up the economy in the wake of disappointing data. Australia’s retail data may stir up volatility in the short-term, but general market sentiment might continue to drive the exchange rate instead of domestic fundamentals. The pair hit resistance at 0.7130 and 0.6850 is a key support. UKOIL recovers over controlled supply Brent crude recoups losses as OPEC+ may cut output to defend prices. As Iran seeks a compromise in its nuclear deal, an agreement seems remote but not unattainable. A return of Iranian oil to the market could undercut major suppliers and Saudi Arabia suggested that OPEC+ would consider cutting production in response. A larger-than-expected drawdown in US inventories offers extra tailwinds to the recovery. As for now, the prospect of tightly-controlled supply may outweigh concerns that an economic slowdown in China could hinder demand. The price has found support at 92.00 and is looking to reclaim 108.00. NAS 100 softens as Fed remains firm The Nasdaq 100 consolidates as the Fed remains hawkish. Weaker economic data are a double-edged sword. Equity markets see them as good news as they could lead the Fed to lift their feet off the pedal. Still, no one wants to see a recession materialise. Markets have become too comfortable with signs of plateauing in price pressures over the past month. The latest FOMC minutes may have wrong-footed investors with hints of a slower pace in rate hikes. Fed officials might want to address that communication hiccups and rein in expectations of a downshift in policy. The index is hovering above 12600 and 14200 is the first hurdle. Key data release (GMT time) Monday, 29 August 01:30 Retail Sales   Wednesday, 31 August 09:00 HICP 12:00 Harmonized Index of Consumer Prices 12:15 ADP Employment Change 12:30 Gross Domestic Product Annualized     Thursday, 1 September 01:30 Trade Balance 06:00 Retail Sales 14:00 ISM Manufacturing PMI Friday, 2 September 07:00 Gross Domestic Product 12:30 Nonfarm Payrolls  
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

Forex: EUR/USD - Waiting For Good News. Maximum Is Reached

InstaForex Analysis InstaForex Analysis 26.08.2022 16:43
Relevance up to 16:00 2022-08-27 UTC+2Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Overview : The US dollar's strong gains against the Euro have continued today ahead of the sturdy news. The common currency reached a high of more than three days earlier this morning. This technical analysis of EUR/USD looks at the one-hour chart. The highest price that EUR/USD reached for that period was 1.0080 (last bullish wave - top). The lowest price that the EUR/USD pair reached during that period was 1.0080 (right now). The bias remains bearish in the nearest term testing 1.0011 or lower. Immediate support is seen around 1.0011. A clear break below that area could lead price to the neutral zone in the nearest term. Price will test 1.0011, because in general, we remain bearish on August 26h, 2022. Yesterday, the market moved from its top at 1.0080 and continued to drop towards the top of 1.0011. Today, on the one-hour chart, the current fall will remain within a framework of correction. However, if the pair fails to pass through the level of 1.0080 (major resistance), the market will indicate a bearish opportunity below the strong resistance level of 1.0080 (the level of 1.0080 coincides with tha ratio of 38.2% Fibonacci retracement). The EUR/USD pair settled below 1.0080 and is testing the support level at 1.0011. RSI and Moving averages continue to give a very strong sell signal with all of the 50 and 100 EMAs successively above slower lines and below the price. The 50 EMA has extended further below the 100 this week. Support from MAs comes initially from the value zone between the 50 and 100 EMAs. Industriously, Euro Is Losing ground against U.S. Dollar around +125 pips. Since there is nothing new in this market, it is not bullish yet. Sell deals are recommended below the level of 1.0080 with the first target at 1.0011 and continue towards 0.9901 so as to test the double bottom. If the trend breaks the double bottom level of 0.9901, the pair is likely to move downwards continuing the development of a bearish trend to the level of 0.9850 in order to test the weekly support 3. According to the previous events the price is expected to remain between 1.0080 and 0.9850 levels. Sell-deals are recommended below the price of 1.0080 with the first target seen at 1.0011. The movement is likely to resume to the point 0.9901. The descending movement is likely to begin from the level 0.9901 with 0.9850 and 0.9800 seen as new targets in coing hours. On the other hand, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1.0135. Source: Forex Analysis & Reviews: Technical analysis of EUR/USD for August 26, 2022
Construction Activity in Poland Contracts in May: Focus on Building Decline and Infrastructure Investment

EUR/USD. Jerome Powell VS PCE index: 1:0 in favor of the dollar

InstaForex Analysis InstaForex Analysis 28.08.2022 21:57
The euro-dollar pair ended the trading week on a minor note, below the parity level. EUR/USD bulls tried to remind themselves, tried to counterattack, but the prevailing fundamental background did not allow them to win back at least part of the lost positions. The only achievement of the bulls of the pair is that they did not allow the bears to enter the area of the 98th figure. The support level of 0.9900, which is currently the key price barrier (replacing the "sacred" level of 1.0000) restrained the onslaught of the bears. And apparently, further events will develop around this target. The EUR/USD pair showed increased volatility at the end of the trading week. The benchmark PCE index was published on Friday, and an hour and a half later, the long-awaited speech by Federal Reserve Chairman Jerome Powell took place in Jackson Hole. These events provoked almost 150-point price fluctuations for the pair.     The inflation report was not in favor of the greenback: all components of the release came out in the red zone, reflecting the slowdown in indicators. Thus, the basic price index of personal consumption expenditures in monthly terms increased by only 0.1% in July, with a forecast of 0.2% growth. On an annualized basis, it rose by 4.6% last month after a June increase to 4.8%. The overall PCE index was also disappointing, taking into account energy and food prices – it grew by 6.3% year-on-year, thereby slowing the growth rate (in June it was marked at 6.8%). Thus, one of the key inflation indicators taken into account by the Fed when forming an interest rate decision turned out to be in the red zone, supplementing reports on CPI growth, producer price index and import price index (which also reflected a slowdown in growth in July). The EUR/USD pair jumped to 1.0089 after the release of the report, thereby updating the weekly high. And, perhaps, bulls would have tried to develop success if Powell had not come to the bears' aid. He dispelled the doubts of dollar bulls by voicing unambiguously hawkish rhetoric. In his speech, the head of the Fed tried to maintain a certain balance in order not to provoke excessive turbulence in the markets. Let's face it: this time it didn't work out. The days of "semitones" are in the past, so Powell had to resort to fairly categorical and unambiguous comments, with a minimum number of "buts" and "if". The main, key and main message voiced by the head of the Fed is that the US central bank will continue to raise interest rates and will keep them at a high level, even if it harms (and it will undoubtedly harm) households and businesses. Powell actually said that Americans will have to put up with the slowdown in economic growth and the weakening of the labor market. "This is a sad price for reducing inflation," Powell stated. In addition, he commented on the July data on the growth of inflation in the United States. As mentioned above, the key indicators showed a slowdown in their growth. But Powell did not attach much importance to this. According to him, although inflation slowed down last month, "it is still very far from the target level."     In other words, Powell has joined the hawkish wing of the Committee, whose representatives support the aggressive pace of monetary policy tightening. In particular, the chairman of the St. Louis Fed, who has the right to vote this year, announced last week that he would support the idea of a 75-point rate hike at the September meeting. The rest of his colleagues who have spoken over the past two weeks have also indicated their hawkish position. However, unlike Bullard, they have not yet decided on a "step". For example, according to Loretta Mester, market expectations regarding the results of the September meeting are between 50 and 75 points – for a final decision, "we need to see more data." Powell voiced a similar position. According to him, the magnitude of the rate increase at the September meeting "will depend on the totality of statistical data and changing forecasts." Thus, Powell supported the dollar following the results of his latest speech. He made it clear that the central bank would not look back at the "side effects" and would increase the interest rate with the knowledge that this could harm households and businesses. After his speech, the scenario of a 75-point rate hike at the September meeting returned to the agenda. According to the CME Group FedWatch Tool, the markets now estimate the probability of this scenario being implemented at 60%. Therefore, it is not at all surprising that US stock indexes fell on Friday, and the dollar again became the favorite of the foreign exchange market. Before the next Fed meeting, the results of which will be announced on September 21, the August Nonfarm, as well as key data on the growth of inflation in the United States for August, will still be published. The dynamics of these indicators will tip the scales towards a 50-point or 75-point scenario. However, the very fact that these two options are among the most likely ones will push the greenback up throughout the market. Given this circumstance, it is advisable to use any more or less large-scale corrective movements in the EUR/USD pair to open short positions. The downward targets are 1.0000 (if the corrective impulse flares up and fades around 1.0050), 0.9950, 0.9910 (the lower line of the Bollinger Bands indicator on the daily chart). Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320085
📈 Tech Giants Soar, 💵 Dollar Plummets! Disney-Charter Truce, Wall Street's AI Warning!

What A Drop! S&P 500 (SPX) And Nasdaq Almost Crashed!

ING Economics ING Economics 29.08.2022 08:03
Powell's tough message on inflation upsets equities - bonds more resilient  Source: shutterstock Macro outlook Global Markets: Fed Chair, Jerome Powell did what he needed to do last Friday at Jackson Hole, and that was to make it clear that the Fed’s over-riding priority was to get inflation down…not give assurances that they would be gentle with markets, not hint that rates might come quickly down once they’d peaked. All these things might be true, but he would have been shooting himself and the economy in the foot if he had undermined his comments on inflation fighting, with remarks that would have loosened, not tightened financial conditions. So at least as far as this author is concerned, he gets full marks for the message. Equities were less impressed. The S&P500 fell 3.37%, and the NASDAQ came off 3.94%. Their gains last week look ill-judged through the prism of history. Further sharp losses look likely at the start of trading today judging by equity futures. The rise in US Treasury yields was less dramatic, but the bond market has, as is often the case, had a more realistic assessment of the economy and the Fed than the equity markets for some time. 2Y US Treasury yields went up only 3.1bp, though they were up closer to 6bp at one point before easing back.  10Y yields rose only 1.5bp to take them to 3.041%. Despite a spike to 1.009, EURUSD went with higher UST yields and falling risk sentiment and declined to 0.9937 and looks to be heading lower in early Asian trading. The AUD has followed the EUR lower and is 0.6863 now, down from about 0.6970 this time on Friday. Cable has plunged to 1.1691, and the JPY has pushed up above 138. There were some small gains from the KRW and MYR on Friday, but on the whole, the rest of the Asia pack was softer against the USD and the CNY still seems as if it is headed higher over the short-term despite some defensive-looking fixings last week. G-7 Macro: A quick backcast to last Friday, when the US released personal income and spending figures for July, both of which came in weaker than market expectations. However, the price measures of PCE inflation and core PCE were also weaker. Both came in 0.1pp below expectations. That resulted in a 0.2pp decline in core PCE inflation taking it to 4.6%YoY. Headline PCE inflation fell to 6.3% from 6.8% in June. There’s nothing of note on today’s G-7 calendar. Australia: July retail sales are expected to post a slight increase on the 0.2%MoM reading for June. An online retail sales survey for July released at the end of last week showed sales declining, though at the same pace as June, so we could be looking at a similar figure for overall sales growth in July What to look out for: Regional manufacturing and US non-farm payrolls Australia retail sales (29 August) Malaysia CPI inflation (29August) Japan labour data (30 August) Australia building approvals (30 August) US Conference board consumer confidence (30 August) South Korea industrial production (31 August) Japan industrial production (31 August) China manufacturing and non-manufacturing PMI (31 August) Hong Kong retail sales (31 August) South Korea GDP and trade (1 September) Regional PMI manufacturing (1 September) China Caixin PMI manufacturing (1 September) Indonesia CPI inflation (1 September) US initial jobless claims and ISM manufacturing (1 September) South Korea CPI inflation (2 September) US non-farm payrolls and factory orders (2 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Euro To US Dollar Instrument Did Not Change In Value

Termination EUR / USD pair. EUR in a downward direction

InstaForex Analysis InstaForex Analysis 29.08.2022 11:07
Valid until 09:00 2022-08-30 UTC+2 The Company does not provide investment advice and the analytical materials provided do not guarantee the desired results. The presented market analysis is informative and is not a guide to the transaction. Forex Analysis & Reviews: Technical Analysis of EUR/USD for August 29, 2022 Technical Market Outlook: The EUR/USD pair had terminated the bounce at the level of 1.0089 and after the Bearish Engulfing candlestick pattern was made the market reversed strongly towards the last week low. The nearest technical resistance located at the level of 0.9955 and 1.0000. The next target for bears is seen at the level of 0.9901, but it might not be enough and the down wave might be extended lower. The momentum remains weak and negative, so the EUR is still under the pressure. The monthly candle looks bearish and there is no indication of the down trend termination or reversal on the higher time frames as well.     Weekly Pivot Points: WR3 - 1.00077 WR2 - 0.99699 WR1 - 0.99503 Weekly Pivot - 0.99321 WS1 - 0.99125 WS2 - 0.98943 WS3 - 0.98565 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue lower towards the level or 0.9900 and below. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue.  
The EUR/USD Pair Is Still In A High Position On The 1H Chart

Forex: EUR/USD (Euro To US Dollar) - Technical Indicators And Possible Scenarios - 29/08/22

InstaForex Analysis InstaForex Analysis 29.08.2022 11:39
Trend analysis (Fig. 1). On Monday, the price may go down from 0.9963 (closing level of the Friday daily candlestick) to the lower fracts of 0.9900 (white dotted line) and test it. The price may then rise, test the 14.6% retracement level of 0.9967 (white dotted line), and continue to increase.     Fig. 1 (daily chart). Complex analysis: - indicator analysis - down; - Fibonacci levels - down; - volumes - down; - candlestick analysis - down; - trend analysis - down; - Bollinger bands - up; - weekly chart down. Conclusion: Today, the price may go down from 0.9963 (closing level of the Friday daily candlestick) to the lower fracts of 0.9900 (white dotted line) and test it. The price may then rise, test the 14.6% retracement level of 0.9967 (white dotted line), and continue to increase. Alternative scenario: the price may go down from 0.9963 (closing level of the Friday daily candlestick), test the lower Bollinger band at 0.9815 (black dotted line), and rise to the lower fractal of 0.9900 (white dotted line). The quote may then extend growth to the 14.6% retracement level of 0.9967 (white dotted line). Relevance up to 08:00 2022-08-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320127
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

Forex: EUR/USD & GBP/USD - Technical Analysis - 29/08/22

InstaForex Analysis InstaForex Analysis 29.08.2022 13:33
EUR/USD     Higher time frames Last week, the pair hit a new extreme low (0.9952) and closed below the psychological level of 1.0000. If the downtrend goes on, the targets are seen at 0.9000 (psychological level) and 0.8225 (2000 extreme low). In this light, bulls will try to break through 1.0000. Ichimoku Kinko Hyo resistance is currently standing at 1.0052 – 1.0080 – 1.0135 – 1.0190 and 1.0182 (weekly short-term trend).     H4 – H1 The bullish zone is again lost. There is a strong bearish bias as trading is below the key levels of 0.9963 (weekly long-term trend) and 1.0000 (central Pivot level). A change in the balance of power will again shift if the price consolidates above these marks. Resistance is seen at 1.0054 – 1.0143 – 1.0197 (classic Pivot levels). Should bears remain strong, the quote may fall to 0.9911 – 0.9857 – 0.9768 (classic Pivot support). *** GBP/USD     Higher time frames Last week, the pair hit a new extreme low of 1.1759. This level has now turned into resistance and is seen as the nearest bullish target. Today, bears are ready to extend the downtrend, with the target at 1.1411 (2020 low).     H4 – H1 In lower time frames, there is still a strong bearish bias. The quote has tested 1.1678 support. The intraday targets stand at 1.1620 – 1.1509 (classic Pivot levels). The bullish intraday targets are seen at around 1.1789-88 (weekly long-term trend and central Pivot level). *** Indicators used in technical analysis: higher time frames: Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun H1: Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Relevance up to 12:00 2022-08-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320165
Short-term analysis - Euro to US dollar by InstaForex - 31/10/22

EUR/USD Could Be Shaken This Week! Eurozone Inflation Is About To Be Released

Jing Ren Jing Ren 29.08.2022 15:01
EuroZone CPI and EU Market Turmoil Tomorrow, Germany reports CPI figures for July. That gives us a first look at what to expect from inflation data out of the EuroZone to be released on Wednesday. The consensus is for another increase, which would help firm up the case for another 50bps hike by the BCE at their meeting in two weeks. This is the last major inflation data the central bank will have before they decide on what to do with monetary policy. Last week, the ECB released minutes from their July meeting, showing they intended to keep tightening. That also implies that a "double" rate hike is likely. Unless there is a major shift in the data, that would catch everyone by surprise. The expectation is for inflation to get worse in the shared economy, both in the headline number and core reading. Read more: A Quick Look At Jerome Powell's (Fed) Key Statements At Jackson Hole Meeting| FXMAG.COM Starting with Germany The largest economy in the EuroZone is often seen as a bellwether for the rest of the shared economy. This is particularly relevant around the inflation figure if it is rising, since as a rule, Germany tends to have more fiscal discipline. If German inflation is rising, chances are that inflation in the rest of Europe is rising even faster. If prices were to get under control, most likely that would be seen in Germany first. German CPI change for August is expected to show an annual rate of 7.8%, higher than the 7.5% reported in July. Germany has a more regulated energy sector, and is less likely to see the benefits from lower fuel prices that helped reduce inflation in the US during the same period. At the same time, German regulators also allowed for energy companies to pass on more of the cost to consumers. Where there could be good news is that monthly inflation is expected to slow to 0.4% compared to 0.9% in the prior month. What's driving the market Wednesday could be a pretty lively day for the markets, because we get CPI data and PMI figures through the course of the day. We'll get into more detail on the PMI numbers tomorrow. For now, inflation is likely to have the bigger impact on the EURUSD as it is driving the main divergence between the currencies of the two largest economies. Last month, EU inflation already surpassed inflation in the US. Meanwhile, the interest rate gap between the two economies continues to grow, as the Fed has been more aggressive in taming inflation. That means real yields in the US have been increasing, while real yields in the Euro have been decreasing. The fluctuations in inflation are bigger than the interest rate policy moves, meaning that inflation is driving the yield spread. Which, in turn, drives the relative price dynamics of the EURUSD. As long as real rates are weakening in the Euro, the pair is likely to be under pressure, and find it hard to get back above parity. The data to pay attention to The EuroZone is expected to report a modest increase in CPI change to 9.0% from 8.9% prior. The core rate is expected to rise by a similar measure to 4.1% from 4.0%, double the target rate. To make matters more difficult for the ECB, the monthly inflation rate is expected to accelerate to 0.6% from 0.1% prior. Inflation rising faster on the monthly basis, and the change being seen in the core numbers, implies a more structural problem. The market already expects the ECB to raise rates, so higher inflation likely won't be all that much of a surprise. But if CPI change were below expectations, then it could have some monetary policy implications.
What's ahead of Euro against greenback today? Let's look at Stefan Doll's review

Forex: Could EUR/USD (Euro To US Dollar) Reach 1.020!?

InstaForex Analysis InstaForex Analysis 29.08.2022 15:51
Overview - EUR/USD: The bullish trend is currently very strong on The EUR/USD pair. As long as the price remains above the support levels of 0.9972, you could try to benefit from the growth. The first bullish objective is located at the price of 1.0052. The bullish momentum would be boosted by a break in this resistance (1.0052). The hourly chart is currently still bullish. At the same time, some stabilization tendencies are visible between 0.9972 and 1.0088. Together with the relatively large distance to the fast-rising 100-day moving average (0.9972), there are some arguments for a relief rally in coming months on the table. The EUR/USD pair is at highest against the dollar around the spot of 1 USD since last week. The EUR/USD pair is inside in upward channel. Since three weeks The EUR/USD pair decreased within an up channel, for that The EUR/USD pair its new highest 1.0052. Consequently, the first support is set at the level of 0.9972. Hence, the market is likely to show signs of a bullish trend around the area of 0.9972 - 1 USD. RSI RSI is seeing major support above 65% and a bullish divergence vs price also signals that a reversal is impending. According to the previous events the price is expected to remain between 1 USD and 1.0137 levels. Buyers would then use the next resistance located at 1.0052 as an objective. Crossing it would then enable buyers to target 1.0088 (the double top - last bullish week). Be careful, given the powerful bullish rally underway, excesses could lead to a possible correction in the short term. If this is the case, remember that trading against the trend may be riskier. It would seem more appropriate to wait for a signal indicating reversal of the trend. The EUR/USD pair has plunged up for a fresh two weeks high. Prices pushed above a key retracement from a Fibonacci setup that spans from the lowest price of 1 USD (38.2% of Fibonacci on the hourly chart), for that buyers pulled the bid back-above that level by the end of the week. Last week, the EUR/USD pair traded up and closed the day in the red area near the price of 0.9901. Today it rose a little, rising above 0.9972. If the pair succeeds in passing through the level of 1.0052, the market will indicate the bullish opportunity above the level of 1.0052 in order to reach the second target at 1.0088. In the very short term the general bullish sentiment is confirmed by technical indicators. Therefore, a small upwards rebound in the very short term could occur in case of excessive bearish movements. Trading recommendations : The trend is still bullish as long as the price of 0.9972 is not broken. Thereupon, it would be wise to buy above the price of at 0.9972 with the primary target at 1.0088. Then, the EUR/USD pair will continue towards the second target at 1.0137. We should see the pair climbing towards the next target of 1.0200. The pair will move upwards continuing the development of the bullish trend to the level 1.0200 in coming days. Conclusion : The EUR/USD pair increased within an uptrend channel from the prices of 0.9901 and 1$ since a week. The bulls must break through 1.0137 in order to resume the uptrend. Relevance up to 15:00 2022-08-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/290403
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What A Surprise! Euro (EUR), As US Dollar (USD) Has Been Supported By Hawkish Rhetoric During Jackson Hole Meeting

Kenny Fisher Kenny Fisher 29.08.2022 21:36
EUR/USD has edged higher today and is trading at the parity line. In the North American sesssion, EUR/USD is trading at 1.0019, up 0.57%. Euro bucks the trend, rises against greenback The US dollar has posted sharp gains against the major currencies, as Fed Chair Powell’s hawkish speech at Jackson Hole left no doubt that the Fed will continue to tighten rates in its titanic battle with surging inflation. The euro, however, bucked the trend and posted strong gains on Friday but ultimately pared these gains, before moving higher once again today. The upward movement has been driven by hawkish comments at Jackson Hole from senior ECB members, including Isabel Schnabel, who is well-known for being a hawk. Shnabel said that the likelihood of high inflation becoming entrenched in expectations was “uncomfortably high” and argued that “central banks need to act forcefully”. Latvian central bank Governor Martins Kazak was even more specific, stating that the ECB should be open to discussing 50 or 75 basis point moves. The ECB has raised rates but only to zero, well below the neutral rate of around 1.5%. This means that ECB policy continues to stimulate the economy, at a time when inflation and inflation expectations continue to move higher. The ECB will be hard-pressed to find the balance of raising rates without tipping the weak eurozone economy into a recession. Overshadowed by Powell’s hawkish speech at Jackson Hole was a host of weak US releases. Personal income and spending data both missed expectations, while the Core PCE Index, the Fed’s preferred inflation gauge, fell to 0.1% in July MoM, down from 0.6% in June and shy of the estimate of 0.3%. The weak numbers mean that the Fed may have to ease back on rate hikes, despite Powell’s hawkish speech, as the data continue to indicate that the economy is slowing in response to the Fed’s tightening. If upcoming releases indicate that the economy is losing steam, the dollar will be under pressure. EUR/USD Technical EUR/USD has support at 0.9985 and 0.9880 There is resistance at 1.0068 and 1.0173 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro rises to parity as ECB hints at 75bp hike - MarketPulseMarketPulse
JPY: Assessing the FX Intervention Zone and Market Conditions

Forex: EUR/USD - The Next Target Is Fibonacci Retracement

InstaForex Analysis InstaForex Analysis 30.08.2022 09:52
Relevance up to 07:00 2022-08-31 UTC+2 Technical Market Outlook: The EUR/USD pair has broken through the nearest technical resistance located at the level of 0.9955 and is currently consolidating around the parity level. The next target for bulls is the 38% Fibonacci retracement again located at the level of 1.0078. The next target for bears is seen at the level of 0.9901, but it might not be enough and the down wave might be extended lower. The momentum is positive-to-neutral, so the EUR is still under the pressure. The monthly candle looks bearish and there is no indication of the down trend termination or reversal on the higher time frames as well. Weekly Pivot Points: WR3 - 1.00077 WR2 - 0.99699 WR1 - 0.99503 Weekly Pivot - 0.99321 WS1 - 0.99125 WS2 - 0.98943 WS3 - 0.98565 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue lower towards the level or 0.9900 and below. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Source: Forex Analysis & Reviews: Technical Analysis of EUR/USD for August 30, 2022
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Hawkish Rhetoric Has Made US Dollar (USD) Go Up, What Can Trigger ECB To Save EUR/USD From Parity

ING Economics ING Economics 30.08.2022 12:18
It seems the Fed is not particularly displeased with the market reaction to Friday's hawkish Jackson Hole speech from Fed Chair, Jay Powell. Here, real US yields have moved higher, equities have fallen and the dollar has strengthened. Weaker consumer sentiment is unlikely to blow the Fed off course. Elsewhere, look out for a policy meeting in Hungary today   Federal Reserve Chair Jerome Powell at this year's Jackson Hole symposium USD: Fed applies the brakes, dollar strengthens We tend to hear it ever more frequently – that a central bank can only control the demand side of an economy and, in an era of dangerously high inflation, its job is to take the steam out of demand. That was a central message in Jay Powell's Jackson Hole speech on Friday (the speech is certainly worth a read). That sentiment has been echoed by newly-minted Fed hawk, Neel Kashkari, who has said that he is 'happy' to see the market reaction since Friday's speech – a market reaction which has included US equity markets falling around 4%. Our point here is that the Fed policy is designed to slow demand and that (orderly) weakness in equity markets and some softer consumer data (confidence and spending) are not enough to blow the Fed off its tightening course. Looking at US money markets the reaction since Friday has been to price the Fed cycle modestly higher, but also to scale back on the amount of easing expected for 2H23. The pricing of that easing still looks vulnerable as we head into the US August jobs report this Friday.  This environment should keep the dollar bid. As we highlighted recently, the Fed seems quite happy with the stronger dollar and once again we are likely to hear the refrain from US officials that 'the dollar is our currency and your problem'. Indeed, the stronger dollar could be one of the reasons why the ECB could turn more hawkish over the coming months as EUR/USD remains offered near parity. Dollar strength on the back of higher US real yields is one side of the coin, the other is the energy crisis and other domestic factors weighing on large parts of Asia and Europe. In the spotlight here is China, where USD/CNY has traded up to 6.92, even as the People's Bank of China (PBoC) has protested with stronger CNY fixings. Perhaps USD/CNH traded volatility (one month now 6%) should be even higher than it is today since recent price action points to the PBoC either losing control of the renminbi market or indeed finally shifting to a more flexible FX regime – both of which should deliver more realised volatility. Heavy positioning is probably the biggest challenge to a further dollar advance. Other than that it is hard to fight against dollar strength. For today, look out for US Conference Board consumer confidence. Lower gasoline prices have consensus expecting a bounce here. But as above, we doubt even a softer number does much damage to the strong dollar story. DXY probably finds demand under 108.50. Chris Turner EUR: Release the hawks EUR/USD has been finding some support near 0.9920 but remains vulnerable. On Friday we saw a Reuters source story suggesting that a 75bp hike could be discussed at next week's ECB rate meeting – yet even that source story seemed to admit that a 75bp hike was unlikely. On that subject, today we hear from a few ECB hawks – most notably from Austrian ECB official, Robert Holzman. He has already aired views on the 75bp hike for next week and should repeat those today. Markets now price a 63bp ECB hike on 8 September – we expect 50bp. And the market also prices 160bp of ECB tightening by year-end, which again looks far too much according to our eurozone macro team. Also, look out this week for natural gas prices. These corrected sharply in Europe yesterday. But whether Russia restarts gas flows via Nordstream 1 after three days of maintenance (starting tomorrow) will be a major driver of gas prices and also of the European currency complex this week. EUR/USD should remain offered in a 0.9900-1.0100 range this week.  Chris Turner GBP: Soft equity environment is not helping Sterling has been a little weaker than we thought, especially against the euro. Sterling typically shows higher correlations to equity markets than the euro (probably given the larger role of financial services in the UK economy). A tough environment for equities is therefore a real headwind to any sterling recovery. 0.8575/85 looks the obvious near-term target for EUR/GBP, while for GBP/USD it remains hard to fight a move to 1.15. Chris Turner CEE: Temporary relief for the region Today, we will see the second release of GDP in the Czech Republic, which should show details of the surprisingly strong growth in the second quarter. Also, there will be a monetary policy decision from the National Bank of Hungary later today. We are expecting 100bp in line with surveys, however this may not be enough for the markets. Polish GDP and inflation data will be released on Wednesday. While the second estimate of GDP should explain the surprisingly negative 2Q result, inflation for August could fall slightly on a year-on-year basis. On Thursday, we will see a pack of PMI releases in the CEE region. Previous months have already shown significant declines and no improvement can be expected this time either. On the other hand, the recent German print sent a positive signal that the decline in sentiment could stop in August. On the FX front, pressure from EUR/USD and gas prices eased yesterday and CEE currencies can take a breath. However, we do not expect a trend reversal this week and remain bearish for the region. We see the Polish zloty as the most vulnerable given the zloty is at its strongest levels in 10 days, the weak economic data and again the dovish tone of the National Bank of Poland. Thus, we see room to move back into the 4.760-4.780 EUR/PLN range. The Hungarian forint should be closer to 409 EUR/HUF, but today's central bank meeting will be the main driver. The Czech koruna escaped the Czech National Bank intervention levels after a few days, however, thanks to recent dovish statements from the central bank, we believe that the increase in market expectations is only temporary, and the koruna will return to 24.650 EUR/CZK. Frantisek Taborsky Read this article on THINK TagsJerome Powell Jackson Hole FX Federal Reserve Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
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US Dollar (USD) Is Teetering On The Verge Of A Reversal Lower...

John Hardy John Hardy 30.08.2022 14:28
Summary:  The US dollar hasn’t been able to sustain a new rally after Fed Chair Powell’s speech on Friday, with further risk of weakness if incoming data doesn’t bring new upside pressure on US yields. A new thaw in risk sentiment has the USD also teetering on the verge of a reversal lower versus the G10 commodity dollars as well, with the technical outlook finely balanced in pairs like AUDUSD and USDCAD. Incoming data could bring a bump ride through the August CPI number on September 13. FX Trading focus: USD bulls on the defensive ahead of key data. EURUSD squeeze risk picks up above 1.0100 EURUSD has squeezed back higher this morning, and looks ready for a poke above 1.0100 if the minor US data points ahead of Friday’s US jobs report (today’s Consumer Confidence survey and JOLTS survey and Thursday’s August ISM Manufacturing survey) don’t offer any drama. But conviction is lacking as long as EURUSD remains within the seeming tractor-beam pull of parity and it is tough to develop conviction until we have had a look at the Friday’s US jobs report (big Average Hourly Earnings surprises may carry more weight than payrolls due to the inflation angle of earnings), the ISM Services survey on Tuesday (completely at odds with the alternative S&P Global non-manufacturing survey in July when the latter showed a slightly contraction while the July ISM Services was still a robust 56+. The flash August S&P Global reading worsened further to 44.0.), and most of all the August CPI release on September 13, given that the Fed has pre-declared that it is willing to tolerate economic weakness if inflation is not yet under control. ECB Chief Economist Lane was out yesterday arguing for a “steady” pace of “smaller” rate hikes rather than large moves – presumably a series of 50 basis point moves – to avoid “adverse effects” and as Lane believes that this would make it easier for ECB to course correct. This seemed to help cut short the EUR rally yesterday, but rate expectations for the ECB meeting next week are still around 50/50 for a 75-basis-point move, somewhat lower than they were at the peak yesterday after the hawkish speech from the ECB’s Schnabel at the Fed’s Jackson Hole conference at the weekend.  The German flash August CPI will be out around pixel time for this article. Chart: EURUSDThe US dollar backing off today and EURUSD pulls back above parity again after bobbing back and forth around that level yesterday and into this morning. The move likely only picks up likely order-driven momentum tactically on a move above 1.0100 and we face a further cavalcade of incoming data tests for the USD through the August US CPI figure as noted above, and for the EUR side of the equation, the test is next Thursday’s ECB meeting as well as whether Russia turns the gas back on next week after the purported maintenance of the Nord Stream 1 pipeline in coming days. A squeeze scenario could see 1.0200, with anything above that beginning to suggest at least an intermediate challenge of the down-trend. Short term long option strangles are one way to trade for zany choppiness in coming sessions (A long strangle approach is an idea for the indecisive trader, or the one that believes that we might see a squeeze on a move above 1.0100 but one that won’t hold – for example long 1.0125 calls and long 0.9975 puts w/ expiry next Wed. or Thursday, or a trader can simply choose one or the other leg if biased.) Source: Saxo Group Elsewhere, the tactical situation could not be more in limbo in pairs like AUDUSD and USDCAD, which teased a break in favour of a stronger US dollar, only to dive back into the range, if with insufficient force to suggest a tradable reversal. The trading conditions might remain treacherous there at least until the other side of the US jobs report. A CAD supportive crude rally, meanwhile, is fading fast today. Table: FX Board of G10 and CNH trend evolution and strength.The US dollar is still top dog, but the Euro momentum has impressed in the wake of ECB guidance in recent days. Leading the race to the bottom is GBP. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.EURCHF is on the verge of flipping to positive for the first time in a very long time (last negative signal an impressive 53 days so far), EURGBP went positive so two sessions ago, and EURJPY did so yesterday. Still some work to get EURUSD there…. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1200 – Hungary Rate Decision 1200 – US Fed’s Barkin (Non-voter) to speak 1200 – Germany Aug. Flash CPI 1300 – US Jun. S&P CoreLogic Home Price Index 1400 – US Aug. Consumer Confidence 1400 – US Jul. JOLTS Job Openings 1500 – US Fed’s Williams (voter) to speak 1600 – ECB Speakers Holzmann and others 0130 – China Aug. Manufacturing/Non-manufacturing PMI   Source: FX Update: USD suddenly on defensive ahead of data.
Technical Analysis Of Natural Gas Price's Movement

Further Decline In Gas Prices May Create The Foundation For EUR/USD Correction

InstaForex Analysis InstaForex Analysis 30.08.2022 17:00
Relevance up to 14:00 2022-08-31 UTC+2 Currently, most investors are confident that the USD index rally will continue, and the trend in US stock indices will remain bearish. They also ignore the increase in the likelihood of a 75 bps increase in the ECB deposit rate in September to over 50%, and the reluctance of the VIX fear index to climb well above 25, signaling no panic in the stock market. Going against the crowd is always dangerous, there is a risk of being burned at the stake, but trends break at the very moment when the majority is sure that they are right. After Jerome Powell's speech at Jackson Hole, the Fed's position became more than transparent. Regardless of the further dynamics of inflation, the Central Bank intends to raise rates, as a pause in this process can turn into sad consequences. Entrenched high prices and a deep recession. The Fed is ready to sacrifice the labor market, so I would venture to assume that the August employment statistics are unlikely to dot the I. Everything will depend on inflation data on September 13. That's when it will become clear whether the rate will increase by 50 or 75 bps at the next FOMC meeting. This circumstance, in my opinion, transfers the initiative from the Fed to the ECB. Indeed, European inflation data is released earlier, and the Governing Council meeting is approaching. They are clearly worried about the fall in EURUSD, which accelerates energy prices, raises inflation expectations and pushes the eurozone into recession. Christine Lagarde and her colleagues must do something. And the best option seems to be a 75 bps increase in the deposit rate on September 8. Dynamics of European inflation expectations It is about such a step that the heads of the central banks of Austria and the Netherlands, Robert Holzmann and Klaas Knot, are talking about. Nevertheless, investors are used to seeing them as the main hawks of the Governing Council, and the statement by ECB chief economist Philip Lane that monetary policy should be tightened gradually to look at the reaction of the economy, brought down the EURUSD bulls' momentum. In fact, it was Lane who put forward the proposal to raise the deposit rate by 50 bps in July, although before that, he also talked a lot about gradualism. In my opinion, a further decline in gas prices against the backdrop of growing occupancy of European storage facilities and an increase in LNG imports from China, coupled with the acceleration of European inflation and the "hawkish" rhetoric of ECB officials, will create the foundation for EURUSD correction. The dollar in the current situation will be able to draw strength only in the fall of the S&P 500. However, the stock index is able to jump up in response to weak employment statistics in the US. Technically, on the 4-hour chart, the consolidation of EURUSD above the pivot point at 0.999 and moving averages indicates the seriousness of the intentions of the bulls. The longs formed on the break of resistance at 0.9985–0.9999 are kept and increased in case of updating the local high at 1.0055 or on a rebound from parity. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: Euro goes against the crowd
The EUR/USD Price May Fall Under 1.0660

EUR/USD (Euro To US Dollar) - Both 50bp And 75bp Variants Are Possible

Kenny Fisher Kenny Fisher 30.08.2022 21:40
EUR/USD has edged higher for a second straight day, but has pared today’s gains. In the North American session, EUR/USD is trading at 1.007, up 0.09%. German inflation rises to 7.9% German CPI is estimated to have climbed to 7.9% YoY in August, up from 7.5% in July and above the forecast of 7.8%. The jump in inflation was driven by the usual suspects, energy and food prices. Energy prices jumped 35.6% and food prices rose 16.6% compared to a year earlier. With the war in Ukraine raging on and Europe facing a possible energy shortage in the winter, it’s hard to envision inflation in the bloc easing anytime soon. The ECB raised interest rates in July but inflation will not be curbed by the current benchmark rate of 0.50%, well below the neutral rate of around 1.5%. The US dollar has showed some strength since Fed Chair Powell’s no-nonsense, hawkish speech at Jackson Hole. Powell’s message to the markets remained consistent with the Fed’s pledge to continue raising rates until inflation is brought down, but this time the markets paid attention, as equity markets fell and the dollar gained ground against the major currencies. The glaring exception was the euro, which has managed to hold its own against the greenback. The euro has received support as expectations rise that the ECB could deliver a supersize 75bp increase at its September meeting. On Friday, ECB officials attending the Jackson Hole Symposium noted that inflation levels remained high and urged the ECB to deliver a September rate hike of 50 or even 75 basis points. Today’s German inflation report will put added pressure on the ECB to consider a 75bp move, as inflation continues to accelerate. On Wednesday, the eurozone releases CPI for August, with an estimate of 9.0% YoY, which would be a notch higher than the 8.9% gain in July. If inflation hits 9.0% or higher, the euro could gain ground as expectations for a 75bp hike will increase. EUR/USD Technical EUR/USD has support at 0.9985 and 0.9880 There is resistance at 1.0068 and 1.0173 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro steady as German inflation accelerates - MarketPulseMarketPulse
The Markets Still Hope That The Fed May Consider Softer Decision

FX Market - Volatility? Today's ADP Is Like A Teaser Trailer For USD (US Dollar). EUR/USD Could Be Quite Stable Despite EU CPI Release

ING Economics ING Economics 31.08.2022 11:15
EUR/USD started reconnecting with its higher short-term rate differential this week, but more good news on the European gas story will be needed to close the undervaluation gap. In this sense, risks of a supply cutoff are set to rise as Nord Stream is shut for maintenance for three days. On the data side, watch ADP numbers in the US, CPI in EZ, and GDP in Canada Gas prices and European sentiment are about to face a major stress test as the Nord Stream pipeline shuts for three days USD: Eyes on new ADP methodology We have seen some divergence in G10 performance since the start of the week, as markets started to hold a slightly more relaxed view on the European gas supply story and the risk premium on highly affected European currencies – EUR and SEK in particular – partially shrank. However, gas prices and European sentiment are about to face a major stress test as the Nord Stream pipeline gets shut for maintenance today for three days, and there is growing concern that another reduction in supply or a complete cutoff in flows may follow at the end of the week. All this warns against getting too excited about a recovery in European currencies at this stage.    In the US, we’ll get a first snapshot of the jobs market in August with the release of ADP employment figures today. The report had been temporarily discontinued after the May release, and will now resume with an updated methodology and a wider range of data (including additional information on wages). It will be interesting to see whether the alleged higher accuracy of the new APD index will trigger a larger-than-normal market reaction. Surely, the timing couldn’t be more appropriate, as Jackson Hole saw a reiteration of the data-dependency rhetoric and markets are split between a 50bp and 75bp hike in September (67bp currently in the price). On the Fedspeak side, we’ll hear from Loretta Mester and Raphael Bostic today, as well as from the freshly-appointed Dallas Fed President Lorie Logan, who will become a voting member in 2023. We think the dollar direction today may mostly hang on ADP figures, although the underlying narrative should continue to be a moderately bullish one if nothing else because the two major alternative markets to the US one – Europe and China – remain broadly unattractive despite the partial easing in gas prices and a slump in Chinese PMIs proved not as bad as expected this morning. DXY reaching 110.00 in the coming days is still a tangible possibility. Francesco Pesole EUR: Watch for the resilient risk premium Following yesterday’s EUR/USD rebound, the pair closed some of its short-term undervaluation gap to around 3.0% from the 5.5% peak seen early last week, according to our calculations. What appears clear in the current EUR price action is that any reconnection with its more favourable short-term rates still needs to rely on an improvement in the European energy story. In other words, as the Nord Stream pipeline closure raises fresh risks of a complete supply cutoff, that process of realignment of EUR/USD with its 2-year swap rate differential (which is at the highest since March) may well halt, or be easily reverted. In this sense, the main highlight of the day in the eurozone – the aggregate CPI numbers for August – may not provide too much of a shock to EUR/USD. After all, the market’s pricing is quite firmly falling on the hawkish side of the spectrum when it comes to the ECB tightening cycle: 70bp priced in for September, 160bp by year-end. The market consensus is for a marginal acceleration in both headline and core acceleration today after Germany’s slightly above-expectations figures yesterday. Our view for the remainder of the week is that EUR/USD may struggle to break above 1.0100 and faces downside risks (i.e. a return below 1.0000) as the end of the Nord Stream planned closure over the weekend inches closer. Francesco Pesole CAD: Jobs numbers should endorse 75bp hike by BoC Commodity currencies have been hit particularly hard since the start of the week as oil prices remained pressured. In this segment, CAD and NOK weakness looks unlikely to last long in our view, as both currencies still have to fully benefit from the economic benefits of their positive terms of trade shock, which ultimately underpins sustained tightening by their local central banks. Today, Canada sees the release of 2Q GDP numbers, which should be quite encouraging: consensus is for +4.4% annualised quarterly growth. This may convince markets to fully price in a 75bp rate hike by the Bank of Canada next week (69bp currently in the price), a notion that should fuel a CAD recovery and send USD/CAD sustainably below 1.3000 despite some resilience in USD bullish momentum. Francesco Pesole CEE: Another reason for dovish NBP and weaker zloty Yesterday's National Bank of Hungary decision to hike rates by 100bps to 11.75% provided fresh impetus for the forint to move to the strongest levels since mid-August. The main reason for a stronger forint, however, is a set of liquidity measures the central bank wants to use to try to halve the liquidity surplus. The goal is quite ambitious, but this new set of measures shows a strong commitment by the National Bank of Hungary to tackle inflation. Of course, we need to see the details of these measures in order to assess the long-term effect on the forint. In the short term, however, it is clear that the forint will benefit from yesterday's decision in the coming days. On the other hand, market optimism may quickly fade, and the forint will return to weaker values. Overall, the cards are once again in the hands of the NBH. However, we believe that the market's attention will once again return to the topic of EU money and negotiations with the European Commission in the second half of September, which is still the main driver of the forint. Today, market attention will turn to Poland, where GDP and inflation data will be published. The first estimate of 2Q GDP came with a significant negative surprise and today's print should explain the reasons for the weak economy. August inflation is likely to show a slowdown in the annual inflation rate from 15.6% to 15.4%, which may give a false impression that inflation is starting to slow. However, we see this as just a summer pause before further growth. Nevertheless, both of today's numbers make the case for the NBP's dovish rhetoric that is holding back the hiking cycle. But it is negative news for the Polish zloty given still high market expectations. Therefore, we expect the zloty to weaken and return to the range of 4.760-4.780 EUR/PLN. Frantisek Taborsky Read this article on THINK TagsFX Daily FX Dollar Canadian dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/AUD Pair May Have The Potential To Continue Its Decline

Forex: EUR/USD - The Euro Needs To Be Sold. Market Perceives The Tightening Of The ECB's Monetary Policy As A Direct Path To Recession

InstaForex Analysis InstaForex Analysis 31.08.2022 18:09
Relevance up to 12:00 UTC+2 Markets are often wishful thinking. And the media actively support them in this. Bloomberg's report that the euro could have its own rally amid record high inflation and the hawkish rhetoric of ECB officials was full of pathos but little sense. Without a decrease in gas futures quotes, the "high prices - aggressive increase in deposit rates" scheme does not work. As soon as the cost of blue fuel began to recover after a two-day decline, EURUSD quotes rushed down. Of course, the acceleration of German and European inflation to 8.8% and 9.1%, respectively, which in the first case is the maximum level in 40 years, and in the second—a new record, cannot please the ECB. Especially in the conditions of EURUSD sliding to the 20-year bottom. The Bundesbank says the recession should not stop Christine Lagarde and her colleagues from raising rates, while the futures market is 60% sure that they will rise by 75 bps in September. After such impressive inflation figures, I won't be surprised if it will be +75 bps in October and another +50 bps in December. Monetary restriction is clearly accelerating, and judging by the reaction of the euro to the previous "hawkish" surprises of the Governing Council, we can expect the growth of the euro on the 8th. Or on expectations before that date. Dynamics of European inflation However, as long as gas prices remain at elevated levels, the market perceives the tightening of the ECB's monetary policy as a direct path to recession. So, the euro needs to be sold. This strategy works very well on the news. Expectations of inflation acceleration in Germany and the Eurozone pushed EURUSD up, and then the sale on the facts began. At the same time, the shutdown of the Nord Stream for maintenance contributed to the growth in the cost of blue fuel and thus deprived the regional currency of its main trump card. Russia has suspended gas supplies to Engie SA due to disputes over payments. In France, storage occupancy is now over 90%, and the country is ready to survive this winter and next. Russia claims maintenance on Nord Stream will take about three days, but eurozone money markets only give a 30% chance that the pipeline will be operational by the deadline. Fears about the complete shutdown of the taps create a major obstacle on the way of EURUSD upward. Technically, on the 4-hour chart of the pair, the possibility of a Broadening Wedge reversal pattern is not ruled out. In this case, the return of euro quotes above the fair value of $1 will be the basis for purchases. On the contrary, a fall in EURUSD below 0.9915 will increase the risks of a continuation of the peak towards 0.97. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: Euro sell on the news
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

Europeans' Scare Of Energy Supply | Inflation Of The Eurozone Shocks Again | EUR/USD Chart

Kenny Fisher Kenny Fisher 31.08.2022 20:47
The euro continues to have a calm week. In the North American session, EUR/USD is showing little movement as it trades a whisker above the parity line. Eurozone inflation tops 9% Inflation in the eurozone continues to move higher. In August, CPI rose to 9.1%, up from the July gain of 8.9%, which was a record high. Core inflation climbed to 4.3%, up from 4.0%. With both the headline and core readings exceeding the forecast of 9.0% and 4.1%, respectively, there will be additional pressure on the ECB to tighten policy more at an accelerated pace. The central bank has been slow to shift its accommodative policy, which was in place for years in order to support the eurozone economy. The ECB now finds itself playing catch-up with inflation, and is also far behind in the tightening cycle compared to other major central banks, with a benchmark rate of just 0.50%. Inflationary pressures remain broad-based, which means inflation is well-supported and unlikely to decline anytime soon. The eurozone inflation report comes just a day after Germany, the largest economy in the bloc, reported that August inflation jumped to 7.9%, up from 7.5% in July and nudging above the forecast of 7.8%. The central bank meets next on September 8th, and there is a strong possibility that the ECB could come out with guns blazing and deliver a super-size 75 basis point increase. A potential energy crisis in Europe continues to hover like a dark cloud, and the uncertainty over whether Moscow will weaponise energy exports remains a massive concern. The Nord Stream 1 pipeline has been shuttered for a scheduled three-day maintenance, but there are fears that Russia will find some excuse and not renew gas flows on Saturday. Any disruptions would likely push European gas prices even higher. In the meantime, the waiting game is on, with Western Europe on edge while it anxiously waits for the gas taps to be turned back on. EUR/USD Technical EUR/USD has support at 0.9985 and 0.9880 1.0068 is a weak resistance line, followed by 1.0173 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro inflation rises, but euro yawns - MarketPulseMarketPulse
Crucial Upcoming PMI Data and High-Stake Meetings Shape China's Economic Landscape

Forex Wakes You Up! (USD) US Dollar Index Is Not Far From 110.00! EUR/USD Is Expected To Be Hovering Between 0.99-1.01

ING Economics ING Economics 01.09.2022 08:50
It is a familiar narrative, but a firmly hawkish Fed plus major exporting nations seeing their trade surpluses wiped out by higher energy costs continue to drive the dollar higher. And we doubt an extra 25bp of ECB tightening this autumn makes much of a difference to the soft EUR/USD profile. Look out for PMIs and US manufacturing ISM today. Dollar to stay bid Over recent weeks and months, we had felt that sterling could hold its own against the weakened euro – but clearly it has failed to do so USD: Fed curve gets priced higher and flatter It is fair to say the dollar remains very well bid across the board. The much-followed DXY trade-weighted dollar index remains close to its highs of the year above 109, while other trade-weighted measures more weighted towards emerging markets push even higher. Two key factors remain at work here. The first is the Fed. Here pricing in US money markets of the Fed policy curve continues to move higher and flatter. By that we mean the terminal rate pricing has now pushed up to 3.95% for next spring, while the easing for late 2023 is also being priced out too. Notably, December 2023 Fed Funds futures now price Fed rates at 3.60%. Back in late July during the 'Fed pivot' story, these futures had dropped to 2.70%. In short, we have seen quite a re-pricing over the last month – a re-pricing that may not be over yet. Yesterday Fed hawk Esther George spoke of needing to get Fed Funds above 4% and keeping it above there for 2023.  Given the experience over the last month and the very hawkish speech of Fed Chair Jerome Powell last Friday, we doubt that even a modestly softer August jobs report tomorrow will be enough to dent this Fed pricing or the dollar. The second factor is the energy crisis, which wiped out traditional trade surpluses for the big energy importers in Europe and Asia. Overnight Korea announced a $10bn trade deficit for the month of August. In September 2020, Korea was running close to a $10bn monthly trade surplus. The Bank of Korea's 125bp of tightening has provided little support to the Korean won – which has fallen 12% against the dollar this year. Equally, we think 100-125bp of ECB hikes this year will struggle to provide much support to EUR/USD, which has equally fallen 12% this year. For today we will see US ISM manufacturing and the initial jobless claims numbers. We doubt these can put too much of a dent in the dollar's rally ahead of tomorrow's US jobs report. DXY to stay bid above 109.00 and could make a run at 110.00 at any time. Chris Turner EUR: ECB hawks may struggle to generate euro lift-off Above-consensus eurozone CPI for August predictably brought out the ECB hawks yesterday, with Austria's Robert Holzmann again suggesting that a 75bp hike be debated at next week's meeting. Markets now price 69bp of hikes at the September meeting, a total of 130bp by the October meeting, and a total of 167bp by year-end. This has contributed to a 1% rally in the ECB's trade-weighted euro over the last few days. However, the recent narrowing in EUR: USD two-year swap spreads may have run its course, and a reversal – should the ECB not deliver on this new hawkish pricing – could send EUR/USD to fresh lows next week. Data in the region is more detailed on the August PMIs. Overall we see investors in no mood to let go of their precious and high-yielding (2.30% overnight rate) dollars. EUR/USD to stay offered in a 0.9900-1.0100 range. Chris Turner GBP: This is getting serious Over recent weeks and months, we had felt that sterling could hold its own against the weakened euro – but clearly it has failed to do so. The Bank of England's (BoE's) trade-weighted sterling fell more than 3% in August and now sits at a new low for the year. Our premise for sterling staying supported was that foreign owners of Gilts would have to cut FX hedge ratios because of rising sterling hedging costs. That view is, shall we say, challenged by foreign investors dumping Gilts. Foreigners sold £16.5bn of Gilts in July according to BoE data, the largest sale since July 2018. Our debt strategy team note some worrying developments in the Gilt market – where underperformance of Gilts versus GBP swaps suggests some independent concerns mounting over Gilts, be it quantitative tightening plans from the BoE or perhaps even some fears over what Britain's next prime minister plans to do with the nation's balance sheet. Notably, the UK's 5-year sovereign Credit Default Swap is starting to rise too. A fiscal risk premium looks to be going into GBP. Cable retesting the March 2020 flash-crash low of 1.1415 low looks the path of least resistance. And 0.8720 is the bias for EUR/GBP. Chris Turner CEE: Too much, too soon Today we have PMI prints for the CEE region in the calendar. Recent months have shown a significant drop in sentiment, especially in Poland, and we cannot expect a significant reversal of the trend for August either. On the other hand, the recent German release suggests at least a halt to the decline in sentiment in the region. Today, we will also see the detail of GDP in Hungary which surprised positively in 2Q. The National Bank of Hungary (NBH) will decide on the one-week deposit rate, however, we cannot expect anything other than a 100bp hike – similar to when the central bank on Tuesday raised the base rate. Later today, the Czech Republic's state budget result will be released, where pressures to loosen fiscal policy are growing. On the FX side, conditions in the region have improved significantly in recent days. EUR/USD above parity has eased pressure on EM markets, gas prices have dropped, and market expectations of rate hikes have increased a bit in the region for the first time in a while. The result is stronger currencies across the region, however, perhaps this is too much, too soon. Thus, we see the region at the moment as highly vulnerable to incoming negative news, which may be the PMI print today. But overall, nothing has changed in the CEE story in recent days. The tougher part of the year is yet to come in terms of both the gas story and negative economic numbers, and on top of that FX is losing the support of hawkish central banks and rising interest rate differentials. So despite recent gains, we remain bearish on CEE currencies over the coming days. Frantisek Taborsky Read this article on THINK TagsFX Daily FX ECB Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

What To Expect From Pair EUR / USD? Currently Trying To Push Through The Support Level

InstaForex Analysis InstaForex Analysis 01.09.2022 09:09
In the first half of Wednesday, the euro was growing against the decline of other world currencies for the second consecutive day - the bulls on the euro were still able to work out the growth of the August CPI to 9.1% from the previous value of 8.9% y/y. Data from ADP on employment in the US private sector came out in the evening - 132,000 jobs were created in August against the forecast of 300,000. The US stock index S&P 500 fell by 0.78%, the yield on 5-year government bonds increased from 3.26% to 3.35%, investors continued their weekly withdrawal from risk and the euro lost ground. The pair is currently trying to push through the support level of 1.0020, leaving under which will open the nearest target of 0.9950. Overcoming 0.9950 opens the 0.9850 target. We are also waiting for the signal line of the Marlin Oscillator to go under the turquoise line forming convergence and its decrease to the area of the pink dashed line, from which a stronger correction is likely to form. The price is still above the balance and MACD indicator lines on the four-hour chart, the Marlin Oscillator is still in the positive area, but it has a clear intention to go below the zero line and change direction. The MACD line is approaching the level of 0.9950, thus it will strengthen it, and the price, in case of overcoming this level, will receive a strong impulse to further decline. The critical level of this scenario is 1.0088, the high on August 26th.   Relevance up to 04:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320504
The Markets Still Hope That The Fed May Consider Softer Decision

Analysis Of The EUR/USD Pair. The Price Will Drop?

InstaForex Analysis InstaForex Analysis 01.09.2022 10:12
Trend analysis (Fig. 1). The euro-dollar pair may move downward from the level of 1.0052 (close of yesterday's daily candle) to test 1.0013, the 85.4% retracement level (blue dotted line). Upon reaching this level, an upward movement is possible to 1.0079, the 38.2% retracement level (white dotted line). From this level, the price may continue to move up. Fig. 1 (daily chart). Comprehensive analysis: General conclusion: Today, the price may move downward from the level of 1.0052 (close of yesterday's daily candle) to test 1.0013, the 85.4% retracement level (blue dotted line). Upon reaching this level, an upward movement is possible to 1.0079, the 38.2% retracement level (white dotted line). From this level, the price may continue to move up. Alternative scenario: from the level of 1.0052 (close of yesterday's daily candle), the price may move downward to test the support level of 0.9952 (thick blue line). Upon reaching this level, an upward movement is possible to 1.0010, the 23.6% retracement level (white dotted line).     Relevance up to 08:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320514
The Upside Of The EUR/USD Pair Remains Limited

The EUR/USD Pair Is Swinging. Details Of What Happens.

InstaForex Analysis InstaForex Analysis 01.09.2022 10:25
EUR/USD 5M The EUR/USD pair continued to move in a style already familiar over the past two weeks. The price reversed sharply again, and the movement took place inside the 0.9900-1.0072 channel. We have already said that this channel cannot be considered a horizontal channel, although formally it is just that. That movement, which we call flat, is also not really such, but has all the signs of it. Best of all, the current movement fits the description of a "swing", which is actually no better than a flat. The pair failed to settle above the level of 1.0072 for the second time, so now we can count on a certain drop in quotes. From Wednesday's macroeconomic reports, we note inflation in the European Union, which continued to accelerate and now stands at 9.1% y/y. It was after the release of this report that the euro began to appreciate, but we do not believe that these two events are connected. At this time, when it is already known about the possible tightening of the European Central Bank's monetary policy in September, the likelihood of a tougher rate hike does not increase. In regards to Wednesday's trading signals, the situation was slightly better than the day before. Mainly due to the formed area of 1.0001-1.0019. First, a sell signal was formed when the price settled below it, and then a buy signal. The sell signal turned out to be false, but the pair went down 15 points. Therefore, Stop Loss should have been set to breakeven. The long position managed to earn 30 points as the price reached the nearest target level of 1.0072. A rebound from the level of 1.0072 could no longer be worked out, since this signal was formed rather late. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For most of 2022, they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. The number of long positions for the non-commercial group increased by 11,600, and the number of shorts increased by 12,900 during the reporting week. Accordingly, the net position increased by about 1,300 contracts. After several weeks of weak growth, the decline in this indicator resumed, and the mood of major players remains bearish. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 44,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. Over the past six months or a year, the euro has not been able to show even a tangible correction, not to mention something more. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 1. The ECB was late, does not admit its mistakes and continues to do everything "for show". Overview of the GBP/USD pair. September 1. The pound is already falling by inertia and tends to overtake the euro in the fall against the dollar. Forecast and trading signals for GBP/USD on September 1. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair has consolidated above the trend line on the hourly timeframe, but still does not leave the feeling that the downward trend continues. At the moment, the pair is generally trading inside the horizontal channel, and this channel has already expanded to 0.9900-1.0072. If the bulls manage to settle above it, then it will be possible to count on a slight increase in the euro, but given the current "swing", there may be constant rollbacks to the downside. We highlight the following levels for trading on Thursday - 0.9900, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (1.0051) and Kijun-sen (1 ,0001). There is not a single level below the level of 0.9900, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union will publish the unemployment rate and the index of business activity in the manufacturing sector in the second assessment for August. Both reports are insignificant. Meanwhile, we have the ISM index of business activity in the service sector in the United States, and this report may provoke a market reaction. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 02:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320492
NatWest Group Reports Strong H1 2023 Profits Amid Rising Economic Concerns

Are You Starting Your Adventure With Forex? This Is What You Should Know About EUR/USD and GBP/USD Today

8 eightcap 8 eightcap 01.09.2022 11:24
Details of the economic calendar for August 31 Eurozone inflation hit a new record high of 9.1% in August. Eurostat reports that the main growth driver is high energy prices. The high level of inflation may again push the European Central Bank to further interest rate hikes. It is worth noting that for the past two days, most speakers from the ECB have been actively advocating the possibility of raising the ECB rate by 0.75% in September. In turn, German Chancellor Olaf Scholz says that citizens will feel a significant increase in electricity prices in September. In simple terms, inflation in the EU will continue to grow. During the American trading session, employment data in the United States was published. According to the ADP report, the number of jobs in the private sector in August increased by 132,000. Forecast expected an increase of 300,000. The divergence of expectations has served as a stimulus for the local sell-off of the US dollar. As a reminder, the ADP report is often viewed by traders as a leading indicator for the US Department of Labor report due on September 2nd. Category "Interesting moments" Bloomberg: Fed Chairman Jerome Powell has buried the concept of a "soft landing" of the US economy. Now the Fed's goal is to bring inflation down by slowing US economic growth below its potential level, which officials estimate at 1.8%. Analysis of trading charts from August 31 The EURUSD currency pair, despite local manifestations of activity caused by speculative interest, is still in close proximity to the parity level (1.0000). Price fluctuation within 150 points lasted for almost two weeks. This movement, in theory, can become a process of accumulation of trading forces. The GBP/USD currency pair gradually weakened, which resulted in a prolongation of the main downward trend. Details: Since August, the pound has lost 700 points (about 5.5%) of value, which is considered a strong price change, allowing short positions to overheat. Since the beginning of the medium-term trend, June 2021, the pound has lost 2,600 points in value (about 18.5%). Economic calendar for September 1 The final data on business activity indices in the manufacturing sector in Europe, the United Kingdom, and the United States are to be published today. If the indicators coincide with the preliminary estimate, the data will be ignored by market participants since they have already been priced in. The EU employment data will also be published, which may rise from 6.6% to 6.7%. This is already a negative factor for the euro if the forecast matches. During the American session, in addition to the manufacturing PMI data, weekly jobless claims in the United States will be published, where figures are assumed to rise. This is a negative factor for the US labor market, which may affect dollar positions. Statistics details: The volume of continuing claims for benefits may increase from 1.415 million to 1.438 million. The volume of initial claims for benefits may increase from 243,000 to 248,000. Time targeting: EU Manufacturing PMI – 08:00 UTC UK Manufacturing PMI – 08:30 UTC EU Unemployment – 09:00 UTC US Jobless Claims – 12:30 UTC US Manufacturing PMI – 14:00 UTC Trading plan for EUR/USD on September 1 A recent attempt to keep the price above 1.0050 proved unsuccessful. As a result, the quote again rolled back to the level of 1.0000. In this situation, do not rush, the tactics of work, as before, will be focused on the main move that will arise after the completion of the stage of accumulation of trading. We concretize the above: The upward scenario for the currency pair is taken into account after the price is held above the value of 1.0050. In order to filter out false touches, the quote needs to stay above the control value in the daily period. The downward scenario is considered in the market in the form of two steps. The local move will be considered by the trailers at the moment the price holds below 0.9970 in a four-hour period. In this case, there is a high probability of movement towards the value of 0.9900. The main move will be relevant after holding the price below 0.9890 in the daily period. This scenario will lead to a prolongation of the trend. Trading plan for GBP/USD on September 1 In this situation, market participants set their sights on the local low of 2020. There are about 150 points left to go, but given the growing oversold level of the pound sterling, a full-length technical correction is possible. The price area 1.1410/1.1525 can serve as a support on the way of sellers. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.     Relevance up to 09:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320541
The EUR/USD Price May Fall Under 1.0660

Eurozone: What Could Help Wages To Grow? Unemployment Decreased To 6.6%

ING Economics ING Economics 01.09.2022 11:44
The eurozone labour market remains historically tight despite a rapidly slowing economy. While the strong labour market increases the risk of rapid wage growth fueling inflation further, there is no evidence of that so far Eurozone unemployment is at a historically low rate, but a recession could change that   Unemployment fell from 6.7 to 6.6% in July, continuing the steady trend of declining unemployment. The rate is currently well below the natural rate of unemployment, which suggests upward pressure on wages. At the same time though, there is little evidence of this happening so far. Negotiated wage growth – most Europeans see wages adjusted by collective bargaining agreements – grew at an annual rate of 2.1% in 2Q, which is still well below what is to be expected given labour shortages and high inflation. The labour market is at an interesting crossroads at the moment. Employment expectations from businesses are dropping moderately and the economy is moving towards recession at the moment. Given the tight labour markets in most eurozone economies, the expectation is that some degree of labour hoarding will take place to ensure adequate staffing once the economy recovers. Where wages are headed is uncertain in these times. We do expect the tight labour market and high inflation rate to result in further rises in wage growth. A recession will dampen the prospects for increases but is unlikely to nullify them all together. Still, signs of a wage-price spiral remain absent. If a recession indeed materializes, expect an unemployment rate slightly creeping up from current historically low levels. Read this article on THINK TagsGDP Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/AUD Pair May Have The Potential To Continue Its Decline

How The EUR/USD Looks In The Short And In The Long Positions?

InstaForex Analysis InstaForex Analysis 01.09.2022 11:54
Analysis of transactions in the EUR / USD pair Euro tested 0.9998 at the time when the MACD was far below zero, which limited the downside potential of the pair. Sometime later, it tested the level again, but this time the MACD line was above zero, so the upside potential was limited. This happened after the test of 1.0043. Although the sharp rise in the eurozone consumer price index came as no surprise, it hurt euro's upward outlook in the morning. Then, in the afternoon, dollar was affected by weak employment data from ADP, which suggested that the rate hikes implemented by the Fed hurt the labor market. Today, a number of reports are scheduled to be released, namely the volume of retail trade in Germany, index of business activity in the manufacturing sector and change in the unemployment rate of the eurozone. Good figures will allow buyers to try updating the weekly highs. But in the afternoon, the focus will shift to the data on US jobless claims, ISM manufacturing index and speech by FOMC member Raphael Bostic. For long positions: Buy euro when the quote reaches 1.0026 (green line on the chart) and take profit at the price of 1.0081. A rally will occur if statistics in the Euro area exceed expectations. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0005, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0026 and 1.0081. For short positions: Sell euro when the quote reaches 1.0005 (red line on the chart) and take profit at the price of 0.9959. Pressure will return if the Euro area releases weak economic statistics. The failure of buyers to update yesterday's highs will also end the upward correction. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0026, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0005 and 0.9959. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.       Relevance up to 09:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320532
What's ahead of Euro against greenback today? Let's look at Stefan Doll's review

Despite Declining Energy Prices, European Central Bank (ECB) Is Expected To Hike The Rate By 75bp

ING Economics ING Economics 01.09.2022 12:46
Markets now favour a 75bp hike by the European Central Bank in an upcoming meeting, ignoring the drop in energy prices this week. Gilts are suffering from fears of fiscal spending and foreign outflows Bonds have their hawkish blinkers on and miss a drop in energy prices A beat in core eurozone CPI, with our economist flagging worrying signs of second-round effects from energy to goods prices, has tipped the scales in favour of a 75bp ECB hike in September. The market is now pricing 125bp of tightening over the next two meetings. Another flurry of hawkish comments, from the usual suspects Joachim Nagel and Robert Holzmann, helped convince investors that hawks are winning the front-loading hike debate. What’s more surprising is that the further rise in front-end rates and, expectedly, curve flattening, occurs while European-traded energy prices continue their decline this week. September and October are shaping up to be busy months in terms of supply With so much hawkishness priced and some relief in traded energy, it is tempting to call the peak in 10Y Bund yields, but there is another factor at play. September and October are shaping up to be busy months in terms of supply. Even if volumes do not match the previous years, we ascribe lower issuance to more difficult liquidity conditions, we would expect a greater market impact. The first eight months of the year are a case in point, despite lower volumes, supply has put greater pressure on bond yields across the credit spectrum. Bond sales should push bond yields higher in September and October Source: Bond Radar, ING Gilts have no (foreign) friends UK rates continue to rise relative to their European and US peers. As we wrote recently, divergence in energy prices and inflation explains their jump relative to USD yields. As for the faster rise than European peers, one needs to dig deeper into UK-specific problems. In an economy that is generating a greater proportion of its inflation domestically, the coming fiscal support package stands a greater chance of resulting in a more aggressive Bank of England (BoE) tightening cycle. These fears are probably exacerbated by the current leadership vacuum and the uncertainty about the extent of extra spending and tax cuts that will be unveiled. Fears of fiscal profligacy tend to hit gilts harder. Due to a (historically at least) wider current account deficit, UK markets are more sensitive to a worsening of its twin deficits. The recent decline in net overseas buying of gilts, still positive but the lowest on a rolling three-month basis since 2020 when fears of a mini run on the sterling were rife, did not help. We’re still far from the simultaneous sell-off in UK bonds, stocks, and currency that occurred in March 2020 and prompted the BoE to restart quantitative easing, but the parallel sheds an awkward light on its plan to actively sell bonds, on top of ‘passive’ balance sheet reduction. Foreign buying of gilts is at its lowest since 2020 Source: Refinitiv, ING Today's events and market views Most manufacturing PMIs released today will be second readings with the exception of the Dutch, Spanish, and Italian indices. Italian and eurozone unemployment complete the list of European releases. Supply will remain an important driver of short-term price action with Spain (3Y/10Y/30Y and linker), France (9Y/10Y/16Y), and Ireland (10Y/30Y) lined up for today. In the afternoon, US PMI manufacturing is a second reading but its ISM equivalent is a first. In addition to a decline in the headline figure, markets will look closely for a further drop in the prices paid component. Jobless claims and construction spending are the other US releases we look out for. The pre-ECB meeting quiet period starts today so we would be surprised to hear Fabio Centeno make any comment on monetary policy. The Fed’s own quiet period only starts this weekend so Raphael Bostic might try to out-hawk his colleagues. Read this article on THINK TagsRates Daily ECB Bonds Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Russia's Weekend Mutiny and Gold's Bounce off Support Raise Concerns; Verbal Intervention in USD/JPY and US Banking Stocks Tumble Ahead of Fed's Stress Test Results

The FED's Monetary Policy Is Favorable To The USD

InstaForex Analysis InstaForex Analysis 01.09.2022 13:12
The US currency is in tension before the release of the US labor market report, despite the advantage over the European one. At the same time, EUR does not leave attempts to rise and catch up. Currently, the downward trend prevails on the markets, plunging the American and European currencies into pessimism. According to economists at Commerzbank, a long-term strengthening of the US labor market provides significant support to the greenback. Experts put an equal sign between a strong labor market and a growing dollar. According to preliminary estimates, the positive trend in the USD will continue as long as the Federal Reserve adheres to a tight monetary policy. This situation is favorable for the US currency, but undermines the position of the European one. The EUR/USD pair was trading at 1.0012 on the morning of Thursday, September 1, trying to get out of the current range. At the same time, analysts pay attention to the high probability of the pair moving towards parity. The greenback plunged a bit on Wednesday evening, August 31, after the release of macro statistics on the US labor market, but later won back short-term losses. U.S. private-sector jobs increased by 132,000 last month, according to Automatic Data Processing (ADP), an analyst firm. Initial jobless claims in the U.S. surged to 248,000 on Friday, according to preliminary forecasts. Data on unemployment in the country will be released on September 2. Experts expect this indicator to remain at the level of July (3.5%) and to increase the number of jobs in the non-agricultural sector of the country. Many currency strategists rely on strong US employment data and falling unemployment. They consider these indicators the most important for the Fed and its future monetary policy. However, some experts argue that the key indicator for the central bank is the level of salaries. Recall that Fed Chairman Jerome Powell and other members of the FOMC are counting on the "cooling" of the national labor market. Representatives of the Fed are trying to avoid a situation in which wage growth provokes another round of inflation. In such a situation, the increase in the number of vacancies recorded in August is a negative signal for the central bank. Against this background, the European currency seeks to maintain balance and get out of the price hole. However, its efforts are rewarded with rare bursts of recovery, and then a decline. Adding fuel to the fire is uncertainty about the European Central Bank's next steps on the rate. According to Nordea economists, next week the central bank will raise the rate by 75 basis points. The bank believes that even negative forecasts for economic growth in the region will not interfere with this. At present, the inflation rate in the eurozone remains stably high. According to current reports, inflation in EU countries reached an impressive 9.1% in August. Previously, this figure was 8.9%. The current situation undermines the euro's position, which is hardly kept afloat. According to analysts, the weakening of the euro against the dollar is due to the active tightening of monetary policy by the Fed. At the same time, the current parity between currencies may disappear when a compromise is reached in the EU on tightening the monetary policy or when inflation in the United States returns to the target of 2%. However, both situations are unlikely, experts say. According to experts, the 1:1 ratio between the dollar and the euro will remain until the EU countries begin to tighten monetary policy following the example of the United States. However, there are many pitfalls here, as the ECB needs to find a compromise between all the countries of the euro bloc. Many experts believe that by the end of 2022 the balance of power in the EUR/USD pair will change, due to which the topic of parity will be removed. Experts allow changes in the ECB's actions regarding monetary policy. The same is possible with regard to the Fed, which is worried about labor market problems and galloping inflation. According to analysts, the pair will tend to the usual ratio of 1.0500-1.1000. "In the event of a sharp turnaround, the EU economy will receive a solid bonus for the growth of exports and the economy at the expense of the US and China," the experts emphasize. Market participants are concerned about the questions: will the Fed take a decisive approach to monetary policy? Will the ECB follow suit? Many traders and investors are skeptical about the immediate prospects for the dollar and the euro. At the same time, analysts expect a reduction in key rates in the second half of 2023. The implementation of such a scenario will weaken the greenback and limit the potential for its strengthening. In the current situation, some experts believe that the markets are wishful thinking, expecting less rigidity from the Fed in the process of forming monetary policy. In this matter, much depends on the level of unemployment in the country. Excessive strengthening of the labor market in the US is pushing the central bank to tighten monetary policy as soon as possible. Fed officials are stepping up the pace of this tightening, emphasizing that they are ready to temporarily sacrifice the economy for the sake of curbing inflation. However, a few months ago they said they would try to avoid a recession. However, despite the economic upheavals, the US currency remains strong and remains competitive in the global market.       Relevance up to 08:00 2022-09-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320524
Long-Term Rates Diverge Amid Policy Divergence and Economic Signals

Will The US Employment Report Affect The EUR/USD Pair?

InstaForex Analysis InstaForex Analysis 01.09.2022 13:54
false breakdown occurred in EUR/USD yesterday, followed by a sharp increase towards the weekly high. Then, there was a slight rollback, which gave buyers an opportunity to open new positions. Tomorrow's employment report from the US will affect market sentiment. As such, traders must limit short positions in order to avoid falling into the trap of sellers. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Read more: https://www.instaforex.eu/forex_analysis/320551 Read more: https://www.instaforex.eu/forex_analysis/320551 Relevance up to 10:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320551
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

Increases on the New York Stock Market. Fall In Raw Materials

InstaForex Analysis InstaForex Analysis 02.09.2022 08:42
At the close of the New York Stock Exchange, the Dow Jones rose 0.46%, the S&P 500 rose 0.30%, and the NASDAQ Composite fell 0.26%. The leading performer among the components of the Dow Jones index today was Johnson & Johnson, which gained 4.00 points or 2.48% to close at 165.34. Amgen Inc rose 5.20 points or 2.16% to close at 245.50. Merck & Company Inc rose 1.79 points or 2.10% to close at 87.15. The losers were Boeing Co shares, which lost 6.59 points or 4.11% to end the session at 153.66. Dow Inc. gained 2.04% or 1.04 points to close at 49.96, while Salesforce.com Inc shed 1.66% or 2.59 points to close at 153. .53. Leading gainers among the S&P 500 index components in today's trading were DXC Technology Co, which rose 7.75% to hit 26.70, General Holdings Inc, which gained 5.72% to close at 233.01, and also Moderna Inc, which rose 5.05% to end the session at 138.95. The losers were shares of NVIDIA Corporation, which lost 7.67% to close at 139.37. Shares of Hormel Foods Corporation shed 6.56% to end the session at 46.98. Quotes of Monolithic Power Systems Inc decreased in price by 6.11% to 425.47. Leading gainers among the components of the NASDAQ Composite in today's trading were Hempacco Co Inc, which rose 63.41% to hit 8.35, GigaCloud Technology Inc, which gained 61.43% to close at 23.65, and also shares of Virax Biolabs Group Ltd, which rose 58.69% to end the session at 5.57. American Virtual Cloud Technologies Inc was the biggest loser, shedding 52.17% to close at 0.22. Shares of Newage Inc lost 46.87% and ended the session at 0.12. Quotes of Okta Inc decreased in price by 33.70% to 60.60. On the New York Stock Exchange, the number of securities that fell in price (2231) exceeded the number of those that closed in positive territory (901), while quotes of 101 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,416 companies fell in price, 1,333 rose, and 244 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.20% to 25.56. Gold futures for December delivery lost 1.13%, or 19.55, to hit $1.00 a troy ounce. In other commodities, WTI October futures fell 3.54%, or 3.17, to $86.38 a barrel. Brent oil futures for November delivery fell 3.71%, or 3.55, to $92.09 a barrel. Meanwhile, in the Forex market, EUR/USD fell 1.11% to hit 0.99, while USD/JPY edged up 0.89% to hit 140.20. Futures on the USD index rose 0.91% to 109.65.         Relevance up to 04:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/291092
FX Daily: Testing the easing pushback

How The EUR/USD Pair May Look Like Today? Will Go Up?

InstaForex Analysis InstaForex Analysis 02.09.2022 09:46
The almost weekly growth of the euro against other major currencies was not in vain for it - yesterday's fall was 108 points (the market leader), the price attacked the target support of 0.9950, behind which is the target of 0.9850. On the daily chart, the signal line of the Marlin Oscillator has stopped at the line forming the convergence. The synchronous transition of this line by the oscillator and the price breaking through the support of 0.9950 will create another downward momentum for the euro. Probably, the 0.9752 target will be reached. On the H4 chart, the Marlin Oscillator moved into negative territory and managed to gain a foothold in it. The price attempted a short-term consolidation under the MACD indicator line, but the first attempt failed. Now we are waiting for the second such attempt and the advance towards the first target support at 0.9850.     Relevance up to 05:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320623
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

Problems Of The Euro. Will The ECB Rates Rise And How Much?

InstaForex Analysis InstaForex Analysis 02.09.2022 10:01
The dollar starts September with a combative mood, trading near 20-year highs and benefiting from flows to safe havens. Fears for the fate of the global economy and the drumbeat of leading central banks are rattling traders' nerves. The greenback is also popular with investors, as they need to buy USD to maintain their margin positions in the face of declining stock indices. Players' nervousness is compounded by the fact that stocks are entering a historically weak period for the market. Since 1950, the S&P 500 has fallen by an average of 0.5% in September. This year, everything speaks in favor of repeating historical trends. Over the past two months, the volume of a net short position against S&P 500 futures has grown significantly and reached its highest value in two years. The index just ended the month with its fourth consecutive daily decline on Wednesday. Investors are still under the impression after Federal Reserve Chairman Jerome Powell's statement last Friday that the central bank's key rate should be raised to a level that will allow inflation to be controlled, despite the risks of recession. The S&P 500 index since last Thursday, the last day before Powell's speech in Jackson Hole, lost more than 5%. "The market has received a message that the Federal Reserve is going to fight inflation at any cost. We don't think we've seen a bottom this year," strategists at Optimal Capital Advisors said. On Wednesday, the head of the Federal Reserve Bank of Cleveland, Loretta Mester, continued this topic. She said that the US central bank needs to raise the base rate from the current target range of 2.25%-2.5% above 4% by the beginning of next year and leave it at this level for some time to reduce inflation. Against this background, the yield of two-year US Treasury bonds, which changes in accordance with expectations regarding interest rates, reached the highest level since the end of 2007 yesterday, rising above 3.5%. The higher yield of treasuries pushes up the dollar as investors sell debt denominated in other currencies to get a higher premium on US treasuries. "It doesn't look like they can actually offer decent resistance to the dollar, given such a gloomy global outlook," Rabobank strategists said, referring to other major currencies. "If you sell the dollar, what will you buy?" – they said. The greenback has been growing for three consecutive months, while the euro fell by 6.5% over the same period. The greenback's growth against the single currency reflects concerns that a sharp jump in energy prices in the eurozone, caused by the conflict between Russia and Ukraine, will lead to higher inflation and push the European economy into recession. "High inflation and gas supplies are still serious problems in the euro area. We think this will continue to put downward pressure on the single currency," Commonwealth Bank of Australia analysts said. As data released on Wednesday showed, inflation in the eurozone rose to a record high of 9.1% in August. This strengthened the case for further significant rate hikes by the ECB to tame it. "Before the start of the Jackson Hole symposium, the market expected the ECB to raise the rate by 1 bps by the October meeting, and since then these expectations have only increased. However, a rate hike is unlikely to strongly support the euro against the greenback, given that investors are likely to remain focused on the risks of stagflation in the eurozone and given the safe haven function for the dollar," Rabobank analysts said. "We maintain our EUR/USD target at 0.9500 for one month and still expect the widespread strengthening of the US dollar to persist over the next six months or so," they added. Another unexpected rise in inflation increases speculation about a 75 bps ECB rate hike at next week's meeting. However, MUFG Bank economists do not believe that the euro will benefit from this sharp tightening. "Market participants currently estimate a 71 bps rate hike by the ECB policy meeting on September 8, as well as the fact that it will continue to raise rates to 1.50% by the end of the year. Market expectations of a sharper tightening of policy were supported by the hawkish comments of ECB policy makers after Jackson Hole and the recent announcement of another unexpected increase in inflation in the eurozone. However, we are not convinced that a sharp tightening of the ECB's policy will support the steady growth of the euro, as the risks of recession in the eurozone remain elevated," they said. The eurozone, in case of termination of pipeline gas supplies from Russia, may face a recession in the second half of 2022, analysts at Fitch Ratings believe. "The onset of recession in the eurozone is likely in the second half of 2022, and in 2023, Germany and Italy will experience an annual decline in GDP. Economic vulnerability in the event of termination of pipeline gas supplies remains high, despite recent active efforts to diversify import sources, in particular LNG," Fitch said. With the passing of the summer heat, as well as news that European countries are filling their storage facilities at a faster pace than expected, energy prices in the eurozone have decreased from peak values. However, the European economy, and especially Germany, remain vulnerable to the onset of winter if Russia stops supplying gas, given that storage facilities cover only 25-30% of winter consumption. "It is very difficult to predict how the situation with gas will develop in the European Union in winter, since much will depend, among other things, on the weather and the volume of gas coming from alternative sources to Russia," said the deputy head of the Directorate of the European Commission for Energy in the relevant committee of the European Parliament. The European Commission expects gas prices in Europe to remain at an elevated level in the coming winter and fall in 2024-2025. "We expect that prices will remain at an elevated level in the coming winter, they will fall again in 2024-2025. But they are subject to some fluctuations," EC spokesman Tim McPhie said. Gas prices and sentiment in Europe are now undergoing a serious stress test, as the Nord Stream-1 gas pipeline closed on August 31 for maintenance. All this warns against excessive enthusiasm for the recovery of the European currency at this stage, ING strategists note. The EUR/USD pair ended Wednesday's session with an increase of 0.3%, near 1.0057, having reached a weekly high at 1.0080 during yesterday's trading. At the same time, the USD index fell by 0.1% to 108.65 points. The euro was supported by expectations that the ECB will raise the interest rate by 75 basis points next week.Meanwhile, dollar shorts were mainly caused by the rebalancing of portfolios at the end of the month, turning into consolidation. The EUR/USD pair lost its bullish momentum on Thursday and plunged by almost 150 points from Wednesday's closing levels. At the same time, the USD index rose to the highest levels since June 2002, coming close to 110. The Fed's tough stance is still working in favor of the greenback, and the energy crisis in Europe is against the euro, which has not gone away with the correction of gas prices over the past three days. "Even after reaching new records, the dollar has room for further growth, which is facilitated by the prospects of a global recession and, in particular, the energy crisis in Europe," Generali analysts said. Fears related to the global recession were exacerbated by China, which announced that Chengdu, a city with a population of about 21 million people, was put on lockdown due to coronavirus. Reflecting investors' unwillingness to take risks, key Wall Street indexes mostly declined on Thursday. Friday's US employment report for August carries risks for stocks, because if it is strong, it will increase the prospects for further Fed rate hikes. The Fed's determination is beyond doubt, since it once led the movement among major central banks to aggressively tighten monetary policy. As for the ECB, it has yet to prove that it is really ready to act, and not just talk. "The ECB has yet to convince the markets with its comments to prove that it is willing to endure economic pain in order to effectively combat price risks. Only at this point will the euro be able to really benefit from the ECB's monetary policy on a more sustainable basis," noted the strategists of Commerzbank. "In a crisis, the market is likely to sell the euro as an initial reaction due to fears of a recession. The ECB's determination to fight inflation is likely to have a positive impact on the single currency only at a later stage – if at that time the ECB really sticks to its approach. This means that euro bulls will probably have to be patient for some time," they added. "The markets are now putting in quotes an increase in the ECB rate by 167 bps in total by the end of the year. However, the recent narrowing of spreads on two-year swaps between the euro and the dollar may have already ended, and a reversal – if the ECB does not meet the new hawkish expectations embedded in prices – could send EUR/USD to new lows next week," ING analysts said. They predict that the EUR/USD pair will remain under pressure in the range of 0.9900-1.0100.         Relevance up to 22:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320609
Escalating Russia-Ukraine Tensions Amplify Oil Supply Risks: The Commodities Feed

The EUR/USD Pair: The Trend Will Be Bullish Or Bearish?

InstaForex Analysis InstaForex Analysis 02.09.2022 10:11
EUR/USD 5M The EUR/USD pair continued to move in the style already familiar over the past two weeks and the 0.9900-1.0072 channel. Despite the fact that there was a fall of more than 100 points during the day, the pair still remained inside the horizontal channel. Therefore, no new conclusions on the technical picture can be made now. Perhaps the euro will continue to fall (especially if the US statistics are strong), and then the pair will overcome the level of 0.9900. But until this happens, we are stating a fact - a wide flat or "swing" remains. There were only minor reports in the European Union on Thursday. The unemployment rate and the second assessment of the index of business activity in the services sector are not the data that could provoke the euro's collapse. Also not involved in the pair's decline and the ISM business activity index in the US. Thus, the macroeconomic statistics was, in contrast to the previous days of the week, but it had no effect on the course of trading. In regards to Thursday's trading signals, everything was pretty good. First, a buy signal was formed when the price settled above the extreme level of 1.0019. The upward movement did not last long and ended near the Senkou Span B line. The signal cannot be considered false, since the nearest target level was worked out. Managed to earn 7 points. The sell signal also had to be worked out, and it brought good profit to traders, since the pair, after its formation, went down about 110 points, forming another sell signal near the critical line along the way. The pair did not reach the level of 0.9900 by only a dozen points, the deal had to be closed manually in the late afternoon with a profit of at least 90 points. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For most of 2022, they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. The number of long positions for the non-commercial group increased by 11,600, and the number of shorts increased by 12,900 during the reporting week. Accordingly, the net position increased by about 1,300 contracts. After several weeks of weak growth, the decline in this indicator resumed, and the mood of major players remains bearish. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 44,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. Over the past six months or a year, the euro has not been able to show even a tangible correction, not to mention something more. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 2. The euro has nothing to hope for and nowhere to expect help. Overview of the GBP/USD pair. September 2. The pound continues to slide downhill. Forecast and trading signals for GBP/USD on September 2. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair continues to be inside the 0.9900-1.0072 channel on the hourly timeframe. If the bears manage to gain a foothold below it, then it will be possible to count on the resumption of the global downward trend. Otherwise, the "swing" will remain. We highlight the following levels for trading on Friday - 0.9900, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (1.0051) and Kijun-sen (1.0001). There is not a single level below 0.9900, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. There will again not be a single important event in the European Union on September 2, but we have as many as three important reports in the United States. Of course, the NonFarm Payrolls report will be of most interest. We are waiting for the market reaction to it, two other reports (wages and unemployment) are important, but more secondary. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group. Paolo Greco   Relevance up to 02:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320611
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

Will The EUR/JPY Pair Gain Or Lose Today?

InstaForex Analysis InstaForex Analysis 02.09.2022 10:24
EUR/JPY has gained some ground in the last couple of weeks, but that doesn't change the larger picture, that a corrective decline is unfolding. We have seen wave A/ as a three-wave decline from 144.25 to 133.40. The question now is whether an X-wave is building before a second three-wave decline takes over. If this is the case, then we should see EUR/JPY peak near 142.33 for a new decline towards at least 131.69. The second option is that we see a break above resistance at 142.33 for a full return to test the peak at 144.25 in a flat correction in wave B/, before the final decline in wave C/ takes over for a decline to 132.66 and possibly 131.69. So, no matter which structure wave B/ ends up in, having the end gold will not change and that is more downside is needed to complete wave 2/.     Relevance up to 07:00 2022-09-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291117
The EUR/AUD Pair May Have The Potential To Continue Its Decline

The EUR Is Downward Trend But What The EUR/USD Pair Looks Like Today ?

InstaForex Analysis InstaForex Analysis 02.09.2022 10:45
Technical Market Outlook: The EUR/USD pair bounce was capped at the 38% Fibonacci retracement level located at the 1.0078 and pushed down by bears. In order to extend the bounce higher, bulls must break through this level and test the 50% Fibonacci retracement located at 1.0133. The momentum is negative again as the market breaks below the parity level again as the main data from the USA are scheduled for release later on in form of the NFP Payrolls for the month of August. The nearest technical support is seen at 0.9955 and 0.9901. Weekly Pivot Points: WR3 - 1.00077 WR2 - 0.99699 WR1 - 0.99503 Weekly Pivot - 0.99321 WS1 - 0.99125 WS2 - 0.98943 WS3 - 0.98565 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue lower towards the level or 0.9900 and below. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue.     Relevance up to 08:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291129
The Upside Of The EUR/USD Pair Remains Limited

Major Players Do Not Want To Let the EUR/USD Pair Go Below Parity

InstaForex Analysis InstaForex Analysis 02.09.2022 11:36
Yesterday, the euro plunged quite significantly, as a result of which several signals were formed to enter the market. Let's take a look at the 5-minute chart and see what happened. A breakthrough and reverse test of 1.0030 from top to bottom led to an excellent entry point for buying the euro in continuation of the bullish scenario, but data on activity in the manufacturing sector of the eurozone countries let us down. As a result, we had to consolidate losses, because after a slight upward jump by 10 points, the pair was under pressure again. It was possible to catch a signal to enter the market in the afternoon after a major sell-off of the euro, which occurred after the release of good statistics on activity in the US manufacturing sector, which, despite the increase in interest rates, continues to show steady growth. A false breakout at 0.9923 gave a buy signal, which could take about 30 points of profit from the market. When to go long on EUR/USD: This morning there is nothing that could lead to a surge in volatility, and most likely the focus will be on the US labor market. The data on the German foreign trade balance and the eurozone producer price index are unlikely to help euro bulls, but in this case it is better that they do not harm them. Of course, the best scenario for buying the euro would be long positions in the new support area of 0.9949, to which the pair may return in case of very disappointing performance in the euro area. Forming a false breakout at the level of 0.9949, which was formed at the end of yesterday, will provide an excellent entry point in anticipation of forming an upward correction with the nearest target of 0.9993, from which one step to the parity controlled by euro bears now. A breakthrough and test to the downside of this range would hit bearish stops and provide an incentive to buy above parity, opening the possibility of a correction to the 1.0034 area, where bears were especially active yesterday. A more distant target will be the resistance at 1.0076, which is the upper boundary of a wider horizontal channel, where I recommend taking profits. If the EUR/USD declines and there are no bulls at 0.9949, then the pair will be under pressure again, as the lower limit of the ascending correctional channel will be broken and the bearish trend will resume. The optimal decision to open long positions in this case would be a false breakout near the low of 0.9905. I advise you to buy EUR/USD immediately on a rebound only from 0.9861, or even lower - around the parity of 0.9831, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears' main task is to protect parity and resistance, which is located a little lower in the 0.9993 area. There are moving averages, while playing on their side. A false breakout at this level after receiving disappointing data on Germany and the eurozone can push the euro down to the 0.9949 area, where, as I said, the lower limit of the upward correctional channel from August 23 passes, which plays a very important role in determining the pair's succeeding direction. Therefore, a breakdown and consolidation below this range with a reverse test from the bottom up creates another sell signal with the removal of bulls' stop orders and a larger drop to the 0.9905 area, where the stop will be temporary. From there, a new annual low of 0.9861 is within easy reach, where I recommend taking profits. A more distant target will be the year's low at 0.9831. If EUR/USD jumps during the European session if we receive strong data, as well as the absence of bears at 0.9993, the situation will not change dramatically, as everyone will be waiting for the release of statistics on the US labor market. It can determine the further short-term direction of the trading instrument. In this case, I advise you to postpone short positions until 1.0034, but only if a false breakout is formed there. You can sell EUR/USD immediately for a rebound from the high of 1.0076, or even higher - from 1.0127, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT) report for August 23 logged a sharp growth in both short and long positions. This indicates a rather high appetite of traders, especially after the update of the euro's parity against the US dollar. Although Federal Reserve Chairman Jerome Powell's speech at Jackson Hole led to a surge in volatility and provided temporary support to the dollar, it is obvious that major players do not want to let the pair go below parity, and each time they become more active on a decline. Powell said that the Fed will continue to fight inflation with all its might and noted the likely continuation of the previous pace of raising interest rates during the September meeting. But the markets were already betting on such changes, and this did not lead to the euro's collapse against the dollar. This week it is necessary to analyze the data on the US labor market, which seriously affects the Fed's plans. A strong labor market will keep inflation high, which will force the central bank to raise interest rates further. The COT report indicated that long non-commercial positions rose by 11,599 to 210,825, while short non-commercial positions jumped by 12,924 to 254,934. At the end of the week, the overall non-commercial net position remained negative and fell to -44,109 against -42,784, which indicates that pressure on the euro remains and further fall of the trading instrument. The weekly closing price decreased and amounted to 0.9978 against 1.0191. Indicator signals: Moving averages Trading is below the 30 and 50-day moving averages, which indicates a possible further fall in the pair. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of a decline, the lower border of the indicator around 0.9915 will act as support. In case of growth, the upper border of the indicator in the area of 1.0005 will act as resistance. Description of indicators: Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 08:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320637
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

The Dollar Is At Highs And The Euro Is Retreating

InstaForex Analysis InstaForex Analysis 02.09.2022 11:51
The US currency is closing the week strongly higher, having confirmed its leading position once again. Its European rival is rapidly losing ground. According to analysts, EUR/USD will be retesting the parity level from time to time, which is not good for the euro. The greenback, which has reached its peak in the past 20 years, started its rally late on Thursday, September 1. On the first day of autumn, the US dollar posted the third week of continuous gains. So, on Friday, it recorded the highest value in the past two decades trading against the euro and the yen. The US dollar hit 20-year highs following the release of the manufacturing index in the US. The data showed that the ISM Manufacturing PMI stayed at the same level of 52.8 in August. Some analysts expected a drop to 52 points. Yet, as the data shows, activity in the US manufacturing sector has notably increased. The indicator has been showing strength for a long time already. In this light, the European currency is noticeably retreating against its American counterpart. The euro opened this week below the parity level but managed to win back some losses later on. In the middle of the trading week, EUR/USD recovered to 1.0078 amid lower gas and oil prices and hawkish comments from the ECB. For your reference, the euro first tested the party level in early July and then slumped to the critical level of 0.9903. The situation only worsened as EUR was struggling to leave the parity level and withstand the downward pressure. On Friday morning, September 2, the EUR/USD pair was trading near 0.9970. There is a possibility that the pair may slightly advance to 0.9980. Its breakout will open the way for sellers towards the area of 0.9800–0.9820. Monetary policy tightening of the US Federal Reserve provides significant support to the greenback. The dollar is getting stronger as the Fed's September meeting is approaching. At the same time, the European currency is in a much less favorable position as it is pressured by a protracted energy crisis in Europe. Market participants expect the Fed to maintain its tight monetary policy as this measure is necessary to tackle accelerated inflation. The rate is projected to increase by 75 basis points to 3-3.25%. On Friday, the employment data in the US will be released. Estimates suggest that the unemployment rate in August stayed close to 3.5% recorded in July. The nonfarm payroll employment has increased by 300K. The Federal Reserve will consider this data to evaluate the state of the labor market and make a decision on the key rate. Experts assume that strong macroeconomic data will greenlight the rate hike through 2023. Markets are sure that the Fed will raise the rate for the third time in September by 75 basis points. For a different scenario, the Fed will need to see a deep decline in the labor market. Yet, there are currently no signs that it is cooling down. This summer, the US economy performed relatively well despite the threat of a recession. However, analysts at Danske Bank are skeptical about the current policy of the Fed. They point out that headline inflation in the country has reached its peak while the labor market and inflationary pressure remain strong. This makes it harder for the regulator to avoid recession as this is where the US economy is headed in 2023, Danske Bank concludes.     Relevance up to 08:00 2022-09-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320649
The EUR/USD Pair Showed Local Speculative Interest In Short Positions Yesterday

The EUR/USD Pair Showed Local Speculative Interest In Short Positions Yesterday

InstaForex Analysis InstaForex Analysis 02.09.2022 11:58
Yesterday, the single currency showed a rather impressive decline, falling below parity again. And it started during the European trading session, under the influence of the actual European macroeconomic statistics. In particular, the final data on the index of business activity in the manufacturing sector turned out to be worse than the preliminary estimate, and fell from 49.8 points to 49.6 points. While the preliminary estimate showed a decrease to 49.7 points. In addition, the data on unemployment also turned out to be not the best, although formally, it fell from 6.7% to 6.6%. But in fact, it remained unchanged, as the previous data were revised upwards. Unemployment rate (Europe): But in the United States, the final data on the index of business activity in the manufacturing sector turned out to be better than the preliminary estimate, which showed a decrease from 52.2 points to 51.3 points. In fact, it dropped to 51.5 points. However, the strengthening of the dollar is still somewhat surprising, as the data on applications for unemployment benefits do not inspire optimism. Of course, the number of initial requests decreased by 5,000. But the number of repeated requests increased by 26,000. And this is quite a lot. Number of retries for unemployment benefits (United States): It is possible that the dollar's growth is purely speculative in anticipation of today's release of the report of the United States Department of Labor. And while the unemployment rate is projected to remain unchanged, data on employment change clearly indicate a high potential for its growth. In addition, 310,000 new jobs should be created outside of agriculture, against 528,000 in the previous month. Such a strong decline in the rate of job creation clearly hints that the US labor market is losing momentum, and the situation is starting to worsen, which will be the reason for a sharp weakening of the dollar. Number of new non-agricultural jobs (United States): The EURUSD currency pair showed local speculative interest in short positions yesterday. As a result, the quote fell below the parity level, having almost reached the lower boundary of the sideways range of 0.9900/1.0050. The technical instrument RSI H4 crossed the middle line 50 from top to bottom during the downward momentum. As a result, the indicator settled in the lower area of 30/50, which indicates the downward mood of market participants. It should be noted that the signals from RSI H4 are of a variable nature due to the fact that the quote, as before, is moving within the sideways formation. MA moving lines on Alligator H4 have many intersections, which corresponds to the flat stage. Alligator D1 is directed to the downside, there is no intersection between the MA lines. This signal from the indicator corresponds to the direction of the main trend. In this case, the strengthening of the downward signal will occur at the moment when the MA (D1) lines are kept below the parity level. Expectations and prospects The convergence of the price with the lower limit of the flat 0.9900 led to an increase in the volume of long positions, as a result, a rebound appeared on the market. Despite the variable speculative interest, the quote is still in the sideways on the basis of a downward trend. Thus, the work can be built on the basis of two tactics: Rebound or breakdown relative to one or another control border. Concretize the above The bounce tactic is seen by traders as a temporary strategy. The breakout tactic is considered the main strategy because it can indicate the subsequent price move. Complex indicator analysis in the short-term and intraday periods have a variable signal due to the current flat. At this time, the indicators indicate a long position due to the price rebound from the lower border of the flat. Indicators in the medium term are focused on a downward trend.     Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320635
The EUR/AUD Pair May Have The Potential To Continue Its Decline

How Can Beginner Investors Interpret The EUR/USD Pair Today?

InstaForex Analysis InstaForex Analysis 02.09.2022 12:38
Analysis of transactions in the EUR / USD pair Euro tested 1.0026 at the time when the MACD was just starting to move above zero, which was a good signal to buy. It led to a price increase of around 15 pips, after which pressure returned mainly because of weak statistics on the Euro area. Sometime later, the pair tested 1.0005, but this time the MACD line was far below zero, which should have limited the downward potential. Surprisingly, the quote continued to move down, and long positions from 0.9959 brought losses. Euro fell yesterday because of the disappointing data on the volume of retail trade in Germany and index of business activity in the manufacturing sector of Germany and the whole Euro area. Similar index from the US also led to its decline as the better-than-expected figure strengthened the positions of euro sellers and dollar buyers. This led to the fall of EUR/USD to yearly lows Data on the foreign trade balance of Germany and producer price index of the eurozone are scheduled to be released today, but they are of little interest to the market. That is why the focus will shift in the afternoon, after the release of reports on the unemployment rate, change in the number of people employed in the non-farm sector, change in the average hourly wage and share of the economically active population in the US. All of these are likely to lead to a surge in volatility as their numbers are expected to be much better than the forecasts. This will prompt another decrease in EUR/USD. The opposite scenario will start an upward correction. For long positions: Buy euro when the quote reaches 0.9978 (green line on the chart) and take profit at the price of 1.0119. A rally will occur only if statistics in the US come out lower than the forecasts. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9959, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9978 and 1.0019. For short positions: Sell euro when the quote reaches 0.9959 (red line on the chart) and take profit at the price of 0.9919. Pressure will return if statistics in the US exceed expectations. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 0.9978, but the MACD line should be in the overbought area, as only by that will the market reverse to 0.9959 and 0.9919. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.     Relevance up to 08:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320645
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

The Euro Is Under Pressure. Will It Able To Rebounds?

Kenny Fisher Kenny Fisher 02.09.2022 14:02
The euro is in positive territory today after taking a nasty spill on Thursday. In the European session, EUR/USD is trading at 0.9984, up 0.40%. Euro slides as risk appetite slides Thursday was a day to file away and move on for the euro, as EUR/USD tumbled 1.07%. The euro is under pressure from a high-flying US dollar and is having trouble staying above the symbolic parity line. A combination of solid US numbers, weak eurozone data and lower risk sentiment sent the euro sharply lower. German Manufacturing PMI dipped to 49.1, down from 49.3 in July. This marked a second straight contraction, and was the lowest level since May 2020, at the start of the Covid pandemic. It was a similar story for the eurozone Manufacturing PMI, which dropped from 49.8 to 49.6, a 26-month low. The manufacturing sector continues to struggle with supply chain disruptions and a shortage of workers, and high inflation and an uncertain economic outlook are only exacerbating matters. In the US, the ISM Manufacturing PMI held steady at 52.8, showing modest expansion. The labour market remains strong, with initial jobless claims dropping to 232 thousand, down from 237 thousand a week earlier and much better than the consensus of 248 thousand. Adding to the euro’s woes is the uncertainty over European energy supplies from Russia. Russia has shut down Nord Stream 1 pipeline for three days for maintenance, but Germany has charged that the shutdown is politically motivated and that the pipeline is “fully operational”. Nord Stream is supposed to come back online on Saturday. Even if Moscow does restore service, this episode is a reminder of Europe’s energy dependence on an unreliable Russia. Germany has greatly reduced its dependence on Russian gas, from 55% in February to just 26%, but a cutoff from Moscow would result in a shortage this winter. The week wraps up with the August nonfarm payrolls report. The consensus is for a strong gain of 300 thousand, after the unexpected massive gain of 528 thousand in July. The report could well be a market-mover for the US dollar. The markets are finally listening to the Fed’s hawkish message, and a strong reading will raise expectations of a 0.75% hike in September and likely push the dollar higher. Conversely, a weak report would complicate the Fed’s plans and raise the likelihood of a 0.50% hike, which could result in the dollar losing ground after the NFP release. . EUR/USD Technical EUR/USD is testing resistance at 0.9985. Above, there is resistance at 1.0068 There is support at 0.9880 and 0.9797 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

European Central Bank Is About To Decide On Interest Rate

InstaForex Analysis InstaForex Analysis 02.09.2022 16:15
The September European Central Bank meeting will be key for interest rates. A 75bp hike would invert the yield curve. After an initial spike, it would send the 10Y Bund through 1%, and the 10Y swap through 1.5% next year. Bringing forward quantitative tightening would send tremors through peripheral bonds Front-loading hikes would invert the yield curve Let us start by stating the obvious, ECB comments have taken a resolutely hawkish turn. Whether it wants to emulate the Fed’s front-loading of hikes, or is simply piggybacking on its credibility, officials made the market’s base case a 75bp hike at this, or the next, meeting, with a preference for September. If markets are right in thinking that the hawks have won the front-loading argument, then the next logical step will be for the curve to price qin another 75bp hike in October. As the Fed’s experience has shown, it is difficult to hike by 75bp to then revert to smaller increments. The EUR curve will keep flattening, and indeed invert This is a very different course of events than the one predicted by our economics team. The key blind spot in the above reasoning is, of course, the recessionary wave about to crash onto Europe’s shore. In our view, it will be difficult for the ECB to keep hiking rates in the middle of a recession. Even if the word has recently entered central bankers’ vocabulary, we think they are guilty of an excess of growth optimism. In short, “it is one thing to hike into a recession, it is a different thing to hike in the middle of one”. This, however, may not be immediately obvious to market participants. If the ECB persists in its rose-tinted view of the world, and if EU energy policy delays the date when harsh economic reality hits home, then the EUR curve will keep flattening, and indeed invert. Taking the German 2s10s slope as an example, a dip from 40bp currently to -10bp in the first quarter of 2023 is the logical consequence of a hawkish ECB in the face of a worsening economic outlook. Like its US and UK peers, the German curve will soon invert Source: Refinitiv, ING Upside to rates now, but they will crash down in 2023 This sequencing of events, markets pricing more aggressive ECB hikes and only waking up to a dismal economic outlook later in the winter, also means the upside to Bund yields still remains. This is mostly a near-term view, however. We struggle to see Bund yields remaining at current, or indeed higher, levels in the midst of a recession, and as the ECB will eventually fail to deliver on the hikes priced by the curve. We expect 10Y rates to dip below 1% in the first half of 2023 until the economic gloom is dispelled. This should only be a temporary state of play as the curve will re-steepen with the return of positive growth in 2024. Our view is thefefore for a sharp reversal of government bonds’ fortunes early in 2023. The drop could be even more marked for 10Y swap rates, with a temporary dip through 1.5% at some point next year as our base case. ECB hikes will push rates up, but the recession will bring them down Source: Refinitiv, ING The next worry: quantitative tightening If hawks are to be believed, the debate on quantitative tightening (QT) is also due to start this year, although not necessarily in September. The minutes of the July meeting already featured an oblique reference to balance sheet forward guidance. In addition to the ‘mechanical’ reduction the repayment of targeted longer-term refinancing operations (TLTRO) funds will cause, the ECB has committed to keeping the size of its pandemic emergency purchase programme (PEPP) bond portfolio constant until at least the end of 2024. Like its recent rate hike signals, we believe this guidance to be at risk. The ECB should tread carefully if it wants to avoid yet more widening in sovereign spreads What’s more, an earlier reduction in the size of its asset purchase programme (APP) portfolio is possible. With the exact wording being "an extended period of time past the date when it starts raising the key interest rates", the clock is ticking. Even if it only occurs in 2024, balance sheet reduction will be a sea change in ECB policy. The central bank is still growing its peripheral bond pile thanks to its PEPP reinvestment policy, and a majority of economists expect it to activate its Transmission Protection Instrument (TPI) this or next year, which will result in yet more buying. ECB bond flows are going in the opposite direction in German and Italy Source: Refinitiv, ING   As in any jurisdiction, a reduction of its almost €5tr bond portfolio would add to the policy tightening delivered through rate hikes. The problem in the eurozone is that a shrinking bond portfolio would deliver sharply different degrees of tightening from one member state to the next. This is the very reason why the ECB is currently a net buyer of Italian bonds and a net seller of German ones. An overall reduction of its bonds portfolio is possible but likely at differentiated speeds in our view. The ECB should tread carefully if it wants to avoid yet more widening in sovereign spreads. Read this article on THINK TagsInterest Rates ECB meeting Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Tokyo Raises Concerns Over Yen's Depreciation, Considers Intervention

US Dollar's (USD) And Stock Market's Reaction To The US Labour Market Data | EUR/USD After The Release

Conotoxia Comments Conotoxia Comments 04.09.2022 20:02
After 2:30 pm, the long-awaited US labor market report came out, showing mixed readings. The market in the first moment seems to have reacted to the publication with a weakening of the dollar and a rise in stock index contracts. Non-farm Payrolls hits 315K The U.S. Labor Department reported that non-farm sectors added 315,000 new jobs in August against a market consensus of 300,000 the smallest increase in new jobs in the U.S. economy since April 2021. The data for July, on the other hand, was revised slightly downward from 528,000 to 526,000. Last month's significant job gains were noted in professional and business services (68,000), which includes computer systems design and related services, healthcare (48,000) and retail trade (44,000). Manufacturing added 22,000 jobs, and leisure and hospitality added 31,000. Unemployment rate reaches 3.7% The BLS report shows that the U.S. unemployment rate rose to 3.7% in August 2022, the highest since February. The market consensus was for an unemployment rate of 3.5%. It seems that it was the rise in the unemployment rate to its highest level since March 2022 that the market may have reacted to. Investors in the interest rate market, according to Bloomberg, reduced bets on a quick interest rate hike by the Fed, which could have been reflected in the dollar, gold, stock indexes or cryptocurrencies. The U.S. labor market saw a slowdown in hourly earnings growth, to 0.3% for the month, from 0.5% in July, which may be the right direction for the Fed, but wages could still grow faster than policymakers would like. Wage growth is still a possible inflationary pressure, hence it seems that the next important publication may be the one on the change in price level, and it will be announced on September 13th. EUR/USD Following the release of the US data, the rate of the main EUR/USD pair seems to have risen above parity. Gold, on the other hand, is trying to turn back from under the $1,700 level to $1,705, and bitcoin is oscillating in the $203 region. ETH, on the other hand, is holding in the region of $1,600 before 15:00 GMT+3. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Source: Mixed labor market data. EUR/USD above parity? (conotoxia.com)
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

Decrease In The New York Stock Exchange. Futures On The USD Index

InstaForex Analysis InstaForex Analysis 05.09.2022 08:22
At the close on the New York Stock Exchange, the Dow Jones fell 1.07% to a one-month low, the S&P 500 fell 1.07%, and the NASDAQ Composite fell 1.31%. Chevron Corp was the top performer among the components of the Dow Jones index today, up 2.31 points or 1.49% to close at 157.85. Salesforce.com Inc rose 0.16 points or 0.10% to close at 153.69. Walgreens Boots Alliance Inc rose 0.01 points or 0.03% to close at 35.27. The losers were 3M Company shares, which lost 3.98 points or 3.17% to end the session at 121.65. Honeywell International Inc. shares rose 2.01% or 3.84 points to close at 186.89, while Procter & Gamble Company shed 1.78% or 2.48 points to close at 137.16. Leading gainers among the S&P 500 index components in today's trading were CF Industries Holdings Inc, which rose 4.34% to hit 106.86, Hess Corporation, which gained 3.83% to close at 120.91, and also shares of The Mosaic Company, which rose 3.79% to end the session at 54.84. The biggest losers were DISH Network Corporation, which shed 4.49% to close at 17.01. Shares of Generac Holdings Inc shed 4.13% to end the session at 223.39. Quotes of Zebra Technologies Corporation decreased in price by 3.92% to 297.60. Leading gainers among the components of the NASDAQ Composite in today's trading were Venus Concept Inc, which rose 54.87% to hit 0.54, Sunrise New Energy Co Ltd, which gained 31.46% to close at 2.80. , as well as shares of Advanced Human Imaging Ltd ADR, which rose 29.90% to close the session at 1.26. The drop leaders were PolyPid, which fell 73.47% to close at 1.43. Shares of Shuttle Pharmaceuticals Inc lost 71.56% to end the session at 14.90. Quotes of ShiftPixy Inc decreased in price by 33.92% to 13.60. On the New York Stock Exchange, the number of securities that fell in price (1,797) exceeded the number of those that closed in positive territory (1,297), while quotes of 136 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,338 companies fell in price, 1,371 rose, and 257 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.35% to 25.47. Gold futures for December delivery added 0.70%, or 12.05, to $1.00 a troy ounce. In other commodities, WTI October futures rose 0.59%, or 0.51, to $87.12 a barrel. Brent oil futures for November delivery rose 1.02%, or 0.94, to $93.30 a barrel. Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.17% to 1.00, while USD/JPY fell 0.02% to hit 140.18. Futures on the USD index fell 0.12% to 109.55.       Relevance up to 04:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/291315
The EUR/AUD Pair May Have The Potential To Continue Its Decline

What Benefits Can The EUR/USD Pair Bring Today?

InstaForex Analysis InstaForex Analysis 05.09.2022 08:45
US labor data came out good on Friday. In the non-agricultural sector, 315,000 new jobs were created against the forecast of 295-300,000, unemployment increased from 3.5% to 3.7%, but due to a solid increase in the share of the economically active population to 62.4% from the previous 62% one. The average hourly wage for the month increased by 0.3%. The market laid down a 43% chance of a 0.50% Federal Reserve rate hike at the September meeting (against 27.0%) a day earlier. The probability of a rate hike by 0.75% was 57.0%. The S&P 500 was down 1.07%, outperforming other markets in risk aversion. The dollar index fell by 0.05%, the euro closed the day with a rise of 10 points, but as a result of a fall from the peak of the day by 80 points. The US market is closed today for a national holiday. On the daily chart, the price broke below the target level of 0.9950 with a gap, the signal line of the Marlin Oscillator under the turquoise line forming the convergence, in order, according to one of our scenarios, to form a convergence a little lower. The price intends to consolidate under the MACD line (0.9933) on the H4 chart. Formally, the 0.9850 target has already been opened. Further decline to the 0.9752 target is possible. The signal line of the oscillator turned down from the zero line. Due to the gap and a holiday in the US today, the efforts of European players can be directed to closing the window and closing the day under the MACD line (0.9933).       Relevance up to 04:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320754
The Markets Still Hope That The Fed May Consider Softer Decision

Would Euro Receive A Tank With Rocket Propeller? What Does ING Economics Expect?

ING Economics ING Economics 05.09.2022 09:12
No more gradual and small steps. The only question for next week’s European Central Bank meeting is whether it will be a 50 or 75 basis point hike   The ECB is another example of a central bank which has been completely overwhelmed by inflation dynamics and a paradigm shift of major central bankers. Remember that it is not too long ago that the ECB ruled out the possibility of even a small rate hike in 2022. Then, there was the gradual and measured approach for rate hikes which was replaced by a surprise 50bp rate hike in July. Now we are at the so-called meeting-by-meeting (MBM and not MiB) approach. This is an approach which clearly makes more sense and should have been introduced much earlier as it would have prevented the ECB from making the described communication mistakes. The MBM approach, however, is also an approach which opens the door widely for speculation and volatility as it makes it harder to read the ECB’s reaction function. Paradigm shift and in search of the ECB's reaction function And exactly this reaction function has changed. It follows a paradigm shift of many central banks as recently witnessed at the Jackson Hole symposium. A paradigm shift that is characterised by central banks trying to break inflation, accepting the potential costs of pushing economies further into recession. This is similar to what we had in the early 1980s. Back then, higher inflation was also mainly a supply-side phenomenon but eventually led to price-wage spirals and central banks had to hike policy rates to double-digit levels in order to bring inflation down. With the current paradigm shift, central banks are trying to get ahead of the curve – at least ahead of the curve of the 1970s and 1980s. Whether the paradigm shift of central bankers is the right one or simply too much of a good thing is a different question. What is striking is the fact that central bankers have implicitly moved away from measuring the impact of their policies by medium-term variables and expectations towards measuring it by current and actual inflation outcomes. This could definitely lead to some overshooting of policy rates and post-policy mistakes. With headline inflation at a new record high... many ECB officials have sounded the alarm bells Back to the ECB. With headline inflation at a new record high and continued passing through of high wholesale energy prices to consumers and corporates in the coming months, many ECB officials have sounded the alarm bells. At Jackson Hole, Isabel Schnabel gave a very hawkish speech, calling for aggressive hiking of interest rates in order to prevent inflation expectations from de-anchoring or a price-wage spiral from kicking in. ‘Caution’, Schnabel said, was the wrong medicine to deal with the current supply shocks. Instead, she called for a ‘forceful’ response even at the risk of lower growth and higher unemployment. Other ECB members followed, calling for a 75bp rate hike next week. Some explicitly argued to bring the policy rate above its neutral level. Only ECB chief economist Philip Lane took a slightly different stance, calling for a gradual approach. Intention of aggressive rate hikes – but will it help? We still find it hard to see how aggressive rate hikes can bring headline inflation down in the eurozone. The economy is far from overheating and will almost inevitably fall into a winter recession, even without further rate hikes. In such a situation, gradual normalisation of monetary policy makes sense, trying to break a supply-side inflation with rate hikes, however, indeed resembles this idea of ‘if you only have a hammer, everything has to be treated as if it was a nail’. Admittedly, the situation is difficult for the ECB: demonstrating its determination to bring down inflation would easily be interpreted as panic. To further identify the ECB’s reaction function, we will have a close eye on the newest staff projections, which will also be released next week. Two things will be of importance: how negative or positive will the ECB be on the eurozone’s growth outlook for the winter and what are the inflation projections for 2024. Remember that in June, the ECB still expected GDP growth to come in at 2.1%, which is far away from our own forecast of -0.6%. As regards 2024 inflation, the June projections had annual inflation at 2.1%. The more downward revisions we will get on both projections, the less likely the suggested aggressive rate hikes will be. Hiking into a recession is not the same as hiking throughout a recession In any case, and even if the ECB doves have been very silent in recent weeks, we expect the ECB to ‘only’ hike by 50bp next week. This would be a compromise, keeping the door open for further rate hikes. 75bp look one bridge too far for the doves but cannot entirely be excluded. Further down the road, we can see the ECB hiking another time at the October meeting but have difficulties seeing the ECB continue hiking when the eurozone economy is hit by a winter recession. Hiking into a recession is one thing, hiking throughout a recession is another thing. Read this article on THINK TagsMonetary policy Inflation GDP Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Upside Of The EUR/USD Pair Remains Limited

Will The EUR/USD Pair Be Bearish Or Bearish Today?

InstaForex Analysis InstaForex Analysis 05.09.2022 09:27
EUR/USD 5M The EUR/USD pair showed multidirectional movements last Friday. If in the first half of the day it grew quite confidently, then in the second half it fell quite significantly. Recall that the pair has been inside the 0.9900-1.0072 horizontal channel for more than two weeks, which is clearly seen in the chart below. Therefore, any movement within the channel can be considered logical. At the moment, the quotes have fallen to the level of 0.9900, which is also logical and expected, since this fall was preceded by a rebound from the level of 1.0072. A large number of important macroeconomic statistics were also published on Friday. The main news of the day was the NonFarm Payrolls report in the US. The number of new jobs created amounted to 315,000 in August, which, in our opinion, is a very good figure and higher than experts' forecasts. Thus, the growth of the US currency does not surprise us. The unemployment rate rose to 3.7%, but traders did not react to it in any way, because unemployment is a less significant report than Nonfarm. As a result, the pair will try to overcome the level of 0.9900 and, if it succeeds, the global downward trend will resume. In regards to Friday's trading signals, everything was quite complicated. All signals formed near the 1.0001-1.0019 area. And there were only two of them, and both were extremely inaccurate. However, the price bounced twice from the indicated area, and traders were able to open a short position twice. They could, but they shouldn't have. The first signal was formed just half an hour before the release of the Nonfarm report, so it was too risky to open a deal. The second signal was formed a few hours before the market closed, so it also needed to be filtered out. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For most of 2022, they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group decreased by 8,500, and the number of shorts decreased by 5,000. Accordingly, the net position decreased by about 3,500 contracts. This is not much, but this is again an increase in the bearish mood among the major players. After several weeks of weak growth, the decline in this indicator resumed. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 47,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. The euro has not been able to show even a tangible correction over the past six months or a year, not to mention something more. We recommend to familiarize yourself with: Forecast and trading signals for GBP/USD on September 5. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair continues to be inside the 0.9900-1.0072 horizontal channel on the hourly timeframe. If the bears manage to settle below it (which may happen today), then it will be possible to count on the resumption of the global downward trend. Otherwise, the swing will remain. We highlight the following levels for trading on Monday - 0.9900, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (1.0051) and Kijun-sen (1.0001). There is not a single level below 0.9900, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union will publish the index of business activity in the service sector for August (final value) and retail sales, and there's nothing in America. Not the most important reports, plus traders are now trading quite actively even without them. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 05:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320756
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

EUR/USD: The EUR Is Under The Strong Bearish Pressure

InstaForex Analysis InstaForex Analysis 05.09.2022 09:55
Technical Market Outlook: The EUR/USD pair has made a new swing low located at the level of 0.9879 (at the time of writing the analysis) as the down move. The momentum is negative and weak on the H4 time frame chart, so the bears are clearly in control again and they might push the price towards the lower levels. In order to terminate the down trend or at least make a correction, the bulls must break above the technical resistance located at the level of 1.0090 and 1.0122. In the longer term, the key technical resistance level is located at 1.0389. Weekly Pivot Points: WR3 - 0.9992 WR2 - 0.99454 WR1 - 0.99156 Weekly Pivot - 0.98988 WS1 - 0.98690 WS2 - 0.98522 WS3 - 0.98056 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue below the parity level. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the longer term, the key technical resistance level is located at 1.0389.     Relevance up to 08:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/291349
What Is Going On Financial Markets Today? Russia Will Not Resume Deliveries Of Gas

What Is Going On Financial Markets Today? Russia Will Not Resume Deliveries Of Gas

Saxo Bank Saxo Bank 05.09.2022 10:57
Summary:  Markets were spooked late Friday by news that Russia would not resume gas flows through the Nord Stream 1 pipeline, pressuring the outlook for the European economy as governments grapple with soaring energy costs and scramble to cap prices and ration power to get through the upcoming winter. The euro weakened toward the cycle low versus the US dollar and equities tumbled. Today, US markets are closed for Labor Day.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities actually rallied on Friday in the wake of the US jobs report, likely as US treasury yields moved lower in the wake of the data after a recent march higher in yields that had clearly pressured equity market sentiment. But later in the session the Russian pipeline news in Europe spooked sentiment and equities reversed lower, trading not far from the lows of the cycle ahead of the three-day-weekend (no cash session today in the US due to Labor Day holiday). The focus in the S&P 500 is the key support just above 3,900, the last notable area ahead of the June lows, and similarly the Nasdaq 100 focus is on the recent 12,000 area lows. Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland China stocks retreated, Hang Seng Index -1.3%, CSI300 -0.4%. A Bloomberg report, citing people familiar with the matter, said that the Biden administration is considering to impose restrictions over US investments in Chinese technology companies. In addition, the U.S. Trade Representative said that it received requests from more than 350 American companies to plead for keeping the “Section 301” tariff on goods imported from China.  Chengdu, the largest city in western China, extended its pandemic control lockdown for another three days. BYD (01211:xhkg) fell 5.4% as exchange filing showed that Berkshire Hathaway sold 1.72 million BYD shares on Thursday, trimming its stake further down to 18.87% from 19.02% of BYD’s H-shares. August Caixin China Services PMI came in at 55.0, edging down slightly from 55.5 in July but above market expectations.  USD as outlook for Europe darkens further The US dollar traded in choppy fashion on Friday but was generally weakening as US treasury yields pushed lower in the wake of the US jobs data. But US yields were thrown from the driver’s seat in favour of risk sentiment, which soured badly on the news that Russia will not resume deliveries of gas through a key pipeline. The risk-off took EURUSD back lower and to new lows for the cycle today below 0.9900 as Europe suffers the fallout from the darkening outlook on energy/power that ECB rate tightening can do nothing to address. Elsewhere, GBPUSD plunged to a new low below 1.1500. Focus this week may intensify on China, as USDCNH held relatively steady last week but jumped to new highs today well above the former 6.93 high. JPY crosses as US treasury yields push lower USDJPY was capped after another run higher on Friday as US treasury yields pushed back lower after the US jobs report and then sharply lower still in reaction to the Russian pipeline news in Europe. But the USDJPY pair remains above the 140.00 level, elsewhere in JPY crosses, the drop in yield brought some more sustained relief for the JPY in the crosses as EURJPY reversed sharply back below 140.00 and even AUDJPY was capped after a poke toward the cycle highs on Friday. JPY crosses are likely to remain a proxy for global sovereign bond yields. EU gas and power prices open sharply higher ... after Gazprom on Friday announced the Nord Stream pipeline will remain shut indefinitely. While an oil leak at the last compressor unit still in operation was used as explanation, the surprise decision came shortly after the G7’s announcement to initiate a price cap on Russian oil. The energy war has therefore escalated further, and Europe look set to lose around 30 mcm/d or 4% of its gas supply. While storage levels across the Euro area have grown rapidly in recent weeks due to surging imports of LNG, the prospect for rationing and further initiatives to curb demand for gas and power prices will be the focus this week. In addition, demand destruction from soaring prices has already lowered demand, but more is needed, especially if the winter turns out to be a cold one. Dutch TTF gas (TTFMV2) down 37% to €215/MWh last week on assumption supply would return jumped by around 30% on the opening to trade around €280/MWh. Crude oil (CLV2 & LCOX2) Crude oil reversed higher on Friday following a three-day drop of close to 12 dollars, and the recovery has continued today and is being led by a 4% jump in diesel prices, both in New York (HEATINGOILOCT22) and Europe (GASOILUKSEP22) as the European energy crisis adds further support to gas-to-fuel switching activity. In addition, OPEC+ meets later today in is expected to make no change, but the market is wary following a recent Saudi comment about cutting supply to stabilize then falling prices. An in-theory price bearish G7 plan to cap prices on Russian oil could turn into a “bullish shock” according to Goldman Sach as Russia, just like it has done with gas, may halt shipments to Europe and other Nato buyers. Focus on today’s OPEC+ meeting, China lockdowns hurting demand, gas-to-fuel switch boost to diesel and Wednesday’s Short-Term Energy Outlook from the EIA. US Treasuries (TLT, IEF) The run-up in US treasury yields last week was reversed in the wake of the US jobs report Friday, perhaps as the report failed to show any new aggravated rise in earnings. The move lower was cemented by an ugly turn lower in risk sentiment in the wake of the Russian natural gas pipeline news. Still, it will take a move back below 3.10-3.00% in the US 10-year yield benchmark to suggest that this run up from the 2.50% area lows of early August is turning more firmly back lower. The upside focus is on 3.50%, should the 3.25% area sticky point of last week fall. What is going on? Russia announces it will not resume deliveries of natural gas through the Nord Stream I pipeline Russian sources claimed a leak was found in the pipeline, although Germany’s Siemens disputed that claim as it is fairly obvious that Russia is using natural gas deliveries as a tool of economic war.The news broke already on Friday and sent risk sentiment plunging across global markets, taking the EURUSD to new cycle lows on Monday below 0.9900 and sending longer yields lower globally. Moderate cooling of the U.S. labor market In August, the U.S. economy added 315k jobs, slightly more than expected, but the 2 prior months of data were revised over 100k lower. The average hourly earnings rose moderately at 0.3 % month-over-month (below the 0.4 % pace of the prior three months). On a yearly basis, the increase is stable at 5.2 %. The unemployment rate rose to 3.7 %, up from its 50-year low of 3.5 %, but this was on the somewhat positive rise in the participation rate (more people seeking work) as the Household Survey showed 442k more Americans were in work in August. Overall, this labor market report is not a source of major concern. It should not weigh much on the monetary policy decision of the FOMC in September. Many economists also pointed out the fact that the August payroll growth is usually subject to higher revision than any other month. Over the past five years, the first release has undershot the third by 119k, compared to an average undershoot of 23k for all months. Therefore, we should avoid over-interpreting past Friday’s figures. Commodity traders' response to Jackson Hole speech The Commitment of Traders (COT) Report on commodities covering the week to August 30 showed the initial response from hedge funds to Federal Reserve Chairman Powell’s hawkish speech at Jackson Hole. A speech that helped drive the dollar and bond yields higher, and the general risk appetite lower. All sectors except for grains and soft commodities were sold with selling concentrated in natural gas, WTI crude, gold, platinum, and livestock. The few exceptions were Brent crude, corn, sugar, and coffee. More in our weekly update, posted later today on www.analysis.saxo. Biden administration considering initiatives to restrict US investment in Chinese tech firms Bloomberg cites unnamed sources on this story, with limitations possibly set to come via executive order in the months ahead. After the recent move to limit NVidia exports of AI-related chips to China, the US Commerce Department may look to look to limit export of other AI tech. What are we watching next? Energy summit in EU on Friday EU leaders will powwow this Friday to discuss a cap on energy prices across EU countries to limit the disruptions from soaring and illiquid pricing markets, although given limits on generation capacity, much of them due to Russia’s cutting off of gas supplies - possibly semi-permanently in the case of the Nord Stream 1 pipeline – some sort of rationing plan may be required. See our Christopher Dembik’s look at the difficult choices Europe faces on this issue here.  RBA meets tonight – set to hike 50 basis points The RBA is set for a monthly meeting tonight and is widely expected to hike the policy rate 50 basis points at its fourth consecutive meeting, although this is not fully priced in. Besides the headline decision, there will be considerable focus on the bank’s forward guidance as the market anticipates that the RBA will soon decelerate the pace of rate hikes after Tuesday’s decision. Reaction in sterling as Liz Truss set to become next Prime Minister of the UK The UK Conservative party will announce the results of its leadership election today, with Liz Truss universally expected to win the vote and become Britain’s next prime minister. Truss has promised tax cuts and rapid action on the UK’s energy emergency, a combination that is likely to leave gaping new holes in the country’s balance sheet at a time when sterling is already collapsing. How will market’s great the next PM’s policy initiatives this week? Earnings to watch The earnings calendar is running light this week. The two earnings releases of importance for the week are DocuSign on Thursday and Dollar Stores on Friday. Tuesday: Ashtead Group Wednesday: People’s Insurance Co Group, Exor, Copart, NIO Thursday: Sun Hung Kai Properties, Sekisui House, Zscaler, DocuSign Friday: Dollar Stores, Kroger Economic calendar highlights for today (times GMT) US Markets Closed for Labor Day Holiday 0715-0800 – Eurozone Final Aug. Services PMI 0800 – Switzerland Weekly SNB Sight Deposits 1530 – UK Bank of England’s Catherine Mann to speak 2301 – UK Aug. BRC Sales Like-for-like 0430 – Australia RBA Cash Rate Target Announcement  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher
PLN Soars to Record Highs Ahead of NBP Decision

The EUR/USD Pair: The Price May Move Downward Today

InstaForex Analysis InstaForex Analysis 05.09.2022 11:14
Trend analysis (Fig. 1). The euro-dollar pair may move downward from the level of 0.9953 (close of Friday's daily candle) to the target of 0.9900, the lower fractal (white dotted line). After testing this level, an upward movement is possible to test 0.9968, the 14.6% retracement level (white dotted line). From this level, the price may continue to move up. Fig. 1 (daily chart). Comprehensive analysis: General conclusion: Today the price may move downward from the level of 0.9953 (close of Friday's daily candle) to the target of 0.9900, the lower fractal (white dotted line). After testing this level, an upward movement is possible to test 0.9968, the 14.6% retracement level (white dotted line). From this level, the price may continue to move up. Alternative scenario: from the level of 0.9953 (close of Friday's daily candle), the price may move downward to test 0.9803, the 208% Fibonacci retracement level (blue dotted line). After testing this level, an upward movement is possible with the target at 0.9900, the lower fractal (white dotted line).     Relevance up to 08:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320765
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

The EUR/USD: The Best Action Is To Close Short Positions

InstaForex Analysis InstaForex Analysis 05.09.2022 11:45
Previous trading tips in EUR/USD pointed at a possible decrease in prices. This really happened after the release of the US NFP report on Friday. From that time, demand for dollar strengthened, so it was not surprising that EUR/USD hit a new yearly low. The best action right now is to close short positions. Congratulations to those who followed the bearish strategy! The pair moved by more than 1,000 pips. The trading idea was based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks! Read more: https://www.instaforex.eu/forex_analysis/320789   Relevance up to 09:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320789
Risks in the US Banking System: Potential Impacts and Contagion Concerns

The EUR/USD And The GBP/USD: The Most Important Details For Beginners

InstaForex Analysis InstaForex Analysis 05.09.2022 12:38
Details of the economic calendar for September 2 European Union Producer Price Index came out with a significant margin, rising from 36.0% to 37.9%. This news stimulated the euro to rise against the dollar. The main event of the past week was the United States Department of Labor report, which slightly surprised market participants. The unemployment rate was forecast to remain unchanged at 3.5%. However, unemployment in the US rose to 3.7%, which was a catalyst for a local sell-off of the dollar, yet this is a possible signal for the Fed to take some easing measures. There is one important remark in this reflection, the regulator is ready to turn a blind eye to many things in order to overcome rising inflation. Meanwhile, jobs created outside of agriculture came out in line with the consensus forecast, 315,000. The reaction of the US dollar took place within the framework of speculation. In the beginning there was a sale and then a buy-off. Analysis of trading charts from September 2 The EURUSD currency pair ended last week with an intense downward move. As a result, there was an inertial movement in the market for the US dollar, which returned the quote to the level of 0.9900. The GBPUSD currency pair resumed its decline after a short stop. This step led to a subsequent update of the low of the medium-term trend, where only a few points remained to pass before the bottom of 2020. Economic calendar for September 5 The new trading week starts with a holiday in the United States. The key player of the financial market will return on Tuesday. Trading volumes may decline at first. As for statistical data, the publication of the final indicators on the index of business activity in the services sector in Europe and the UK is expected. If the data coincide with the preliminary assessment of the reaction in the market, it is not worth waiting. At the same time, Eurozone retail sales data is to be published. Its rate of decline may slow down, which is a positive signal for the euro. Time targeting: USA - Labor Day (holiday) EU Services PMI – 08:00 UTC UK Services PMI – 08:30 UTC EU Retail sales volume – 09:00 UTC Trading plan for EUR/USD on September 5 With the opening of the European session, a local level of 0.9900 appeared. The sale of the euro was associated with a sharp jump in gas prices in Europe. At the opening of trading, prices jumped by 30%, to $2,800 per thousand cubic meters. The reason for the increase in the cost of gas lies in the message of Gazprom on Friday evening that the maintenance of the only working turbine of SP-1 revealed "gross violations" and the gas pipeline will not work without their elimination. In order to confirm the signal about the prolongation of the long-term downward trend for the euro, the quote must be kept below the level of 0.9900 steadily in the daily period. In this case, a path will open in the direction of 0.9850–0.9500. Otherwise, the amplitude 0.9900/1.0150 has every chance for further formation. Trading plan for GBP/USD on September 5 Despite the growing oversold level of the pound sterling, the market remains an inertial course, where speculators ignore the overheating of short positions in vain. The low of 2020 (1.1410) may play as support on the sellers' path. In this situation, traders will consider two possible options for price development: The first scenario comes from a rebound from the 2020 local low area. In this case, an increase in the volume of long positions is possible, which at the beginning will slow down the downward cycle, after which a rebound will occur. The second scenario considers the lack of reaction of traders to technical signals about the oversold pound and the support level. In this case, holding the price below 1.1400 in the daily period will lead to a prolongation of the long-term trend. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.       Relevance up to 09:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320791
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

Bears Dominate The Euro To The US Dollar And The British Pound To US Dollar The Market

InstaForex Analysis InstaForex Analysis 05.09.2022 13:19
EUR/USD Higher timeframes Bears dominate the market at the opening of today's trading, updating the low of 0.9901. In the case of consolidation and restoration of the downward trend, the reference points for the decline can be considered the levels of 0.9000 (psychological level) and 0.8225 (minimum extremum of 2000). If the bears cannot hold below 0.9901 and return to the consolidation zone, then after gaining the boundaries of 0.9984 (daily short-term trend) and 1.0000 (psychological level), we can expect that bulls will try to go beyond the existing zone uncertainty and develop a full-fledged corrective movement. The targets of the further rise will be the elimination of the daily death cross (1.0066 - 1.0124 - 1.0181) and gaining support from the weekly short-term trend (1.0124). H4 – H1 Bears also hold the advantage on the lower timeframes as the market is currently operating below key levels. By now, the S2 support (0.9886) has been tested, the reference point is the S3 support (0.9830). Key levels today join forces in the area of 0.9993–77 (central pivot point + weekly long-term trend). Consolidation above will change the current balance of power, returning the advantage to the bulls. Upward targets within the day are now at 1.0012 - 1.0068 - 1.0103. *** GBP/USD Higher timeframes Bears started the new working week with a new low (1.1495) and a decline into the zone of attraction and influence of the historical support at 1.1411. The formed result of interaction with the level of 1.1411 will most likely determine the prospects for further developments in the current situation. H4 – H1 In the lower timeframes, the advantage is on the side of the bears. Two of the three supports of the classic pivot points (1.1471 – 1.1437) have been tested, leaving S3 (1.1378) in reserve for a decline. The nearest reference point for the current upward correction is the central pivot point (1.1530), then the intermediate resistance can be noted at 1.1564 (R1), but the key value belongs to the resistance of the weekly long-term trend (1.1607). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Relevance up to 11:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320814
Euro (EUR) May Be Weaker Because Of Shocking Gas News!

Euro (EUR) May Be Weaker Because Of Shocking Gas News!

ING Economics ING Economics 05.09.2022 12:21
European asset markets start the week under pressure after Russia’s Gazprom said gas supplies via its Nordstream 1 pipeline would be indefinitely suspended. Expect European currencies to continue under-performing, with fiscal support packages unlikely to reverse recent trends USD: The pre-eminent safe haven right now What initially looked like a benign end to the week after some encouraging US jobs data quickly reversed on Friday evening when Russia’s Gazprom announced it would be indefinitely suspending gas flows through its Nordstream 1 pipeline. While European nations have made progress towards their gas storage targets, such a complete, early withdrawal of Nordstream 1 supplies is likely to see European natural gas prices surge today and European equity markets resume under heavy pressure. Over the weekend, authorities in Finland and Sweden announced liquidity guarantee schemes for large utility companies, making reference that they did not want an energy crisis to turn into a financial crisis. We have not yet really seen financial stress indices such as the 3m Euribor-ESTR spread start to widen appreciably. But understandably, international investors are looking to steer clear of European exposure at present. Offering 2.3% overnight deposit rates and backed by near energy independence and a relatively strong US economy, it should not be a surprise to see the dollar remaining bid. As we noted last week, we doubt the Japanese yen offers much of a safe haven at the moment given the nature of the crisis wiping out Japan’s trade surplus.   For the week ahead the US data calendar is light, but we have several Fed speakers including Chair Powell on Thursday. Equally the G10 has several big central bank meetings including the European Central Bank (ECB), Bank of Canada (BoC) and Reserve Bank of Australia (RBA). All should be considering rate hikes at least in the 50bp region, if not 75bp. These size hikes can offer some support to respective currencies – but look unlikely to turn core FX trends around.  DXY is now comfortably through 110 and 111.30 looks to be the next resistance area. Don’t fight the trend here. Chris Turner EUR: Trial by gas The gas news has sent EUR/USD to a new low for the year and it is not obvious where the next support levels exist – perhaps 0.9850 and then not until the 0.9600/9650 area. There is a risk of moving into ‘fast markets’ and understandably EUR/USD implied volatility is turning bid again. Our German macro team feels that the weekend package of support measures to the German economy does not go far enough – worth just 2% of GDP compared to 15% of GDP levels of support seen through the pandemic. Equally, we think a 75bp hike at Thursday’s meeting is a leap too far for the ECB – we look for 50bp. This will not help the euro either. EUR/CHF should turn lower again after its recent spike higher. We expect the Swiss National Bank to be intervening on both sides of EUR/CHF now. But given the SNB’s recent hawkish shift, we do not think it would have a problem with EUR/CHF at 0.95. Chris Turner  GBP: Searching for a floor The broadly stronger dollar has seen GBP/USD losses extend and the 1.1410 March 2020 flash crash low come into view. The highlight of today’s session will be the announcement of a new Conservative Prime Minister – widely expected to be Liz Truss. Most recently she has been discussing the need for an early and aggressive fiscal stimulus package – perhaps worth £100bn. Such a fiscal package could see Bank of England tightening expectations push ahead even further. Normally, loose fiscal and tight monetary policy would be good for a currency. But given the negative growth environment – sterling is a pro-cyclical currency – it is hard to see the pound turn around against the dollar. Equally, it seems the UK bond market is starting to prove uneasy with the fiscal outlook – potentially inserting a sovereign risk premium into sterling, too. Cable should stay offered, while 0.8600-0.8700 could be the new trading range for EUR/GBP.     Chris Turner CEE: Gains at risk A new month will bring a heavy calendar this week. Today, we will see second quarter wages in the Czech Republic, closely watched by the central bank, which expects real wages to fall by 13.1% year-on-year, more than the market. Today we will also see retail sales in Hungary, which should show an acceleration in the year-on-year pace due to a retroactive increase in pensions. On Tuesday, industrial production and foreign trade in the Czech Republic will be released. Leading indicators point to a further decline driven mainly by the automotive sector. On Wednesday, the highlight of the week will be the meeting of the Polish central bank. We expect a 25bp hike to 6.75% but given the upside surprise in August inflation, a 50bp hike may be discussed. Also, on Wednesday we will see Hungarian industrial production and Czech retail sales. On Thursday, August inflation will be released in Hungary. We expect a jump from 13.7% to 16.2% YoY partly due to the changes in the fuel price cap. In the FX market, CEE currencies are maintaining recent gains while global conditions are mixed. EUR/USD around parity is keeping pressure on EM currencies, but gas prices have in turn allowed some temporary relief for the CEE region. However, in our view, this is not sufficient for current levels, especially in light of recent gas news, and domestic conditions are not helping the situation either. CEE economies are showing signs of slowing and the geopolitical story has not changed. Thus, it is hard to look for additional support from central banks and interest rates for FX. In our view, CEE currencies remain very sensitive to global events and may thus lose their recent gains. In our view, the most vulnerable at the moment is the Hungarian forint, which gained 2.6% just over the past week and dominated the EM world and we could see a correction back above 405 EUR/HUF this week. The Polish zloty will be mainly driven by the central bank decision. However, surprisingly high inflation has raised market expectations and it will be hard for the central bank to meet expectations, which may negatively impact the zloty and push the level closer to 4.75 EUR/PLN. The Czech koruna should return to Czech National Bank intervention levels after recent central bankers' statements have once again cooled market expectations and confirmed the dovish stance of the bank's board. Overall, we remain bearish on CEE currencies. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Saxo Bank Podcast: Natural Gas On Colder Weather, Wheat And Coffee Under Pressure, JPY Weaker And More

The Interruption Of Gas Supply Has Sent The Euro Downwards

InstaForex Analysis InstaForex Analysis 05.09.2022 13:29
The energy crisis in the EU continues to deepen amid Russia's full shutdown of the Nord Stream pipeline over the past weekend. The interruption of gas supply has sent the euro downwards once again. Early on Monday, the European currency lost 0.5% against the US dollar and hit a 20-year low at 0.9903. EUR/USD came under pressure following Russia's decision to extend maintenance of the Nord Stream pipeline. Gazprom shut down the pipeline indefinitely, citing an oil leak in one of its turbines. EU officials believe the technical issues are merely a pretext by the Kremlin to shut down gas exports to the European Union According to the West, Moscow is trying to impose an energy blockade on the EU at the beginning of the heating season in a last-ditch attempt to force EU to relax its sanctions against Russia. At the same time, the Kremlin has blamed Western sanctions imposed on Russia for the pipeline's shutdown. Russia is claiming that sanctions prevent Gazprom from keeping the Nord Stream's turbines running. On Saturday, Gazprom tried to alleviate EU concerns by stating that the company would increase natural gas exports to Europe via Ukraine. However, the West has deemed Gazprom's promises to be unreliable. Such an increase would not fully compensate for the shutdown of Nord Stream. Furthermore, this cannot be a permanent solution. Natural gas deliveries via Ukraine could be difficult due to the ongoing conflict between the two countries. This escalation of the gas war between Russia and the EU is forcing EU policymakers to seek solutions for the supply problem. The EU is worried that the shutdown of Nord Stream could send natural gas prices in Europe even higher. On Friday, EU energy ministers are set to present emergency measures to tackle rising energy prices. These measures would likely include natural gas price caps. Furthermore, EU politicians would push for a reduction in gas demand and consumption in the European Union. The ongoing energy crisis will be in the headlines this week, dimming the short-term prospects of the euro. As the gas conflict escalates, risks of an economic slowdown would rise. With the ECB preparing for another interest rate increase, the timing for these risks could not be worse. The ECB's policy meeting is scheduled to take place on Thursday. The EU regulator is now increasingly expected to carry out more aggressive policy measures after inflation in the eurozone reached 9.1%. However, with the EU facing a renewed threat of an energy collapse, recession, and a serious financial crisis, many analysts do not believe that ECB president Christine Lagarde will take a more hawkish step than in July. Earlier, the European Central Bank increased the key rate by 50 basis points to 0.5%. At the same time, the Federal Reserve hiked the rate by 75 basis points to 2.25-2.5%. The gap between EU and US interest rates could likely increase even further in September, as traders expect another 75 bps move by the Fed in September. It would be a third such increase in a row. "Everything is pointing to a lower euro," Carol Kong, senior associate for international economics and currency strategy at Commonwealth Bank of Australia said. "We've heard a great deal of negative news about the European economy, and I think the decline in the euro can continue this week." On the technical side, EUR/USD bears hold dominance in the market. The 7-week support line at 0.9880 is acting as an additional downside filter for the pair. EUR/USD must regain 1.0100 for bullish traders to return to the market.     Relevance up to 10:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320805
The Euro May Attempt To Resume An Upward Movement

The Euro To US Dollar May Potential Trend Reverse Soon?

InstaForex Analysis InstaForex Analysis 05.09.2022 14:23
Technical outlook: EURUSD dropped to fresh swing lows at 0.9877 during the Asian session on Monday, before finding interim support. Bulls now need to clear past the 1.0085-90 initial price resistance to confirm a meaningful bottom is in place. The daily chart is unfolding a Doji candlestick pattern. If successful, it would indicate a potential trend reversal soon. EURUSD has carved a larger-degree downswing between 1.2350 and 0.9877 as discussed in the last several trading sessions. It is just a matter of time when the bulls are back in control to produce a counter-trend rally at least towards 1.0800-1.0900. The trend line and the Fibonacci 0.382 retracement of the above drop are also converging close to 1.0800. Furthermore, it should be noted that despite the new lows being carved at 0.9977, the RSI has already produced again a bullish divergence on four different timeframes (1H, 4H, Daily and Weekly). It is a potential indication of a trend reversal anytime soon and a break above 1.0085 will confirm it. The downside is limited from here. Trading plan: Potential rally towards 1.0800 against 0.9800 Good luck!       Relevance up to 13:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291425
Gazprom Threathening To Cut Gas Transits Via Ukraine

It's Said That Gazprom Could Compensate The Nord Stream 1 Shutdown By Rising Deliveries Via Ukraine

Craig Erlam Craig Erlam 05.09.2022 15:49
European stock markets are plunging at the start of the week following a day of mixed trade in Asia, with Gazprom’s announcement on Friday weighing heavily on the bloc. In the USA there is a bank holiday, Euro goes down as Nord Stream 1 is shut down A bank holiday in the US often results in relatively quiet trade everywhere else but that’s certainly not looking the case today. The decision not to restart gas flows via Nord Stream 1 after an oil leak was apparently discovered has created enormous uncertainty in Europe going into the winter. The euro slipped to a new 20-year low against the dollar in response to the shutdown. The decision conveniently came hours after the G7 agreed to an oil price cap and as countries announced they’re ahead of schedule in filling gas reserves. Many would argue it was only a matter of time until the decision was taken, with Europe having been squeezed over a number of months for one reason or another. There have been reports that Gazprom could increase deliveries via Ukraine as a result of the shutdown but it’s not clear whether this would be enough to offset the loss of Nord Stream 1. And considering Siemens has claimed that such a leak would not ordinarily affect the operation of a turbine and is easily fixed, you have to wonder whether Russia would actually take that decision. A painful winter lies ahead. A massive job for the incoming UK PM The UK will discover who its new Prime Minister will be today, with Liz Truss the standout favourite to win the run-off against Rishi Sunak. Whoever is victorious, the job facing them is enormous, with the economy facing a long recession and eye-watering inflation. Alleviating one while not exacerbating the other will be the first job for the incoming Prime Minister and it won’t be easy, to put it mildly. There’s a huge amount of pessimism around the UK at the moment, as evident by the pound, which looks on course to fall to its lowest level since 1985 against the dollar. Chinese headwinds strengthen China is also facing numerous headwinds going into the end of the year, with Covid once again creating huge uncertainty. Beijing’s commitment to its zero-Covid policy has created major challenges for the economy this year and with mass testing taking place over the weekend and lockdowns being extended in Chengdu, that’s going to persist. ​ The pressure is being felt in the yuan which fell for a sixth month in August and is continuing to fall against the dollar. That’s despite the best efforts of the PBOC which continues to set the yuan fix stronger than markets expect. To make matters worse, US President Biden is reportedly weighing up measures to limit US investment in Chinese tech firms. The US is becoming increasingly hawkish toward China and the latest move is another blow to its tech space. Major support being tested Bitcoin is continuing to show resilience around $20,000 but that’s really being put to the test as risk aversion sweeps through the markets once more. It’s down 1% so far today and trading a little below that crucial support level. A significant break at this point could be really damaging, with the following key level below here being the June lows around $17,500. Considering the outlook for risk appetite in the near term, it’s not looking good. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Risk aversion sweeps across Europe - MarketPulseMarketPulse
The Upside Of The EUR/USD Pair Remains Limited

The EUR/USD Currency Pair Today Updated A 20-year Low

InstaForex Analysis InstaForex Analysis 05.09.2022 15:55
At the start of a new trading week, dollar bulls again reminded of themselves: the greenback strengthened its position throughout the market, updating price records. Thus, for the first time in 20 years, the EUR/USD pair fell to the area of the 98th figure, having carried out reconnaissance in force. Having been marked at 0.9879, sellers retreated, but the mood for the pair still remains bearish. Other dollar pairs of the "major group" demonstrate similar dynamics, reflecting the increased demand for the US currency. The US dollar index today reached the 110th mark—again, for the first time in the last 20 years. In other words, the picture emerges in a very unambiguous way: dollar bulls have organized another rally, playing out the events of the past two weeks. Note that the EUR/USD currency pair today updated a 20-year low not only due to the strengthening of the greenback, but also due to the weakening of the euro. Firstly, macroeconomic reports were published in Europe, which for the most part ended up in the "red zone." Secondly, at the start of a new week, gas prices increased again on European stock exchanges after a significant decline on Friday. The combination of these factors put pressure on the euro, which once again reminded of its vulnerability. For example, retail sales in the European region decreased by 0.9% in July (in annual terms). Experts expected a more modest decline (by 0.7%). In the previous month, this indicator also came out in the negative area (-3.2%). Another indicator was also disappointing—the index of investor confidence in the eurozone economy, calculated by Sentix. It collapsed in September to -31 points, although it showed signs of recovery in August. The final estimates of the PMI indices for August were also revised downwards. In particular, the German index of business activity in the services sector dropped to 47.7 points, and the composite PMI index to 46.9 points. Pan-European indices were similarly revised downwards. But, perhaps, the main driver of the weakening of the euro was the aggravated energy crisis in the European region. Recall that at the end of last week, the cost of gas decreased significantly—for the first time in 2 weeks, a thousand cubic meters of blue fuel was estimated at less than two thousand dollars. Reuters on Friday distributed unofficial information (citing its sources) that the pipeline will resume its work until Monday. In addition, gas became cheaper due to the fact that the EU countries filled the storage facilities ahead of schedule by an average of 80% (although such an indicator was planned only by November). However, at the opening of today's trading, the price rose sharply by 35% at once, exceeding the mark of $3,000 (with a subsequent rollback to $ 2,700). This happened against the background of a complete shutdown of gas supplies by Nord Stream-1. It turned out that Gazprom had not resumed the operation of the gas pipeline—it was stopped indefinitely, until the malfunction of the only working engine was eliminated. In addition, Dmitry Peskov, press secretary of the President of Russia, said that anti-Russian sanctions do not allow Gazprom to fully supply fuel to Europe. It is obvious that the worsening energy crisis will drag inflation, which has already reached 9% in the eurozone. The euro was again under strong pressure, allowing the EUR/USD bears to completely control the situation on the pair. The dollar, in turn, is getting more expensive amid increasing hawkish expectations. The contradictory Nonfarm Payrolls report published last Friday did not break the hawkish mood of investors. According to the CME FedWatch Tool, the probability of a third consecutive rate hike by 75 basis points at the next Fed meeting in September is estimated at almost 60%. Before the publication of Nonfarms, the chances were even higher (75%) – but in my opinion, such a downward correction does not matter significantly. Fed Chairman Jerome Powell warned at the end of August that the process of tightening the Fed's monetary policy would affect the dynamics of the US labor market, but this "side effect" would not prevent the regulator from resisting high inflation. In other words, the scenario of a 75-point rate hike at the September meeting is still the basic one, and this fact supports the greenback. Thus, hawkish expectations regarding the further actions of the Fed, as well as general concern about the European gas crisis (here the dollar is in high demand as a defensive asset), allow EUR/USD sellers to significantly strengthen their positions. It is noteworthy that the euro failed to organize a defense, even against the backdrop of hawkish rumors that hover around the ECB. At the end of August, Reuters published an insider that many representatives of the European regulator are ready to support a 75-point rate hike at the September meeting. Later, this information was confirmed by the heads of the Central Bank of the Netherlands, Germany and Estonia. However, this circumstance did not save EUR/USD from falling. All this suggests that bearish sentiments still prevail for the pair. It is advisable to enter sales on corrective upward pullbacks (to the area of 1.0020-1.0050). In this case, the downward targets will be at 1.0000, 0.9950, 0.9900. It is still risky to open short positions at the bottom of the 99th figure: as a result of today's offensive, the bears failed to gain a foothold below the target of 0.9900, which indicates that the main support level is located in this price area.         Relevance up to 13:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320825
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

EUR/USD Has Been Harmed By The Gas News. Eurozone Prints - i.a. Services PMI And Retail Sales Didn't Meet Expectations, NFP Gave Fed The Green Light

Craig Erlam Craig Erlam 05.09.2022 16:16
The euro fell below the 0.9900 line earlier in the European session but has pared its losses. Currently, EUR/USD is trading at 0.9937, down 0.19%. Euro falls on Nord Stream 1 shutdown US  markets are closed for the Labour Day holiday. A US holiday often means a quiet day for the currency markets, but not today. Last week, investors were warily keeping an eye on the latest energy crisis development in Europe. Russian officials shut down the Nord Stream 1 pipeline on Wednesday, citing the need for three days of maintenance. Saturday came and went, and the pipeline remains closed, with Moscow now claiming an oil leak in a turbine. Germany has countered that the pipeline is fully operational, stoking fears that Russia is again weaponising energy exports to Europe. The predictable result has been renewed fears of an energy crisis, which sent the euro to a new 20-year low of 0.9876 earlier today. Germany has greatly reduced its dependence on Russian gas Even if Moscow does restore service, this episode is a reminder of Europe’s energy dependence on an unreliable Russia. Germany has greatly reduced its dependence on Russian gas, from 55% prior to Russia’s invasion of Ukraine to just 26%, but if Russia chooses to play hardball and cut off gas supplies, the result will be a full-blown energy shortage for Europe this winter. There were a host of releases out of Germany and the eurozone today, and the weak data didn’t help the euro at all. Eurozone and German Services PMIs both weakened in August with readings of 49.8 and 47.7, respectively. This points to a contraction in business activity. Eurozone Sentix Investment Confidence remains in deep freeze, and fell to -31.8, down from -25.2 and below the forecast of -27.5. Finally, eurozone retail sales declined -0.9% YoY in July, following a -3.2% reading in June (-0.7% est.)  The soft numbers point to weakness in the German and eurozone economies. The highly-anticipated US nonfarm payrolls on Friday turned out to be a whimper rather than a bang, as the economy produced a solid 315 thousand new jobs, edging above the forecast of 300 thousand. The reading will enable the Fed to continue its aggressive rate-tightening cycle as it relies on a robust US labour market. EUR/USD Technical EUR/USD is testing support at 0.9888. Below, there is support at 0.9816 There is resistance at 0.9984 and 1.0056 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro hits 20-year low on oil shutdown - MarketPulseMarketPulse
The Upside Of The EUR/USD Pair Remains Limited

Could The Price Of the EUR/USD Pair Increase Today?

InstaForex Analysis InstaForex Analysis 06.09.2022 08:35
he euro closed Monday with a slight decrease, not having time to close the gap from the market opening. This was prevented by resistance at 0.9950. The line of the Marlin Oscillator, which forms the convergence, also showed noticeable resistance. This morning the resistance level is overcome, the gap is closed, the euro may resume its decline, but the oscillator is still struggling with the linear support hurdle. To develop a downward movement, the price needs to return under the level of 0.9950. Next, we are waiting for the target levels 0.9850 and 0.9752 to be worked out. The price is between the balance and MACD indicator lines on the H4 chart, the Marlin Oscillator is in the negative area. To consolidate the downward momentum after the price goes under 0.9950, it will also need to overcome the MACD line, approximately in the area of 0.9918. It is also possible for the price to move slightly upwards (0.9985) so that the signal line of the Marlin Oscillator reaches the zero line and reverses from it, thus forming a repeated reversal pattern. This main scenario will be broken if the price settles above the resistance level of 1.0020.     Relevance up to 04:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320877
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The EUR/USD Pair Movement On Trade. The Euro Will Continue To Fall.

InstaForex Analysis InstaForex Analysis 06.09.2022 08:39
EUR/USD 5M The EUR/USD pair did not trade in the best way on Monday. It has not been such for a long time that during the day there is a blatant flat with low volatility. Sooner or later it had to happen. There were no important macroeconomic statistics either in the European Union or in the US on Monday. Two reports were published in Europe, but the first is the index of business activity in the service sector in the second assessment for August - that is, a priori, not the most interesting report for traders, and the second - retail sales, the value of which for July almost coincided with the forecast. It was naive to expect a market reaction under such circumstances. It didn't happen. The euro managed to retreat literally 50 points from its 20-year lows, so we believe that the pair's fall will resume again. Moreover, the European Central Bank meeting will take place this week, and the market reaction to its results can be absolutely anything, despite the fact that it is already known that the key rate will be increased by at least 0.5%. But once again: the reaction of the market can be completely unpredictable. Therefore, it is not at all a fact that this week we will see a strong growth of the euro. In regards to Monday's trading signals, everything was also very sad. Only two of them were formed. The first one to sell is definitely false, since the price could not go in the right direction by even 15 points. The second one is a little better, one could earn about 15-20 points for the long position and cover the loss on the first transaction. The result is absolutely normal for Monday. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For most of 2022, they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group decreased by 8,500, and the number of shorts decreased by 5,000. Accordingly, the net position decreased by about 3,500 contracts. This is not much, but this is again an increase in the bearish mood among the major players. After several weeks of weak growth, the decline in this indicator resumed. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 47,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. The euro has not been able to show even a tangible correction over the past six months or a year, not to mention something more. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 6. The ECB meeting is the key event of the week. Overview of the GBP/USD pair. September 6. An almost empty week for the pound. What can stop it from falling against the dollar? Forecast and trading signals for GBP/USD on September 6. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair continues to be inside the 0.9900-1.0072 channel on the hourly timeframe, although it briefly left it during the past day. The lower limit of this channel has been broken, and we have no doubt that the euro will continue to fall. But this week it is quite possible that the "broad flat" will continue. We highlight the following levels for trading on Tuesday - 0.9900, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9996) and Kijun-sen (0 .9978). There is still no level below 0.9900, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthroughs" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. No important events are planned in the European Union on September 6, meanwhile, the indexes of business activity in the services sector ISM and S&P will be published in the US. The first is more important and may follow the second - that is, below the 50.0 level. We are waiting for the market's reaction to this report, especially since it is almost the only one this week. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/320865
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

The Euro To The US Dollar: The Currency Pair Might Have Completed

InstaForex Analysis InstaForex Analysis 06.09.2022 09:01
Technical outlook: EURUSD climbed through the 0.9960-65 range during the late Asian session on Tuesday after finding support at around 0.9875 early this week. The single currency pair is seen to be trading close to 0.9965 at this point in writing and is expected to push through the 1.0085-90 zone in the near term. A Morning Star pattern is likely to unfold on the daily chart. EURUSD has carved a larger-degree downswing between 1.2350 and 0.9875 since January 2021. The currency pair might have completed or is about to complete a larger-degree corrective pattern at around 0.9400. Before that, a corrective rally towards 1.0800-1.0900 could be expected and a break above 1.0365 will confirm the same. Furthermore, since the recent swing low at 0.9875 is accompanied by a strong bullish divergence on the daily RSI, prices are expected to turn higher soon. Immediate price resistance is seen at 1.0085. Once taken out, the bulls would target the 1.0365 mark, which is next in line as seen on the daily chart here. Trading plan: Potential rally towards 1.0365 and 1.0800 against 0.9800     Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291518
Credit squeezing into central banks – what next?

New Swing Low Of The Euro To The Us Dollar, The Momentum Is Negative.

InstaForex Analysis InstaForex Analysis 06.09.2022 09:06
Technical Market Outlook: The EUR/USD pair has made a new swing low located at the level of 0.9879, but bulls are trying to bounce again. The momentum is negative and weak on the H4 time frame chart, so the bears are clearly in control again and they might push the price towards the lower levels. In order to terminate the down trend or at least make a correction, the bulls must break above the technical resistance located at the level of 1.0090 and 1.0122. In the longer term, the key technical resistance level is located at 1.0389. The whipsaw price action below the parity level continues. Weekly Pivot Points: WR3 - 0.9992 WR2 - 0.99454 WR1 - 0.99156 Weekly Pivot - 0.98988 WS1 - 0.98690 WS2 - 0.98522 WS3 - 0.98056 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue below the parity level. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the longer term, the key technical resistance level is located at 1.0389.     Relevance up to 08:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291524
Are You Ready Australian Dollar (AUD)? Reserve Bank Of Australia Decides On The Cash Rate Today!

Are You Ready Australian Dollar (AUD)? Reserve Bank Of Australia Decides On The Cash Rate Today!

ING Economics ING Economics 06.09.2022 09:11
Reserve Bank of Australia rate action today's main focus Source: shutterstock Macro outlook Global: US markets were closed for Labor Day yesterday, though European bourses were mostly in the red and if early trading out of New Zealand is any guide, Asia Pacific markets will not open today in an ebullient mood. There is no Treasury pricing to consider today because of yesterday’s holiday. But bond futures seem to suggest some further upward creep in 10Y yields today. EURUSD is roughly unchanged from this time yesterday, though did have a look at pushing below 0.988 before recovering to sit at 0.994 currently. The AUD is looking a touch stronger at 0.6814, and Cable is also looking a bit less weak at 1.1555 as the UK takes on a new Prime Minister. The JPY lost some further ground yesterday but is looking a bit perkier in early trading today, moving down to 140.46. Asian currencies were mostly soft against the USD yesterday.  G-7 Macro: There’s not much on the G-7 Macro calendar today and the main overnight news is the token supply target cut by OPEC+ (see here for more on this) Australia: The Reserve Bank of Australia (RBA) will decide how much to raise the cash rate today, with most analysts looking for a 50bp increase to 2.35%, though a few are forecasting only a 25bp move. Analysts have been making a lot out of some text in recent RBA statements noting that rates were not on a "preset path", though it seems a bit of a leap to view this as code for “rates will be increased at a slower pace”, which is how some are viewing it. Still, we’ll know soon enough. Philippines: Philippine August inflation is set for release today.  Market expectations point to a 6.4%YoY rise driven largely by substantial increases in the price of food, transport and utility items.  Transport groups have lobbied for a fare price increase which is expected to be granted within the week.  Meanwhile, storm damage from the recent typhoon will also likely nudge up prices for vegetables and fruit in the near term.  We expect inflation to stay elevated with the central bank likely hiking rates at each of the remaining policy meetings over the rest of the year.      What to look out for: ECB meeting Philippines CPI inflation (6 September) Australia RBA meeting (6 September) Taiwan CPI inflation (6 September) US ISM services (6 September) Australia GDP (7 September) China trade (7 September) Taiwan trade (7 September) US trade balance (7 September) Japan GDP (8 September) Australia trade balance (8 September) ECB policy meeting (8 September) US initial jobless claims (8 September) Philippines trade (9 September) China CPI inflation (9 September) US wholesale trade (9 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
PLN Soars to Record Highs Ahead of NBP Decision

The Euro To US Dollar And An Excellent Entry Point For Short Positions

InstaForex Analysis InstaForex Analysis 06.09.2022 09:33
Several interesting market entry signals were formed yesterday. I suggest you take a look at the 5-minute chart and figure out what happened. In my morning forecast, I reversed the growth and a false breakout formed at this level led to an excellent entry point for short positions. However, despite the weak fundamental statistics and the continuation of the bear market, the pair recovered, which resulted in consolidating losses. A breakthrough and reverse test of 0.9909 gave a signal to buy, which led to the pair's growth by more than 40 points. The bears showed themselves around 0.9934 in the afternoon, forming a false breakout there and a sell signal. As a result, the pair fell by 20 points and that was it. COT report: Before talking about the further prospects of the EUR/USD movement, let's look at what happened in the futures market and how the positions of the Commitment of Traders have changed. The Commitment of Traders (COT report) for August 30 logged a decline in both short and long positions. If a week ago there was a surge in activity, now there has been a similar decline. This indicates a decrease in investor appetite for risk after the release of the eurozone inflation data, which once again rose to a high in the last ten years. The problem is exacerbated by the energy crisis, as the flow of gas through the Nord Stream is practically suspended - this is another increase in energy prices in the winter and upward inflation surges, which will force the European Central Bank to further raise interest rates and tighten belts. This week we are also waiting for the central bank's decision on interest rates, which may aggravate the euro's position against the US dollar. Even though the rate hike will be considered by investors as a signal for the growth of profitability, at the same time there will be a slowdown in economic growth, which is more important. So don't expect a serious euro recovery in the medium term. The COT report indicated that long non-commercial positions decreased by 8,567 to 202,258, while short non-commercial positions decreased by 5,000 to 249,934. At the end of the week, the total non-commercial net position remained negative and decreased to the level of -47,676 against -44,109, which indicates continued pressure on the euro and further fall of the trading instrument. The weekly closing price slightly recovered and amounted to 1.0033 against 0.9978. When to go long on EUR/USD: Today we do not have serious statistics in the first half of the day and people could only pay attention to the report on the volume of industrial orders in Germany and the index of business activity in the construction sector from IHS Markit. Both indicators may fall, but I do not expect serious pressure on the euro, as traders even ignored yesterday's weak data on the services sector. It looks like everyone is "charged" for the ECB meeting, which will be held this Thursday, so the demand for the euro in the short term will remain. In case of bad reports and a negative reaction, forming a false breakout in the area of the nearest support at 0.9941 will be a reason to open long positions. In this case, it will be possible to count on building a correction and updating the resistance at 0.9984. A breakthrough and test of this range would make it possible to get out of the bearish pressure, which will hit the stops, creating another signal for entry into long positions with the possibility of a larger move up to 1.0039. The farthest target will be the area of 1.0076, where I recommend taking profits. If the EUR/USD declines and there are no bulls at 0.9941, and moving averages are also passing there, playing on the bulls' side, the pressure on the pair will increase. This will bring up the 0.9910 update. From this level, I recommend buying also only on a false breakout. I advise you to open long positions on EUR/USD immediately for a rebound only from the annual low of 0.9879, or even lower - in the area of 0.9819, counting on an upward correction of 30-35 points within the day. ---- When to go short on EUR/USD: Bears received a significant rebuff yesterday and failed to offer anything even amid negative fundamental statistics. The reason for this may be the ECB's upcoming meeting, at which it is still not clear how much the central bank will raise interest rates: by 0.5% or 0.75%. A good option for selling would be a false breakout in the area of the nearest resistance at 0.9984, growth to which may occur after the release of a number of good fundamental statistics on Germany. All this will lead to the movement of the euro down to the area of 0.9941. A breakdown and consolidation below this range, as well as a reverse test from the bottom up, create another sell signal with the removal of bulls' stop orders and the resumption of the bearish trend with the prospect of updating 0.9910. Consolidating below this area is a direct road to the annual low of 0.9879, where I recommend completely leaving short positions. A more distant target will be the area of 0.9819. If EUR/USD moves higher during the European session, and there are no bears at 0.9984, we can expect a bigger push for the pair, as bulls retain control of the market. Then I advise you to postpone shorts until 1.0029. Forming a false breakout there will be a new starting point for entering short positions. You can sell EUR/USD immediately for a rebound from the high of 1.0076, or even higher - from 1.0127, counting on a downward correction of 30-35 points. Indicator signals: Moving averages Trading is conducted above 30 and 50 moving averages, which indicates a slight advantage of the bulls. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands A breakthrough of the lower border of the indicator in the area of 0.9910 will lead to a fall in the euro. Surpassing the upper limit of the indicator in the area of 0.9970 will lead to the growth of the euro. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.     Relevance up to 08:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320887
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The Euro To The US Dollar Pair: There Is A Signal To Buy

InstaForex Analysis InstaForex Analysis 06.09.2022 09:44
Although a lot of macroeconomic data were published yesterday, they did not determine the course of trading. The central news of the day was Gazprom's decision to cut off gas supplies to Europe. As follows from the official statement, the cause is a breakdown, while it is not specified how long it will take to fix it. All this threatens Europe with shutdowns of enterprises and massive power outages. So it is not surprising that the single currency immediately collapsed by more than a hundred points. Then the situation on the markets stabilized somewhat, and there was a small rollback, the reason for which was precisely the macroeconomic statistics. Namely, retail sales in Europe, the rate of decline of which slowed down from -3.2% to -0.9%, with a forecast of -1.4%. It is clear that today the gas situation will remain the central theme that determines the course of events. Much will depend both on the statements of officials and the press service of Gazprom. If the company of course will make any statements. In any case, the single currency has no reasons for growth at the moment, and it will certainly not be able to rise above parity. Rather, on the contrary, some statements may contribute to another decline below 0.99, followed by a rebound. Retail sales (Europe): The EURUSD currency pair opened the new trading week with an intensive decline, during which the quote temporarily fell below 0.9900. Speculators failed to stay outside the control value, as a result of which a technical rollback occurred. The RSI H4 and D1 technical instruments are moving almost all the time in the lower area of the 30/50 indicator, which indicates a downward trend among traders in the market. The moving MA lines on Alligator H4 and D1 are directed downwards, which corresponds to the direction of the main trend. It should be noted that in the four-hour period the indicator signal is unstable due to the variable range. Expectations and prospects Despite the speculative activity, the quote is still within the range of 0.9900/1.0050. Thus, traders are guided by the borders of the flat, working according to the method of breakdown or rebound from the given values. Complex indicator analysis in the short-term and intraday periods have a variable signal due to the current flat. At the moment, there is a signal to buy due to a rollback from the lower border of 0.9900. Indicators in the medium term are focused on a downward trend.     Relevance up to 19:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320881
ARM's US IPO Amidst Challenging Landscape: Will Investors Pay an ARM and a Leg?

EUR/USD. Results of the week. The gas issue and the greenback's return: parity loomed on the horizon again

InstaForex Analysis InstaForex Analysis 21.08.2022 16:02
Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The US dollar is again in high demand. The greenback regained lost positions against the euro and finally broke out of the price range of 1.0130-1.0280, within which it had been trading for almost four weeks. The parity level is on the horizon again, which serves as the key and strongest support level for the EUR/USD pair.     Let me remind you that the bears tested the strength of the price line of 1.0000 a little more than a month ago, on July 14th. Then the pair updated the 20-year price low, reaching 0.9953. But at the same time, the bears failed to gain a foothold below parity: they did not dare to hold short positions at such bottoms. The initiative was expectedly seized by EUR/USD bulls, having organized a fairly large-scale correction, which, however, ended fairly quickly. Traders did not break through the price ceiling around the 3rd figure. Although there was a corresponding attempt: amid a slowdown in US inflation indicators, bulls reached 1.0370. They stayed in this price area for only two days, after which the pair started to slide down again. It is noteworthy that the downward trend resumed with renewed vigor at a time when the growth of US inflation slowed down for the first time in many months. The latest releases on the growth of the consumer price index in the US, the producer price index and the import price index in the red zone. But traders interpreted the published figures in their own way: according to most experts, inflation in the United States is still too high, allowing the Federal Reserve to tighten monetary policy (albeit not at an aggressive, moderate pace). Moreover, the decline in the CPI in July was mainly due to a slowdown in the growth of energy prices (the cost of which increased by 32% after the highest growth in June, when a 42-year high of 41.6% was recorded). The structure of the report says that last month gasoline rose by 44%, while the increase was at the level of 60% in June (the high since March 1980). Natural gas prices are up 30% after climbing nearly 40% in June, the highest since autumn 2005. All other components of the CPI did not give up their positions in July and continued their upward movement. And although the further pace of the tightening of the Fed's monetary policy will depend on the incoming data, analysts have no doubt that at the September meeting the central bank will raise the rate by at least 50 points. And even this conditional "low" allows the Fed to be ahead of the European Central Bank, whose representatives are still discussing how much to increase rates in September - by 50 or by 25 points. In general, the worsening energy crisis in anticipation of the autumn-winter period serves as a heavy anchor for the pair. Despite the low growth of the European economy in the second quarter (0.7%), many experts are sounding the alarm, looking back at the growing cost of blue fuel. The price of gas in Europe is above the $2,000 mark, and today it has updated another multi-month record, reacting to the news flow from the Russian Federation.     Gazprom announced that the only Nord Stream turbine will be stopped on August 31 for repairs. According to preliminary data, the repair work will last at least three days. This means that for three days gas will not be supplied through this pipeline at all: the supply of blue fuel for this time through the Nord Stream will be completely stopped. Against the backdrop of this statement by Gazprom, stock prices for gas in Europe rose by 4.6% and for the first time since March they have overcome the mark of $2,700 per thousand cubic meters. According to Bloomberg, the cost of gas in the European Union is now about 12 times higher than usual at this time of year. At the same time, household and business spending is skyrocketing amid record price pressures. Bloomberg analysts note that Europe has already lost about half of its zinc and aluminum production due to high energy prices. And with the onset of the autumn-winter period, the situation is expected to worsen - fuel becomes too expensive for industrial use and energy production. That is, factories will close or suspend their activities. By the way, the latest reports of many research institutes (GfK, IFO, ZEW, PMI indices) reflected the growing pessimism of representatives of the European business environment - both about the current situation and about future prospects, especially with regard to the upcoming winter cold. It is obvious that in such conditions it will be difficult (if not impossible) for the ECB to tighten monetary policy at an aggressive pace. The Fed will be one step ahead of the ECB in this regard, and over time this gap will only increase. Therefore, even the first signs of a slowdown in the growth of US inflation did not break the dollar: after a corrective surge, the EUR/USD bears seized the initiative for the pair. At the same time, in my opinion, it is not worth considering the downward price targets located below the parity level now. EUR/USD bulls are not able to reverse the trend, but they are able to organize a corrective counteroffensive, especially around the key support level of 1.0000. Therefore, short positions should be considered only on corrective rollbacks, with targets of 1.0050 and 1.0010.   Read more: https://www.instaforex.eu/forex_analysis/319453
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Massive Collapse In Both Pairs The EUR/USD And The GBP/USD

InstaForex Analysis InstaForex Analysis 06.09.2022 10:04
Although a lot of macroeconomic statistics were released yesterday, markets were unaffected as players focused more on Gazprom's decision to cut off gas supplies to Europe. According to the official statement, there was a breakdown, so there is a need for additional repairs. This threatens Europe with shutdowns of enterprises and massive power outages. Unsurprisingly, the incident caused a massive collapse in both EUR/USD and GBP/USD. The situation only stabilized after the release of retail sales data on Europe, which declined by -0.9%. For future price movements, much will depend both on the statements of officials and the press service of Gazprom. Nevertheless, euro has little chance of increasing, and there is certainly no hopes of rising above parity. On the contrary, some statements may even contribute to another decline below 0.99, followed by a rebound. Retail sales (Europe): EUR/USD failed to break through the lower boundary of the range 0.9900/1.0050. As a result, there was an increase in the volume of long positions, which led to a rebound in prices. It can be assumed that, despite the prevailing downward sentiment among speculators, the market is still developing within the base of the medium-term trend. The best action to this is to work a rebound or breakdown relative to the given boundaries. In case of a breakdown, wait for a strong signal in the daily (D1) timeframe. GBP/USD continued to fall and came close to the 2020 low, where a local reduction in the volume of short positions occurred, which eventually led to a rollback. To prolong the main trend, it is necessary to keep the price below 1.1410 in the four-hour timeframe.     Relevance up to 19:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320883
The EUR/USD Price May Fall Under 1.0660

A Bullish Outlook For The Dollar Index. The Importance Of The Rate Hike For The Euro

InstaForex Analysis InstaForex Analysis 06.09.2022 11:26
The euro seeks to wrap itself in favor of the gas problems faced by the countries of the eurozone. Most often, the EUR loses, but now there is a small chance for its short-term recovery amid a slowing USD rally. The greenback took a breather on the morning of Tuesday, September 6, to recover from a heady rally. This strategy has led to some decline from all-time highs against the euro, but it is still too early to draw conclusions. The threat of a recession looms over both currencies. Adding fuel to the fire is the high likelihood of a sharp rise in US interest rates. A short-term slowdown in the growth of the USD against key currencies and a slight subsidence against the European one was caused by expectations of statistical data on the index of business activity in the US services sector (ISM). According to preliminary estimates, this figure fell to 55.1% in August from 56.7% in July. Significant support for the US currency is provided by expectations about the rate hike by the Federal Reserve. According to analysts, the central bank is "at a low start" in this matter. At the same time, 62% of specialists include in prices its increase by an additional 0.75 percentage points, up to 3-3.25% per annum. In such a situation, the dynamics of the euro, which has to withstand the gas crisis in the eurozone, is in distress. At the beginning of this week, the euro fell by 0.7% to 0.9880. According to experts, this is the lowest figure in the last 20 years. The current energy crisis has seriously shaken the euro's position. The driver of this fall was the actions of the Russian authorities, who announced a complete suspension of the supply of natural gas through the Nord Stream pipeline. According to analysts, this will increase the economic problems of European businesses and households. Against this background, mass short positions on the European and British currencies were recorded. Experts fear that this trend will strengthen. According to currency strategists at ING Bank, "gas pressures sent the EUR/USD pair to new lows this year." Recall that earlier this week, the pair fell below 0.9900 for the first time since October 2002. According to ING economists, in the near future the EUR/USD pair will continue to fall to a new support level in the range of 0.9600-0.9650. However, this is an extremely low level for a pair, which threatens the existence of the single currency. The EUR/USD pair cruised near 0.9963 on the morning of Tuesday, September 6, winning back previous losses. However, experts warn against euphoria, as the dollar is ready to brace itself and continue its rally, displacing the euro. In such a situation, many analysts see a way out in a further increase in the key rate by the European Central Bank. However, ING economists do not agree with this, who consider it excessive to raise the rate by the central bank by 75 bps at once. According to experts, this will not solve the current problems of the eurozone. ING bank believes that the rate hike by 75 bps at the next meeting, scheduled for Thursday, September 8, is "too big a step for the ECB, which will not help the euro." You should expect it to increase by 50 bps, analysts conclude. Expectations about a sharp rate hike by the ECB (by 75 bps) are fueled by growing inflation in the euro area, the threat of a recession and disappointing macroeconomic data for the region. The icing on the cake was the deepening of the energy crisis in Europe. This undermines the demand for a single currency, experts emphasize. According to current reports, in July, retail sales in the euro area fell by 0.9% in annual terms. At the same time, markets expected a decline of 0.7%. In addition, the Sentix investor confidence index fell to -31.8 points in September from -25.2 points in August. Against this backdrop, Sentix analysts noted a "clear deterioration" in the economic situation in the eurozone, stressing that this is the lowest rate since May 2020. The US currency continues to benefit from the current situation, despite a short-term subsidence. Many experts agree on the long-term upward trend of the dollar, which has been observed since mid-2021. Experts believe that a significant divergence in the monetary strategies of central banks is a significant driver of the growth of the USD against the euro. It is noted that the ECB is still "two steps behind the Fed" in terms of raising rates. The situation was not saved even by its increase by 50 points in July. However, the ECB may revise its strategy and raise the rate at the next meeting by 50-75 bps. Another important factor in the greenback's growth is the stability of the US economy. According to analysts, the US is relatively easy to survive the gas crisis, while selling energy to Europe. In the long term, this state of affairs plays against the ECB and the countries of the European bloc, but it plays into the hands of the Federal Reserve. In such a situation, it is difficult for the ECB not only to raise, but also to keep rates at a high level, unlike the Fed. Under such a scenario, a deep economic downturn in the eurozone is possible, experts warn. The current market environment creates a bullish outlook for the dollar index (USDX). Currently, the bulls on the dollar are in a strong position, pushing the bears. However, the situation may change at any time. In the short and medium term, analysts allow it to rise to an impressive 120 points, that is, an increase of 9%. In a favorable scenario, USDX will head towards the peaks of 2001-2002. However, experts consider this option extreme, although they allow its implementation until the end of 2022.     Relevance up to 08:00 2022-09-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320889
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

The Gas Price Is Recovering And The Euro And British Pound Are Strengthening

InstaForex Analysis InstaForex Analysis 06.09.2022 11:48
Details of the economic calendar for September 5 Data on indices of business activity in the services sector in Europe and the UK were published, which came out worse than expected. Details of statistical indicators: Eurozone services PMI fell from 51.2 to 49.8 points against the expectation of 50.2 points. The composite index fell from 49.9 to 48.2 points. The euro was already heavily oversold at the time of the release of the data, so it was difficult to fall further. UK services PMI fell from 52.6 to 50.9 points, with forecast of a decline to 52.5 points. The composite index fell from 52.1 to 49.6 points. The pound sterling, like the euro, was oversold; there was no reaction to the statistics. Data on retail sales in the euro area were also published: its rate of decline slowed down from -3.2% to -0.9% YoY. Despite the fact that the data came out worse than expected (-0.7%), the euro ignored them. The reason for the lack of response to statistical indicators arose due to the commodity market. Yesterday, with the opening of trading, there was a sharp increase in the cost of gas in Europe, which jumped by 30% to $2,800 per thousand cubic meters. The reason for the increase in the cost of gas lies in the message of Gazprom on Friday evening that the maintenance of the only working turbine of SP-1 revealed "gross violations" and the gas pipeline will not work without their elimination. Speculators worked out this information flow in the form of a sell-off of the euro, where, through a positive correlation, it followed the euro and the pound sterling. As soon as the price of gas began to recover relative to the morning jump, the euro began to strengthen, followed by the pound. Analysis of trading charts from September 5 The EURUSD currency pair opened a new trading week with an intensive decline, during which the quote temporarily fell below 0.9900. The speculators failed to stay outside the control value, which resulted in a technical pullback. The GBPUSD currency pair, through a positive correlation with EURUSD, first rushed down, almost reaching the 2020 low, and then moved into the pullback stage. Economic calendar for September 6 The United States is coming off a three-day holiday today, and service sector PMI data will be released. In the UK, data on the index of business activity in the construction sector will be released, where they predict its decline. Not the best signal for the pound sterling, but it is worth considering that it is already oversold in the market. Time targeting: UK Construction PMI (Aug) – 08:30 UTC US Services PMI (Aug) – 13:45 UTC Trading plan for EUR/USD on September 6 Despite the speculative activity, the quote is still within the range of 0.9900/1.0050. Thus, traders are guided by the borders of the flat, working according to the method of breakdown or rebound from the given values. Trading plan for GBP/USD on September 6 With the pound losing more than 800 pips in value in three weeks, a pullback/correction was brewing in the market due to short overheating. In this situation, holding the price above 1.1620 will lead to the subsequent strengthening of the pound towards 1.1750. As for the prolongation of the downward trend, it is necessary to keep the price below the value of 1.1400 in the daily period. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.     Relevance up to 09:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320915
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

The Euro To The US dollar Pair May Move Upward

InstaForex Analysis InstaForex Analysis 06.09.2022 12:04
Trend analysis (Fig. 1). The euro-dollar pair may move upward from the level of 0.9978 (close of yesterday's daily candle) to 1.0011, the 23.6% retracement level (white dotted line). Upon reaching this level, a continued upward movement is possible with the target of 1.0042, the 21-period EMA (thin black line). When testing this level, the price may move downward to 1.0002, the 13-period EMA (thin yellow line). From this level, the price may move up. Fig. 1 (daily chart). Comprehensive analysis: General conclusion: Today the price may move upward from the level of 0.9978 (close of yesterday's daily candle) to 1.0011, the 23.6% retracement level (white dotted line). Upon reaching this level, a continued upward movement is possible with the target of 1.0042, the 21-period EMA (thin black line). When testing this level, the price may move downward to 1.0002, the 13-period EMA (thin yellow line). From this level, the price may move up. Alternative scenario: from the level of 0.9978 (close of yesterday's daily candle), the price may move upward to 1.0011, the 23.6% retracement level (white dotted line). When testing this level, a downward movement is possible towards the support level 0.9951 (thick blue line). When testing this level, the price may move up.     Relevance up to 10:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320923
The EUR/AUD Pair May Have The Potential To Continue Its Decline

What Transactions In The EUR/USD Pair Look Like Today?

InstaForex Analysis InstaForex Analysis 06.09.2022 12:08
Analysis of transactions in the EUR / USD pair Euro tested 0.9916 at the time when the MACD was far from zero, which limited the upside potential of the pair. Sometime later, it tested the level again, but this time time MACD line was in the overbought area, which was a good signal to sell. Sadly, there was no price decrease and no other signals appeared for the rest of the day. Euro only fell slightly despite the weaker-than-expected report on business activity in the services sector of Germany, Italy and the eurozone. In addition, volatility was limited as it was Labor Day in the US. A number of reports are scheduled to be published today, such as the volume of industrial orders in Germany and the index of business activity in the construction sector. Considering how the market ignored the data on composite PMI yesterday, it is likely that today's indicators, even if they turn out to be worse than expected, will not affect euro. Then, in the afternoon, data on business activity in the services sector and PMI for the US will be released, which will hit the positions of dollar and may lead to a rise in risk appetite, provided that the figures are lower than the forecasts. For this reason, expect growth and upward correction in EUR/USD. For long positions: Buy euro when the quote reaches 0.9987 (green line on the chart) and take profit at the price of 1.0030. A rally will occur only if statistics in the Euro area, especially in the construction sector, exceed expectations. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9949, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9987 and 1.0029. For short positions: Sell euro when the quote reaches 0.9949 (red line on the chart) and take profit at the price of 0.9894. Pressure will return if statistics in the Euro area come out lower than the forecasts, while data in the US exceed expectations. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 0.9987, but the MACD line should be in the overbought area, as only by that will the market reverse to 0.9949 and 0.9894. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 09:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320900
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

Continued Growth In Oil Prices May Put Pressure On The USD/CAD Pair

InstaForex Analysis InstaForex Analysis 06.09.2022 13:37
Market activity was noticeably lower than usual on Monday due to the holiday in the US. Local markets were closed and only electronic trading took place. Today, however, important economic data will be released, which fully reflect the negative situation in Europe. According to the data presented, business activity in the service sector of Germany, the Euro area and the UK showed a decrease, with Germany and the eurozone's level below 50 points. This indicates lack of growth in the sector, which is important for the Western post-industrial economy. Attention was also drawn to the retail sales report in the Euro area, which declined 0.9% y/y and 0.3% m/m in July. The data prior to this was revised upwards to -1.0%. In the wake of all these events, as well as the resumption of growth in oil prices in response to the unexpected decision of OPEC to slightly reduce the volume of production in order to keep prices near $100 per barrel, the European stock market lost all its positiveness and finished trading in different directions. The gloomy outlook for the European economy is back in the spotlight after the release of weak service PMI data. Additional negative was the decision to continue deliveries of natural gas to Europe only after the lifting of sanctions. This means that energy crisis can develop after the collapse of local industry, then proceed into a full-scale crisis with social consequences. In terms of the forex market, nothing significant happened yesterday because of low trading volatility. The ICE dollar index, having tested the 110-point mark, failed to gain a foothold above, and is currently below this level. It is likely that players are anticipating the outcome of the ECB meeting this week, as well as the speeches of Christine Lagarde and Jerome Powell. Today, the RBA raised its key interest rate by 0.50% to 2.35%, but did not cause any special movement in pairs with the Australian currency. Ahead are reports on business activity in the construction sector of Germany and the UK, as well as the index of purchasing managers for the non-manufacturing sector of the US. The dynamics can set the tone for trading not only in the US, but also on other world trading floors. But there is a chance that the current situation is just the calm before the storm, which may arise after the ECB meeting and release of GDP data from a number of economically developed countries. Forecasts for today: EUR/USD The pair is consolidating below 0.9975. A break of this level may lead to further growth towards 1.0050. USD/CAD The pair is trading below 1.3135. Continued growth in oil prices may put pressure on it, which will push the quote to 1.3065.       Relevance up to 09:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320908
bybit-news1

EUR/USD Is Vigilant To The Highly Awaited Jerome Powell's (Fed) Speech. Rise Of Monthly Bond Sales Could Make Stock Market Decrease By Over 20%!

Alexander Boltyan Alexander Boltyan 06.09.2022 14:21
The head of the Federal Reserve (Fed) Jerome Powell is expected to deliver a speech on Friday at Jackson Hole annual symposium. Investors are completely focused on Powell’s testimony mostly ignoring incoming macroeconomic data. However, some economic data was a matter of concern. Shocking PMI Prints PMI indexes in the United States and in some other countries came out shocking as Services PMI in the U.S. dropped in august to 44.1 points, while Production PMI in the United Kingdom fell to 46.0 points. The3se are worst reading since 2020. PMI’s in other countries with a minor exclusion are pointing to a global economic slowdown. Some positive tunes were brought by the Q2 2022 second GDP estimate in the U.S. and Germany. Estimates were upgraded to -0.6% from the previous -0.8% in America and to 0.1% from 0.0% in Germany. This could hardly comfort investors, but together with lower Initial Jobless Claims in the U.S. it leveled up the market before the weekend. Read next: Interest rates hiked. The most important indicators continue their downward trend| FXMAG.COM Stock Market Could Plunge! S&P broad market index lost around 2% this week. Major investment houses are warning its clients that a rise of monthly bond sales by the Fed to $95 billion in September would plunge the stock market by another 25-30%. Technical picture of the S&P 500 index demonstrates a downside patter of the index with primary target at 3900-4000 point. The U.S. stock market benchmark fell below the support at 4220 points close to the gap of the beginning of this week. It is quite possible this gap could be closed after Powell’s testimony. . During two previous week short positions for the 70% of targeted amount for S&P 500 index were opened at the average price at 4285-4290 points. The rest of the targeted volume would be used once new technical signals would emerge. The target area is located at 2100-2300 points that is expected to be reached by the end of 2022. Technical Analysis Suggest Brent Crude Oil Could Even Hit $50-60 Oil market is short of time to active an upside scenario with targets at $135-145 per barrel of Brent crude benchmark. There are no triggers for such a scenario to become real at the moment. Moreover, if Brent prices would close this week below $106 per barrel an aggressive downside formation could pressure prices to $75-85 per barrel, and even to the extreme targets at $50-60 per barrel by the end of November. So, the Powell’s speech at Jackson Hole could be the last chance for bulls to avoid this scenario. What Are Gold's Downisde Targets? Gold prices slightly rebounded from the support at $1700-1730 per troy ounce to $1760. However, it does not change much as the decision to open short positions has to be made in the first half of September either from $1800-1820 per ounce, or after prices drop below the support at $1700-1730. Both scenarios have downside targets at $1350-1450 per ounce.  Powell's Can Make EUR/USD Go Much Below Parity! EURUSD met its primary target at 0.99500-1.00500, and has missed a chance for a rebound. The pair is likely to continue diving deep below after it tested 0.99500 support level several times this week. Next week the euro may fell to 0.98500 is Powell’s speech would be disappointing. GBP/USD - It Seems It's Not The Best Moment To Start GBPUSD continues aggressive downside with the completed primary target at 1.18000-1.19000 with the remaining secondary targets at 1.15000-1.16000 that are becoming more as the Euro goes down. However, there are no good entry points to open any trade positions so far. Read next: ECB Will Continue To Hike Rates To Slow Inflation? | FXMAG.COM
German Business Confidence Dips, ECB's Lagarde Hosts Central Banking Conference in Portugal, EUR/USD Drifts Higher

US Dollar (USD) May Rise Further As The Labour Market Data Shows It's Strong Enough To Withstand Fed's tightening

Alexander Boltyan Alexander Boltyan 06.09.2022 14:43
The U.S. dollar, measured by the DXY index, retreated on Friday following the August nonfarm payrolls report. The greenback weakened as a knee-jerk reaction to a mixed employment report. Still, the bigger picture supports the bullish case for the dollar once the dust settles as the labor market keeps showing resilience to Fed’s aggressive tightening policy. Non-farm Payrolls Exceeded Forecast Hitting 315K At the time of writing, the DXY trades at the 109.50 area, 0.1% below its opening price, having bottomed in at a daily low of 108.93 after posting on Thursday a fresh cycle high just a couple of pips shy from the 110 level. The US Bureau of Labor Statistics reported the US economy added 315,000 jobs in August, beating the market's consensus of 300,000 but down from the stunning July reading of 526,000. On the other hand, wage inflation, measured by the average hourly earnings, slowed to 0.3% MoM, below the market's expectations of 0.4%. In addition, the unemployment rate jumped to 3.7% from its previous reading of 3.5%, coming higher than expected. The Fed’s tightening plan probably won’t change as Chair Powell made it clear at Jackson Hole that the committee needed to see “substantial” evidence that inflation is slowing down and that they are willing to see some economic pain. Robust Labour Market Data Supports Idea Of Potential Further Tightening In contrast, the jobs report shows that the labor market can handle tighter financial conditions as it beat the market’s expectations for a fifth consecutive month. As an immediate reaction, for the Sept. 20-21 meeting, markets are betting on higher odds of a 75 bps hike of 64% and 36% probabilities of a 50 bps increase. According to the weekly chart, the technical outlook for the DXY remains bullish as the index posts the third weekly gain in a row. Read next: Interest rates hiked. The most important indicators continue their downward trend| FXMAG.COM DXY weekly chart.   What Do We Learn From US Dollar Index (DXY) Daily Chart? The positive outlook is also seen in the daily charts, although indicators suggest a deceleration of the bullish momentum. The daily RSI pulled back from overbought territory, while the MACD printed a lower green bar. On the upside, the next resistances are seen at the cycle high of 109.97, followed by the 2003 highs at the 112.00 and 115.00 levels. On the other hand, supports could be faced at the 109.00 zone, followed by the 108.80 area, and then the weekly lows at the 108.30 regions. DXY daily chart.
The USD/JPY Price Seems To Be Optimistic

Geopolitical Situations And Macroeconomic Data Can Strongly Affect The Forex Market This Week

Saxo Bank Saxo Bank 06.09.2022 15:14
Summary:  The JPY is tumbling again even as yields trade relatively sideways and as the grinding disparity widens between the Bank of Japan’s yield caps and rising front-end policy rates and rate expectations elsewhere, most notably in Europe, where the ECB nonetheless needs to hike 100 basis points if it really wants to impress markets this Thursday. In the background, the US dollar is a bit sideways, while sterling has launched a relief rally on the arrival of Liz Truss as new UK Prime Minister. FX Trading focus: Market challenges BoJ again. ECB has to hike 100 to impress. A new runaway move lower in the JPY is the focus today even as yields at the longer end of the yield curve remain relatively anchored after a modest correction late last week. The focus may simply be on the widening divergence between policy rates ratcheting higher everywhere else while the Bank of Japan maintains that it will not budge any time soon. Some thoughts on EURJPY below, while USDJPY has cleared 141.00 and has not traded this high since a brief episode of a few months in 1998 during the Asian financial crisis. The Bank of Japan YCC policy is under duress and the pressure will ratchet that much higher if the US 10-year yield. Already with this latest move we should expect some stiffening verbal intervention that inevitably won’t last long. EURUSD teased back towards parity for whatever reason this morning, perhaps in hopes that the European energy cap plan will prove a boost, perhaps on hopes that the ECB is set to surprise to the upside at Thursday’s ECB meeting. It’s a long shot according to the odds, which strongly favour a 75 basis point move over a 50 basis point move, but if the ECB wants to play some real catchup and help stabilize the euro currency, it should hike rates 100 basis points and indicate a willingness to do so again. It is not helpful for Europe that the Kremlin has now explicitly made it clear that the failure to restart deliveries of gas through the Nord Stream I pipeline are a weaponization of gas flows aimed at EU sanctions. Everyone is becoming a natural gas expert now, with the gist that the EU can survive the winter with no Russian gas as long as demand drops around 20% and there are no further disruptions of other non-Russian supplies. The situation would have been far better had not French nuclear woes and a massive drought impacted hydroelectric production not created the perfect storm this winter for power prices. Chart: EURJPYEURJPY is an interesting to watch in addition to USDJPY as the pair has traded back to new highs despite Europe’s dire energy situation (to a significant degree, Japan is also beset with high energy costs, given its reliance on important LNG and oil). But the ECB policy rate anticipated through the December ECB meeting is some 70 basis points higher than it was in mid-August, while the Bank of Japan carries on its yield-curve control policy, helping to pump this cross back higher. Next key test is over the ECB meeting on Thursday and then whether US data this week and through Monday’s August CPI data point excites a further rise in US treasury yields.   Freshly minted UK Prime Minister Truss used her first day in office to launch a £130 billion package to cap energy bills at their current level in order to avoid the cost-of-living crisis for many had bills risen as scheduled to nearly double the current levels next month. The cost estimate is spread over 18 months and represents some 5% of UK GDP now, (likely considerably less next year, given the runaway nominal growth in the UK economy at present). Sterling has seen a solid relief rally on hopes for Trussonomics, which will include tax cuts and a possible threat to Bank of England independence. Longer term efforts to increase investment in new energy sources could pay long term dividends, but the UK and its currency can ill-afford aggravating already yawning deficits in the near term, and further Bank of England rate hikes will aggravate risks to growth/real estate while piling onto the stark mathematics of future deficits and sovereign cost-of-debt-service calculations. Still, it is a riveting effort to watch as Truss and her strong Conservative majority can show more dynamism and force in policy making than we are going to get in the near to medium term from the US or Europe. Australia’s RBA hiked 50 basis points as almost universally expected and claimed in its statement that it is on “no preset course”. The front-end of the Australian yield curve hardly budged on the news after some intraday volatility as the market expects higher odds that the RBA downshifts at tone of the coming two meetings to a 25-bp hike. RBA Governor Lowe is set to speak on Thursday, an event that could provide a stronger bias than the neutrality we saw last night. Note fairly strong new highs in USDCNH today above the cycle high and within reach of the psychological 7.00 level now (7.20 area nearly touched in 2019 and 2020 the cycle focus and the CNY hasn’t shown much independence of movement in the crosses.) Table: FX Board of G10 and CNH trend evolution and strength.Sterling trying to make a comeback in momentum terms, but is only about halfway to notable resistance in the key EURGBP and GBPUSD pairs. Elsewhere, not the recent CNH downside momentum and Aussie following suit to a degree, while the JPY takes the crown for most negatively trending currency in our universe. Table: FX Board Trend Scoreboard for individual pairs.The AUDNZD upside attempt is faltering – is it set to flip negative? Elsewhere, note GBPJPY and SEKJPY trying to set the direction back higher, a sign of the broadening downside pressure on the JPY. Upcoming Economic Calendar Highlights 1345 – US Aug. S&P Global Services PMI 1400 – US Aug. ISM Services 2105 – New Zealand RBNZ’s Silk to speak 0130 – Australia Q2 GDP     Source: https://www.home.saxo/content/articles/forex/fx-update-market-challenges-boj-ecb-set-to-hike-100-bps-06092022  
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange, The Number Of Securities Fell In Price

InstaForex Analysis InstaForex Analysis 07.09.2022 08:33
At the close on the New York Stock Exchange, the Dow Jones fell 0.55% to a one-month low, the S&P 500 fell 0.41%, and the NASDAQ Composite fell 0.74%. The leading performer among the components of the Dow Jones index today was Visa Inc Class A, which gained 0.88 points (0.45%) to close at 198.64. Boeing Co rose 0.57 points (0.38%) to close at 152.39. Johnson & Johnson rose 0.44 points or 0.27% to close at 163.18. The losers were 3M Company, which shed 5.05 points or 4.15% to end the session at 116.60. Intel Corporation was up 2.75% or 0.86 points to close at 30.36, while Goldman Sachs Group Inc was down 1.51% or 4.99 points to close at 326. .49. Leading gainers among the S&P 500 index components in today's trading were Rollins Inc, which rose 6.05% to 35.78, Enphase Energy Inc, which gained 4.93% to close at 292.82, and SolarEdge Technologies Inc, which rose 4.22% to end the session at 278.38. The biggest losers were Moderna Inc, which shed 6.13% to close at 130.08. Shares of Church & Dwight Company Inc shed 4.69% to end the session at 80.23. Leading gainers among the components of the NASDAQ Composite in today's trading were Shuttle Pharmaceuticals Inc, which rose 91.28% to hit 28.50, IVERIC bio Inc, which gained 66.31% to close at 15.70, and also shares of HyreCar Inc, which rose 58.12% to end the session at 1.27. Shares of Creatd Inc were the biggest losers, losing 48.11% to close at 0.19. Shares of Addentax Group Corp lost 39.52% and ended the session at 5.80. Quotes of Rigetti Computing Inc decreased in price by 37.09% to 2.29. On the New York Stock Exchange, the number of securities that fell in price (2121) exceeded the number of those that closed in positive territory (1009), while quotes of 117 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,468 companies fell in price, 1,299 rose, and 194 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 3.54% to 26.91, hitting a new monthly high. Gold futures for December delivery lost 0.62%, or 10.75, to hit $1.00 a troy ounce. In other commodities, WTI October futures fell 0.14%, or 0.12, to $86.75 a barrel. Brent oil futures for November delivery fell 3.19%, or 3.05, to $92.69 a barrel. Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.24% to 0.99, while USD/JPY edged up 1.58% to hit 142.80. Futures on the USD index rose 0.66% to 110.24. Relevance up to 05:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/291695
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

The EUR/USD Pair Is In Still Downward Trend? Further Decline In The Euro

InstaForex Analysis InstaForex Analysis 07.09.2022 08:49
As a result of yesterday, the euro fell by 26 points. After slight fluctuations, investors were inclined to think that the growth of the US ISM Services PMI in August from 56.7 to 56.9 against the fall of German manufacturing orders by 1.1% in July is more conducive to strengthening the dollar even amid its slight overheating. The price is approaching the first target level of 0.9850 on the daily chart, after which the 0.9752 target will open. The signal line of the Marlin Oscillator has overcome the support line of early convergence, now it can form when the price reaches the level of 0.9752. But it may not form at all due to the brewing of powerful social discontent in Europe. Since the beginning of September, local rallies have begun to take place in European capitals against the increase in utility tariffs. A 70,000-strong anti-government rally was held in Prague on September 3, less massive in Amsterdam. Alternative for Germany has scheduled the largest rally in Berlin on October 8 with the main demand for the launch of Nord Stream 2. In response, German Defense Minister C. Lambrecht announced the introduction of military patrols from October 1st, probably with the imposition of anti-COVID bans. British Prime Minister Truss yesterday proposed a £130bn freeze on public utilities and £40bn on small businesses. The nearest historical support for the euro in case of a negative development of the situation is at the level of 0.9607 - this is the low of September 2002. The price settled below the MACD indicator line on the four-hour chart, the Marlin Oscillator is developing in the downward trend area. We are waiting for a further decline in the euro.       Relevance up to 04:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321001
The Euro May Attempt To Resume An Upward Movement

The USD Will Continue To Strengthen And The EUR/USD Pair Is Still Decline?

InstaForex Analysis InstaForex Analysis 07.09.2022 09:00
EUR/USD is still pushing lower and is testing levels not seen in the last 20 years. Does that mean the USD will continue to strengthen? We do not think that is the case. We are seeing weakness in the USD in form of a possible ending diagonal. A break above minor resistance at 0.9986 will be the first good indication that EUR/USD has bottomed out and a new impulsive rally is unfolding. A break above solid resistance at 1.0090 will confirm that EUR/USD has bottomed out, calling for a rally towards 1.0790 and ultimately much higher.     Relevance up to 06:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291709
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Let's Have An Eye On Canadian Dollar (CAD) And Polish Zloty (PLN)! It's The Day Of Rate Hiking Across The Globe!

ING Economics ING Economics 07.09.2022 09:09
We expect the Bank of Canada to hike by 75bp and to maintain a hawkish tone for future tightening. In Poland, we see risks of a dovish surprise, as the NBP may only hike by 25bp and sound less hawkish after recent data. Elsewhere, good ISM data has reinforced Fed pricing and the dollar's momentum, while the risk of JPY intervention is rising significantly The Bank of Canada may raise rates by 75bp   We have recently published our monthly update of FX views and forecasts: “FX Talking: This is going to hurt” USD: Eyes on Fed speakers, and on the BoC's rate hike The dollar has remained bid since the start of the week, and was bolstered yesterday by a surprise rise (albeit marginal) in the US ISM service index. Our economist thinks yesterday’s figures endorse our 3%+ 3Q GDP forecast for the US. A solid growth story is indeed a key source of momentum for the dollar rally as markets feel increasingly confident with their pricing for more aggressive Fed tightening. A 75bp hike in September is almost fully priced in now (69bp are embedded into the swap market), but barring any big data disappointment, the room for any dovish re-pricing appears limited at this stage. The sharp underperformance of the Chinese yuan and Japanese yen has continued to fuel dollar strength too. This morning, a miss in Chinese trade data sent USD/CNY to test 9.9800, erasing efforts by the People's Bank of China to support the yuan. It remains to be seen how much Chinese authorities see 7.00 as a pivotal level: it’s possible that policymakers may want to keep USD/CNY below such a level, at least until the party congress is over. Further east, Japanese authorities are again trying verbal intervention as a way of supporting the yen, but markets appear quite happy with testing their tolerance. 145.00 might be the line in the sand: expect any FX intervention around the US or European open when markets are most liquid. Today, the Fed’s Beige Book will be scanned in search of regional economic trends, but the main focus will be on a few Fed speakers. Quite interestingly, we’ll hear from both sides of the spectrum: the quite dovish Lael Brainard and the hawk Loretta Mester. Both are voting members in 2022. Thomas Barkin is also due to speak today, while Chair Jerome Powell will deliver remarks tomorrow. For now, we see little reason to call for any reversion in the strong dollar pattern. The domestic story was fortified by yesterday’s data and there are no major data releases today, so ultimately the Fed pricing should not be too heavily affected even in the event of some dovish Fedspeak. DXY should remain around its highs. Elsewhere in North America, the Bank of Canada will announce monetary policy today. In our meeting preview, we highlight how the recent jitters to Canada’s growth story suggest another 100bp move is unlikely, but a 75bp rate hike (to 3.25%) is our base case considering that the employment picture remains rather strong and the BoC has remained firm in its intent to fight elevated inflation. 75bp appears to be the call from both economic consensus and the market, and we therefore think forward-looking language will drive most of CAD's reaction today. With “data-dependent, meeting-by-meeting” having become the leitmotiv of developed central bank policy communication lately, there’s surely a risk the BoC will refrain from offering any strong hint on future policy, but a reiteration that more substantial tightening is needed could be enough to see markets push their expectations for peak rates from the current 3.8% to 4%+. CAD is currently going through a rough period, and any support from the BoC today may fade rapidly. However, aggressive tightening by the central bank does raise the upside potential for the loonie beyond the short-term, when a stabilisation in sentiment and solid fundamentals may allow it to recover. We target a return to sub-1.25 levels in USD/CAD early next year. Francesco Pesole EUR: A bit of calm before the ECB? As of this morning, markets are pricing in 66bp of tightening by the European Central Bank at tomorrow’s announcement, but - as discussed in our economics team’s preview - our base case remains a 50bp hike. This obviously widens the scope for a further weakening of the euro later this week, but for today, some wait-and-see approach ahead of the big risk event could cap EUR/USD volatility, and the pair may enter tomorrow’s meeting from the 0.9900 level. A thread to keep an eye on this week aside from central bank activity is the ongoing discussion among EU members about solving the energy price problem. This may have particular relevance for the ECB as an EU-wide cap on energy bills would likely put a lid on inflation expectations, as well as offer a lifeline to the battered economic outlook. German Chancellor Olaf Scholz has continued to push for an agreement on price caps and stated yesterday that this could prove to be a relatively quick mechanism to implement. Francesco Pesole GBP: Expect more of the "Truss effect" The change of Prime Minister in the UK is most surely being felt by asset prices. Yesterday, gilts took a big blow, and the pound was the only G10 currency holding on to gains against a rising dollar as Liz Truss took office and reports about draft proposals piled up. So far, what we know is that Truss is planning a £130bn bill to freeze energy bills, to be paired with measures worth £40bn to support businesses. While Truss has also pledged to cut taxes in an effort to support the economy, it’s been reported that the new cost-of-living support packages would likely be funded by a bigger deficit instead of loans/grants to energy companies. All this matters for sterling not only because it has an impact on the growth outlook and Bank of England policy, but because it may have rather wide implications for the UK’s debt position. This is a factor that FX may start to be increasingly sensitive to especially in those instances (like the UK) where there is an increasingly negative current account balance. On the foreign policy side, it’s been reported that Truss is planning to ease the confrontation with the EU over post-Brexit agreements, and refrain from activating Article 16 of the Northern Ireland Protocol which allows the UK to unilaterally suspend parts of the agreement. This is undoubtedly a GBP positive, even though markets had not given a great deal of importance to the previous government’s standoff with the EU on Brexit. Today, expect more GBP volatility as details about Truss's plans continue to emerge. However, the net impact of support measures may not be too straightforward as they may easily get mixed in with the implications for BoE policy. EUR/GBP may edge back above 0.8600 today but seems to lack strong bearish momentum, while cable could re-test 1.1600. Francesco Pesole CEE: NBP slows hiking pace Today in the region we have the second estimate of GDP in Romania, which should show the details of the surprisingly strong economic growth in the second quarter. Also, we will see the release of industrial production in Hungary and Czech National Bank FX intervention data for July. We previously estimated that the CNB spent almost EUR11bn in July, almost half of all costs since mid-May. However, central bank activity since then has been almost zero by our estimates. Later today, we will see the highlight of the week in Central and Eastern Europe, the National Bank of Poland's decision. Our Warsaw team expects a 25bp rate hike to 6.75%, but a 50bp hike may also be on the table. The key though will be governor Adam Glapinski's press conference on Thursday which, given the latest economic data, should be dovish in any case. Markets are shifting rather to the hawkish side after the latest inflation number. So we think the market is expecting a clear response from the NBP to the surprisingly high inflation data and it will be very difficult for the central bank to meet hawkish expectations. Moreover, the NBP has surprised with a smaller step twice out of the last three meetings and in all three cases, it resulted in lower market rates. We think market conditions will lead to the same situation this time again. The Polish zloty is thus vulnerable both from the global environment due to the gas story this week and the domestic environment due to the dovish NBP. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Credit squeezing into central banks – what next?

The Euro In The Last Few Months Clearly Reflect What Is Happening In The Euro/Dollar Pair

InstaForex Analysis InstaForex Analysis 07.09.2022 09:11
EUR/USD 5M The EUR/USD pair fell again on Tuesday. However, this hardly surprises anyone. Despite the fact that in recent weeks the pair has been moving close to a flat or "swing", it still tends to fall and is close to its 20-year lows. And when the pair is trading near multi-year lows, then it cannot help but cling to them at least a bit. So it turns out that there is no pronounced downward trend (in the short term) now, but the pair is still updating its lows. Then the second breakthrough of the level of 0.9900 took place. It was not possible to consolidate below this level for a long time, however, we still have no doubt that the decline will continue. Only the European Central Bank, which will announce the results of its meeting this Thursday, can break this trend. An increase in the rate may for some time increase the demand for the euro. And yesterday, among the important macroeconomic data, we can only take note of the ISM index in the US, which reflected business activity in the service sector. The index rose again, although the similar S&P index continues to fall... There were few trading signals on Tuesday, but traders could earn very well. The first sell signal turned out to be strong - the price bounced off the critical line, after which it went down at least 100 points and overcame the level of 0.9900 along the way. However, after that, it nevertheless returned to the area above this level, and at this moment it was necessary to close short positions. Profits amounted to at least 50 points. The signal to buy should not have been worked out, since it was formed rather late. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For most of 2022, they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group decreased by 8,500, and the number of shorts decreased by 5,000. Accordingly, the net position decreased by about 3,500 contracts. This is not much, but this is again an increase in the bearish mood among the major players. After several weeks of weak growth, the decline in this indicator resumed. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 47,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. The euro has not been able to show even a tangible correction over the past six months or a year, not to mention something more. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 7. Energy crisis in the European Union. Is everything so bad? Overview of the GBP/USD pair. September 7. Liz Truss is the new British prime minister. What does this mean for the pound? Forecast and trading signals for GBP/USD on September 7. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair continues to be inside the 0.9900-1.0072 channel on the hourly timeframe, although it has already broken through its lower border twice. Formally, we have a "swing", but now this swing is already descending. We have no doubt that the euro will continue to fall, because the market does not react even to the very high probability of an ECB rate hike of 0.75% on Thursday. We highlight the following levels for trading on Wednesday - 0.9900, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9996) and Kijun-sen (0 .9973). There is still no level below 0.9900, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union will publish a report on GDP for the third quarter. From our point of view, this is an important report, but its potential value may not differ from the value of the second quarter and from the forecast value. In this case, the market will not react to it. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group   Relevance up to 02:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320989
The Upside Of The EUR/USD Pair Remains Limited

The EUR/USD Currency Pair Is Showing Its Resilience By Not Dropping Significantly

InstaForex Analysis InstaForex Analysis 07.09.2022 09:20
Technical outlook: EURUSD dropped through the 0.9863 lows during the New York session on Tuesday before finding support. The currency pair is showing its resilience by not dropping significantly below the 0.9900 handle. It is seen to be trading close to 0.9895 at this point in writing and is expected to produce a counter-trend rally exceeding the 1.0085 initial resistance in the near term. EURUSD has produced a religious downtrend since January 2021 after printing highs at 1.2350. The bears have managed to remain in control dragging prices below 0.9870. Importantly, each low is quite shallow from the previous one, which is a potential reversal indicator towards 1.0365 sharply. EURUSD has further produced a strong bullish divergence on the daily RSI as prices collapsed to fresh swing lows lately, as highlighted on the daily chart here. This is a potential trend reversal indicator from near levels around 0.9850-60 and towards the 1.0365 and 1.0800 resistances going forward. We are looking higher from here. Trading plan: Potential rally towards 1.0365 and 1.0800 against 0.9800     Relevance up to 07:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291717
The Price Of EUR/USD Pair Will Develop Sideways Movement

The Euro To The US Dollar: The Down Trend Will Continue

InstaForex Analysis InstaForex Analysis 07.09.2022 09:39
Technical Market Outlook: The EUR/USD pair has made a new swing low located at the level of 0.9865, but bulls are trying to bounce again as the Pin Bar candlestick was made at the end of the move on the H4 time frame chart. The momentum is negative and weak on the H4 time frame chart, so the bears are clearly in control again and they might push the price towards the lower levels. In order to terminate the down trend or at least make a correction, the bulls must break above the technical resistance located at the level of 1.0090 and 1.0122. In the longer term, the key technical resistance level is located at 1.0389. The whipsaw price action below the parity level continues. Weekly Pivot Points: WR3 - 0.9992 WR2 - 0.99454 WR1 - 0.99156 Weekly Pivot - 0.98988 WS1 - 0.98690 WS2 - 0.98522 WS3 - 0.98056 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue below the parity level. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the longer term, the key technical resistance level is located at 1.0389.       Relevance up to 08:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291729
Eurozone's GDP Is Forecasted To Hit 2.1% For 2022, Inflation Expectations May Be Corrected

Eurozone's GDP Is Forecasted To Hit 2.1% For 2022, Inflation Expectations May Be Corrected

Jing Ren Jing Ren 06.09.2022 15:01
We can expect quite a bit of volatility on Thursday, when the ECB will make its rate decision. Surveyed economists are almost evenly split on whether there will be a 50bps or a 75bps hike. The market has priced in around 68bps, implying a favoritism towards the tighter policy. However, it's still possible to get a bounce in the currency, since the move isn't fully priced in. Though part of the expectations could be influenced by an unusually large amount of debt issuance by Eurozone countries this week. Italy, Austria and Germany are all issuing bonds before the ECB meeting, which could put upward pressure on yields, and obscure how the market is really feeling about what will happen with the rate decision. Putting the pieces together There are good fundamental arguments for both positions, as might be expected. On the one hand, EU inflation is likely to keep rising after Russia cut off supply of gas through Nord Stream 1. Tighter policy might be justified in an attempt to prevent higher energy costs from spreading through the economy. On the other hand, that very possibility of higher energy costs could justify keeping rates on hold. Higher energy costs would contribute to a recession, thus lower prices, and less need for the ECB to take as aggressive attitude. However, the reality is inflation isn't on the "supply side" (that is, because of increased funds) as much as it is due to factors outside the ECB's control. The ECB doesn't control the price of energy, nor the flow of gas from Russia, nor the shutdown of factories because of higher energy and transportation costs. The ECB has one tool, and just because it might not be the most appropriate for the situation, it doesn't mean they won't use it, anyway. The market reaction There is wide expectation that the Fed will also hike rates by 75bps. Meaning that if the ECB goes for only 50bps, the gap between the Euro and the dollar will once again widen. That would put downward pressure on the EURUSD. On the other hand, a 75bps hike would simply maintain the gap, which could help the EURUSD, but would have less buoyancy. The other factor to keep in mind is that ECB staff projections are announced at the same time. This could have a bigger impact on the currency, since forward expectations of rate hikes weigh more on institutional investors. Lately, there have been several ECB members emphasizing that they will push for tighter policy. Some have gone so far as to suggest that rates could go above the "neutral rate" in order to tamp down inflation. That would imply at least another 175bps of hikes over the next four meetings. The future is what matters Those aggressive stances might be tempered if the staff forecasts cut the outlook for the shared economy's growth for this year and next. The last projections showed that the bank expected 2.1% growth for this year, and is likely to be revised downward. Inflation was also projected to be at 2% for next year, something that is likely to be revised upwards.
PLN Soars to Record Highs Ahead of NBP Decision

Does The Euro To The US Dollar Decline Again Today?

InstaForex Analysis InstaForex Analysis 07.09.2022 10:25
Trend analysis (Fig. 1). The euro-dollar pair may move downward from the level of 0.9904 (close of yesterday's daily candle) to the target of 0.9864, the lower fractal (white dotted line). When testing this level, the price may move upward with the target of 0.9937, the 14.6% retracement level (white dotted line). After reaching this level, a continued upward movement is possible with the target of 0.9982, the 23.6% retracement level (white dotted line). Upon reaching this level, the price may move down. Fig. 1 (daily chart). Comprehensive analysis: General conclusion: Today the price may move downward from the level of 0.9904 (close of yesterday's daily candle) to the target of 0.9864, the lower fractal (white dotted line). When testing this level, the price may move upward with the target of 0.9937, the 14.6% retracement level (white dotted line). After reaching this level, a continued upward movement is possible with the target of 0.9982, the 23.6% retracement level (white dotted line). Upon reaching this level, the price may move down. Alternative scenario: from the level of 0.9904 (close of yesterday's daily candle), the price may move downward with the target of 0.9803, the 208.0% Fibonacci retracement level (blue dotted line). After testing this level, an upward movement is possible to test the lower fractal 0.9864 (white dotted line).           Relevance up to 08:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/321011
Inflation Rising Again In The Eurozone, Positive GDP In The Great Britain

Euro Is Awaiting Thursday! Is There Any Chance For ECB (European Central Bank) To Change Its Stance?

ING Economics ING Economics 07.09.2022 11:14
Thursday’s ECB rate decision is apparently on a knife edge. This should also tell you that there is a very broad range of possible hike outcomes by year end, do not dismiss anything. The upshot is higher front-end rates volatility, especially with the explosion in swap spreads and collateral shortage ECB doves out in force, but enough to force a 50bp hike? Despite the ECB’s pre-meeting quiet period being in full force, it seems doves have mounted a last minute, and coordinated, push to a more gradual approach to policy normalisation. Fabio Centeno, Yannis Stournaras, and to a lesser extent Martins Kazaks and Edward Scicluna, seem to push back against the barrage of hawkish comments that have coloured ECB communication in the past few weeks. The disagreement on the face of it does not seem insurmountable, but they highlight that whatever policy decision is taken tomorrow, a 75bp hike is not yet set in stone. A 75bp hike is not yet set in stone The main takeaway from our four doves (for the purpose of these comments at least) was that they did highlight the policy trade-off between fighting inflation and safeguarding growth, something the hawks, and other central banks such as the Fed, have been at pains to dismiss. Ultimately ECB forward guidance, for it hasn’t abandoned the idea of steering market expectations despite what it says, should be taken with a pinch of salt by markets. In addition to a wide range of opinions today, the range of possible economic outcomes into this winter should in turn convince markets that it is very difficult to predict ECB policy even a few meetings into the future. 2Y implied EUR rates volatility has overtaken 10Y Source: Refinitiv, ING Don't get wedded to any specific ECB outcome, and expect more volatility The implications are twofold. First, even out-of-consensus calls like our own for only another 75bp of hikes this year, are far from impossible if the economy takes a turn for the worse between this meeting and the next. On the other hand, more hikes than the roughly 150bp priced for this year, let alone next, are definitely possible, especially if governments expand support measures for energy consumers. The second implication is that rates volatility at the short-end is definitely warranted, more so than for longer maturities which should rely mostly on much slower-moving estimates for long-term equilibrium interest rates. Rates volatility at the short-end is definitely warranted, more so than for longer maturities On the topic of front-end volatility, the explosion in swap spreads is gaining more attention in rates markets. The 0% rate cap on government deposits at the ECB (or at national central banks) means some national treasuries have suspended their repo operations as they will soon get a much worse rate on their deposits than the interest rates they are paying on repos. Similarly, we expect national and sub-national treasuries to prefer parking their excess cash into short-term securities rather than earning nothing by placing it at their domestic central banks. Both effects are worsening the collateral shortage, and widening swap spreads. The collateral shortage is widening the gap between bond yields and swap rates Source: Refinitiv, ING US 10yr continues to journey towards 3.5% The rise in US market rates and the pressure it places on wider core rates continues. The US economy is clearly refusing to lie down, with yesterday's ISM number a reminder of this. The structure of the curve has moved from being a bullish one for bonds to quite a neutral one (positioning of the 5yr to the curve). But it has not quite switched to outright bearish positioning. This continues to imply that a rise in the 10yr back towards the high hit at 3.5% in June remains on the cards, but not necessarily a big rise beyond that (so far). The US economy is clearly refusing to lie down The 2yr is already there (at 3.5%), and the market has 3.75% to 4% as an end game for the Federal Reserve. The risk going forward is that the market decides to edge this even higher. The fact that risk assets are lower will not worry the Fed here. The key thing is whether the system can take it. Based off where banks can print commercial paper as a spread over the risk free rate, the system remains in good shape (as that spread remains exceptionally low). The rising rates environment has more to go, and that also forms the background music as the ECB faces its own key decision on Thursday. Today's events and market view Bank of England governor Bailey and other members will appear in front of the treasury select committee. It is hard to imagine the questions and answers not being heavily interpreted by markets with an eye on next week’s policy meeting. Germany will add to long-end supply this week with a 15Y auction worth €1.5bn. This is the last scheduled euro sovereign bond sale of the week so we expect the long-end to trade better afterwards. Eurozone Q2 unemployment and GDP will feel dated and the economic focus will likely be on US July trade in the afternoon instead. There is a long list of Fed speakers today including Thomas Barkin, Loretta Mester, and Lael Brainard. Read this article on THINK
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

The Energy Crisis In Europe Puts Pressure On The Markets

InstaForex Analysis InstaForex Analysis 07.09.2022 11:36
Details of the economic calendar for September 6 The further aggravation of the energy crisis in Europe puts pressure on the markets, which does not allow the euro to move into the stage of a full correction. German Chancellor Olaf Scholz said yesterday that the energy crisis will last for several more years. This statement caused the euro to accelerate its decline. Meanwhile, UK's construction Purchasing Managers' Index (PMI) was published, which rose to 49.2 instead of the expected decrease from 48.9 to 48.0. However, the market ignored the statistics. During the American trading session, the US services Purchasing Managers' Index (PMI) was published, which fell more than expected from 47.3 to 43.7. Again, there was no reaction to the statistical data. Analysis of trading charts from September 6 The EURUSD currency pair is stubbornly trying to prolong the downward trend, as indicated by a number of attempts by traders to stay below the 0.9900 level in the daily period. There is no clear signal of prolongation for the Tuesday period. The GBPUSD currency pair, after a short pullback, again rushed down towards the local low of 2020 (1.1410). This move indicates the continuing downside mood among traders in the market. It is worth noting that the pound sterling has a positive correlation with the euro. Thus, we observe identical cycles in the market. Economic calendar for September 7 Today, the publication of the third estimate of Eurozone GDP is expected, where there will be no reaction in the market if the data coincides with the previous two estimates. If there is a discrepancy in the statistical data, then a speculative activity may appear depending on the indicators. Time targeting: EU GDP – 09:00 UTC Trading plan for EUR/USD on September 7 Market participants still expect the price to hold below 0.9900 in the daily period. This move will indicate the possibility of further weakening of the euro towards 0.9500. It is worth considering that a variable level of 0.9850 stands in the way of the downward cycle. Thus, a confirming signal about the downward move will be received after its breakdown. The upward scenario considers the absence of holding the price beyond the control values. In this case, another rebound is possible, with the price returning above the parity level. Trading plan for GBP/USD on September 7 In order for a signal to prolong the long-term downward trend to appear, the quote needs to be firmly held below 1.1400 in the daily period. In the opposite case, it is impossible to exclude the scenario of a price rebound from the 2020 low area with a subsequent amplitude of 1.1450/1.1600. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.   Relevance up to 10:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321035
China's Deflationary Descent: Implications for Global Markets

The EUR/USD Pair Is Trading Like In The Early 2000s. The ECB Meeting May Push The GBP/USD Pair?

InstaForex Analysis InstaForex Analysis 07.09.2022 12:17
Dollar continues to rise, thanks to higher yields of Treasuries ahead of the Fed's monetary policy meeting this September. Clearly, markets are driven by expectations of further rate hikes by world central banks, with the Fed having the full leadership. Most likely, it would implement a 0.75% increase, along with the ECB despite the start of recession in Europe. At the time of writing, EUR/USD is trading near the historical low of the early 2000s. It is logical to buy as soon as the price decreases; however, there are a lot of reasons that are holding back traders from such actions. One example is the situation of the eurozone economy, which is very deplorable amid the conflict in Ukraine. Crisis is already brewing, and there is a chance that full-scale unrest will start soon. But euro could rise a bit if the ECB raises rates by 0.75%. Then, it will move sideways ahead of the Fed meeting, nervously reacting to the decisions of the ECB and incoming economic data, as well as outlook for monetary policy. After the Fed meeting, euro will fall, which strengthens the idea to sell the pair rather than buy. Forecasts for today: EUR/USD The pair is consolidating slightly above 0.9900. There is a possibility of a rebound to 0.9975, but trading will most likely be conducted sideways. GBP/USD The pair is trading above 1.1450. Incoming economic statistics, as well as the ECB meeting, may push it to 1.1590.       Relevance up to 09:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321029
The EUR/USD Price May Fall Under 1.0660

Euro/ US Dollar: Medium- And Short-term Trend Remain Bearish

InstaForex Analysis InstaForex Analysis 07.09.2022 13:34
  Blue line- short-term resistance EURUSD is trading around 0.99. So far price action today has been neutral with low volatility and no clear direction. Medium- and short-term trend remain bearish with no sign of a reversal. Price continues making lower lows and lower highs in the 4 hour chart. Price is below the resistance trend line and as long as this is the case, short-term trend will remain bearish. This resistance is now at 0.9970. A break above this level will give bulls hopes for a bigger bounce. Until then, price remains vulnerable to a move towards 0.9850-0.98. Alexandros Yfantis Relevance up to 13:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291792
PLN Soars to Record Highs Ahead of NBP Decision

How The EUR/USD Pair Look In Short- And Long- Positions?

InstaForex Analysis InstaForex Analysis 07.09.2022 14:30
Analysis of transactions in the EUR / USD pair Euro tested 0.9949 at the time when the MACD was far from zero, which limited the downside potential of the pair. Sometime later, it tested the level again, but this time the market signal that was to buy, which only brought losses. No other signals appeared for the rest of the day. EUR/USD fell on Tuesday amid a decline in the volume of industrial orders in Germany and weak business activity in the construction sector. Then, strong data on US PMI increased pressure on the pair, pushing it to new yearly lows. A number of reports are scheduled to be published today, such as the volume of GDP in eurozone and Germany, as well as level of employment in the Euro area. Strong numbers will raise the rate of euro ahead of the ECB meeting on Thursday. US trade surplus is due out in the afternoon, but much more important will be speeches from FOMC members Loretta Mester and Lael Brainard. Their statements are likely to support dollar, which will return the pair into a bear market. For long positions: Buy euro when the quote reaches 0.9926 (green line on the chart) and take profit at the price of 0.9981. A rally will occur if statistics in the Euro area exceed expectations. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9893, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9926 and 0.9981. For short positions: Sell euro when the quote reaches 0.9893 (red line on the chart) and take profit at the price of 0.9835. Pressure will return if statistics in the Euro area come out lower than the forecasts, while data in the US exceed expectations. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 0.9926, but the MACD line should be in the overbought area, as only by that will the market reverse to 0.9893 and 0.9835. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.       Relevance up to 10:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321037
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

What Can We Expect From Euro (EUR) And ECB (European Central Bank)? Check Out This Detailed Comment By ING Economics

ING Economics ING Economics 07.09.2022 15:02
We expect the European Central Bank (ECB) to hike by 50bp at its September meeting. Markets are pricing in 66bp at the moment, and the consensus is leaning in favour of 75bp, so we see some downside risks for the euro. At the same time, short-term rates have not had much of an impact on EUR/USD lately, and the energy crisis should remain the key driver Four scenarios ahead of the September ECB meeting As discussed in our September ECB preview, policymakers in Frankfurt will likely have to choose between a 50bp or 75bp rate hike this week. We think that a 75bp move would be too hard to digest for the dovish front within the Governing Council, and our call is for a 50bp move. That said, we cannot fully exclude a 75bp hike aimed at frontloading tightening before a recession hits this winter. In our “Crib Sheet”, we analyse four potential scenarios on a scale from dovish to ultra-hawkish and what this can mean for EUR/USD and EUR rates, taking into account the size of the rate hike as well as the ECB’s stance on inflation, growth and quantitative easing/tightening (QE/QT). EUR and ECB crib sheet Source: ING Downside risks for EUR... The market’s pricing for the meeting is currently around 66bp, which by itself suggests some negative reaction by the EUR if our 50bp call proves correct. Much of the market reaction will also be driven by any hints about future policy. Since a reiteration of the meeting-by-meeting, data-dependent approach seems quite likely, markets will have to derive their rate path expectations from the updated staff projections on growth and inflation. In particular, the size and length of a winter recession will be key, and should it become the ECB’s baseline scenario, then some dovish re-pricing across the curve might occur and weigh on the euro. Comments about the euro weakness are likely to be a theme too and could have some impact on the EUR. However, verbal protest about a weak currency is now the norm among many central banks and has notably yielded very few results. Unless any reference to FX interventions is made, markets may not read too much into currency-related comments. ... but the ECB is a secondary driver now Regardless of the direction of the EUR reaction on Thursday, there’s a non-negligible chance that the FX impact will prove rather short-lived. This is because EUR/USD has been blatantly unreactive to ECB rate expectations lately, as the energy crisis has continued to drive the majority of the pair’s moves. In the chart below, we show how the two-year EUR-USD swap rate differential – a gauge of ECB-Fed monetary policy divergence expectations – has moved significantly in favour of the EUR recently, but EUR/USD has failed to follow it higher. EUR/USD hasn't followed the short-term rate differential higher Source: Refinitiv, ING   In our EUR/USD short-term fair value model, the short-term rate differential now has a smaller beta than relative equity performance, which is a gauge of diverging growth expectations and is more directly impacted by the energy crisis. This also means that the short-term undervaluation in EUR/USD has shrunk to around 3-4% from the 5-6% peak seen two weeks ago.   We expect the energy story to return firmly to the driving seat for EUR/USD after the post-ECB reaction. Barring a very hawkish surprise, this should keep EUR/USD below parity and prevent it to reconnect with the more supportive rate differential. The 0.98-0.99 area could prove to be a near-term anchor for EUR/USD, but a further worsening of the energy crisis and/or further dollar strengthening can trigger a drop to the 0.96-0.97 area. Read this article on THINK TagsEURUSD Energy crisis ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
It's Time To Meet iPhone 14! Apple Stock Price May Fluctuate Today!

It's Time To Meet iPhone 14! Apple Stock Price May Fluctuate Today!

Swissquote Bank Swissquote Bank 07.09.2022 15:43
The three major US indices fell on Tuesday, the US yields spiked, and the dollar extended rally, as Americans returned from their Labor Day break. Europe opened in the negative. The rising yields helped the US dollar extend rally, of course. The US dollar index is now above the 110 mark; the USDJPY spiked to 144, the EURUSD slipped below the 0.99 mark, the pound failed to hold the 1.15 support, and gold is now below the $1700 level, again. Bitcoin on the other hand accelerated the selloff, and is now below the $19K mark, as the bears are eyeing the June support of around $17500. The stronger dollar is a growing headache, and we want to believe that the USD rally cannot continue forever, but if history is any guide, the US dollar could strengthen way more than now. If we go back to 80’s, when Volcker was hiking the interest rates at great speed to tame inflation, the US dollar also got very VERY strong. And unfortunately, other central banks’ hawkishness doesn’t tame the dollar appetite. The Bank of Canada (BoC) is expected to hike ‘big’ for the 4th consecutive meeting today, and the European Central Bank (ECB) is expected to raise its rates by 75bp tomorrow. But the euro looks bad, and the Loonie doesn’t look any better. In equities, everyone in Europe talks about the upcoming Porsche IPO, while Apple fans are holding their breath to find out the new iPhone14! Watch the full episode to find out more! 0:00 Intro 0:22 Equities down, US yields & USD up 2:42 How far could the US dollar rally extend? 5:38 BoC, ECB to hike rates 6:28 US crude tests important support 7:05 Porsche will go public soon! 8:25 Apple reveals new iPhone today! Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #rally #BoC #ECB #rate #hike #USD #EUR #GBP #JPY #CAD #Gold #XAU #Bitcoin #energy #crisis #crude #oil #Porsche #IPO #Apple #iphone14 #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH  
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

What Can We Expect From The EUR/USD Pair Today?

InstaForex Analysis InstaForex Analysis 08.09.2022 08:35
Yesterday, the euro cheered up during the US session, although the matter is moving towards the European Central Bank meeting, and it will be held today. Also, the US trade balance in July showed an increase from -80.9 billion dollars to -70.7 billion. The consensus forecast shows an increase in the main rate by 0.50%, that is, up to 1.00%. And in this case, we are waiting for the euro to fall, as in the closest example yesterday, when the Bank of Canada raised the rate by 0.75% (from 2.50% to 3.25%), but the Canadian dollar strengthened by only 32 points, and then on the fall of the dollar index by 0.60%, and it has won back half of this movement this morning. Only with a rate hike of 0.75%, we expect to see some revival of the bulls in the single currency, but it will not be long. The first resistance to the euro is the MACD indicator line at 1.0070. Breaking this line may extend the correction to the target level of 1.0150. The main scenario we assume is going down - the price goes under 0.9950 and further decline to 0.9850 and further to 0.9752. The signal line of the Marlin Oscillator shows the intention to reverse downwards from the zero line for the second time. The price sharply went above the MACD line and the Marlin Oscillator moved into the growth area on the four-hour chart. This is a signal for a possible continuation of the received momentum, but on such a powerful factor as a change in the central bank rate, the movement may turn out to be false. Therefore, we can only wait for all incoming data, not only from the release of the ECB, but also from further comments from its key figures (Lagarde, 15:15 London time).       Relevance up to 04:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321110
The Markets Still Hope That The Fed May Consider Softer Decision

How Geopolitical Situation Impact On The EUR/USD Currency Pair?

InstaForex Analysis InstaForex Analysis 08.09.2022 08:39
On Wednesday, the EUR/USD currency pair continued to trade near its 20-year lows. In essence, it does not even make much sense to celebrate the next update of these very minimums or the absence of it. It is evident to everyone that, given the current conditions, only a miracle can help the European currency. The market does not buy euros even when there seem to be causes and reasons for this. We understand that in the first half of the year, the euro currency fell due to the following: (1) geopolitical conflict in Ukraine; (2) EU sanctions against Russia, which are hitting the EU economy too; (3) the strengthening of the "hawkish" attitude of the Fed; (4) a strong increase in the Fed rate. All these considerations were solid reasons to get rid of the euro and buy the dollar. But in the last few months, the geopolitical struggle in Ukraine has steadily evolved into a passive one. Neither the APU nor the Russian army have a major advantage. Both are pleased with local successes. If this fight continued for ten years, would the euro currency sink all this time? Unlikely The Fed has been raising rates and will continue to raise them. This is evident, but the ECB is finally starting to battle inflation, has started raising the rate, and is also doing it at the fastest possible speed. Therefore, why is the European currency not strengthening today, at least a little? It should be mentioned that technical analysis also has a big influence on the movement of the pair. After all, if traders detect a severe and long-term downturn, why would they buy a pair? Consequently, geopolitics and the foundation may be beginning to stabilize the European currency, but it cannot profit from this. The euro has every opportunity to update its 20-year lows multiple times. As soon as the two primary causes of the euro's depreciation in 2022 began to stabilize, many other reasons emerged that could lead to a further depreciation of the European currency. First, there is an energy shortage. The European Union is more dependent on foreign oil and gas supplies than the United States. They will be significantly less affected by the increase in energy prices. Additionally, they may earn. If the European Union abandons Russian hydrocarbons entirely (or if Moscow bans shipments), Europe will have to purchase oil and gas from somewhere else. Why not in the United States? Considering the issue from this vantage point, the American dollar emerges as the superior option. The dollar is the world's reserve currency, implying that traders choose to purchase dollars rather than the euro, pound, yuan, or lira at times of high risk and uncertainty. In addition, both the yuan and the lira have recently depreciated, reinforcing our thesis on the dollar's cosmopolitan standing and high demand. Third, the European economic downturn will be heavily influenced by the energy issue, which cannot be averted. No one can predict how much gas and oil prices will increase if the European Union can fully compensate for the loss of hydrocarbons from Russia or how much Europe's industrial production will decline. Once more, there is uncertainty. The market anticipates a significant decline, and in the United States, everything appears reasonably obvious. The economy is slowing down due to the Fed's rate hike and QT program. In the near future, the Fed will stop raising interest rates, causing the situation to improve. If in the United States we are discussing a recession that may finish by the end of next year (i.e., the terms are evident), then it is impossible to predict its depth and duration in the European Union. So it turns out that the geopolitical foundation has not changed, but traders can also consider a few additional aspects that have been introduced. And none of these characteristics are favorable to the EU currency. It has already fallen below parity with the dollar and cannot even adjust. Therefore, we believe that the drop will continue for a while, potentially for several months. The euro requires robust support, not a single ECB rate hike in the current environment. As of September 8, the average volatility of the euro/dollar currency pair over the previous five trading days was 108 points, considered "high." Thus, we anticipate the pair to trade between 0.9800 and 1.0016 today. The Heiken Ashi indicator's upward reversal will suggest a new round of upward movement. Nearest support levels: S1 – 0.9888 S2 – 0.9827 S3 – 0.9766 Resistance levels closest: R1 – 0.9949 R2 – 1.0010 R3 – 1.0071 Recommendations for Traders: The EUR/USD pair continues to trade in a flat or "swing" pattern, despite the recent appearance of a bearish tendency. Thus, it is now possible to trade on Heiken Ashi indicator reversals until the price exits the 0.9900-1.0072 range. Formally, she continues to hold this position. Explanations for the figures: Channels of linear regression – aid in determining the present trend. If both are moving in the same direction, the trend is now strong. Moving average line (settings 20.0, smoothed) – determines the current short-term trend and trading direction. Murray levels serve as movement and correction targets. Volatility levels (red lines) represent the expected price channel the pair will trade within over the next trading day, based on the current volatility indicators. The CCI indicator — its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal is imminent. Relevance up to 05:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321112
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

What Is Happening In The Euro To The US Dollar Pair

InstaForex Analysis InstaForex Analysis 08.09.2022 08:51
EUR/USD 5M The EUR/USD pair was once again trading near its 20-year lows on Wednesday. It seems that now everything depends on the US, the dollar and American traders, because even the trades for the umpteenth time in the US session are much more active than in the European one. It was in the second half of the day that the euro, unexpectedly for many, turned up and began an impressive growth. It was not triggered by any fundamental or macroeconomic event, because the only important event is the EU GDP report in the third estimate for the second quarter, which was published this morning. Nevertheless, such growth was to be expected, as we talked about in our last articles. The fact is that the euro is already very low and should correct at least a little from time to time. Such corrections are quite difficult to predict, since they are usually not associated with any events. Plus, today the European Central Bank will announce the results of the meeting, among which there will be a 0.5-0.75% rate hike with almost 100% probability, which, you see, is a hawkish decision. Thus, the euro really had reasons to grow yesterday. But everything was very unfortunate in regards to the trading signals due to the flat at the European trading session. For the umpteenth time, we are faced with a situation where, in general, the movement is not bad, but due to the small number of levels or due to strange movements, it is not possible to earn money. Four trading signals were formed near the level of 0.9900, three of which turned out to be false. Traders could work out only the first two and get a small loss on the first trade, since the price there did not move even 15 points in the right direction. Stop Loss was triggered at breakeven on the second long position. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For most of 2022, they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group decreased by 8,500, and the number of shorts decreased by 5,000. Accordingly, the net position decreased by about 3,500 contracts. This is not much, but this is again an increase in the bearish mood among the major players. After several weeks of weak growth, the decline in this indicator resumed. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 47,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. The euro has not been able to show even a tangible correction over the past six months or a year, not to mention something more. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 8. The market is beginning to shift its focus away from geopolitics and fundamentals to other factors. Overview of the GBP/USD pair. September 8. Andrew Bailey pulled down the pound again. Forecast and trading signals for GBP/USD on September 8. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair continues to trade on the hourly timeframe in a mode very similar to the "swing". The price has not dropped much in the last few days, so the lower border of the horizontal channel has simply shifted to the level of 0.9877. And now we have the 0.9877-1.0072 channel. The channel is almost 200 points wide, but the price is stubbornly trading inside it. We highlight the following levels for trading on Thursday - 0.9877, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9996) and Kijun-sen (0 .9947). There is still no level below 0.9877, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The ECB will announce the results of its meeting on September 8, and then for the first time in a long time, ECB President Christine Lagarde will make a speech. Federal Reserve Chairman Jerome Powell is speaking in the US today. Looks like we're in for a very interesting day... Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 06:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321116
The Upside Of The EUR/USD Pair Remains Limited

How The EUR/USD Pair Look From A Technical Point Of View

InstaForex Analysis InstaForex Analysis 08.09.2022 09:09
Technical Market Outlook: The EUR/USD pair had broken above the short-term trend line resistance and is consolidating around the parity level again ahead of the ECB interest rate decision today at 14:15). In order to terminate the down trend or at least make a correction, the bulls must break above the technical resistance located at the level of 1.0090 and 1.0122. In the longer term, the key technical resistance level is located at 1.0389. Nevertheless, in a case of a big surprise from the ECB, like a hike more than 1.25%, the EUR might surge even towards the last swing high located at the level of 1.0370, so please stay focused during the time of the announcement. Weekly Pivot Points: WR3 - 0.9992 WR2 - 0.99454 WR1 - 0.99156 Weekly Pivot - 0.98988 WS1 - 0.98690 WS2 - 0.98522 WS3 - 0.98056 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue below the parity level. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the longer term, the key technical resistance level is located at 1.0389.   Relevance up to 08:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291893
Poland's Inflation Expected to Reach Single Digits in August, but Disinflation to Slow Down

Australia’s Economy, ECB Decision In Focus, The UK Has Problem With A Dockers

Saxo Bank Saxo Bank 08.09.2022 09:27
Summary:  The combination of a nearly 6% drop in crude oil price, a retracement of the dollar to close to parity with the Euro and a 8bp fall in the 10-yar treasury yields have jointly put together an environment for the stock market to rally and snap a 7-day losing streak since the Jackson Hole. The Bank of Canada raise its policy rate by 75bps, as expected. August trade data from China was much weaker than expectation with both exports and import falling. Excluding inflation, real export growth was estimated to be negative and crude oil import growth in volume terms was negative in August. The news contributed to the fall in crude oil price yesterday. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  The U.S. equity markets bounced off from the trough of the post-Jackson Hole decline and snapped a 7-day losing streak to finish Wednesday decisively higher, S&P500 +1.8%, Nasdaq 100 +2.1%.  The move higher was largely driven by a confluence of macro factors: lower bond yields, and announcing new products at the company’s annual event.  lower US dollar, and lower crude oil price plus short covering and call option delta hedging. With a 5.7% decline in crude price, the energy space was the only sector in the S&P 500 that fell. Twitter (TWTR:xnys) surged 6.6% following a Delaware court rejected Elon Musk’s request to delay a trial into the reclination of his offer to acquire Twitter. Snap (SNAP:xnys) jumped 6.4% after the Verge magazine cited an internal memo from CEO Spiegel stating the company’s goals to grow its user base by 30% and bring up revenue by 20% by the end of 2022. Apple (AAPL:xnas) gained 1.4% after a new line of products at its annual event. Apple did not raise prices for its new iPhone 14 series.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) Nick Timiraos at the Wall Street Journal (who is believed to be the Fed’s mouthpiece to guide market expectations) suggested that Fed Chair Powell’s “public pledge to reduce inflation even if it increases unemployment appears to have put the central bank on a path to raise interests by 0.75 percentage point rather than 0.50 point this month”. Fed Vice Chair Brainard pledged to fight against inflation “for as long as it takes” but also mentioned risks that might potentially be caused by over-tightening. The money market curve is pricing in a 78% chance a 75bp hike at the September FOMC. Treasury yields however fell across the curve as crude oil price went sharpy lower, 2-year yields -7bps, 10-year yield -8bps. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong stocks notably underperformed their mainland counterparts second day in a row.  Hang Seng Index lost 0.8% and Hang Seng Tech Index dropped 1.3% while CSI300 was little changed. Heavyweight financial names HSBC (00005:xhkg) and AIA Group (01299:xhkg) tumbled about 2%.  The short video and live streaming names dragged on the China Internet space, Kuaishou (01024:xhkg) -3.7%, Bilibili (09626:xhkg) -4.2%.  U.S. House Representative Dusty Johnson (Republican, South Dakota) introduced the Block the Tok Act, a bill that would if enacted, prohibit Tik Tok from accessing U.S. citizen’s user data from within China and block Tik Tok’s apps on U.S. government devices.  Tencent (00700:xhkg) is increasing its stake in French video game developer Ubisoft (UBIP:xpar) but the latter’s founder retaining majority control.  Following President Xi Jinping stressing China’s determination to “mobilize resources nationwide to achieve breakthroughs in core technologies in key fields” in a high-level reform planning meeting on Tuesday, semiconductor leader SMIC (00981:xhkg) gained 1.2%. China developer Soho China (00410:xhkg) jumped 11% after Chairman Pan Shiyi and CEO Pan Zhangxin Marita resigned.  The Covid-19-related lockdowns, a weakening yuan, the disappointing August trade data from China, and the rise in U.S. interest rates continued to pressure the sentiment of the stock market.     USDJPY holding up despite softer yields USDJPY eased after hitting highs of 145, but still remained above 144 in early Asian hours on Thursday despite softer US yields overnight. The threat of intervention remains as Japan’s final Q2 GDP released this morning suggests markets may continue to test the Bank of Japan’s resolve to keep an accommodative policy. Q2 GDP was revised higher to 3.5% q/q annualized from 2.2% earlier. 10Y JGB yields are also at 2-month highs and in close sights of the 0.25% cap. Verbal intervention has had little effect, and real intervention will need a coordinated effort and will only increase the volatility as long as the US yields are on the rise. The only real scope of a yen recovery will be seen if US economic data starts to deteriorate or Bank of Japan tweaks policy. Crude oil prices (CLU2 & LCOV2) Oil prices steadied in the Asian morning after steep declines in the last few days amid demand concerns especially with China pushing further with its zero Covid policy. Chengdu extended a lockdown in most of its downturn areas, raising concerns the restrictions will hurt oil consumption. A stronger dollar, despite softer yields, also weighed on investor appetite. Supply issues made little impact, even as EIA lowered its annual oil production targets, with domestic production now expected to reach 12.6mb/d, and raised its demand outlook, with annual petroleum usage rising 2mb/d through next year. The likelihood of an Iran nuclear deal in the near term is also fading. What to consider? Fed speakers, and another possible WSJ leak? Federal Reserve Vice Chair Brainard noted rates will need to rise further and policy will need to be restrictive for some time. She needs to see several months of low inflation readings to be confident inflation is moving down to 2% but how long it takes to get back to target will depend on a combination of continued easing in supply constraints, slower demand growth, and lower markups, against the backdrop of anchored expectations. Mester (2022 voter) reaffirmed that she is not yet convinced about inflation peaking yet, and she also spoke on the August jobs report, where she said they are beginning to see some moderations but labour market conditions remain strong. Besides, WSJ's Nic Timiraos wrote: "The Federal Reserve appears to be on a path to raise interest rates by another 0.75 percentage point this month in the wake of Chairman Jerome Powell’s public pledge to reduce inflation even if it increases unemployment." While the Fed is not yet in a blackout period, with Chair Powell set to be on the wires later today, there is little chance this could be a leak like last time. Still, money market pricing of a 75bps rate hike at the September meeting has picked up from 68% on Tuesday to 81% now. China’s exports in August slowed In U.S. dollar terms, China’s exports in August come in much weaker at +7.1% YoY (Bloomberg consensus: +13% YoY; July: +18.0% YoY).  Once adjusting the data with export price inflation, the real growth of exports may have turned negative in August YoY.  Export growth decelerated across destinations, except Russia (having risen to 26.4% YoY in August from 21.4% in July).   The growth of export to the U.S. was particularly weak, having turned to minus 4.2% YoY in August from a growth of 10.9% in July.  Imports growth was also slower than expected, coming in at +0.3% YoY (Bloomberg consensus +1.1% YoY; July: +2.3%). The weakness in import growth tends to indicate weak domestic demand.  The growth of imports from the U.S. slowed to -7.5% YoY in August from -4.3% YoY in July. Import volume growth for crude oil was negative at -9.4% YoY in August, little changed from -9.5% in July but import volume of coal bounced to a growth of 5.0% YoY in August from -22.1% in July. Import volume of iron ore declined to -1.3% YoY in August from a growth 3.1% in July.  The import volume of copper, however, increased to +26.4% YoY in August from 9.3% in July.     Australia’s economy grew stronger than expected YoY vindicating more rapid hikes are coming Australia’s A$2.2 trillion economy grew at 0.9% q/q in the second quarter (beating Bloomberg estimates), while growing 3.6% y/y also beating the 3.4% expected. Australia’s economic firepower came from record high commodity exports, with exports now accounting for 1% of GPD YoY. The data also showed the economy strengthened by a boost in retail sales with department store sales at record pace. Services and economic earnings were also able to offset the pull back in savings rates, which fell for the third straight quarter to 8.7%, as households are having to dive into their bank accounts to pay record high energy prices. AUDUSD vulnerable of another pull back The USD against the Aussie popped to its highest level since June 2020, after a Wall Street Journal article suggested Fed Chair Powell is committed to reducing inflation with a 0.75% hike likely in September. What also supports this is that stronger than expected US economic data continues to come through (with the most recent data showing the US services sector is healthy), validating the Fed has room to rise rates. Basically, the market is thinking the Fed has room to be more aggressive, while the RBA’s hikes are more subdued. Bottom line, you can’t fight the Fed. The technical indicators suggest the AUDUSD could also retest its lows, while the USDAUD could touch its April 2020 high. Australia assures its Asian customers it will remain a reliable LNG supplier; but it won’t guarantee anything Australia’s Minister for resources has again been called on to ‘pull the trigger’ and limit gas exports given the projections show Australia will have an energy shortage next year. The Minster said although it has the matter under control, it cannot guarantee it won’t be limiting exports. Japan imported A$17 billion of the fossil fuel from Australia last year. As such Japan says it’s watching the situation closely. Bank of Canada raised rates As expected, Bank of Canada hiked rates by 75bps bringing the rate to 3.25% into restrictive territory, given the central bank’s estimate of neutral rate is 2-3%. The tone remained hawkish, but lacked clear guidance as it reiterated that further hikes will be necessary to bring inflation to target, implying the BoC is not done yet and will move even further into restrictive territory. While growth is slowing and housing prices are down 18% since February, but short-term inflation expectations remain high, signalling a risk that elevated inflation becomes entrenched. NIO earnings Chinese EV maker NIO (NIO:xnys/09866:xhkg) reported better-than-expected revenue of RMB 9.57 billion due to pent-up demand. The company delivered 25,059 vehicles in Q2, a 14.4% growth from last year. Gross margins, however, decreased to 16.7% from 18.1% in Q1 this year and 20.3% in Q2 last year. Management’s guidance for Q3 delivery was 31,000 to 33,000 vehicles, below analyst expectations.  ECB rate hike in focus; what could it mean for EURUSD? The European Central Bank meeting will be in focus after plenty of chatter around front-loading rate hikes in the last few days. Most members have come out in support of a 75 basis point rate hike for the September, and the market pricing suggests 125 basis points between September and October meetings (so one 75bps and one 50bps). Only Philip Lane seemed to strike a different tone, saying that he would prefer step-by-step hikes to make sure the financial markets have time to absorb the tightening in a measured manner. August inflation for the Euro area, reported last week, also suggested further price pressures with a 9.1% YoY print from 8.9% YoY previously. Market pricing suggests a 67bps rate hike today, and a cumulative hike of 129bps by October or 157bps by year-end. With a 75bps rate hike not fully priced in for September, such a move along with commitment to do more front-loading could be positive for EURUSD in a knee-jerk. Still, with energy crisis in focus and EU emergency meeting scheduled for tomorrow, it may remain hard for EURUSD to stay above parity. Only a 100bps rate hike will really count as a hawkish surprise. If ECB decides to go for 50bps, we could see EURUSD test the cycle lows. New dockers strike in the United Kingdom (UK) The UK has been facing recurring transport disruptions over the past few years. This is related to Brexit, Covid and now higher cost of living. A dockers strike at Felixstowe port (the country’s first container port) ended a few days ago. But a new one is looming at the port of Liverpool. The dockers trade union is calling for a strike from 19 September to 3 October (at least) after negotiations to raise salary failed. This matters a lot. The port of Liverpool is a key hub for transatlantic sea transport. If inflation continues to rise (which is likely), expect much more strikes to come and not only in the transport industry. Social tensions will probably increase sharply in the coming months.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – September 8, 2022 | Saxo Group (home.saxo)
PLN Soars to Record Highs Ahead of NBP Decision

The EUR/USD Pair: Decrease In Investor Appetite For Risk

InstaForex Analysis InstaForex Analysis 08.09.2022 09:56
A large number of excellent market entry signals were formed yesterday, which made it possible to make good money. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 0.9915 level in my morning forecast and advised making decisions on entering the market from it. Pretty good German and eurozone data helped bulls bring the pair back to the 0.9915 area in the morning, but a false breakout at this level and the bulls' inability to gain a foothold above this range all led to a sell signal and a large sell-off of the pair with a fall of 35 points. Closer to the second half of the day, the bulls came to the defense of the large support at 0.9880, where a false breakout gave a buy signal, which pushed the pair to rise by more than 40 points up. Another attempt by the bears to protect 0.9915 was successful. Along with a sell signal, the pair went down about 15 points, but then the pressure eased. By the middle of the US session one could observe an attempt by the bears to protect the resistance of 0.9949, but the matter did not come to a major sell-off. When to go long on EUR/USD: Today, the entire focus will be on the European Central Bank meeting and on how aggressively the central bank will continue to raise interest rates. Almost no one doubts that the ECB will raise its key rate by 0.75% today, which will be the sharpest tightening of policy in recent times. This will certainly lead to the strengthening of the euro. But much more important are statements about how fast the central bank plans to tighten policy in the future. If we hear a hawkish tone in the words of ECB President Christine Lagarde, the demand for the euro can only increase. A sharp drop in the pair is not ruled out if the ECB raises rates by only 0.5%, fearing a difficult winter period and the economy sliding into recession. The optimal scenario for buying then would be a false breakout in the new support area of 0.9982, formed as a result of today's Asian session. This will provide an excellent entry point in view of the continuation of the upward correction with the nearest target at 1.0029. As I noted above, only hawkish statements by European politicians, as well as a breakthrough and test from the top to the bottom of this range, will hit the bears' stops, which creates another signal to open long positions with the possibility of a correction to the 1.0076 area. A more distant target will be resistance at 1.0127, where I recommend taking profits. In case EUR/USD falls and bulls are not active at 0.9982, the pair will be under pressure again. The optimal decision to open long positions in this case would be a false breakout near the low of 0.9949, where the moving averages are, playing on the bulls' side. I advise you to buy EUR/USD immediately on a rebound only from 0.9915, or even lower - in the area of 0.9880, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears no longer control the market, especially after yesterday's sharp buying by the big players. The bears' main task is to protect the nearest resistance at 1.0029, as having lost control of the parity, the pressure on the euro may ease. A false breakout at this level after the announcement of the ECB's decision on the interest rate will lead to an excellent signal to sell in order to resume the bear market and lower the euro to the 0.9982 area. A breakdown and consolidation below this range with a reverse test from the bottom up creates another sell signal with the removal of bulls' stop orders and a larger fall of the pair to the 0.9949 area, where the moving averages are passing. I recommend taking profit there. A more distant target will be a low of 0.9915. In case EUR/USD jumps during the European session, as well as the absence of bears at 1.0029, the situation will change dramatically. In this scenario, I recommend postponing short positions to 1.0076, but only if a false breakout is formed there. You can sell EUR/USD immediately for a rebound from the high of 1.0127, or even higher - from 1.0155, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT report) for August 30 logged a decline in both short and long positions. If a week ago there was a surge in activity, now there has been a similar decline. This indicates a decrease in investor appetite for risk after the release of the eurozone inflation data, which once again rose to a high in the last ten years. The problem is exacerbated by the energy crisis, as the flow of gas through the Nord Stream is practically suspended - this is another increase in energy prices in the winter and upward inflation surges, which will force the European Central Bank to further raise interest rates and tighten belts. This week we are also waiting for the central bank's decision on interest rates, which may aggravate the euro's position against the US dollar. Even though the rate hike will be considered by investors as a signal for the growth of profitability, at the same time there will be a slowdown in economic growth, which is more important. So don't expect a serious euro recovery in the medium term. The COT report indicated that long non-commercial positions decreased by 8,567 to 202,258, while short non-commercial positions decreased by 5,000 to 249,934. At the end of the week, the total non-commercial net position remained negative and decreased to the level of -47,676 against -44,109, which indicates continued pressure on the euro and further fall of the trading instrument. The weekly closing price slightly recovered and amounted to 1.0033 against 0.9978. Indicator signals: Moving averages Trading is conducted above the 30 and 50-day moving averages, which indicates an upward correction in the pair. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of a decline, the lower border of the indicator around 0.9915 will act as support. In case of growth, the upper border of the indicator in the area of 1.0055 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.     Relevance up to 08:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321130
The Upside Of The EUR/USD Pair Remains Limited

The Euro-Dollar Pair: Today The Price May Move Downward

InstaForex Analysis InstaForex Analysis 08.09.2022 10:07
Trend analysis (Fig. 1). The euro-dollar pair may move downward from the level of 1.0006 (close of yesterday's daily candle) to test 0.9977, the 23.6% retracement level (red dotted line). Upon reaching this level, an upward movement is possible to 1.0056, the 38.2% retracement level (white dotted line). From this level, the price may continue to move up. Fig. 1 (daily chart). Comprehensive analysis: General conclusion: Today, the price may move downward from the level of 1.0006 (close of yesterday's daily candle) to test 0.9977, the 23.6% retracement level (red dotted line). Upon reaching this level, an upward movement is possible to 1.0056, the 38.2% retracement level (white dotted line). From this level, the price may continue to move up. Alternative scenario: from the level of 1.0006 (close of yesterday's daily candle), the price may move downward to test 0.9952, the 38.2% retracement level (red dotted line). Upon reaching this level, an upward movement is possible to 1.0056, the 38.2% retracement level (white dotted line).   Relevance up to 07:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321120
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The GBP/USD Pair Hit The 2020 Low. The Bullish Dynamics Will Extend Today For The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 08.09.2022 10:20
Euro came close to parity, but it had nothing to do with the GDP data of the Euro area for the second quarter, which was better than the previous one. According to reports, the growth rate slowed to only 4.1%, indicating that the region is still away from recession than previously thought. EUR/USD did not increase immediately after the release of the GDP data, but after a couple of hours, when confidence grew that the European Central Bank will raise interest rates by 75 basis points today. Most likely, this bullish dynamics will extend today as ahead is the board meeting of the Federal Open Market Committee, as well as a speech from ECB Chairman Christine Lagarde. If Lagarde hints at a further tightening of monetary policy, euro will continue to grow. If not, everything will return to normal, and euro will fall again below parity. GDP (Europe): All the attempts to keep EUR/USD below 0.9900 failed, so euro slipped back into parity. Most likely, speculation will take place in the market, which is why further growth in the pair is possible. But the overheating of long positions in the short term may ultimately lead to the exit of many players in the market. GBP/USD hit the 2020 low, but market participants failed to make it stay below. This is why the quote rolled back by 130 pips. In this situation, much will depend on speculators as they have a strong positive correlation between trading instruments.       Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321126
ECB press conference brings more fog than clarity

The EUR/USD Pair: A Break Below 0.9945 Level Would Be A New Bearish Signal

InstaForex Analysis InstaForex Analysis 08.09.2022 10:46
EURUSD bounced higher yesterday from 0.99 towards 1. In the 4 hour chart price is challenging the Kumo (cloud) resistance. So far price shows rejection signs and vulnerability to the downside. Resistance by the cloud is at 1. In order for bulls to hope for bigger bounce, we should first see a break above the 4 hour cloud resistance. The tenkan-sen (red line indicator) and the kijun-sen (yellow line indicator) provide short-term support at 0.9945. A break below this level would be a new bearish signal and will increase chances of seeing a move below 0.99 towards 0.9850-0.98.     Relevance up to 10:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/291955
JPY: Assessing the FX Intervention Zone and Market Conditions

The Euro Can Locally Receive Support In The Market From Buyers, The Pound Is Oversold

InstaForex Analysis InstaForex Analysis 08.09.2022 11:32
Details of the economic calendar for September 7 The European statistical agency Eurostat report on the third final estimate of GDP in the second quarter showed an increase of 4.1% in annual terms and 0.8%. The actual data came out better than the preliminary estimate, but this did not help the euro at the time of publication. Analysis of trading charts from September 7 The EURUSD currency pair tried to overcome the control value of 0.9900 for three days in a row, but the market participants failed to stay below it in the daily period. This resulted in a price rebound, which led to a reverse move towards the parity level. The GBPUSD currency pair did not just update the 2020 low (1.1410), the quote for a while turned out to be at the levels of 1985 . This historical event was instantly won back by speculators in the form of a technical pullback. As a result, the rate of the pound sterling returned above 1.1500. Economic calendar for September 8 The main event of Thursday, and the whole week, will be the meeting of the European Central Bank (ECB). Without any doubt, the market is waiting for the regulator to raise the interest rate from 0.50% to 1.25%. This event has already been taken into account in the market but will still attract the proper attention of speculators, because a change in the rate by 75 basis points at once is a historical event. Thus, the euro can locally receive support in the market from buyers. After that, all attention will be focused on the subsequent press conference, where specifics are expected from the head of the ECB, Christine Lagarde. The ECB's comments will indicate the subsequent price move in the market. Time targeting: Results of the ECB meeting – 12:15 UTC ECB press conference – 12:45 UTC ECB President Christine Lagarde speech – 14:15 UTC Trading plan for EUR/USD on September 8 Despite the possible overheating of long positions, in short-term time periods, speculators can still send the euro up due to the results of the ECB meeting. In this case, local price movement above 1.0050 is not excluded. In the work, it is worth considering that speculative hype is not the basis for a stable price movement. In the event of a minimal change in the mood of speculators, mass fixation of long positions is possible, which will lead to a reverse price move. Trading plan for GBP/USD on September 8 In this situation, there is still a signal that the pound is oversold, which, with rational technical analysis, could lead to the formation of a full-size correction. Everything would be exactly like this if there were no information and news flow, as well as other factors of pressure on the quote. Today there will be a lot of envy from the behavior of speculators in the euro market since, in this case, the European currency will be considered the leading one. Thus, synchronous price fluctuations will occur through a positive correlation between trading instruments. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.   Relevance up to 10:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321156
PLN Soars to Record Highs Ahead of NBP Decision

EUR/USD: What Currency Pair Look Like In Short- And Long Position?

InstaForex Analysis InstaForex Analysis 08.09.2022 11:41
Analysis of transactions in the EUR / USD pair Euro tested 0.9893 at the time when the MACD was far from zero, which limited the downside potential of the pair. Sometime later, it tested the level again, but this time the market signal that was to buy, which led to a price increase of around 60 pips. No other signals appeared for the rest of the day. The Q2 GDP data of the Euro area was revised upwards, which led to a slight increase of EUR/USD on Wednesday morning. Although sellers attempted to push the quote to the yearly lows, no such thing happened. Today, markets are waiting for the decision of the ECB on interest rate, as well as the report on monetary policy and press conference at which Christine Lagarde will announce further plans to raise interest rates. Euro could strengthen and gain a foothold above parity, but only if the policy continues to be aggressive. In the afternoon, the US will release data on jobless claims, followed by a speech from Fed Chairman Jerome Powell. He might hint at further rate hikes, which would put pressure back on euro and prompt a stronger dollar. Data on the volume of consumer lending will not affect the market in any way, especially after such statistics. For long positions: Buy euro when the quote reaches 1.0010 (green line on the chart) and take profit at the price of 1.0085. Growth may occur if the European Central Bank raises rates by 0.75%. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9985, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0010 and 1.0085. For short positions: Sell euro when the quote reaches 0.9985 (red line on the chart) and take profit at the price of 0.9941. Pressure will return if traders are disappointed by the decision of the ECB. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0010, but the MACD line should be in the overbought area, as only by that will the market reverse to 0.9985 and 0.9941. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 09:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321142
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

How Will The Decisions Of The ECB And The Fed Affect The Main Currency Pairs?

InstaForex Analysis InstaForex Analysis 08.09.2022 12:49
Global equity markets rebounded after dollar and US Treasury yields pared losses on Wednesday. It seems that risk appetite recovered on the eve of the ECB meeting on monetary policy as many expect the central bank to raise the key interest rate by 0.75%. Investors also paid attention to published economic statistics, such as the Q2 GDP of the Euro area, which grew by 0.8% instead of 0.6%. Its previous data was also revised upwards to 0.5%. In annual terms, the indicator added up to 4.1%, but is significantly lower than the previous figure of 5.4%. Other data showed that industrial production in Germany returned to negative in July, as evidenced by industrial output figures. These data, as well as the decision of the ECB to consider emergency measures to curb electricity price surges, pushed the local stock market and euro up. However, dollar's fall was not really caused by them as it is more likely prompted by the warning made by Fed member Lael Brainard about the risk of too-high interest rates. If the Fed withstands pressure and continues to follow the current cycle of raising rates, a new wave of sell-offs will be seen stock markets, while demand for dollar will grow. Talking about the upcoming ECB meeting, it is likely that the central bank will increase rates by 0.75% to curb inflation. This will push EUR/USD up to 1.1000 and support other currencies including the British pound. But if Jerome Powell talks about continued aggressive actions by the Federal Reserve, the US stock market will collapse, while Treasury yields and dollar will grow. This will limit the rally of euro, preventing it to break through 1.1000. Forecasts for today: EUR/USD The pair is consolidating below 1.0010. It could rise to 1.0080 if the ECB raises the rate by 0.75% and makes it clear that they will continue to act aggressively in the future. USD/CAD The pair is consolidating above 1.3100. Continued growth in crude oil prices, as well as a tough policy of the Bank of Canada, may lead to a fall to 1.3015.     Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321136
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The Euro To The US Dollar Is Expected To Print One More High Intraday

InstaForex Analysis InstaForex Analysis 08.09.2022 13:07
Technical outlook: EURUSD rallied through the 1.0016 intraday highs intraday on Thursday before pulling back below the 1.0000 handle briefly. The currency pair might have carved a flat correction and is now pushing higher again towards 1.0075-80 in the near term. It is seen to be trading close to the 1.0015 mark after carving an intraday low at around 0.9975. Looking higher from here. EURUSD might be set up to unfold a larger-degree corrective rally towards the 1.0800-1.0900 area. The currency pair is looking poised to retrace its earlier downswing between 1.2350 and 0.9863 respectively. A minimum push is probable towards 1.0800, which is also the Fibonacci 0.382 retracement of the entire drop. EURUSD is expected to print one more high towards 1.0075 intraday before carving a lower-degree upswing. Prices are expected to retrace thereafter before turning higher towards 1.0400-1.0500 and higher in the coming weeks. The bullish divergence scenario on the daily chart has turned out strong with prices rallying from the 0.9963 lows. Trading plan: Potential rally towards 1.0800-1.0900 against 0.9800 Good luck!   Relevance up to 12:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a tra Read more: https://www.instaforex.eu/forex_analysis/291985
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

The Euro To The US Dollar And Its Further Direction

InstaForex Analysis InstaForex Analysis 08.09.2022 13:51
Technical analysis: EUR/USD has been trading upside this morning and it is aproaching the key resistance leveele at 1.0075. Watch for the reaction of this key pivot resistance to confirm further direction. In case of the rejection of key resistance at 1.0075, watch for the downside rotation towards 0.9975 and 0.9885 In case of the upside breakout of 1.0075, watch for the buying opportunities on the intraday dips with the upside objective at 1.0128     Relevance up to 13:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291991
Forex: Naturally ECB Decision Is The Key Event Today, How Could 50bp Hike Affect EUR/USD?

Forex: Naturally ECB Decision Is The Key Event Today, How Could 50bp Hike Affect EUR/USD?

ING Economics ING Economics 08.09.2022 10:01
The highlight of today's FX session will be the European Central Bank meeting. We are looking for a sub-consensus 50bp hike which in theory may see EUR/USD edge lower after a modest recovery overnight. We will also hear a speech from Fed Chair Jerome Powell at 1510 CET. As usual, we expect the dollar to remain supported on any intra-day dips Over recent weeks and months, we had felt that sterling could hold its own against the weakened euro – but clearly it has failed to do so   USD: Powell to stay hawkish The dollar has entered another consolidative phase - albeit very close to the highs of the year. Following Fed Chair Powell's hawkish Jackson Hole speech a couple of weeks ago, the pricing of the Fed cycle has remained remarkably steady. The cycle is priced to peak around 3.90% next spring and soften to 3.60% by the end of the year. We suspect that year-end 2023 pricing of a cut still could be priced out as the Fed continues to emphasise that policy needs to be taken into restrictive territory and to be kept there for a while. A fresh dose of Fed hawkishness should come in a speech by Fed's Powell to the Cato institute at 1510 CET today. With the Fed/dollar side of the FX equation pretty steady, there is an increasing focus on how trading partners will react. Overnight, the Reserve Bank of Australia's (RBA) Governor Philip Lowe said that it would probably be shifting to a slower pace of hikes - comments that weighed on the Australian dollar. We comment on today's main event, the ECB meeting, below, but there is also much focus on USD/JPY this week. This has surged over 3% and remains in the vanguard of the strong dollar/energy crisis story. Japanese policymakers have increased their rhetoric in support of the yen - e.g. calling the moves one-sided - but equally, comments from the finance minister that a weak yen has 'its merits and demerits' are not providing a consistent message here. In early European trade, USD/JPY has sold off on news of a meeting between the Bank of Japan, Finance Ministry and Financial Services Agency - potentially to discuss FX intervention. But the base case is probably that we do not see intervention until closer to 150 in USD/JPY. And the FX options market certainly does not see the imminent risk here. Still, USD/JPY implied volatility looks too cheap in our opinion. The ECB meeting will be key for European currencies and the DXY today. We are not looking for a significant reversal anytime soon and think corrections probably hold the 109.00/109.25 area Chris Turner   EUR: ECB to comment more directly on the euro? Please see our full ECB preview here. We have also outlined a scenario analysis in our ECB crib sheet. Our base case is that the ECB only hikes 50bp versus the 75bp consensus and the 67bp priced by money markets. In theory, that should be a euro negative and we have a base case of EUR/USD dropping back to 0.9900. In our experience, EUR/USD has always been a tough call on ECB day and the upside risks to the euro stem from a hawkish message from the ECB. Particular interest might be had in the 2024 CPI forecast which in June was predicted at 2.1%. Upside or downside revisions here could help determine whether the market is correct in pricing a 225bp ECB tightening cycle into 2023. Certainly, our macro team thinks the ECB will not deliver on such a cycle. It will also be interesting to see how President Christine Lagarde (press conference 1430 CET) handles any questions on the weak euro - where EUR/USD sub parity is contributing to the energy shock. Her hands will be tied as to what she can say - the G7/G20 agrees on market-determined exchange rates - but any comments along the lines of the ECB is 'watching FX closely' could trigger a brief counter-trend rally in EUR/USD. That said, EUR/USD is trading down here for solid macro reasons and we doubt any intra-day rallies last. We would assume that 1.0100 proves the extent of any EUR/USD short squeeze and would favour a move back to 0.9900. Chris Turner     GBP: How fiscal package is funded will drive sterling The highlight of today's sterling session will be the announcement of the new UK government's energy package and in particular how it is funded. The announcement comes around lunchtime. The greater amount of public funding, the greater the Gilt supply and the greater the pressure on sovereign risk and the pound. Our team discusses the challenges faced by this topic here. After a brief rally earlier this week, the pound is looking soft again. Our base case would assume that GBP/USD struggles to break 1.16 and EUR/GBP tests the June high at 0.8720. Basically, new PM Liz Truss is undertaking a highwire act and it will be a real challenge to refloat the UK economy without concerns growing about how the UK funds it. Chris Turner    CEE: Divergence emerges between floating FX in region In line with surveys, the National Bank of Poland hiked the key rate by 25bp to 6.75%. The MPC statement saw only cosmetic changes. The council hopes the slowing economy will translate into slower inflation and the forward guidance for rates remained unchanged. Today, we will see Governor Adam Glapinski's press conference which should show the full picture and hint at what else we can expect this year. With markets expecting a bit more from the central bank after surprisingly high inflation, rates are lower across the curve, which has led to the interest rate differential falling to its lowest level since March of this year. The Polish zloty strengthened slightly, likely supported by the fall in gas prices. The drop in rates over the past two days may be enough to cover the governor's dovish press conference, but we hardly see the outcome supporting the zloty today. Thus, as we mentioned yesterday, we see room for an upward move into the 4.74-4.76 EUR/PLN band. Meanwhile, in Hungary, the forint has reached its strongest levels since mid-August after rates jumped by 15-30bp across the curve, though on zero liquidity. So while the forint has followed the rate move, we see no reason for levels below 400 EUR/HUF for now. However, August inflation could come into play today. Peter Virovacz, our economist in Budapest, expects a jump from 13.7% to 16.2% year-on-year, above market expectations. Part of the jump is due to changes in the fuel price caps. Thus, a surprise in inflation could support rate hikes and support current forint levels. However, to keep levels below 400 in the long term, we would like to see some tangible progress in EU talks, which could come in the coming weeks.  Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Price May Fall Under 1.0660

European Central Bank (ECB) Hiked The Interest Rate. The Question Is What's Next...

ING Economics ING Economics 08.09.2022 15:23
The European Central Bank has decided on the largest rate hike since the start of the monetary union and has given the impression that it is fully determined to do more   The ECB did it. In a historic move and the single largest rate hike since the start of the monetary union, the ECB just announced it will hike all three policy interest rates by 75bp. At the same time, the ECB decided to suspend the two-tier system by setting the multiplier to zero. With today’s decision, it is clear that the ECB has given up on inflation targeting and forecasting and has joined the group of central banks focusing on bringing down actual inflation. It’s not so much a new strategy based on conviction but rather a strategy based on missing alternatives. We still can’t see how monetary policy can bring down inflation that is mainly driven by (external) supply-side factors. Even the impact of policy rate hikes on inflation expectations is anything but certain. At the same time, the size of today’s rate hike will not determine whether or not the eurozone economy slides into recession and will also not make the recession more or less severe. Any recession in the eurozone in the winter will be driven by energy prices and not by interest rates. Today’s decision shows that the doves and hawks are on the same page. We will have to wait for ECB President Christine Lagarde’s comments at the press conference but at face value, today’s decision shows that the ECB is willing to hike interest rates towards the upper rather than lower end of the range of neutral interest rates. In our view, this range for the refi rate is between 1% and 2%. It indeed looks as if the doves have left the ECB nest. While Christine Lagarde had not made any public remarks on monetary policy since the end of the summer, ECB Chief Economist Philip Lane went on record calling for a more gradual and measured approach to normalising rates. Today’s decision shows that Lane’s influence in ECB decisions has been significantly diminished. For us, today’s decision also means that we will have to strongly adjust our ECB call. Dovishness is no more, even if the ECB is still far more optimistic about growth (+0.9%) in 2023 than we are (-0.6%). The question remains whether the ECB would really be willing to continue hiking as aggressively as they are suggesting if the recession becomes reality. Hiking into a recession is one thing, hiking throughout a recession another. Let's stay tuned to see whether the ECB press conference, starting at 2.45pm CET will bring any additional insights. Read this article on THINK TagsMonetary policy Inflation Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ByBit talks Grayscale Bitcoin Trust. How Does GBTC work?

Do You Know How Low Was Bitcoin Price Yesterday? | ECB's Decision

Craig Erlam Craig Erlam 08.09.2022 16:15
A mixed session in Asia overnight after Wall Street rebounded on Wednesday, while Europe is poised to open a little higher as well. It’s been a frankly awful few weeks for stock markets so yesterday’s gains will come as a mild relief, albeit one I don’t think anyone is getting particularly excited about. Given the economic backdrop, this could be nothing more than a dead cat bounce. Of course, there may be more potential next week if the US delivers a favourable inflation report. With the BoC and RBA both signaling a desire to ease off the brake in the months ahead, the Fed could be next if inflation allows, at which point we could see investors become a little more optimistic as they assess the damage. Perhaps the anticipation of another encouraging inflation report is what’s already tempting investors back in. More bold action needed from the ECB Of course, not all central banks are at the dovish pivot stage yet, in fact, the ECB is only just getting started. Today’s rate hike is only the second of the cycle and will take the deposit rate above zero for the first time in a decade. There’s a long way to go to get inflation in check which makes a 75 basis point hike all the more reasonable. This is the problem with starting the process so late and learning nothing from the experience of other central banks this year, the ECB is forced to play catch up quickly and the economy could suffer the consequences. A recession looms for the euro area and the central bank is not going to make the process any easier. Lockdowns persist Asia appears to have missed out on the midweek rebound and China’s zero-Covid strategy may be to blame. The country announced an extension of the lockdown in Chengdu which exacerbated fears of an economic slowdown in China as it continues to push back against the yuan decline, support the property market and boost domestic demand. Clearly, the impact of its Covid stance stretches beyond its own borders and today it appears to be taking a toll on regional markets. Sell-off momentum fading? Bitcoin recovered a little on Wednesday after slipping to around $18,500 – its lowest level in almost three months – as broader markets pared recent moves. It’s lower again today though and appears to have quickly run into resistance around $19,500 where it had seen strong support in late August and early September. It’s not looking great for crypto, with bulls perhaps hoping sentiment in the broader markets can sustain some of yesterday’s lift. One thing worth noting is that momentum in the decline appears to be fading which could suggest we’re seeing some profit taking on approach to the June lows, which may support the price in the short-term. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
EUR/USD Pair Has Potential For The Downside Movement Today

It Is Said ECB, Like Fed And Bank Of England Put Battle With Inflation Before Escape From Recession

ING Economics ING Economics 08.09.2022 16:26
EUR/USD has stabilized today, after sliding 1.0% on Wednesday. In the European session, EUR/USD is trading at 1.0009, up 0.09%. All eyes on ECB What can we expect from the ECB at today’s meeting? A large rate increase is a given. The markets have priced in a supersize 0.75% hike, although the ECB could opt for a less dramatic rise. Earlier this week, eurozone government yields fell sharply today on reports that the ECB was considering a 0.60% move. The ECB has raised rates by 0.75% only once in its history, but the current economic landscape is such that there are strong arguments in support of such a massive move. Inflation in the eurozone remains red hot, with an August estimate of 9.1%. ECB members such as Isabel Schnabel have urged the central bank to come down hard on inflation, which is yet to show any signs of a peak. With the euro stumbling at 20-year lows, a 0.75% hike would likely give the currency a badly-needed boost. The main drawback of a 0.75% move is the weak state of the eurozone economy, which has been made worse by the Ukraine war. Russian cutoffs of natural gas to Europe have become a frequent occurrence, as Moscow as proven to be an unreliable energy supplier. Germany, so often the locomotive which has pulled the eurozone back on track, is also grappling with weak growth. Eurozone and German PMIs are pointing to contraction or stagnation in manufacturing and business activity. With a recession a very real possibility, a 0.75% would raise the likelihood of a recession. The Federal Reserve and Bank of England have made clear that taming inflation is more important than avoiding a recession, and the thinking of ECB policy makers is likely the same. If the ECB does deliver a 0.75% hike, we could see the euro respond with gains. EUR/USD Technical EUR/USD is testing resistance at 0.9984. The next resistance line is 1.0056 There is support at 0.9888 and 0.9816 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Will ECB deliver 75 basis point hike? - MarketPulseMarketPulse
The Upside Of The EUR/USD Pair Remains Limited

The EUR/USD Pair: Yesterday's Trading Volumes Were High And Today The Euro Began With Growth

InstaForex Analysis InstaForex Analysis 09.09.2022 08:34
At yesterday's meeting, the European Central Bank raised the rate by 0.75% - as expected by the optimistic part of economists. The moderate part assumed an increase of 0.50%. ECB President Christine Lagarde's subsequent speech made it clear that further growth would slow down. The next increase will be 0.50% followed by 0.25% until the target level of 2.00% is reached. Such a plan clearly shows that the ECB's policy will be softer than the Federal Reserve, which is more than obvious in the current political and economic realities. We will not be surprised that a further European crisis will force the ECB to carry out the next increase only for the form - by 0.25%. Note that Lagarde did not commit to raise the rate at the next meeting by 0.50%. The euro closed the day down 20 points. Today the euro began with growth. The price returned above the target level of 1.0020 and entered the struggle with the MACD line (1.0065). Consolidating above the level will allow the price to continue rising to the target level of 1.0150. The Marlin Oscillator has already moved into the growth zone and supports the price's bold intention. If the level of 1.0150 is overcome, then the euro will fall into a strong speculative game up to 1.0360, after which a strong collapse below 0.9850 may follow. Yesterday's trading volumes were the highest since August 2nd. On the four-hour chart, the price is in an upward trend for all indicators. We do not rule out that the market is now being bought out on the occasion of the death of the English Queen Elizabeth II in order to avoid a fall in values, but the markets seem to have calmed down and they can be released into further free development, that is, downward.     Relevance up to 04:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321230
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

What To Expect From Trading The EUR/USD Pair?

InstaForex Analysis InstaForex Analysis 09.09.2022 08:46
EUR/USD 5M     The EUR/USD pair continued to trade inside the 0.9877-1.0072 horizontal channel and not far from its 20-year lows. The flat or "swing" has been going on for several weeks now and is right around the 20 year lows. That is why we believe that the downward trend is not over and will resume. Yesterday, the key event of the day was the European Central Bank meeting. It became known that experts' forecasts coincided with reality, and the central bank raised the key rate by 0.75%. Moreover, ECB President Christine Lagarde said that the rate will continue to rise, and admitted that the rate of its growth may even increase. Thus, the ECB is heading for the fastest rate hike in the hope of catching up with the Federal Reserve. We would say that this is very good news for the euro. Lagarde made it clear that high inflation is not part of the ECB's plans, so monetary policy will be tightened until the end of 2022. However, as we can see, the euro fell immediately after these statements, and after a few hours it was already rising. We believe that in the current circumstances, we need to wait for the price to leave the horizontal channel, since without this trend we will not wait. In regards to trading signals, the situation was far from being great. Movements during the day were ragged, which is not surprising, given the fundamental background. The first signal was formed at the beginning of the European session after consolidating below the Senkou Span B. It turned out to be false, and the price could not go down even 15 points. The next signal was formed exactly at the time when the results of the ECB meeting were summed up. The price once again consolidated below the Senkou Span B and fell to the critical line. We believe that this signal could be worked out and it brought profit. This was followed by three buy signals at once - rebounds from the critical line - and each time the price went up at least 15 points. Therefore, Stop Loss should have been placed at breakeven for all transactions. COT report:     The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For most of 2022, they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group decreased by 8,500, and the number of shorts decreased by 5,000. Accordingly, the net position decreased by about 3,500 contracts. This is not much, but this is again an increase in the bearish mood among the major players. After several weeks of weak growth, the decline in this indicator resumed. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 47,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. The euro has not been able to show even a tangible correction over the past six months or a year, not to mention something more. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 9. The ECB raised the rate by 0.75%, the euro continues to remain in a coma. Overview of the GBP/USD pair. September 9. The British pound is floating around 37-year lows. Forecast and trading signals for GBP/USD on September 9. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H     The pair continues to trade on the hourly timeframe in a mode very similar to the "swing". The price continues to be inside the 0.9877-1.0072 horizontal channel, so it is not very convenient to trade now. It is best to wait for the trend to resume. We highlight the following levels for trading on Friday - 0.9877, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9996) and Kijun-sen (0 .9947). There is still no level below 0.9877, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. No important events planned in the European Union and the United States for today, but the market may continue to work out the results of the ECB meeting. Therefore, you can prepare for an active Friday. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 02:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321218
The EUR/USD Pair Maintains The Bullish Sentiment

Forex: EUR - Today's EU Energy Ministers Meeting Is Crucial For Euro

ING Economics ING Economics 09.09.2022 08:54
The ECB tried to come up with a bold move, while in the US the market is bracing for a 75bp Fed hike. The main focus today will be the EU energy ministers' meeting to discuss an EU-wide solution to gas price capping. This could be a key message not only for the gas market price but also for the euro and CEE region EU energy ministers meet today to discuss an EU-wide solution to gas price capping USD: Markets cementing 75bp hike view Any market reaction to Fed Chair Jerome Powell’s comments yesterday got caught in the mix with ECB headlines, but – as noted by James Knightley here – there was nothing suggesting a shift from the current hawkish stance. Markets are cementing their view that the Fed will hike by 75bp (71bp is already priced in), also thanks to a larger-than-expected decline in weekly jobless claims yesterday. This should continue to offer a supportive undercurrent to the dollar, and DXY should remain around recent highs.  Today, the focus will be on some more Fed speakers: Charles Evans (generally a dovish voice), Christopher Waller (a hawk) and Esther George. After yesterday’s comments by Powell, we doubt we’ll see much market impact from today’s speakers. The US data calendar is rather light. Elsewhere in North America, Canada’s jobs figures for August will be released today, and the key question is whether we’ll see a positive headline read after two months of employment losses. Some robust numbers may help CAD marginally by pushing markets to price in 75bp worth of tightening by year-end, which is currently our call. However, external factors continue to be in the driving seat for the loonie, and a sustained decline below 1.3000 in USD/CAD may be a bit premature given risk sentiment instability. Francesco Pesole EUR: Hawkish ECB provides little support EUR/USD price action after a hawkish ECB session yesterday proved very underwhelming. Short-dated yields moved in the euro’s favour, but to no avail for the currency. In addition, when asked about the weak euro, President Christine Lagarde had little to say beyond the ECB being attentive. As we have been discussing recently, it seems growth differentials and the international investment environment are dominating the FX environment right now – neither of which are supporting the euro. For today there will be much focus on the meeting of EU energy ministers. On the agenda to be discussed are price caps for Russian oil and gas, a levy on electricity suppliers, mandatory scaling back of electricity consumption, and liquidity support for utility companies. This meeting may prove bearish for the euro for a number of reasons. For example, reaching an agreement on gas price caps, gas sharing and electricity levies look to be difficult and may be delayed. Mandatory electricity reduction could spark what the Belgium PM calls de-industrialisation and social unrest. There is also the risk that if Russian oil and gas caps are approved, Russia could immediately suspend the remaining oil and gas shipments coming into the EU. With the Fed remaining hawkish, expect EUR/USD to stay offered in a broad 0.9900-1.0100 range. Chris Turner GBP: Sterling remains fragile The UK Gilt market found little to sink its teeth into yesterday regarding the energy support package. Details were scarce in terms of the size of the package – probably around £150bn – and how it is to be funded. At least some of that funding looks set to go through the Gilt market – meaning that the 10-year Gilt-Bund spread can widen out to the 200bp area. That’s a sterling negative. Cable risks sinking back to the 1.1410 low. Given the challenges in continental Europe, EUR/GBP may trade close, but not break resistance at 0.8720. Chris Turner CEE: Negative drivers recede into the background Friday's calendar for the region is completely empty, but the market will still absorb the echoes of the ECB and National Bank of Poland (NBP) and the surprisingly low inflation in Hungary. In addition, today's EU energy ministers' meeting could bring new news about gas prices. A dovish NBP Governor's press conference and the Hungarian inflation number knocked rates lower again while EUR/USD is lower. So, all in all, everything points to weaker FX in the region, while the result is the strongest levels since mid-August. Our belief is that this is due to another drop in gas prices, which has become the main driver of the region these days. Purely based on this relationship, we could see further appreciation, especially for the Polish zloty towards 4.680 and the Czech koruna towards 24.450 per euro. In addition, today's EU meeting could bring a further drop in gas prices and additional support for the CEE. However, nothing changes the previous arguments for weaker FX and the narrow influence of gas prices should not last forever. Thus, in the short term, the region may benefit from this relationship, but in the long term, we believe it should trade higher. Frantisek Taborsky Read this article on THINK TagsSterling FX Daily Energy market Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Price Of EUR/USD Pair Will Develop Sideways Movement

The Euro To The US Dollar: The Down Trend Will Continue - 09.09.2022

InstaForex Analysis InstaForex Analysis 09.09.2022 09:24
Technical Market Outlook: The European Central Bank raised its key interest rates by an unprecedented 75 basis points on Thursday and promised further hikes, prioritising the fight against inflation even as the bloc is likely heading towards a winter recession and gas rationing. In the result, the EUR/USD pair had broken above the short-term trend line resistance and is rallying higher towards the technical resistance located at 1.0090 after the ECB interest rate hike to 1.25%. In order to terminate the down trend or at least make a correction, the bulls must break above the technical resistance located at the level of 1.0090 and 1.0122. In the longer term, the key technical resistance level is located at 1.0389.     Weekly Pivot Points: WR3 - 0.9992 WR2 - 0.99454 WR1 - 0.99156 Weekly Pivot - 0.98988 WS1 - 0.98690 WS2 - 0.98522 WS3 - 0.98056 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue below the parity level. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the longer term, the key technical resistance level is located at 1.0389.     Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292114
The EUR/USD Price May Fall Under 1.0660

Euro: We Can Expect More Hikes From ECB (European Central Bank) This Year

ING Economics ING Economics 09.09.2022 10:06
The ECB President, Christine Lagarde has confirmed the Bank's hawkish stance and has prepared markets for more hikes to come. We still think the European Central Bank is too optimistic about growth but have changed our call; we now expect it to hike rates by another 75bp before the end of the year ECB President, Christine Lagarde, at Thursday's news conference ECB Is Determined The ECB news conference just confirmed the message that was already clear from the policy decisions: the European Central Bank is fully determined to hike interest rates aggressively. Earlier, it announced a 75 basis point rate rise, the largest hike since the start of monetary union. It's given up on inflation targeting and its main aim now seems to be restoring its inflation-fighting credibility. It is still hard to see how the ECB can bring down inflation that is mainly driven by supply side factors, other than 'hoping' for a recession that suppresses demand. During the press conference, President Christine Lagarde said the ECB still intends to hike interest rates several times in the coming months but didn’t say where it sees the level of the neutral interest rate. We still think the ECB is too optimistic about the economic outlook We still think it's being too optimistic about the economic outlook. The ECB’s baseline scenario is +0.9% GDP growth in 2023 which is much more optimistic than our own forecast. Only in its downside risk scenario do we see GDP growth coming in at -0.9% but this scenario assumes a full end to Russia's rationing of oil and gas in the eurozone. Interestingly, in its baseline scenario, the ECB expects inflation to still come down to 2.3% in 2024 and actually to reach 2.2% from the second quarter of 2024. Admittedly, there is currently very little belief among ECB members in the reliability of these long-term projections. However, the very hawkish tone today doesn’t really match these inflation projections. Taking today’s decision and Lagarde’s comments at the news conference at face value, we have to change our ECB call. For the time being, there are no more doves. The Bank is clearly determined to bring interest rates to their neutral level, and this level is clearly at the upper end of the common range of between 1% and 2%. If it were up to the hawks, they would probably like to hike by another 100bp before next spring. However, we think that at some point in the coming months, the ECB will have to acknowledge that its growth expectations are too positive. In our view, the ECB will only be able to hike rates by a total of 75bp by the end of the year. This could be another 75bp at the October meeting or 50bp in October and a last-minute 25bp hike at the December meeting. For now, the doves have clearly left the ECB nest. However, we don’t think that they have left that nest for good and they will be back, somewhat earlier than the migrating birds which return to Europe after the winter. Read this article on THINK TagsMonetary policy Inflation Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Price Of The Euro To The US Dollar May Move Upward Today

InstaForex Analysis InstaForex Analysis 09.09.2022 10:09
Trend analysis (Fig. 1). The euro-dollar pair may move upward from the level of 0.9998 (close of yesterday's daily candle) to 1.0056, the 38.2% retracement level (white dotted line). Upon reaching this level, an upward movement is possible with the target of 1.0079, the 50.0% retracement level (white dotted line). When testing this level, the price may move down. Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today the price may move upward from the level of 0.9998 (close of yesterday's daily candle) to 1.0056, the 38.2% retracement level (white dotted line). Upon reaching this level, an upward movement is possible with the target of 1.0079, the 50.0% retracement level (white dotted line). When testing this level, the price may move down. Alternative scenario: from the level of 0.9998 (close of yesterday's daily candle), the price may move upward to 1.0056, the 38.2% retracement level (white dotted line). Upon reaching this level, a downward pullback is possible to test 1.0032, the 23.6% retracement level (red dotted line). After testing this level, the price may resume moving upward with the target of 1.0079, the 50.0% retracement level (white dotted line).   Relevance up to 08:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321244
The Euro May Gradually Climb To The Target Level

The Euro To The US Dollar Pair And Good Sign For Further Rally

InstaForex Analysis InstaForex Analysis 09.09.2022 10:31
Technical analysis: EUR/USD has been trading upside in the background and there is the breakout of the supply trendline at 1.0083., which is good sign for further rally. Trading recommendation: Due to the breakout of the supply trend-line and strong upside momentum, I see further rally. Watch for the potential buying opportunities on the intraday dips with the upside objective at the price of 1.0300. Stochastic oscillator is showing bull divergence and upside momentum, which is good sign for further rally. Key support is set at the price of 0.9875     Relevance up to 10:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292148
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Will Currency Pairs (EUR/USD And GBP/USD) Continue Yesterday's Trends?

InstaForex Analysis InstaForex Analysis 09.09.2022 12:06
Details of the economic calendar for September 8 The European Central Bank (ECB) raised all three key interest rates by 75 basis points. The base interest rate on loans was raised to 1.25%, the rate on deposits to 0.75%, and the rate on margin loans to 1.5%. The main points of the ECB press release: - Over the next few meetings, the regulator is considering further rate hikes to protect against rising inflation. - The ECB will regularly review the course of its monetary policy in the course of incoming statistics. - Future ECB rate decisions will be data driven and follow the approach taken at each meeting. - ECB members have revised their inflation forecasts, which are expected to average 8.1% in 2022, 5.5% in 2023 and 2.3% in 2024. - The ECB expects GDP in the EU to grow by 3.1% in 2022, 0.9% in 2023 and 1.9% in 2024. Conclusion from the meeting: The regulator's decision to raise rates by 75 basis points was anticipated by the market. This event was already on everyone's lips. For this reason, there was no reaction, despite the historical scale of the hanging. The main theses of Christine Lagarde's press conference: - The regulator will continue to raise interest rates at upcoming meetings. - The energy crisis is intensifying the economic slowdown. - The weakness of global economic growth will slow down economic growth in the EU. - A weak euro is bad; it leads to an increase in inflation. - The decisions on the rate at the current meeting were made unanimously. - The subsequent rate increase will not necessarily be by 75 basis points. - The ECB is not at a neutral rate. - In order to reach a neutral level on the rate, additional increases will be required. - The unfavorable scenario considers a recession in 2023. - Now is not the time to stop reinvestment in the Asset Purchase Program (APP). - Rates are far from being necessary to reduce inflation, and even more rate hikes will be required than at the remaining two meetings this year. - To curb the growth of inflation, it is necessary to raise rates at more than two meetings, but less than five meetings Conclusion from the press conference: Christine Lagarde has repeatedly spoken out in favor of further tightening of monetary policy. There is no clear understanding of the neutral rate yet, but the intention to raise it at the remaining meetings this year and next year is clear. Lagarde also noted that the regulator does not like the weak euro table. Analysis of trading charts from September 8 The EURUSD currency pair spent the past day in speculation, where at first there was a downward trend, and then all the drawdowns in the euro were bought off. As a result, the day was closed at the parity level, from which all speculation began. The cause and effect of speculation is described above—this is an information and news flow. The GBPUSD currency pair, despite the speculative activity, repeats the price fluctuations of its counterpart in the EURUSD market. This is due to the positive correlation between trading instruments, where at this time, the euro is considered the leading currency. Economic calendar for September 9 Today the macroeconomic calendar is empty, important statistics for Europe, Great Britain and the United States are not expected. Investors and traders are likely to continue to focus on the information flow of such hot topics as the energy crisis in the EU, the ECB/Fed, inflation. Trading plan for EUR/USD on September 9 There was a rush on the market for long positions on the euro at the opening of Asian trading session. This led to an upward jump in the price, based on which the quote rose above the value of 1.0050. Stable price retention above the reference value (1.0050) in the daily period may indicate the formation of a full-size correction relative to the downward trend. Otherwise, it is impossible to exclude the scenario of a reverse move to the boundaries of the previous amplitude of 0.9900/1.0050. Trading plan for GBP/USD on September 9 In this situation, the price rebound from the local low of 2020 led to the strengthening of the British currency by about 180 points. To move into the stage of a full correction, the quote needs to stay above the value of 1.1620 for at least a four-hour period. Otherwise, the current ascending cycle may slow down, followed by a return to the support. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.     Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321266
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The Euro To The US Dollar Pair: The Bullish Mood Arose

InstaForex Analysis InstaForex Analysis 09.09.2022 12:54
Previous trading plan for EUR/USD indicated a price increase after an ECB rate hike and speech of Christine Lagarde. The target was the level of 1.00900. Plan: The bullish mood arose during the Asian session, and extended up to the European session. That time, the pair managed to break the level of 1.00900. Development: Congratulations to those who followed the strategy! The pair moved by as much as 1,300 pips. To those who are yet to close positions, you may do so at current prices. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks     Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321264
The EUR/USD Price May Fall Under 1.0660

The ECB Forecasts Indicate Faster Price Growth

InstaForex Analysis InstaForex Analysis 09.09.2022 13:32
ECB officials are poised to introduce another rate hike in October if the inflation outlook calls for an additional significant step. This second 75 bp increase would be in line with the Fed's recent aggression, underscoring a tougher approach taken by the ECB recently as inflation in the region hits record after record. A reduction in the nearly €5 trillion ($5 trillion) worth of bonds purchased by the ECB during recent crises may also be discussed at an informal meeting on October. But noticeably, Philip Lane, who in his last speech called for a "steady pace" of rate hikes, has been more hawkish during his speech to the Board of Governors this week. The ECB also promised several future moves after Thursday's rate announcement. Christine Lagarde said it may be more than two, but less than five. Surprisingly, euro still slipped because Fed Chairman Jerome Powell also said that the US central bank will not back down in its efforts to curb inflation. But at the end of the day, EUR/USD closed with a bullish pin bar having been traded higher during the Asian and European sessions. Investors have raised the stakes on further ECB tightening. They bet on another 75 basis point hike reaching 40% in October, which is a drastic change after the central bank was accused of being too slow to respond to inflation. Further decisions will be made according to fears of recession, especially since new ECB forecasts point to faster price growth along with slower economic growth. The growth forecast for next year has been cut to just 0.9%.     Relevance up to 10:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321274
Analysis Of The EUR/JPY Pair Movement

Geopolitical Events And Macro Data Strongly Affect Currency Pairs

Saxo Bank Saxo Bank 09.09.2022 13:58
Summary:  A sharp US dollar sell-off has developed, one that materialized suddenly overnight and was extended by comments from Bank of Japan Governor Kuroda that inspired a steep plunge in USDJPY after its recent aggravated extension higher. The ECB meeting yesterday brought more hawkish than expected guidance, theoretically helping the EURUSD back-up well above parity, though the timing of the bulk of the rally in Asian hours offers cause for head-scratching. FX Trading focus: What is the quality of this USD sell-off…and JPY rally? The USD move overnight looked suspicious as it came just after midnight GMT – perhaps led by a run on stop orders above yesterday’s post-ECB meeting high around 1.0030? Hmm – the move was broad-based, so not entirely convinced. China set its yuan reference rate sharply higher than expected about an hour later, and then the BoJ Kuroda comments discussed below came on board. The move in EURUSD happening in Asian hours rather in the context of the ECB meeting having already sharply boosted EU yields earlier in the day yesterday has me scratching my head and wondering at the quality of this USD move lower – and wanting to reserve judgment on what is going on here at least until the end of today’s/this week’s action and possibly until we see how the market treats the EU’s power price cap plan after the summit on the matter in Brussels today and then next Tuesday’s US August CPI release. It is no major surprise that some stern words from Bank of Japan Governor Kuroda were able to inspire a sharp consolidation lower in USDJPY after its wild extension higher recently that seemed a bit excessive relative to the support from coincident fundamental indicators like global long sovereign yields/spreads. After meeting Prime Minister Kishida overnight, Kuroda said that “sudden moves in foreign exchange rates increase uncertainty for firms and are undesirable.” And “ a two to three yen move against the dollar in a single day is very sudden.” A couple of figures on a comment are easy, more would require a more notable retreat in global yields and commodity prices and perhaps real intervention. By the way, an FT article with the provocative title “Can Japan feed itself” makes clear that food prices have been capped by the Japanese supermarket industry for some time now at the retail level and are set for a significant reset on October 1. This will mean a leap in the official CPI numbers from the month of October. At the same time, PM Kishida is readying a new raft of packages aimed at supporting lower income households cost-of-living challenges. There is a chicken and egg problem here with price controls and preventing cost-of-living increases on the one hand and the Bank of Japan theoretically waiting for the Godot of wages beginning to rise to signal that inflation is becoming more embedded. With cost-of-living support, the wage earner is less likely to demand a raise…. Something is going to have to give, but it’s hard to believe that a stern few phrases from Kuroda will do the trick, although this could be the beginning of a far more choppy JPY trajectory from here, as from these levels or lower in the JPY, the Ministry of Finance may be willing to throw billions of intervention into the mix in an attempt to halt further JPY declines. Chart: USDJPYBoJ comments overnight have triggered a significant slide in USDJPY, if one not yet as large as the two-day rallythat sent the pair soaring all the way to the cusp of 145.00 two days ago. A retreat and close anywhere close to 140.00 today would create an interesting shooting star formation for the weekly candlestick, although really the pair needs to wipe out a great proportion of the move from the pivot low in early August at 130.40 to suggest a more profound reversal is afoot here. Meanwhile, a close today in the 142-143 range suggests that little harm has been done, even tactically, to the USDJPY up-trend. The ECB meeting brought far firmer guidance from the central bank than expected, as German 2-year yields traded some 30 basis points higher today relative to the close the day before the meeting – to a new cycle high north of 1.40% before that move faded sharply today back toward 1.30%. The 75-basis point hike was the largest in the ECB’s history and is expected to be repeated at the late October meeting after the guidance that another move of that size can’t be ruled out in yesterday’s presser. But Europe needs sustained relief on the energy/power price front for a more sustainable rally. Curiously, the market waking up to EURUSD trading well north of parity this morning had nothing to do timing-wise with the ECB as it unfolded overnight. Yesterday, the market seemed unsure with what to do with the euro in the immediate aftermath of the decision and guidance. For EURUSD, a close above 1.0100, which was teased today, is needed to set the focus toward the next area into 1.0350, while a close back below parity today would suggest that the overnight pump was merely linked to poor liquidity, order flow and the Bank of Japan verbal intervention mentioned above. An election is set this weekend for Sweden, with the currency market not particularly holding its breath in anticipation. EURSEK has corrected sharply lower in fitting with the strong risk sentiment of the moment, but has a lot of work to do to set the focus back lower, at least a move below 10.50. As I am writing this, the Bank of England has announced that it is moving back its next meeting from next week to the following week, likely due to Queen Elizabeth’s death and the mourning period, but this will give the Bank the luxury of having a look at the FOMC meeting the day before and whether it needs to stiffen its message or even hike more than it anticipated if sterling is struggling to new lows going into the meeting. Table: FX Board of G10 and CNH trend evolution and strength.The USD momentum has shifted sharply lower over the last couple of days, but reserving judgment at least until the daily/weekly close today. Elsewhere, look at CHF continuing to power on despite the ECB hawkish guidance yesterday. Table: FX Board Trend Scoreboard for individual pairs.It’s looking like cross-over day again for EURCHF after the ECB failed to sustain the recent rally despite the mark-up of EU yields. USDCHF has also rolled over and is threatening a turn lower, although looking at the chart, there is a lot of choppy range to work with yet. Upcoming Economic Calendar Highlights 1230 – Canada Aug. Net Change in Employment / Unemployment Rate 1600 – US Fed’s Waller (Voter) to speak 1600 – US Fed’s George (Voter) to speak   Source: https://www.home.saxo/content/articles/forex/fx-update-usd-weakens-broadly-but-are-the-drivers-sustainable-09092022
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD Pair: Prices Will Pull Back Lower?

InstaForex Analysis InstaForex Analysis 09.09.2022 14:07
Technical outlook: EURUSD pushed further towards the 1.0110-20 area during the European session on Friday. The bulls have taken out initial resistance at around 1.0080 with relative ease and might take a break now. The single currency pair is seen to be trading at around 1.0060 and it is expected to drop towards 0.9930 before resuming higher again. EURUSD might have produced the initial lower-degree upswing of the counter-trend rally, which was expected after printing the 0.9863 low. The entire drop between 1.2350 and 0.9863 is expected to be retraced at least towards the 1.0800-1.0900 area before turning lower again. Also, note that the Fibonacci 0.382 retracement of the entire drop is also seen passing through 1.0800 as seen on the daily chart. EURUSD bulls have managed to carve a lower-degree upswing between 0.9863 and 1.0113. Prices are now expected to pull back lower towards the 0.9930-50 zone before finding support again. We can expect the rally to resume higher thereafter and push the price higher towards 1.0450 and 1.0800. First, the price will turn lower, then it will be bullish again from here. Trading plan: Potential rally towards 1.0800 against 0.9800 Good luck!     Relevance up to 13:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292182
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

Euro (EUR): Reasons Why ECB Hiked The Interest Rate By 75bp. Lagarde Spills The Tea On The Future

Kenny Fisher Kenny Fisher 09.09.2022 16:51
EUR/USD hasn’t posted a winning week since August, but a spectacular rise today should put that trend to rest. In the European session, the euro is trading at 1.0102, up an impressive 1.03%. ECB delivers There were plenty of expectations ahead of Thursday’s ECB meeting, as the markets waited to see if the ECB would raise rates by 0.75% or play it safe with a smaller hike. Earlier in the week, eurozone yields and the euro dropped on reports that the ECB was looking at a 0.60% increase. In the end, the ECB came out with all guns firing, raising rates by 0.75% for only the second time in its history. The main driver behind the dramatic move is spiralling inflation, which hit 9.1% in August. The ECB is lagging behind other central banks, with the benchmark rate currently at 1.25%. This will not tame inflation, and at the meeting, the ECB revised upwards its inflation forecast for 2023, from 3.5% to 5.5%. At the same time, the ECB is sending a powerful message that it is serious about curbing inflation by tightening, even at the risk of a recession. Investors have reacted positively to the move, sending the euro sharply higher. What’s next for the ECB? Christine Lagarde was unambiguous when said that she is planning more rate hikes “because inflation remains far too high and is likely to stay above our target for an extended period”. Lagarde went further, saying there could be up to four more hikes in the current rate-tightening cycle. The markets have priced in 0.50% increases for the October and December meetings. Lagarde & Co. have clearly shown that they are willing to pay the price for higher rates, which is weaker growth that could result in a recession. The weak economic climate in Germany and the eurozone has been exacerbated by a potential energy crisis, with Russian President Putin declaring yesterday that he might cut off energy exports to Western Europe. Putin may or may not be bluffing, as the eurozone scrambles to find alternatives to Russian oil and gas before winter. EUR/USD Technical There is resistance at 1.0056 and 1.0152 0.9984 has switched to support, followed by 0.9888 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Summary Of The Week On Financial Markets

Summary Of The Week On Financial Markets

Ed Moya Ed Moya 11.09.2022 09:18
This week suddenly ends on a positive note as the S&P 500 broad market index, which started to climb on Wednesday, has lead the major stock market indicator to 4032 points, the highest since August 30. This is very strange considering all the negative news that could have affected the stock market this week. The European Central Bank (ECB) raised all interest rates by 75 basis points. This is the second time in the history of the single currency that such a move has been performed. The Federal Reserve’s (Fed) Chairman Jerome Powell confirmed the central bank will continue to do everything needed to bring inflation down to the 2.0% target. This kind of rhetoric is also being echoes by ECB President Christine Lagarde who has assured markets that the Bank is likely to take further bold steps to raise interest rates over the coming months. The message from these two bank leaders may enforce stocks to continue to move down.  However, investors found a reason to pull on the breaks and stop markets from another sell-off. Chicago Fed Bank President Charles Evans supported investors by saying that the next inflation report next week may point to how much the Fed could raise its interest rates this month. "If I saw inflation maybe cooling a little bit that's not going to change the fact that I still think we are going to need to top out at something like 3.5% to 4%, it's just that maybe we don't have to do it that soon," Evans said. Some investors were flooded with euphoria after crude prices fell by 16% over the last two month. It is clear that inflation may slow down significantly in August and perhaps prompt a less-than-expected Fed interest rate move.  It sounds more like wishful thinking as inflation is considerably above the existing level of interest rates for the Fed to pull the breaks on, even if prices slowed down in August. However, many investors are seen to support the idea and hope for stocks to recover. Even though some investors are holding onto hope, we should not exclude the possibility that a downside path of stock indexes could be a bit bumpy. The technical picture for the S&P 500 index is still negative as it is moving within an aggressive downside formation after it failed to climb above 4020 points on Thursday. This has now become a strong resistance level that may send the index back to the downside targets at 3850-3950 points. More negative drivers may send the index further down to the extreme secondary targets at 3600-3700 points, and even further down to heartbreaking 3000-3100 points.  In recent weeks, short positions at 70% of the targeted volume were opened at the average price of 4285-4290 points. The rest of the 30% could be opened once strong reliable downside signals emerge. The final downside target in the long-term is located at 2100-2300 points that could be reached by the end of 2022. The oil market made a huge step to the downside towards $75-85 per barrel of the Brent crude benchmark. Crude prices dipped down amid new anti-covid measures in China, unwinding global recession fears and a sharp rise of oil inventories in the United States. Brent prices slipped down to $87-88 per barrel, the lowest since January 2022, and are likely to continue down to the extreme targets at $50-65 per barrel that could be hit by November. In the short-term crude prices are less predictable making any entry points unreliable at the moment.  Gold prices are on a downside slide and they may last until the end of October. The primary scenario suggests prices may reach $1350-1450 per ounce by November. So, it would be reasonable to open short or small-short positions considering the current price movement at $1730 per ounce. The Euro was cheered on by the ECB’s decision to sharpen its interest rates hike, changing its formation to the aggressive upside with a primary target at 1.02500-1.03500. A reasonable correction to 1.00500-1.00800 is needed to open long positions. Once this correction is made the EURUSD could be interesting for long trades. GBPUSD also changed its formation to the aggressive upside with a target at 1.18000-1.18500. The pair needs to step back to 1.15300-1.15800 to be interesting to open long positions.
The Upside Of The EUR/USD Pair Remains Limited

The EUR/USD Pair: The Price Is Still In A Growing

InstaForex Analysis InstaForex Analysis 12.09.2022 08:12
The euro ended Friday up by 48 points, closing above the target level of 1.0032. The upper shadow broke above the MACD indicator line. Today it opened exactly on the MACD line and growth was shown in the first hours of the trading session. Also, the Marlin Oscillator went into the positive area. At first glance, the price seems to be aiming for and even above the 1.0150 target level, which will create a deep correction from the decline since June (above 1.0360), but this plan has a serious obstacle in the desire of large players to avoid risk, which is primarily manifested in the stock market. We are waiting for its decline from day to day. We have already said that Friday's growth was associated with the buyout by large players in order to avoid a strong decline on the occasion of the European Central Bank rate hike and the death of Elizabeth II. Reinsurance turned out to be excessive, which affected today's opening with a gap. In the current situation, we do not expect the euro to rise above the resistance of 1.0150. A decline below 1.0020 will open the first bearish target at 0.9950. If the price settles above 1.0150, then an alternative plan will open with a large degree of uncertainty and a target of 1.0360. The price is still in a growing position on the H4 chart. The 1.0150 target is relevant, but we are following the growth with increased caution. The gap can close today, maybe in a day, maybe in a month...   Relevance up to 04:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321370
The EUR/USD Price May Fall Under 1.0660

How Can The Euro-US Dollar Pair Trade Today?

InstaForex Analysis InstaForex Analysis 12.09.2022 08:15
EUR/USD 5M The EUR/USD pair was trading rather calmly on Friday. Weekly highs have been updated, but the euro remains quite low, near its 20-year lows. Thus, it is still very early to talk about the end of the downward trend. By and large, the pair continues to ride the "swing". It went above the level of 1.0072 for a short time, which, we recall, is considered the upper boundary of the horizontal channel, but by the end of the day it returned to the area below it. Therefore, for the time being, we see no compelling technical reasons to expect further growth. But there are certain fundamental reasons. Last week, the European Central Bank raised the rate by another 0.75%, so the fundamental component is starting to improve for the euro. Indeed, this moment may not help, as the Bank of England raised rates six times, and the pound hit its 37-year lows in response. There were no important statistics or events either in the European Union or in the US on Friday, so traders had nothing to react to during the day. As for trading signals, there were only three of them during the day. First, the pair settled below the level of 1.0072, but this signal turned out to be false and one could receive a loss on it. The next signal was formed on a consolidation above 1.0072, but it should not have been worked out, since the candle on which the signal was formed was very strong and the price almost immediately approached the target level of 1.0124. The third sell signal was not strong, but it made it possible for us to make some money and cover the morning loss. The short position had to be closed manually in the late afternoon. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 3,000, while the number of shorts decreased by 8,300. Accordingly, the net position grew by about 12,000 contracts. This is not very much, but it is still a weakening of the bearish mood among the major players. However, this fact is not of particular importance, since the mood still remains bearish, and the euro remains "at the bottom". At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 36,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new depreciation of this currency. Over the past six months or a year, the euro has not been able to show even a tangible correction. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 12. European inflation and the speeches of the ECB representatives. Overview of the GBP/USD pair. September 12. Inflation in the UK, inflation in the US... it's going to be an interesting week! Forecast and trading signals for GBP/USD on September 12. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair continues to trade on the hourly timeframe in a mode very similar to the swing. The price tried to leave the horizontal channel, but at the moment it cannot be said that it succeeded. Thus, in the new week, we may well see a new round of downward movement with a target of 0.9877. We highlight the following levels for trading on Monday - 0.9877, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9985) and Kijun-sen (0 .9988). There is still no level below 0.9877, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. Among the important events on September 12, we can single out only the speeches of ECB members Schnabel and de Guindos. Perhaps they will provide important information to the market regarding rates and monetary policy. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321358
The Euro May Gradually Climb To The Target Level

Technical Outlook Of The Euro To The US Dollar Pair

InstaForex Analysis InstaForex Analysis 12.09.2022 08:23
Technical outlook: EURUSD pushed through the 1.0113 high last week, taking out initial resistance at 1.0085-90 with ease. The currency pair should correct lower this week towards the 0.9940-50 area before proceeding higher again. It is seen to be trading close to 1.0085 at this point in writing and is expected to drag lower soon. EURUSD is unfolding a larger-degree downswing since January 2021 after hitting resistance at 1.2350. The bears have carved a huge bearish boundary between 1.2350 and 0.9863 as seen on the daily chart. A pullback rally towards 1.0800-1.0900 remains a high probability before prices turn lower towards the 0.9400-0.9500 zone. EURUSD has carved a lower-degree upswing between 0.9863 and 1.0113 last week. The bears will remain inclined to correct lower towards 0.9940-50 over the next few days before giving in to the bulls. We can expect another push towards 1.0400-1.0500 thereafter with potential towards 1.0800-1.0900, which is the Fibonacci 0.382 retracement of the entire drop. Trading plan: Potential rally towards 1.0800-1.0900 against 0.9860 Good luck!     Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292284
The Euro May Gradually Climb To The Target Level

Can The ECB's Decision On Interest Rates Aggravate The Euro's Position Against The US Dollar?

InstaForex Analysis InstaForex Analysis 12.09.2022 09:31
Several market entry signals were formed last Friday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.0094 level in my morning forecast and advised making decisions on entering the market from it. The euro continued its gains during the European session after the European Central Bank's decision a day earlier to raise interest rates while maintaining further hawkish attitude towards monetary policy. The downward breakthrough and reverse test of 1.0094 provided an excellent entry point for long positions, but after a 15-point surge, buying activity dropped sharply. A return below this level and a reverse downward test led to a sell signal, which resulted in the pair falling by more than 50 points. When to go long on EUR/USD: The demand for the euro returned in today's Asian session, which allows us to count on the renewal of last week and this month's high above 1.0102. Given that there are no important fundamental statistics, most likely the bulls will cope with this task. The only thing I would pay attention to is the speeches of the ECB representatives. Considering the position even dovish politicians are now taking, their statements are unlikely to seriously harm the prospects for a recovery in the euro. In case the euro falls, the best scenario for buying will be a false breakout in the new support area of 1.0070, formed on the basis of last Friday. This will provide an excellent entry point, counting on the continuation of the upward correction with the nearest target at 1.0102. Statements by ECB representatives may also help the euro if it continues to aggressively raise interest rates. A breakthrough and downward test of 1.0102 will hit the bears' stop orders, which will create another signal to open long positions with the possibility of a correction to the 1.0138 area. A more distant target will be resistance at 1.0185, where I recommend taking profits. If the EUR/USD declines and there are no bulls at 1.0070, the pair will be under pressure again, but there is no need to panic. The optimal solution for opening long positions in this case would be a false breakout near the low of 1.0039, where the moving averages are, playing on the bulls' side. I advise you to buy EUR/USD immediately on a rebound only from the parity of 1.0001, or even lower - in the area of 0.9982, countin on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears fought back last Friday, but this was only a pretext for building up long positions in today's Asian session. The bears' main task for today is be to protect the nearest resistance at 1.0102, just above which a divergence may form on the MACD indicator, which, together with a false breakout, will lead to an excellent entry point for short positions with the goal of moving the euro down to 1.0070. A breakdown and consolidation below this range with a reverse test from the bottom up creates another sell signal already with the removal of bulls' stop orders and a larger drop in the pair to the 1.0039 area, where the moving averages are passing. I recommend taking profit there. A more distant target will be at least 1.0001, where in my opinion larger players should enter the market. In case EUR/USD jumps during the European session, as well as the absence of bears at 1.0102, the upward correction will only intensify. In this scenario, I recommend postponing short positions to 1.0138, but only if a false breakout is formed there. You can sell EUR/USD immediately for a rebound from the high of 1.0185, or even higher - from 1.0221, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT report) for August 30 logged a decline in both short and long positions. If a week ago there was a surge in activity, now there has been a similar decline. This indicates a decrease in investor appetite for risk after the release of the eurozone inflation data, which once again rose to a high in the last ten years. The problem is exacerbated by the energy crisis, as the flow of gas through the Nord Stream is practically suspended - this is another increase in energy prices in the winter and upward inflation surges, which will force the European Central Bank to further raise interest rates and tighten belts. This week we are also waiting for the central bank's decision on interest rates, which may aggravate the euro's position against the US dollar. Even though the rate hike will be considered by investors as a signal for the growth of profitability, at the same time there will be a slowdown in economic growth, which is more important. So don't expect a serious euro recovery in the medium term. The COT report indicated that long non-commercial positions decreased by 8,567 to 202,258, while short non-commercial positions decreased by 5,000 to 249,934. At the end of the week, the total non-commercial net position remained negative and decreased to the level of -47,676 against -44,109, which indicates continued pressure on the euro and further fall of the trading instrument. The weekly closing price slightly recovered and amounted to 1.0033 against 0.9978. Indicator signals: Moving averages Trading is conducted above the 30 and 50-day moving averages, which indicates an upward correction in the pair. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of a decline, the lower border of the indicator around 1.0025 will act as support. In case of growth, the upper border of the indicator in the area of 1.0102 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.       Relevance up to 08:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321386
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

The Down Trend Of The Euro To The US Dollar Pair Will Continue

InstaForex Analysis InstaForex Analysis 12.09.2022 09:36
Technical Market Outlook: The EUR/USD pair has been seen testing the key short-term supply zone located between the levels of 1.0090 - 1.0122. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the longer term down trend is reversed. The intraday technical support is seen at 1.0033 and 1.0000. The strong and positive momentum on the H4 time frame chart supports the short-term bullish outlook for EUR. Please watch the USDX as the correlation between this two is directly opposite. Weekly Pivot Points: WR3 - 1.01483 WR2 - 1.01150 WR1 - 1.01017 Weekly Pivot - 1.00817 WS1 - 1.00684 WS2 - 1.00484 WS3 - 1.00151 Trading Outlook: Despte the recent relief rally towards the short-term support one, the EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated.     Relevance up to 09:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292302
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

The EUR/USD Pair: Today The Price May Move Upward

InstaForex Analysis InstaForex Analysis 12.09.2022 09:59
Trend analysis (Fig. 1). The euro-dollar pair may move upward from 1.0042 (close of Friday's daily candle) to the target of 1.0116, the 50% retracement level (white dotted line). After testing this level, a downward pullback is possible to test 1.0054, the 23.6% retracement level (red dotted line). Upon reaching this level, the price may move upward with the target of 1.0175, the 61.8% retracement level (white dotted line). Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – down; Volumes – down; Candlestick analysis – down; Trend analysis – down; Bollinger bands – down; Weekly chart – down. General conclusion: Today the price may move upward from the level of 1.0042 (close of Friday's daily candle) to the target of 1.0116, the 50% retracement level (white dotted line). After testing this level, a downward pullback is possible to test 1.0054, the 23.6% retracement level (red dotted line). Upon reaching this level, the price may move upward with the target of 1.0175, the 61.8% retracement level (white dotted line). Alternative scenario: from the level of 1.0042 (close of Friday's daily candle), the price may move downward to test 1.0017, the 38.2% retracement level (red dotted line). After testing this level, an upward movement is possible with the target of 1.0116, the 50.0% retracement level (red dotted line).     Relevance up to 08:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321384
Belarusian opposition leader proposed a collaboration to Ukraine

The Military Activities In Ukraine Are Also Supporting The Markets

Saxo Bank Saxo Bank 12.09.2022 10:23
Summary:  Amid depressed sentiment, with Fed officials reiterating their consistent hawkishness, US equities managed to close higher on the week for the first time in four weeks. It comes as technical trading, short-covering is at play. Meanwhile, fuel shortages see more investment moguls buy in, with Occidental Petroleum shares rising after hours. The volatility index, as measured by the VIX index dropped to its lowest level in 10 days (to 22.8), supporting risk-on sentiment, while Bitcoin moved up 10% to $21,704, after breaking above the $20,000 psychological level. However markets are ready to pivot, with a full calendar of data on tap that with provide clues on the Fed's tightening path. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rally amid another bear market bounce US equities rallied for the third day closing off Friday at the highest level since August 26, while also ending higher over the five days, for the first time in four weeks. S&P 500 gained 1.5% on Friday, 3.7% on the week, Nasdaq 100 2.2% Friday, 4.1% on the week. We think a technical quant rally is at play and short-covering, which is why there is a risk-on mode, in the midst of depressed sentiment, with Fed officials reiterating their consistent hawkish chorus. The last three trading days have also seen dealers report larger buying from long-funds and hedge funds buying into information technology, banks, pharmaceutical, and consumer discretionary (in particular luxury brands), while there has also been unusually large volume in option activity. The volatility index, as measured by the VIX index dropped to its lowest level in 10 days (to 22.8) while Bitcoin moved above the $20k psychological level, after moving up 10% to $21,704. Companies big moves in the US   The Grocer Kroger (KR:xnys) soared 7.4% after the company updated its full-year EPS guidance to USD4.05 from the previous forecast of USD3.95, citing strong demand for fresh food and a shift to private-label products. RH (RD:xnys) gained 4.5% despite the upscale home retailer lowering its sales and operating income guidance due to weaker demand and delayed store openings. While the CEO of RH said the US it would not lower prices to boost salesas it fears discounting will erode its luxury brand, this is despite saying the US is already in a recession. Shopify (SHOP:xnys) jumped 8.9% following the company appointing a Morgan Stanley investment banker to take up the role of CFO. Fuel shortages see more investment moguls buy in. Occidental Petroleum shares, one of the hottest shares to watch After hours one of the biggest movers in the US was Occidental (OXY.xnys) after Warren Buffett increased his stake in the company, pushing up Occidental shares 1.6% to ~$66.68 (after hours). On Friday night, data filings showed Berkshire Hathaway increased its stake to 26.8%, up from the 20% holding the fund held previously (according to Bloomberg data). It comes as Buffett won regulatory approval to buy up to 50% of the stock, after he has been growing his stake in the company over the last three years. So will Buffett take over the oil and gas giant? A Wall Street Journal article quashed such theories, but one thing is certain, Buffett is bullish on energy amid the energy crisis. So why is Occidental attractive to some? Its price to earnings (PE) ratio is 6.2 times, meaning its relatively cheap, and is expected to report another record profit in 2023 (according to Bloomberg data). Plus, its gas production is forecast to rise in the coming years, as the US bolsters LNG exports to Europe who is weaning itself off Russian fuel. Currently Occidental only makes 50% of its revenue from gas. Also note, Occidental is the best performer in S&P500 this year, up 126%, and you’d think if Buffett increases his stake from ~27% up to 50%, this would excite shareholders. US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) With another round of fed talks, this time from Fed Governor Waller, St. Louis Fed President Bullard, and Kansas Fed President George reiterating the Fed’s intention to go for another significant rate hike, i.e. 75 basis points on Sept 21, and auctions of USD42 billion 6-month T-bills, USD41 billion 3-year T-notes, and USD32 billion 10-year (fronted loaded) scheduled for Monday, and USD18 billion 30-year T-bonds on Tuesday, the 2-year yield rose 5bps to 3.51%.  The treasury yield curve flattened as the 10-year yield remained unchanged last Friday.  Tuesday’s August CPI will be the last key economic data release before the Sept FOMC meeting.  While traders are eagerly awaiting the CPI report to get some hints about the Fed’s path of rate hikes, Bullard said on Friday that a “good CPI report shouldn’t affect September Fed call”. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index soared 2.7% last Friday, snapping a six-day losing streak, following China’s August inflation data surprised on the downside and raised hope for more monetary easing to come from the Chinese policymakers. Mega-cap internet stocks strongly, Meituan (03690:xhkg) +4.9%, Netease (09999:xhkg) +4.8%, Baidu (09888:xhkg)+3.9%, Alibaba (09988:xhkg) +3.0%, Tencent (00700:xhkg) +1.7%.  One notable underperformance in the internet space was Bilibli (09626:xhkg/BILI:xnas) which plunged 16.3% after reporting a larger than expected loss in 2Q2022 on the deterioration of gross and operating margins.  Chinese property names rallied, Country Garden (02007:xhkg) +16.8%, Longfor (00960:xhkg) +7.4% on market chatters about unconfirmed stimulus measures from policymakers to boost the ailing property sector. CSI 300 climbed 1.4%, led by property, dental services, infrastructure, and digital currency. Ahead of the mid-autumn festival, catering stocks gained, Jiumaojiu (09922:xhkg) +8.9%, Haidilao (06862:xhkg) +2.8%. Lepu Biopharma (02157:xhkg) jumped 284%. After the market closed, the Center for Drug Evaluation posted on their website that a targeted antibody-drug conjugate co-developed by Lepu Biopharma and Keymed Biosciences has obtained breakthrough therapy designation status from the Chinese drug regulator.  Northbound inflows into A shares reached USD2.1billion equivalent last Friday, the largest inflow in a single day since the beginning of the year.  Hong Kong, Shanghai, and Shenzhen are closed today for the mid-autumn festival holiday. EURUSD boosted by Ukraine progress The US dollar ended the week on a backfoot after printing fresh YTD highs earlier in the week. EURUSD took a look above 1.01 once again early on Monday, amid optimism after military progress was made by Ukraine and talks of ECB considering quantitative tightening by year-end (see below). Gains were however reversed later. USDJPY optimism was also braked with the verbal intervention from the authorities getting louder late last week. Crude oil prices (CLU2 & LCOV2) Oil prices are lower to start the week with sentiment somewhat supported by Ukraine recapturing some of the key cities from Russia, and making military progress. Still, concerns on Russia’s war tactics getting bigger will continue to underpin caution, and Biden administration is now mulling whether to stop releasing oil from the US Strategic Reserves. WTI in Asian trading hours is 0.5% lower at $86.34/barrel.     What to consider? Fed speakers stay hawkish before the blackout period begins Fed rate hike expectations have picked up strongly since Jackson Hole, and we have heard an extremely unanimous voice from the Fed speakers since then. Some of them have clearly made the case for a 75bps rate hike in September, with Bullard on Friday even saying that Tuesday’s CPI report is unlikely to alter the incoming 75bps rate hike in September. Governor Waller leaned hawkish as well, but did not specify the size for September’s decision, but a “significant” hike still points to that. Esther George stayed away from guiding for individual meetings, but made the case for sustained rate hikes. EU minsters split on Russian price cap At the EU energy summit that kicked off on Friday, several key issues pertaining to energy supplies and liquidity were discussed, but decisions have been postponed as proposals are only likely to be delivered in the next few weeks. Consensus could not emerge on whether and how to impose a price cap on Russian natural gas, and members differed on whether a price cap should apply only to Russia or to other producers too. Tensions also bristled over proposed mandatory cuts in power demand and German calls for a mechanism to share any excess supply. India’s rice export ban to aid the galloping global food crisis After a wheat ban earlier this year, India has now announced restrictions on rice exports, aggravating concerns of a global food crisis. Bloomberg reported India imposed a 20% duty on white and brown rice exports and banned shipments of broke rice -- parboiled and basmati rice were excluded from the export duty and/or trade restrictions. The new curbs apply to about 60% of India's rice exports and go into effect Friday. India’s rice output has been depressed due to the severe heatwaves, but also possibly to cap domestic price pressures. If these measures are duplicated by other key rice exporting countries like Thailand and Vietnam, there could potentially be a severe grain shortage globally, especially weighing on poor rice importing nations. We continue to see a threat of climate change to global agricultural output, which along with a prolonged energy crisis, suggested price pressure will stay in the medium-to-long term despite some cooling off from the recent highs. Record volumes of Australian wheat go to China Despite trade disputes over other agricultural commodities, data shows China is importing a record amount of Australian wheat, as farmers gear up for a third consecutive bumper grain harvest. Industry sources estimate China will import about 6.3 million tonnes of Australian wheat for the year to September 30, making China by far Australia’s biggest customer. Indonesia is in second place with 3.7 million tonnes. The trade with China is up 186% from 2.2 million tonnes last year. Australian Federal government forecaster, ABARES expects farmers across Australia will have harvested 32.2 million tonnes of wheat, just shy of last year's record, 12.3 million tonnes of barley and a near-record 6.6 million tonnes of canola. Australian Agricultural stocks to watch include Graincorp (GNC), Elders (ELD), which are trading flat this year. China’s medium to long-term corporate loans picked up in growth while mortgages remained sluggish Over the past months, Chinese policymakers instructed policy banks and gave window guidance to commercial banks to extend credits to support infrastructure construction and key industries of the economy.  Some results showed up in the August loan data which recorded a growth of 16% MoM annualized in the outstanding medium to long-term loans to corporate. The amount of new medium to long-term loans to corporate was RMB735 billion in August versus RMB346 billion in July and RMG522 billion in August 2021.  Loans to households however remained sluggish. New medium to long-term loans to households (which were primarily mortgage loans) were RMB 266 billion in August, still much lower than the RMB426 billion level in August 2021.  The outstanding medium to long-term loans to households grew 5.3% MoM annualized in August. Outstanding aggregate financing grew 10.5% YoY in August, slightly below the 10.7% YoY in July. M2 grew 12.2% in August, edging up from July’s 12.0% YoY.  China’s PPI and CPI surprised on the downside China’s PPI slowed to 2.3% YoY (Bloomberg consensus: 3.2% ) in August from 4.2% in July.  The deceleration was largely attributable to the base effect and a decline in energy and material prices. CPI unexpected fell to 2.5% YoY in August from 2.7% in July while economists surveyed by Bloomberg had expected a rise to 2.8%.  Rises in both food prices (down to 6.1% YoY in August from 6.3% YoY in July) and the prices of non-items decelerated (down to 1.7% YoY in August from 1.9% YoY in July).  Excluding food and energy, consumer prices were unchanged at 0.8% YoY and Services inflation was also unchanged at 0.7% YoY in August. China’s central bank and banking regulator issued a list of 19 systemically important banks The People’s Bank of China and the China Banking and Insurance Regulatory Commission issued a list of 19 systematically important banks.  These 19 banks will face between 0.25% and 1% higher minimum capital requirements and additional leverage requirements.  They are also asked to prepare contingency plans for major risk events.  These 19 banks are Industrial and Commercial Bank of China, Bank of China, China Construction Bank, Agricultural Bank of China, China Minsheng Bank, China Everbright Bank, Ping An Bank, Hua Xia Bank, Ningbo Bank, China Guangfa Bank, Jiangsu Bank, Bank of Shanghai, Bank of Beijing; China CITIC Bank, China Postal Savings Bank, Shanghai Pudong Development Bank, Bank of Communications, China Merchants Bank, and Industrial Bank. The Communist Party of China (CPC) is set to amend the party constitution at its upcoming national congress The Political Bureau of CPC Central Committee said in a readout last Friday that the Communist Party of China (CPC) is set to “work out an amendment to the Party Constitution that facilitates the innovative development of Party theories and practices and meets the need of advancing the great new project of Party building in the new era” at the CCP’s national congress to convene starting on October 16.  It further elaborates that “the latest adaption of Marxism to China's context and new circumstances will be fully epitomized and so will the new ideas, new thinking and new strategies of governance developed by the CPC Central Committee since the Party's 19th National Congress in 2017. The amended Party Constitution will also clarify the new requirements for upholding and strengthening Party's leadership and advancing the Party's full and rigorous self-governance under new circumstances, so as to better navigate the great social revolution with vigorous self-reform”. ECB set to announce Quantitative Tightening by year-end After the European Central Bank’s 75bps rate hike this month, chatter on quantitative tightening to begin by year-end has gathered pace. Wall Street Journal reported that the ECB members agreed to  start discussions on quantitative tightening in early-October at a non-decision meeting in Cyprus on October 5, and will also likely be debated at subsequent meetings. Decision is expected to be made before year's end and will most likely see the beginning of balance sheet run-off in the first quarter of 2023. Whether the move will tighten financial conditions a lot will depend on details, especially pace of reduction in the €5 trillion balance sheet. Interestingly, ECB President Lagarde said last week that now is not the time for such measures to be implemented   For a look ahead at markets – tune into our Saxo Spotlight.For a global look at markets – tune into our Podcast.           Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-12-sept-2022-12092022
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

Expectations Of Fed Actions And Their Impact On The Currency Market

InstaForex Analysis InstaForex Analysis 12.09.2022 10:59
World markets closed higher last week, indicating that sellers are inactive ahead of incoming US news and Fed meeting next week. The main reason was the ECB meeting, at which the key interest rate was raised by 0.75% to 1.25%. Another factor could be the statements of both Christine Lagarde and Jerome Powell, which once again hinted that central banks would act aggressively when raising rates. However, some believe that the Fed will not be able to withstand pressure, so they will take a pause in rate increases. They said the central bank will act only when consumer inflation in the US slows down. Forecasts already say CPI is likely to decline from 8.5% to 8.1% y/y, then from 0% to -0.1% m/m. If the data comes out lower than expected, the Fed will raise rates by only 0.25% in October. In this case, a slowdown in the sale of government bonds and a continuation of the weakening of dollar can be expected. Also, the rally in stocks that began last week may continue, which will spur the growth of risky assets, including euro. Forecasts for today: EUR/USD The pair is trading below 1.0110. Overcoming this mark may push the quote towards 1.0200. USD/JPY The pair is rising, thanks to positive market sentiment. This may lead to a further increasefrom 143.65 to 145.00.   Relevance up to 08:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321372
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

What Can Expect From The Major Currency Pairs, Will Be Bullish Or Bearish Trend? (EUR/USD & GBP/USD)

InstaForex Analysis InstaForex Analysis 12.09.2022 11:11
EUR/USD Higher timeframes The opening of the week took place with some upward gap. Bulls are not in a hurry to complete the corrective rise. Instead, there is hope for its development, as well as a change in daily preferences. To implement these tasks, bulls need to overcome the resistance of the weekly short-term trend (1.0116) and eliminate the daily death cross (1.0116 - 1.0176 - final levels). For bears, the 1.0000–0.9989 zone (psychological level + daily short-term trend) remains as support, while the minimum extremum (0.9864) and the downward trend recovery are still the targets. H4 – H1 As of writing, the main advantage on the lower timeframes is on the bulls' side. The reference points for the upward movement within the day today can be noted at 1.0128 (H4 target) and 1.0168 - 1.0224 (classic pivot points). The key levels of the lower timeframes are now supports, guarding bulls at 1.0050 (central pivot point of the day) and 0.9976 (weekly long-term trend). Consolidation below will change the current balance of power. *** GBP/USD Higher timeframes At the opening of the trading week, an ascending gap of several points is noticeable, as well as the desire of bulls to develop the current corrective movement, formed earlier after testing support at 1.1411 (minimum extremum of 2020). The bulls have already updated last week's high, we can note the resistance levels of the daily cross 1.1737 - 1.1840 - 1.1943 among the reference points, and the weekly short-term trend (1.1848) serves as support in this area. H4 – H1 Bulls currently have the advantage on the lower timeframes. They are now testing the strength of the upper boundary of the H4 cloud (1.1672). Upon breakdown, an upward target will be formed. In addition, the reference points for the rise within the day are now the resistance of the classic pivot points (1.1728 - 1.1810). The key levels form support and are currently located at 1.1575 (central pivot point) and 1.1537 (weekly long-term trend). A breakdown of 1.1575–37 and a reliable consolidation below will change the current balance of power, while the situation would be better to re-evaluate. *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)         Relevance up to 09:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321400
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

EUR/USD - Euro May Get Stronger Thanks To The ECB And Ukraine's Activity. Will The US Inflation Reading Boost The US Dollar (USD)?

Conotoxia Comments Conotoxia Comments 12.09.2022 11:17
The euro this morning is the strongest of the world's major currencies, gaining nearly 0.5 percent against the USD. The main currency pair's exchange rate is still above parity and has reached its highest level in three weeks. EUR/USD with a chance for a bigger rebound? The struggle with the parity level of 1.0000 on the EUR/USD pair has been going on for quite some time. The rate seems to oscillate around this level, finding itself once above and once below this "psychological" barrier. Nevertheless, there may now be chances that the euro may be preparing for a bigger rebound. On the one hand, this may be supported by expectations of monetary tightening in the Eurozone, and on the other by the Ukrainian military offensive and its effective retaliation.  As the British Defense Ministry reported on Monday, Moscow is believed to have ordered the withdrawal of its military forces from the Kharkiv region, leading Ukraine to regain control of some territories. Near the city of Kherson, the latest intelligence briefing noted that Russia is having difficulty bringing reserves to the front line across the Dnieper River using improvised bridges, while Ukraine continues to shell the area with long-range artillery. Due to recent developments, confidence in the Russian military command will continue to decline, the British report concluded, BBN/ND mentioned. Source: Conotoxia MT5, EUR/USD H1 The gap between the USD and Euro advantage seems narrowing From the point of view of the interest rate market, the difference in the expected interest rate of the US dollar and the euro in the future also seems to be narrowing - as FRA contract quotes may indicate.  In addition, the gap between the 2-year USD and EUR interest rates has narrowed to levels last seen in early March, when the EUR/USD rose toward 1.10, Bloomberg commentators note. So it seems that this may be changing the outlook in the forex market from a one-sided view that everything may depend only on Fed action to a more balanced view in which the ECB may play a more prominent role. Perhaps the impact of this has not yet been fully priced in, and could result in EUR/USD possibly having a chance to make up some of its losses after Russia's invasion of Ukraine. EUR/USD has finished forming an accumulation? From the point of view of the chart, we can go back to the events of late August. At that time, the EUR/USD fell to the area of 0.9900 and consolidated in the region of 1.0000 - 0.9900 for many days. This could have led to the emergence of a potential accumulation in a relatively small range of fluctuations. Instead, it could culminate in a move toward 0.9850, where the euro fell to its lowest level in 20 years, which happened in early September. Then there could have been a so-called spring and a test of supply. The ensuing upward wave, in turn, is a possible "show of strength."  At stake now could be a sustained hold above 1,0000 and the overcoming of the downward trend line, the beginning of which was already set six months ago, in March. Source: Conotoxia MT5, EUR/USD D1 What else is the EUR/USD likely to react to this week? In addition to events from the war front and statements from central bankers, US inflation data may also be important. According to market consensus, inflation may fall to 8.1 percent in August from 8.5 percent in July and 9.1 in June. On the one hand, a deeper drop in inflation could be more positive for risky assets, while an above-consensus reading could continue to support the dollar, and the current weakness could be considered a correction.   Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service)   Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. Source: Euro gains strength with Ukrainian military offensive? (conotoxia.com)
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD And The GBP/USD Pairs Will Keep Upward Trend Today?

InstaForex Analysis InstaForex Analysis 12.09.2022 12:00
Details of the economic calendar for September 9 The week ended with an empty macroeconomic calendar. Important statistics in Europe, the United Kingdom, and the United States were not published. Despite the absence of statistical data on Friday, the market continued to show speculative activity. Probably, traders were playing back the decision of the ECB to tighten its own policy. Analysis of trading charts from September 9 The EUR/USD currency pair strengthened its position during the past week. As a result, the quote went above the two-week range of 0.9900/1.0050. The cause and effect of the upward cycle lies in the results of the ECB meeting, released last Thursday. The GBP/USD currency pair gained about 230 points (about 2%) in less than a week. The level of the local low of 2020 (1.1410) serves as a support in the corrective movement. Economic calendar for September 12 At the opening of the European session, data on UK industrial production was published, which slowed down from 2.4% to 1.1%. This is a negative factor for the country's economy, but based on the trading schedule and the market's reaction to statistical indicators, the pound sterling ignores them. Important statistics in Europe and the United States are not expected today. However, it is worth paying attention to the sppeches of the representatives of the ECB. Earlier, interesting statements were already received from representatives of the ECB, which indicate that the regulator should act tougher. Joachim Nagel (ECB): - Inflation in Europe could rise above 10% by December. - The ECB needs to act more aggressively if necessary. - A recession is possible in Europe. Klaas Knot (ECB): - The regulator needs to be more decisive if the situation requires it. - Some economists have already started talking about a 0.75% rate hike in October. Yannis Stournaras (ECB): The ECB has not yet raised the rate to a neutral level. We need to raise it to this level faster. The neutral rate level can be within 1.5%–2%. Trading plan for EUR/USD on September 12 Since the opening of the new trading week, an upward gap of about 60 points has appeared. This price gap brought the quote back to the highs of last week. With the opening of the European session, the upward cycle accelerated, which led to a move above the 1.0150 level. In this situation, a price impulse of more than 100 points in a short period of time can lead to overheating of long positions in short time periods. This may lead to a technical pullback. At the same time, stable price retention above the 1.0150 mark allows for the subsequent formation of a correction for dollar positions. Trading plan for GBP/USD on September 12 There is also an upward gap in the pound, which returned the quote to the high of last week. Subsequently, there was a prolongation of the correction course, where the cycles are similar to the movement of the EURUSD pair. Stable price retention above 1.1650 will eventually lead to an increase in the value of the pound to at least 1.1750. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.           Relevance up to 10:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321417
Industrial Metals Outlook: Assessing the Impact of China's Stimulus Measures

Podcast: The Situation In Ukraine Helps The European Market, The Yen's Situation

Saxo Bank Saxo Bank 12.09.2022 11:24
Summary:  Today we discuss market risk sentiment brightening in Europe in the wake of Ukrainian momentum on the battlefield since late last week, with EURUSD breaking well above important local resistance. The JPY is nearly as weak as the US dollar as yields have poked higher again. We also discuss developments in crude oil, wheat and rice after an Indian export ban, stocks to watch this week, including Oracle on the earnings report today and key semiconductor stocks as the US is likely to widen its curb on exports to China. Today's pod features Peter Garnry on equities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.     Source:https://www.home.saxo/content/articles/podcast/podcast-sep-12-2022-12092022
PLN Soars to Record Highs Ahead of NBP Decision

Will The EUR/USD Pair Break Above The Resistance Level?

InstaForex Analysis InstaForex Analysis 12.09.2022 15:11
Red lines- bearish channel Black lines- Fibonacci retracements EURUSD has started the week exactly how it ended the previous one. Dollar weakness across the board and EURUSD making short-term higher highs and higher lows. Price has so far retraced the 61.8% of the decline from 1.0368. This Fibonacci retracement level is key resistance. Short-term trend might be changing to bullish, however price remains inside the medium-term bearish channel. Next resistance is at 1.0260. Breaking above this level will increase chances EURUSD moves higher towards 1.04.       Relevance up to 15:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292398
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

Euro's Performance Is Impressive, Look At The EUR/USD Chart! We Will Soon Find Out How Is The US Economy Doing

Kenny Fisher Kenny Fisher 12.09.2022 15:35
The euro is red hot, having gained close to 2% in just two days. EUR/USD is trading at 1.0144, up 0.97% on the day. ECB gives euro boost The ECB showed last week that its hawkishness was not limited to words, as the central bank delivered a massive 0.75% rate hike, for only the second time in its history. The markets are paying attention, and the move has triggered an impressive rally by the euro. The ECB sent a powerful message that it is committed to curbing inflation by raising rates, even at the risk of a recession. President Christine Lagarde said at the meeting that she expected three or four more hikes, and the markets have priced in 0.50% increases at the October and December meetings. The economic outlook in the eurozone remains grim, with PMIs pointing to weakness in manufacturing and business activity. Russia has shut down the Nord Stream 1 pipeline which supplies gas to Germany, raising fears that the eurozone countries could face an energy shortage this winter. It should not come as a surprise that confidence levels are weak. The ZEW Economic Sentiment index remains mired in a deep freeze, and slowed to -60.0 in July, down from -55.5 in September. Read next: It's Going To Be An Interesting Week For UK! ECB Members Is Set To Speak| FXMAG.COM US inflation Has US inflation peaked? We’ll get a look at US CPI for August, with the markets expecting inflation to fall to 8.1%, down from 8.5% in July. Following the unexpected drop in July’s inflation release, market exuberance that the Fed would make a U-turn on its aggressive tightening sent the equity markets up and the US dollar sharply. The Fed has remained consistent with its stance and the markets appear to have internalized that the tightening cycle has some more room to run. The markets have priced in a 75 basis point hike at the meeting on September 21st. Tuesday’s inflation report will be doubly important, as it marks the final economic release before tomorrow’s meeting. If inflation hits 8.1% or higher, it would likely cement a 75bp move by the Federal Reserve. EUR/USD Technical EUR/USD has support at 1.0107 and 1.0008 There is resistance at 1.0152 and 1.0257 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro climbs to 3-week high - MarketPulseMarketPulse
Analysis Of The EUR/JPY Pair Movement

The Price of USD/JPY Pair Is Gearing Up To Overcome Resistance Level

InstaForex Analysis InstaForex Analysis 13.09.2022 08:07
By now, the second day of the yen's consolidation in the closing area on September 9th is expiring. The price is probably preparing to overcome the resistance at 144.25 in order to reach the high target at 147.05. During this consolidation, the Marlin Oscillator left the overbought zone and may continue to grow. To deepen the correction, the price needs to overcome the support at 141.10 - then the 139.20 target will be available. But even in this case, the decline will be considered as corrective. Overcoming 139.20, and with it the MACD line, will send the price into a medium-term downward movement. On a four-hour scale, the price is consolidating under the MACD line, at the Fibonacci level of 238.2%. If the price rises above this line (142.97), the price will once again attack the target level of 144.25, located between the reaction levels of 261.8-271.0%.   Relevance up to 04:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321485
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

The EUR/USD Price Is Currently Below The Breakout Level, Does It Mean A New Wave Of Decline?

InstaForex Analysis InstaForex Analysis 13.09.2022 08:17
The euro showed a strong growth on Monday - a rise in the moment by 154 points, closing the day by 80 points. The target level of 1.0150 was pierced, the closing of the day occurred under the level where the price is now. The signal line of the Marlin Oscillator is starting to turn down, perhaps this is the beginning of the price reversal into a new wave of medium-term decline, because the opening gap of the week is still not closed (the nearest target is 1.0020). Consolidating above 1.0150 will formally open the target of 1.0360, but this range is very tight, it was formed in the period from July 19 to August 17, so a downward reversal can happen without reaching the target of 1.0360. The price settled below 1.0150 on the four-hour chart, yesterday's exit above this level in this situation can be interpreted as false, until it settles above the level. The Marlin Oscillator is declining. According to the main scenario, we are waiting for the closing of yesterday's gap, the development of support at 1.0020. Consolidating below the level will open the target at 0.9950 (14 July low). Relevance up to 04:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321489
The Upside Of The EUR/USD Pair Remains Limited

Is Situation Of The Euro To The US Sollar favorable?

InstaForex Analysis InstaForex Analysis 13.09.2022 08:28
EUR/USD 5M The EUR/USD pair continued its upward movement for most of the day. Why did it start doing this the night before? At the beginning of the day, the euro already rose by 60 points in just five minutes. Therefore, in the morning it was clear that traders had tuned in for new long positions over the weekend. However, after testing the extreme level of 1.0195, a downward correction began, during which more than half of the success was lost. It should also be noted that Luis de Guindos and Isabelle Schnabel (members of the ECB Monetary Committee) did not report anything extra important on Monday. And there were simply no other important events during the day. Thus, the volatility equal to 150 points was shown almost out of the blue, which few people expected. However, this movement allowed the upward trend to be maintained. The price is now above the lines of the Ichimoku indicator, which allows it to continue rising for some time. Recall that this week there will be several important reports that can change the mood of the market dramatically. The euro is not yet strong enough to talk about a new long-term upward trend. There was a complete order with yesterday's trading signals. The very first buy signal allowed traders to earn at least 100 points, since the level of 1.0195 was worked out perfectly. Two sell signals were formed near the same level, which also had to be worked out. If the first one was closed by Stop Loss at breakeven, then the second one made it possible for us to earn another 50 points. A short position should have been closed when the price settled above the level of 1.0124 again. The same buy signal could also be worked out, but it did not bring any profit or loss. As a result, the total profit was 150 points. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 3,000, while the number of shorts decreased by 8,300. Accordingly, the net position grew by about 12,000 contracts. This is not very much, but it is still a weakening of the bearish mood among the major players. However, this fact is not of particular importance, since the mood still remains bearish, and the euro remains "at the bottom". At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 36,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new depreciation of this currency. Over the past six months or a year, the euro has not been able to show even a tangible correction. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 13. The euro is at a crossroads. Much will depend on inflation reports. Overview of the GBP/USD pair. September 13. Liz Truss is the best candidate available, but may prove to be a weak prime minister. Forecast and trading signals for GBP/USD on September 13. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair showed at least some kind of upward trend on the hourly timeframe, but it is ready to form. It seems to us that the growth was due to the results of last week's European Central Bank meeting, because there were no other reasons to buy the euro. We highlight the following levels for trading on Tuesday - 0.9877, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9977) and Kijun-sen (1 .0032). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The key and in fact the only event of the day on September 13 will be the US inflation report for August. It is on the basis of this report that the Federal Reserve can make a decision on monetary policy next week, so it is very important. And the reaction to it may be appropriate. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 02:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321477
The Euro May Gradually Climb To The Target Level

Further Downward Trend In The EUR/USD Pair Is Expected

InstaForex Analysis InstaForex Analysis 13.09.2022 08:50
Technical Market Outlook: The EUR/USD pair has broken above the key short-term supply zone located between the levels of 1.0090 - 1.0122 and made a new local high at the level of 1.0198. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the longer term down trend is reversed. The intraday technical support is seen at 1.0122 and 1.0090. The strong and positive momentum on the H4 time frame chart supports the short-term bullish outlook for EUR. Please watch the USDX as the correlation between this two is directly opposite. Weekly Pivot Points: WR3 - 1.01483 WR2 - 1.01150 WR1 - 1.01017 Weekly Pivot - 1.00817 WS1 - 1.00684 WS2 - 1.00484 WS3 - 1.00151 Trading Outlook: Despte the recent relief rally towards the short-term support one, the EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated.   Relevance up to 08:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292486
Reduction In Demand For Power In UK, Bank of Japan Plans To Maintain Current Policy

Reduction In Demand For Power In UK, Bank of Japan Plans To Maintain Current Policy

Saxo Bank Saxo Bank 13.09.2022 09:26
Summary:  Equity sentiment remained upbeat and the US dollar weakened further despite a surge higher in US Treasury yields. Globally sustained inflation pressures, such as those in Japan’s producer prices and New Zealand’s food prices, continues to raise concerns. US inflation print for August takes all the attention today with impact likely to reverberate through markets but unlikely to change the Fed’s upcoming rate hike at the September meeting. Precious metals tested key resistance levels and crude oil prices made a recovery as well. The lack of consensus on EU energy proposals may spark some concerns. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) extend their bear market bounce U.S. equities extended the bear market bounce for the fourth day amid a relatively uneventful and light volume day. The S&P 500 rose 1.1%, Nasdaq 100 up 1.2%. It comes despite bond yields rising, with the 30-year yield hitting a new high of 3.53%. Meanwhile the volatility index, the VIX rose for the first time in four days to 23.9, suggesting uncertainty could be brewing. Noteworthy moves in US stocks   Apple (AAPL:xnas) contributed to the days move, accounting for more than 60 points of the 151 points in Nasdaq 100, after the stock surged 3.9% on strong pre-order data of the new iPhone 14. A larger number of call options were traded on Apple shares on Monday. Twitter (TWTR:xnys) lost 1.7% after it sent a letter to Elon Musk and said the company intends to enforce Musk’s agreement to buy the company. Oracle (ORCL:xnys) reported sales growth of 18% to $11.4 billion, with higher contributions from cloud computing and the newly acquired Cerner, a health records provider. Adjusted EPS came in at $1.03, below the analyst consensus of $1.06 as per the Bloomberg survey. Oracle shares gained 1.3% in after-hours trading. Gilead Sciences (GILD:xnas) surged 4.2% following the settlement of an HIV drug intellectual property dispute. Bristol-Myers Squibb (BMY:xnys) gained 3.2% as regulators approved the company’s psoriasis drug.  US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) The treasury yield curve bear steepened on Monday, with the 30-year yield finishing the day at 3.51%, a new high just a little above the previous high print in June. The long-end, yields of the 10-years through 30-years jumped 5 to 6 bps after the poor 3-year notes and 10-year notes auctions, in particular the latter. The 10-year auction stopped at a yield of 3.33%, which was 2.7 bps higher than the notes were trading at 1:00 pm New York time when the results were announced. The 10-year notes weakened to finish the day at 3.36%. In addition to the USD41 billion 3-year and USD32 billion 10-year auctions, eight corporate new issues with a total size of about USD12 billion came to the market yesterday. The decline in the inflation expectations print in the New York Fed’s survey of consumer expectations did not move the treasury markets which had the day’s focus on supply. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong and China markets were closed on Monday for a public holiday.  Overnight in U.S. trading, the Nasdaq Golden Dragon China Index bounced by 2.8%.  Chinese EV maker, NIO (NIO:xnys) soared 13.7% following Deutsche Bank and BoA Merrill Lynch analysts reiterating “buy” rating as well as reiterating and raising price targets respectively.  EURUSD recovery extended, but risks ahead EURUSD tested highs of 1.02 on Monday amid some optimism on Ukraine’s military advances and Bundesbank President Joachim Nagel signaling support for further interest-rate hikes in Europe. Gains however cooled later with ECB's Scicluna suggesting the central bank will continue with rate hikes but they are unlikely to be as large as the 75bps hike seen last week. Meanwhile, EUR/GBP printed a fresh YTD high of 0.8722 before unwinding the gains later. Pressure could build on EUR as the EU energy proposals will likely face some opposition, and US CPI data today will also be on watch. Russia may also increase the energy pressure on Europe if Ukraine’s advances stick. Crude oil prices (CLU2 & LCOV2) Crude oil prices saw some recovery on Monday amid a softer USD as well as weaker US inflation expectations from the NY Fed offset some of the weaker dollar concerns. Iran nuclear deal also seems to be making little progress, delaying any possible relief on the supply side. WTI futures rose to $88/barrel while the Brent futures were up at $94/barrel. US CPI data due later today is key to further gauge the path of Fed’s rate hikes from here, and the EU energy proposals will also be a key catalyst. Gold (XAUUSD) and Silver (XAGUSD) Gold rose on Monday as the dollar extended its retreat from a record high ahead of US inflation data due later today, which could potentially slow down the pace of Fed’s rate hikes if the headline print is softer than expected. Gold tested $1734, the 21-day SMA and 38.2% retracement of the August slump, but was rejected and back below $1730 in early Asian trading. Silver also rallied sharply to touch the $20-mark supported by a weaker dollar, higher gold prices and signs of tightness supporting the copper market. Last Tuesday speculators held the largest short position in three years and the continued rally is now forcing broad short covering.   What to consider? US CPI print will point to higher and stickier price pressures With the labor market remaining strong in the U.S. over the last few months, the focus has remained on the inflation data to predict the path of the Fed’s rate hikes. Clearly, all of the Fed’s members have had a unified hawkish stance since the Jackson Hole conference, and many have clearly hinted at a 75bps rate hike for September. Tuesday’s US CPI report is the one to watch, as it can move the market pricing of the Fed’s rate path and is the last key data point scheduled to release ahead of the September 21 Fed meeting. After some softening in July, it can be expected that the headline print may ease further in August as well given the decline in gasoline prices. Still, the inflation print is likely to stay elevated due to the stickier shelter and services costs, as well as still-high energy and food prices. Consensus estimates point to a mild decline of 0.1% MoM while the core remains strong at 0.3% MoM. EU proposes mandatory cuts to power use and profit levies It is expected that the EU draft energy plan will include mandatory power demand cut, an “exception and temporary” levy on oil, gas, coal and refining companies, as well as revenue caps for non-gas fuelled power generators. There is likely to be opposition from some of the member states, as the plan is detailed out tomorrow. Here is another sign inflation is not peaking; New Zealand food inflation hits a 13-year high New Zealand food prices rose 8.3% over the year to August 2022, which is the biggest annual increase since July 2009, according to data from Statistics New Zealand. The surge was mainly driven by a 8.7% increase in grocery food prices compared to a year ago, after fruit and vegetable prices rose 15%. Prices for staples like, eggs, yogurt, and cheddar cheese saw the largest moves in grocery prices. Companies to look at that sell food and dairy products to supermarkets include Costa Group (CGC), as well as A2 Milk (A2M) and Bega Cheese (BGA) and Synlait Milk (SM1). The New Zealand dollar rose to a two-week high against the USD, on expectation the Reserve Bank of New Zealand (RBNZ) will need to keep hiking rates. Japan producer prices remain above expectations Japan’s August PPI was up 9.0% y/y (vs. 8.9% y/y expected) while last month’s was also revised higher to 9.0% y/y from 8.6% y/y previously. The m/m print was slightly softer at 0.2% vs. 0.4% expected, but continued to show rising cost pressures amid the surge in commodity prices and a weaker yen. This suggests more CPI pain is in the pipeline, and the resolve of Bank of Japan to maintain accommodative policy will continue to be tested. New York Fed 1-year consumer inflation expectations at 10-month lows The latest NY Fed consumer inflation expectation gauges declined sharply, suggesting easing price pressures. Expectations for US inflation three-years ahead fell to two-year lows to come in at 2.8% in August, while the one-year ahead gauge was at 5.7%, a 10-month low. Meanwhile, inflation expectations on a five-year horizon fell to 2% from 2.3% previously, suggesting that inflation expectations remain anchored. Gloomy economic outlook for the United Kingdom According to the Office of National Statistics, UK GDP grew only 0.2% month-over-month in July. This is less than expected (0.4 % month-over-month). The weakness is mostly centered on the industry and the construction sector. This is worrying. There is no big bank holiday effect. However, there is anecdotal evidence of a reduction in demand for power because of cost, but it was also a hot month. In addition, the UK July industrial production fell 0.3% month-over-month versus expected +0.3%. Expect negative print in the eurozone for the same period too. California’s electricity infrastructure is under severe tension According to data released over the weekend by California Independent System Operator, demand on California’s power grid hit an all-time high on 6 September above 50,000 MW. The last two times it was close to this threshold was in 2007 and in 2017. The situation is getting worse and worse. Oracle reported sales in line with expectations but missed EPS estimates Oracle (ORCL:xnys) reported sales growth of 18% to $11.4 billion, in line with expectations. The sales growth was largely attributable to contributions from cloud computing and the newly acquired Cerner, a health records provider. Adjusted income came in at USD1.68 billion, a 33% drop from last year quarter and missing analyst estimates.  Adjusted EPS was $1.03, below the analyst consensus of $1.06 as per the Bloomberg survey. The earnings miss was partly due to FX losses which were results of a stronger dollar. Banking job cuts? Goldman Sachs is getting ready for jobs cuts. Who’s next? Goldman to report a 40% drop in earnings, which will foreshadow job cuts. However, there could be a lot of stake; in July Goldman said it planned to slow hiring and reinstate performance reviews. There is a huge question looming about how banks will get work with global deal volumes having dropped by about $1 trillion from a year ago. Investment banks are reliant on equity capital markets and IPOs and our sense is that more job cuts could be coming with inflation set to continue to rise, and push up the yield curve, and official interest rates into next year. For investors the takeaway here is that while markets remain uncertainty and rates are rising, investment banks will likely continue to face pressure. Banking ETFs, such as Vanguard Financials ETF (VFH) and Financial Select Sector SPDR ETF (XLF) are both down about 13% from their October 2021 peaks. Although they are both rallying amid the bear market bounce lately, we think the sector is likely to pair back again once stronger US data comes out and Fed suggests more rate hikes are coming.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-13-sept-2022-13092022
BSP Maintains Rates Amid Moderate Inflation; Eyes Further Tightening if Needed

Forex: The Headline-Topping US Dollar's (USD) Downtrend May Be Tricky!

ING Economics ING Economics 13.09.2022 10:09
The dollar correction may extend a little further today as slowing US CPI could help risk sentiment further. However, Fed rate expectations should not be affected, and optimism about the Ukraine conflict and lower gas prices may be misplaced or too premature, so the dollar may stabilise or recover later in the week USD: Another leg lower with US CPI slowing? An extension of supported risk assets kept the dollar under pressure at the start of this week. In particular, European sentiment appears to be rebounding quite sharply, largely on the back of falling gas prices and some market optimism around developments in the Russia-Ukraine conflict. All this has likely prompted some position-squaring effect on the overbought dollar which has widened the scope of the dollar drop. The question is whether this correction is sustainable and the dollar did indeed peak last week. In our view, the narratives behind the recent FX moves are not solid enough for the strong bearish call on the dollar just yet. First, because the drop in gas prices may actually be related to mandated lower usage levels, which would actually be rather bad news for the eurozone’s economy given the centrality of the manufacturing sector. Second, the market’s optimism around a ceasefire based on Ukraine’s recent counteroffensive may be premature. Third, the dollar can still count on a strong domestic story, both on the growth side and on the monetary policy side, as markets have now cemented their expectations for a 75bp Fed hike in September and a 4.00% Fed Funds rate in early 2023. Today’s US CPI figures for August are, however, a risk event for the dollar. The consensus is centred around a deceleration in headline inflation from 8.5% to 8.1%, largely due to lower gasoline prices. Core inflation may instead accelerate above the 6.0% mark from 5.9% in July. All in all, and given the recent hawkish messages by Fed Chair Jerome Powell, it appears unlikely that – barring significantly below-consensus reads – expectations around Fed tightening will be heavily affected by today’s CPI report. That said, there is surely a possibility that a risk-on environment may be bolstered further by evidence of US inflation having peaked, and another leg lower in the dollar may be triggered by another good session for global equities. As discussed above, it is too early in our view to see a more structural dollar downtrend, and we see a higher probability of stabilisation or small recovery in the greenback in the second half of the week. Francesco Pesole EUR: Equity differential on the driver's seat Last week, we highlighted the growing relevance of relative equity performance (as a gauge of diverging growth paths) in driving EUR/USD short-term fair value. Indeed, the market’s growing optimism on Europe is fuelling a rebound in European equities, and the euro’s parallel recovery is keeping that FX-stocks correlation very well alive. We mentioned above how markets may have turned optimistic too early on the gas and Ukraine themes, but the euro may also have been helped by some hawkish comments from ECB officials. It’s important to note that monetary policy is not playing a primary role in driving short-term EUR/USD moves, and that parallel hawkish repricing in Fed expectations means that the EUR-USD 2-year swap spread is close to its post-ECB meeting level. The current swap rate differential does surely point at a stronger EUR/USD, but in order for the pair to reconnect with that differential under current market conditions, we’ll likely need a period of stabilisation in European sentiment, something we are seeing now but may prove hardly sustainable in the coming weeks. Today, some focus will be on the ZEW survey out of Germany, while there are no scheduled ECB speakers. Another potential good day for risk assets if US CPI moves lower may keep EUR/USD bid for now: a break above 1.0200 is possible at this stage, but a return to the 1.0000 level parity remains our base-case scenario into year-end for EUR/USD. Elsewhere in Europe, Sweden’s general election results haven’t been called yet, and an official final count may only be announced tomorrow. However, it looks like a right-wing/far-right coalition is on track to secure a majority by a razor-thin margin. SEK is the best-performing currency since Friday, but that is in line with its high beta to European risk sentiment rather than a reaction to election results. Francesco Pesole GBP: Jobs market remains tight Jobs data released this morning were largely in line with consensus expectations and confirmed the UK jobs market has remained quite tight. Most crucially for the Bank of England, evidence that wage growth has continued to accelerate may suggest more aggressive tightening. GBP is trading slightly higher after this morning’s release but should have a larger reaction after tomorrow’s CPI data. Today, Cable should still be moved by external drivers and may remain supported, while EUR/GBP may stay in the upper half of the 0.86-0.87 range. Francesco Pesole CEE: FX switched the pipe from rates to gas Current account data for Poland, the Czech Republic and Romania will be published today. We do not expect any changes in the current trend of negative balances across the region. But we don't think it will do anything to the stronger FX in CEE, which is already fully disconnected from the markets and follows only gas prices. Yesterday's rates sell-off sent interest rate differentials to new lows, in Poland since March this year, in the Czech Republic since December last year and in Hungary since mid-August. However, the market seems unconcerned by this move, and further declines in gas prices indicate further gains for CEE FX. We currently see the biggest gap in this relationship for the Czech koruna, which could continue its yesterday rally below 24.50 EUR/CZK and the Polish zloty closer to EUR/PLN 4.680. On the other hand, we see the Hungarian Forint fairly priced at the moment and awaiting news from the negotiations with the European Commission. Frantisek Taborsky Read this article on THINK TagsFX Daily FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Can Prices Of The EUR/USD And The GBP/USD Pairs Stay Steady?

InstaForex Analysis InstaForex Analysis 13.09.2022 10:10
The only thing investors are worried about right now is the extent of the European Central Bank and Federal Reserve's rate hikes. That was the reason for the noticeable growth of the euro, which, due to its scale, pulled up other currencies as well—firstly, the pound. The reason for this was the words of ECB Vice President Luis de Guindos, who almost directly stated that the refinancing rate will be raised again by 75 basis points at the next board meeting. The reason for such aggressive actions of the European Central Bank is the growing inflation. Most likely, the dollar will continue to lose its positions today. The reason for this will be inflation. According to forecasts, US inflation should slow down from 8.5% to 8.1%. That is, inflation is slowing down for the second month in a row, which gives the Fed a reason to reduce the rate of interest rate growth. So there may be a situation where interest rates are rising quite strongly in Europe but much slower in the United States, if the American regulator does not stop this process at all. Just a few months ago, the situation was diametrically opposite, and it was the Fed that was actively raising the rate, and the ECB was only considering the possibility of tightening monetary policy. And this led to a serious rise in the dollar. Now it is quite possible to talk about a U-turn. Inflation (United States): The EURUSD currency pair locally jumped to 1.0200 during an intense upward movement. This move resulted in overheating of long positions in the short term, resulting in a technical pullback in the market. A stable holding of the price above 1.0150 allows the subsequent growth of the euro with a breakout of 1.0200. The GBPUSD currency pair has a similar dynamics, where the quote has firmly fixed above the level of 1.1650. With the upward mood on the market, a subsequent increase in the value of the pound sterling in the direction of 1.1800 is not excluded, where stagnation/pullback is already possible.   Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321509
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

The EUR/USD Pair: Trend Analysis And Review Of Investment Scenarios

InstaForex Analysis InstaForex Analysis 13.09.2022 10:20
Trend analysis (Fig. 1). The euro-dollar pair may move upward from the level of 1.0121 (close of yesterday's daily candle) to 1.0175, the 61.8% retracement level (white dotted line). Upon reaching this level, continued upward movement is possible with the target of 1.0197, the upper fractal (daily candle from 09/12/2022). When testing this level, the price may move downward to 1.0160, the 76.4% retracement level (blue dotted line). From this level, the price may move up. Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today the price may move upward from the level of 1.0121 (close of yesterday's daily candle) to 1.0175, the 61.8% retracement level (white dotted line). Upon reaching this level, continued upward movement is possible with the target of 1.0197, the upper fractal (daily candle from 09/12/2022). When testing this level, the price may move downward to 1.0160, the 76.4% retracement level (blue dotted line). From this level, the price may move up. Alternative scenario: from the level of 1.0121 (close of yesterday's daily candle), the price may move upward to the resistance level of 1.0146 (thick red line). When testing this level, a downward movement is possible to 1.0096, the 100.0% retracement level (blue dotted line). When testing this level, the price may move up.     Relevance up to 08:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321507
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

The EUR/USD Pair Has A Chances For A Further Recovery

InstaForex Analysis InstaForex Analysis 13.09.2022 12:23
Euro is likely to rise as risk appetite will surge if inflationary pressure in the US eases. The lower figure will also affect the Federal Reserve, weakening its grip on rate increases. Recently, US Treasury Secretary Janet Yellen expressed optimism for a slowdown in inflation, but warned that uncertainty remains. The core CPI for August is expected to show growth, while the overall index is likely to slow to 8.1%. Inflation has been a major concern for the Biden administration as high gas and food prices earlier in the year have seriously undermined the president's popularity and the Democrats' prospects for maintaining control of Congress. Also, in response to high price increases, the Federal Reserve has been raising interest rates rapidly. They hope that such a move will curb further price hike as quickly as possible, so there were several increases of 75 basis points at once at the past meetings, and the same is expected in September. But even if inflation slows in August, the Fed is unlikely to step back from its mandate as the central bank intends to do whatever it takes to bring inflation under control. Talking about EUR/USD, there are chances for a further recovery, but only in the event that inflation eases in the US. If the opposite happens, euro will decline, and buyers will have to cling to 1.0100 in order to bring back the possibility of a rally. The nearest target will be resistance level of 1.0150, the breakdown of which will open a direct path to 1.0190 and 1.0240. The farthest target will be the level of 1.0270. In case of a further decrease and breakdown of 1.0100, sellers will become more active in the market, which could push the quote to 1.0030 and 1.0000 In terms of GBP/USD, a lot depends on the 17th figure as its breakdown creates a pretty good chance for a larger upward correction. That will open a direct route to the highs at 1.1750 and 1.1790. The farthest target will be 1.1840. But if pressure on the pair returns, buyers will have to do everything to stay above 1.1660, otherwise, there will be another major sell-off towards the level of 1.16130. Its breakdown will open a direct path to 1.1580 and 1.1550.   Relevance up to 08:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321521
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

The GBP/USD Pair Is Following The Euro, The Pound Has Received Support In The Market

InstaForex Analysis InstaForex Analysis 13.09.2022 12:49
Details of the economic calendar for September 12 UK industrial production data showed a slowdown in growth from 2.4% to 1.1%. This is a negative factor for the country's economy, but based on the behavior of the price, the pound ignored the statistical indicators. Speculators focused on the speeches of the representatives of the European Central Bank. Their comments confirmed the "hawkish" forecast regarding further rate hikes. Experts are sure that the ECB intends to raise rates by 75 basis points in October. Based on expectations, the market experienced a sharp rise in the value of the euro. The main theses of the speeches of the ECB representatives: Joachim Nagel, ECB: - The rate increase during the September meeting brought us one step closer to the neutral level—it is necessary to raise rates further; - Inflation is very high—it can reach 10% YoY; - It is possible that the inflation rate will peak in December and will gradually decrease in 2023; - Inflation could reach 6.0% YoY next year. Frank Elderson, ECB: - All members of the ECB intend to return inflation to 2.0% YoY—this is a priority; - The ECB will continue to raise interest rates; - A period of recession is possible but may not be long; - Stable prices are an important medium- and long-term growth factor for good prospects for the EU. Luis de Guindos, ECB: - The 75 basis point rate hike in September was made to reduce inflation expectations; - The ECB should help the EU cope with the energy shock; - Higher interest rates could slow down economic growth; - The regulator must direct all its tools to restore price stability; - No idea where the ECB rate ceiling will be. Analysis of trading charts from September 12 The EUR/USD currency pair strengthened in value by about 300 points from the lows of the downward trend. This movement is classified as corrective, during which the quote locally rose to the area of 1.0200. The GBPUSD currency pair rushed up after the euro. As a result, the corrective move from the local low of 2020 was prolonged, where the British currency strengthened by about 300 points in less than a week. Economic calendar for September 13 At the opening of the European session, data on the UK labor market was published, which came out much better than forecasts. The unemployment rate fell from 3.8% to 3.6%, while forecast assumed the previous level to remain. The negative factor in the report is the increase in the number of claims for unemployment benefits by 6,300, while their reduction is forecast by 13,200. At the same time, employment in the country grew less than the forecast, by only 40,000. Despite the negative factors, the decrease in the unemployment rate in the country covers everything. As a result, the pound sterling received support in the market from buyers. The main event of the day and the whole week is the data on inflation in the United States. Based on the indicators, investors and traders will be guided by the Fed's possible steps during the next meeting. In simple words, a gradual decline in inflation may push the regulator to slow down the rate of increase in the refinancing rate, and this, in turn, will lead to a noticeable weakening of dollar positions. Based on forecasts, inflation in the US may slow down from 8.5% to 8.1%. Time targeting: US Inflation – 12:30 UTC Trading plan for EUR/USD on September 13 In this situation, stable price retention above the level of 1.0150 will eventually lead to a breakdown of the value of 1.0200. This step allows for the subsequent formation of a corrective move that does not violate the integrity of the downward trend. Trading plan for GBP/USD on September 13 In this situation, the upward cycle is still relevant in the market. Therefore, the prolongation of the current corrective move is not excluded, where at first, the price will hold above the level of 1.1750 and then move towards 1.1800–1.1850. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.       Relevance up to 10:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321539
Navigating the European Landscape: Assessing the Significance and Variations of Non-Bank Financial Institutions

The GBP/USD And The EUR/USD Pairs Are Bullish

InstaForex Analysis InstaForex Analysis 13.09.2022 13:28
EUR/USD Higher timeframes Bulls, yesterday, tested the reference points indicated earlier at the boundaries of 1.0116 - 1.0176 (final levels of the daily cross + weekly short-term trend). The liquidation of the daily Ichimoku death cross (1.0176) and the entry into the daily cloud (1.0203) will allow us to build further plans and consider new upward prospects. The levels passed the day before now form a support area, which today can be defined within 1.0057 - 1.0031 - 1.0000. H4 – H1 The bulls keep the main advantage in the lower timeframes. Their next intraday upside targets are now at 1.0194 – 1.0266 – 1.0334 (classic pivot points resistance). Despite the overall advantage, the pair is currently in the correction zone, relying on the support of the target broken yesterday on the breakdown of the H4 cloud (1.0128) and the central pivot point (1.0126). The key support is the weekly long-term trend (1.0019), which is responsible for the current balance of power. Its breakdown and reversal will support a change in priority in the movement. *** GBP/USD Higher timeframes The development of an upward correction continues. The pair approached the first resistance of a fairly wide zone, which is currently located at the boundaries of 1.1737 (daily Fibo Kijun) - 1.1840–48 (daily medium-term trend + weekly short-term trend) - 1.1943 (the final level of the Ichimoku cross in D1). The passage of this zone will significantly change the current balance of power and open up new targets for bulls. Immediate support now is the previous daily short-term trend (1.1568). H4 – H1 The advantage at the moment is on the side of the bulls. In the lower timeframes, they continue the development of the upward movement and test the first resistance of the classic pivot points (1.1729). Their further targets within the day are 1.1778 (R2) – 1.1847 (R3). Key levels today act as supports and are located at 1.1660 (central pivot point) and 1.1570 (weekly long-term trend). The breakdown of key levels can lead to a change in the current balance of power. *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend) Relevance up to 11:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321562
The Euro To US Dollar (EUR/USD) Pair Moved Without Panic But Now No One Is Thinking About Buying The Euro

If The US Dollar Is Under Pressure Then EUR/USD Will Continue To Grow

InstaForex Analysis InstaForex Analysis 13.09.2022 13:59
EUR/USD continues to fall despite the current correction of almost 300 points. If the dollar is under pressure today after the release of inflation data in the US, then EUR/USD will receive a new impetus for further growth. As of this writing, the price is trying to overcome the strong resistance level of 1.0150 (50 EMA on the daily chart). In case of successful development of a positive scenario for EUR/USD, the breakdown of yesterday's local high of 1.0198 will become a confirming signal for building up long positions with targets near the upper border of the downward channel on the weekly chart and the level of 1.0355. In the main scenario, we expect the decline to resume. The breakdown of the crucial short-term support level 1.0087 (200 EMA on the 4-hour chart) will be a signal for the resumption of short positions, and the level of 0.9900 will be the first target of a decrease (in the range of 1–3 weeks). Below the key resistance levels 1.0660 (200 EMA on the daily chart), 1.0750 (50 EMA on the weekly chart), EUR/USD is in the zone of a long-term bearish market. Support levels: 1.0150, 1.0087, 1.0030, 1.0000, 0.9900, 0.9865, 0.9800 Resistance levels: 1.0198, 1.0220, 1.0300, 1.0355 , 1.0500, 1.0660, 1.0750 Trading Tips Sell Stop 1.0110. Stop-Loss 1.0210. Take-Profit 1.0087, 1.0030, 1.0000, 0.9900, 0.9865, 0.9800, 0.9700 Buy Stop 1.0210. Stop-Loss 1.0110. Take-Profit 1.0300, 1.0355, 1.0500, 1.0660, 1.0750   Relevance up to 12:00 2022-09-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321566
The US PCE Data Is Expected To Confirm Another Modest Slowdown

Market Eyes On US CPI Results, Increased Risk Sentiment

Saxo Bank Saxo Bank 13.09.2022 13:35
Summary:  An important US CPI release up later today, which could extend the USD weakening move in the short term if we see a soft print, with JPY crosses likely the most sensitive to any jolt the data delivers to US treasury yields. Elsewhere, it is all about market sentiment, which has rushed higher on hopes that Ukrainian battlefield momentum will continue and change the game for the European energy outlook. FX Trading focus: US CPI release and USD picture. AUDNZD in the spotlight. Over the last few days, the US dollar has largely weakened as a function of brightening risk sentiment and hopes that the energy situation might eventually improve for Europe if Ukrainian battlefield successes compound further and prove a gamechanger for the medium term energy outlook for Europe. It’s impossible to predict developments there, but to get a more determined extension higher, we’ll need a steady stream of improvements and something that can bring the prospect of actual deliveries of Russian natural gas through the pipelines. I’m not sure I understand the path in that direction in the near term. That brings us to today’s August US CPI release, which is expected to show headline inflation at -0.1% month-on-month and +8.1% year-on-year, with the more important core “ex Food and Energy” CPI reading expected at +0.3% MoM and +6.1% YoY (vs. +5.9% in July and a cycle peak of ). The core print, especially the month-on-month reading, is far more important than the headline data. Look for a significant reaction on a downside miss even of 0.1%, but the market may get very upset if we get a +0.4% or higher reading. It’s hard to know how the market is positioned for this data point, given that Fed expectations are pinned near the highs of the cycle, while the USD has backed off very sharply and risk sentiment has enjoyed a strong surge. The latter suggests that the surprise side is a hot core inflation reading. Chart: GBPUSDSterling is trading a bit firmer as the currency is the most sensitive to prospects for an improved natural gas delivery outlook, with the markets hopes up on that front due to developments in Ukraine. The UK August payrolls data this morning was stronger than expected and the unemployment dropped to a nearly 50-year low of 3.6% versus expectations for 3.8% expected. And yet, August Jobless Claims posted their first positive reading since early 2021 and are trending very sharply higher. The Bank of England is rapidly seeing expectations repriced for a 75 basis point hike at next Thursday’s meeting, but it’s not fully there yet. Ahead of today’s US CPI release, GBPUSD is trading up close to the first important resistance, the major pivot low in July near 1.1760. The next few sessions should be pivotal for the pair. AUDNZD update as the pair pushes on resistance again. The drumbeat of economic data out of Australia is not particularly encouraging, and the last Australian trade balance saw the surplus shrinking sharply after a string of record levels in recent months. That surplus relative to the new very large external deficits that New Zealand has been running due to its reliance on energy imports is one of the key factors favouring a significant break higher in AUDNZD into a new range above the 1.1250 that has held since 2017 (and on a weekly close basis since 2015, with the highest weekly close since 2013 only slightly above 1.1300). Watching that pair for a change of mentality, as fair price in the very long term perspective looks more like 1.2000+. The Norwegian Regions Survey for August showed the first negative print (-0.16 vs. +0.80 in July) for the expected growth for the next six months since 2009, a fairly remarkable development suggesting that the oil and gas boom has not sufficiently offset concerns for real growth in the country. NOK trades a bit weaker this morning versus the euro and SEK, with NOKSEK only having a bit more than a figure to worth with before suggesting a reversal lower (1.0500 area versus current 1.0620 as of this writing). Table: FX Board of G10 and CNH trend evolution and strength.The USD is leaning lower – does the CPI deliver the coup de grace today? Elsewhere, the weak JPY will be very sensitive to the US treasury market reaction on the back of the CPI, as its weakness is reflection of US treasury yields pinned near the highs for the cycle. Table: FX Board Trend Scoreboard for individual pairs.USDCAD is trying to turn negative – let’s have a look at the US CPI release today and the close on the day before drawing conclusions. EURUSD flipped positive yesterday and needs to remain above 1.0100 after the US data today to keep the focus higher, perhaps to 1.0350 next. Upcoming Economic Calendar Highlights 1000 – US Aug. NFIB Small Business Optimism 1230 – US Aug. CPI 1700 – US 30-year T-bond Auction Source: https://www.home.saxo/content/articles/forex/fx-update-usd-eyes-cpi-europe-eyes-energy-prices-13092022    
5% for the US 10-Year Treasury Yield: A Realistic Scenario

Eyes On US Inflation Data And Gold & Silver Benefit From Softer USD

Swissquote Bank Swissquote Bank 13.09.2022 14:16
Global indices made a solid start to the week. The EuroStoxx 600 closed yesterday 1.76% higher on news that the Ukrainians are doing well pushing back the Russians in territories they launched a counteroffensive attack. The S&P500 and Nasdaq advanced more than 1%, despite chatter of rail strike in the US. Hope of softer US inflation is what keeps the bulls running. US inflation data US inflation data is due today, and the CPI is seen easing toward 8.1% in August versus 8.5% printed a month earlier, and 9.1% peak printed the month before. A second month of soft inflation read has the power to soften the Fed hawks and increase the bets of softer rate hikes beyond September, whereas a figure above expectations, or worse, a figure above last month’s read could snap the latest rally and send the stocks tumbling. We are tilted toward a softer read than not. Hope of a soft inflation data is also what’s pulling the US dollar lower across the board. The dollar index tipped a toe below the 108 mark yesterday, while the EURUSD made an attempt above its 50-DMA, as news that Ukrainian troops are being successful in their counteroffensive attack, and chatter that voices are rising in Russia against the regime’s strategy in Ukraine, brought forward the possibility of Russia being defeated in Ukraine. Cable flirts with the 1.17 level, the dollar-swissy retreated to 0.95 and the USDCAD slipped below 1.30. The American crude, gold and silver are better The American crude rallied more than 2% yesterday on improved market sentiment, and flirted with the $90 offers, without however being able to clear them. Gold and silver are also better bid into the inflation data, thanks to a broadly softer US dollar. Watch the full episode to find out more! 0:00 Intro 0:25 Equities extend gains 0:58 … despite discouraging news for US retailers 2:25 US inflation is all that matters 6:20 USD soft pre-CPI, EUR gains on Ukraine news 7:15 Pound firmer but… 8:40 Crude oil flirts with $90 9:00 Gold & Silver benefit from softer USD Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #inflation #EUR #CAD #CHF #GBP #Gold #XAU #Silver #XAG #crude #oil #EuroStoxx #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH        
The Euro To US Dollar (EUR/USD) Pair Moved Without Panic But Now No One Is Thinking About Buying The Euro

How The Euro To US Dollar Pair Started The Day

InstaForex Analysis InstaForex Analysis 14.09.2022 08:02
The EUR/USD currency pair resumed its growth quite calmly on Tuesday. We have already said in previous articles that it is too early to make an unambiguous conclusion about the completion of the formation of a long-term downward trend. This trend has been forming for too long to break in one week. Recall that we have a certain "bifurcation point" - 1,0369. This level is the last local maximum. If it is updated, the chances of forming a new upward trend will increase dramatically. If not, then the entire current segment of the growth of the euro currency will be recognized as another "weak" correction, as we recall that during the entire downward trend, the pair showed corrections of a maximum of 400 points. And Tuesday eloquently showed us that the level of 1.0369 is unattainable for the pair, and it's too early to put an end to the dollar. The market only had enough understanding that inflation in the US in August fell slightly less than predicted to collapse the pair by almost 200 points. What else is there to talk about? The morning growth of the euro currency can also not be called logical from a macroeconomic point of view. In the morning, an inflation report for August was published in Germany, which showed a new acceleration to 7.9%, fully corresponding to experts' forecasts. On the one hand, such a report could cause a new strengthening of the euro currency since any increase in inflation is at least a little. Still, it increases the likelihood of further tightening the ECB's monetary policy. And Germany is the "locomotive" of the European economy. The indicators of this country cannot be ignored. On the other hand, inflation in Germany is just one of the lowest among the countries in the European Union. The acceleration of the consumer price index in the Bundestag is not something critical. European inflation is higher. Therefore, the growth of the euro currency does not quite correlate with this report. The head of the Bundesbank urges the ECB to continue raising the rate. But the head of the Central Bank of Germany, Joachim Nagel, said this week that the European Central Bank needs to continue tightening monetary policy. However, Nagel remarked: "if the inflation picture continues to remain as it is now or worse." From our point of view, the inflation picture will remain the same as it is now or worse. Most likely, this is also understood in the European Union. Thus, several leading central banks in the EU are already calling for a continued increase in the rate. Nagel also drew attention to the fact that, with the current rate of price growth in December, inflation may exceed 10%. Joachim noted that he expects a slowdown in price growth in 2023, but inflation will remain at a high level – above 6%. He also notes that confidence in the European currency has fallen greatly in recent months and needs to be restored. This can be done again by raising the key rate. As for the recession, Nagel did not comment on this topic in any way, although the ECB can hardly ignore it as easily as the head of the Bundesbank. Suppose everything is fine with Germany's economy, and the country's central bank is ready to raise rates. In that case, the European Union is full of weaker economies, for which an increase in rates may mean a recession and a serious collapse of the economy. And then the European Commission will have to again throw "lifebuoys" to such countries from the European budget, which will be replenished at the expense of Germany and other "pillars" of the European economy. However, in general, we agree with Nagel and believe that if the ECB has raised the rate by 1.25% twice, it will continue to do so in the future while maintaining the current pace. In principle, Christine Lagarde almost openly stated this last week after the meeting. It intends to raise the rate at all subsequent meetings in 2022 to catch up with the Fed. For the euro currency, such news is like manna from heaven. We have been saying that the divergence between the ECB and Fed rates is pushing the euro down for a long time. Now this divergence can be leveled, which means that the euro currency can get a couple of trumps on its hands. The average volatility of the euro/dollar currency pair over the last five trading days as of September 14 is 137 points and is characterized as "high." Thus, we expect the pair to move today between 0.9881 and 1.0155. A reversal of the Heiken Ashi indicator back to the top will signal a possible resumption of the upward movement. Nearest support levels: S1 – 1.0010 S2 – 0.9949 S3 – 0.9888 Nearest resistance levels: R1 – 1.0071 R2 – 1.0132 R3 – 1.0193 Trading Recommendations: The EUR/USD pair may have started a new uptrend, but it may have already ended it. Now we should consider sell orders if the price is fixed below the moving average line with targets of 0.9949 and 0.9888. Buy orders should be opened if the pair bounces off the moving average, with targets of 1.0132 and 1.0155. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. Moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 02:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321616
The Euro May Gradually Climb To The Target Level

The Situation On The Stock Market And The EUR/USD Exchange Rate

InstaForex Analysis InstaForex Analysis 14.09.2022 08:29
So, the fall of the stock market, which we talked about in the review on the 12th, was not long in coming. Yesterday, the US stock index S&P 500 collapsed by 4.32%, and the Nasdaq lost even more - 5.16%. The yield on US bonds went up, on 5-year securities it increased from 3.45% to 3.58%. The dollar index jumped 1.47%, the euro lost 1.54% (153 points). The price went under the MACD indicator line on the daily scale, this morning it almost touched the target level of 0.9950. The Marlin Oscillator has returned to the negative area, ready to move down along with the price. We are waiting for the price to go under the support of 0.9950, then move to 0.9850 and to 0.9752. The price managed to consolidate below the MACD indicator line on the four-hour chart, the Marlin Oscillator went into the negative area with force, and there is still a lot of room for it to fall ahead.   Relevance up to 04:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321624
PLN Soars to Record Highs Ahead of NBP Decision

How The Demand For The US Dollar And For The Euro Affects The Pair

InstaForex Analysis InstaForex Analysis 14.09.2022 08:41
EUR/USD 5M The EUR/USD pair showed extreme movements on Tuesday. The whole day can be safely divided into "before" and "after" the release of the US inflation report. The US currency rose by 180 points after this report was released, although in the first half of the day it was trading with an increase. What was so special about this report that we saw a reaction comparable to the reaction to the Federal Reserve meeting? Really nothing special. The consumer price index amounted to 8.3% in August, which is 0.2% lower than the previous month and 0.2% more than the forecast. Thus, it is absolutely impossible to call an adequate reaction of the market to this event. We would not be surprised if the pair went up or down 100 points, after all, the report is important, but more than 180 is too much. Moreover, the report showed nothing shocking. Inflation continued to decline, but not at the rate expected by the market. Since the pace slowed down, the market probably decided that now the Fed's rate hike of 0.75% is guaranteed and rushed to buy the dollar. The explanation can only be this. In regards to Tuesday's trading signals, everything was complicated. The first buy signal was excellent in terms of accuracy and after it the pair went up about 50 points. In any case, the long position should have been closed manually in profit, since it clearly should not have been left open before the release of an important report. Traders either did not have time to work out all subsequent signals, or there was no point in trying to work them out. A collapse of 180 points happened literally in half an hour and, of course, it was not worth trying to enter the market in the middle of such a "storm". COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 3,000, while the number of shorts decreased by 8,300. Accordingly, the net position grew by about 12,000 contracts. This is not very much, but it is still a weakening of the bearish mood among the major players. However, this fact is not of particular importance, since the mood still remains bearish, and the euro remains "at the bottom". At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 36,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new depreciation of this currency. Over the past six months or a year, the euro has not been able to show even a tangible correction. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 14. Joachim Nagel provokes the strengthening of the European currency. Overview of the GBP/USD pair. September 14. Market skepticism towards the pound has not gone away, but now is a good time for a global trend reversal. Forecast and trading signals for GBP/USD on September 14. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H On the hourly timeframe, the pair showed on Monday how fragile any rise in the euro can be. In fact, a single report led to a huge drop that broke the emerging upward trend. So far, the pair remains above the important Senkou Span B line, but it may well overcome it tomorrow. In this case, the global downward trend will resume. We highlight the following levels for trading on Wednesday - 0.9877, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9977) and Kijun-sen (1 .0035). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The only report of the day will be industrial production in the European Union. This is not the most significant report, and the Europeans can work out the US inflation report this morning, as they might not have had time to do it yesterday. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.         Relevance up to 02:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321612
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The GBP/USD Pair: The British Pound Still Can Not Expect Strong Growth

InstaForex Analysis InstaForex Analysis 14.09.2022 08:48
GBP/USD 5M The GBP/USD currency pair fell sharply by more than 200 points on Tuesday. In principle, everything that we said in the article on the euro/dollar is also true for the British currency. The only difference is that several macroeconomic reports were published in the UK yesterday morning, which could have provoked a slight increase in the pound. However, at the same time, without any statistics, the euro was also growing. Unemployment in the UK, unexpectedly for many, fell to 3.6%, while wages rose by 5.5%. This, of course, is less than the current inflation, but such growth is better than none. Thus, the pound really had every reason to rise yesterday morning. And then it had grounds for a fall, since the seemingly average inflation report in the US disappointed traders so much that they simply rushed to buy the US dollar. Inflation fell less than the market expected, so traders rightly decided that now the Federal Reserve will definitely raise the key rate next week by 0.75%. The question only raises the strength of the market's reaction to US inflation, everything else is quite logical. But there was a problem with trading signals on Tuesday. Not a single signal was formed during the European trading session, and all signals from the US session should have been ignored, since they were formed either during the release of the inflation report, or a little later, when it was still not clear what to expect from the pair, and the price has already passed 200 points down. Thus, trades should not have been opened yesterday. COT report The latest Commitment of Traders (COT) report on the British pound released yesterday, was very eloquent. During the week, the non-commercial group closed 5,700 long positions and opened 15,500 short positions. Thus, the net position of non-commercial traders immediately fell by 21,100, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains pronounced bearish, which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new fall, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its fall has resumed altogether, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 103,000 shorts and 52,000 longs open. The difference is twofold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the foundation and geopolitics. If they remain the same as they are now, then the pound may still be in a "downward peak" for some time. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 14. Joachim Nagel provokes the strengthening of the European currency. Overview of the GBP/USD pair. September 14. Market skepticism towards the pound has not gone away, but now is a good time for a global trend reversal. Forecast and trading signals for EUR/USD on September 14. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair has now completed an upward trend on the hourly timeframe. At least the price has already consolidated below all Ichimoku indicator lines, and all because of one US inflation report. The pair may now resume its long-term downward trend and renew 37-year lows several more times. We highlight the following important levels on September 14: 1.1411-1.1442, 1.1649, 1.1874. The Senkou Span B (1.1653) and Kijun-sen (1.1569) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. The UK will publish an important inflation report on Wednesday, which may also provoke a strong market reaction. Apart from this report, there are no other important events planned for today. But the market can still work out yesterday's US inflation report at the European trading session. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group. Relevance up to 02:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321614
The Euro May Attempt To Resume An Upward Movement

Despite The Bearish Pressure On The Euro, The EUR/USD Pair Rose

InstaForex Analysis InstaForex Analysis 14.09.2022 09:53
Technical Market Outlook: The EUR/USD pair has hit the 61% Fibonacci retracement level seen at 1.0178, made a marginal high and reversed sharply after a worse than expected US inflation data were published. The intraday technical support is seen at 1.0000 and 0.9934 and this is where the market trades currently. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the longer term down trend is reversed. The weak and negative momentum on the H4 time frame chart supports the short-term bearish outlook for EUR. Please watch the USDX as the correlation between this two is directly opposite. Weekly Pivot Points: WR3 - 1.01483 WR2 - 1.01150 WR1 - 1.01017 Weekly Pivot - 1.00817 WS1 - 1.00684 WS2 - 1.00484 WS3 - 1.00151 Trading Outlook: Despite the recent relief rally towards the short-term support one, the EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292679
The US PCE Data Is Expected To Confirm Another Modest Slowdown

US Inflation Report Disappointed, Eyes On US Producer Price Index

Swissquote Bank Swissquote Bank 14.09.2022 10:18
Ouch! The US inflation data disappointed yesterday, and dashed hopes of seeing a dovish pivot regarding the Federal Reserve (Fed) policy in the foreseeable future. Stock market drops The US 2-year yield spiked more than 5% to 3.80%, the US dollar index jumped 1.50%, and equities slumped. The S&P500 futures fell free as soon as we saw the inflation print come in, and the index closed the session 4.30% lower, having slipped below the 4000 mark. Gold tipped a toe below the $1700 level posterior to the US inflation data and is trying to find ground around this level this morning. Two major catalyzers of the two bullish price actions since summer, recession chatter and softening inflation, have now both fallen. The strong inflation data, which boosted the Fed hawks, also weighed on the global growth prospects sending the barrel of American crude down to $81 first. But oil managed to recover losses on news that the US would refill the Strategic Oil Reserves at prices below $80 per barrel. Expectations for producer price index Later today, the US will reveal the latest producer price index. The PPI is expected to have eased from 9.8% to 8.8% in August. A sufficiently soft figure could spray some water on fire, but will hardly reverse the bad mood. The dollar will likely remain strong, equities, gold and cryptocurrencies will likely remain under pressure until investors find another glimpse of hope, somewhere in the dark. Watch the full episode to find out more! 0:00 Intro0:23 US inflation disappointed3:16 US yields, dollar rallied, equities slumped5:15 Bitcoin, Ethereum under pressure before Merge upgrade6:01 Oil recovered on US will to refill Strategic Reserves6:43 Why both hawkish & dovish Fed expectations are bad for gold?7:30 UK inflation surprised to the downside8:04 EURUSD down, despite good news from Ukraine8:30 Watch US PPI today! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #UK #inflation #USD #EUR #GBP #Gold #XAU #crude #oil #Bitcoin #Ethereum #Merge #update #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Check EUR To USD Chart! US Dollar Increased Amid The US Inflation Data

Check EUR To USD Chart! US Dollar Increased Amid The US Inflation Data

Jing Ren Jing Ren 14.09.2022 08:22
EURUSD seeks support The US dollar surged after consumer prices rose faster than expected last month. The euro’s rally came to a halt in the supply zone around 1.0190, then a fall below 1.0090 forced leveraged short-term long positions to close out. After the RSI sank into oversold territory, some traders could be tempted to buy the dip between 0.9950 and the parity level. 0.9870 is a critical floor and its breach would invalidate the current rebound and send the single currency below 0.9800. On the upside, 1.0090 has turned into a resistance. XAUUSD tests key support Gold tumbled after hotter US inflation propelled the greenback across the board. The precious metal has been grinding its way up after it stabilised next to the major support 1690. Though it gave up its latest gains and came to a rest on the psychological tag of 1700. The price action is now at a crossroads. A lack of follow-up bids could shift the direction to the sell side. A drop below 1690 might seal its fate and cause an extended sell-off. 1713 is the first hurdle and the bulls need to clear 1730 before they can regain control. UK 100 hits major resistance Global equities tumbled after being wrongfooted by inflation data. The FTSE 100 had recouped most of the losses from the mid-August liquidation but turned south near the previous peak at 7570. Strong selling below 7370 forced more buyers to bail out. 7270 at the origin of a bullish breakout is a key level to see whether there is strong enough interest in keeping the rebound intact. Or 7180 could be the last level to keep the index afloat. 7380 is the first resistance as an oversold RSI may cause a limited bounce.
Chinese Stocks: Attractive Valuations Amidst Challenges and a Cyclical Recovery - 12.09.2023

Wow! S&P 500 (SPX) And Nasdaq Plunged Yesterday! Euro, Australian Dollar And Japanese Yen Hit Quite Low Levels

ING Economics ING Economics 14.09.2022 11:08
Asian markets to face a sharp drop after the inflation-driven rout in the US overnight  Source: shutterstock Macro outlook Global markets: US CPI data caught markets completely off guard, though in all fairness, there had been a lot of complacency about a figure that was only going to fall because of the volatility in energy markets. What made that US inflation print a much uglier one than forecast, was a much bigger than expected 0.6%MoM increase in the core CPI index, which took core inflation to 6.3%YoY. Core inflation was expected to rise, but not that much. And that upside surprise from core prices totally absorbed any downshift from lower crude oil prices, which resulted in the headline CPI index actually rising slightly on the month, resulting in only a very small decline in headline inflation to 8.3% from 8.5%YoY. See here for our US economist’s views on the figures. The S&P500 gapped lower and ended down 4.32% on the day. The NASDAQ fared even worse, dropping 5.16%. Equity futures suggest that the rout stops here. I’m not sure I would put a big bet on that outcome. Yields on 2Y US Treasuries rose 18.5bp to 3.756%, while those on the 10Y rose a more modest 5bp to 3.4% but are now closing in on the June highs. Here is a piece by our head of rates strategy on whether the 10Y yield could hit 4%. The EUR didn’t hold above parity for very long and is back down to 0.9972. The AUD, which had been nibbling at 0.69 is now back to 0.6733, and the GBP is also down back below 1.15, while the JPY will give the BoJ renewed headaches as it rises above 144.60.  All of this adjustment is yet to come for most of the Asia pack, and sharp falls are to be expected once markets begin trading. G-7 Macro: We have already outlined above the main macro driver – namely higher than expected US core and headline inflation numbers. Today’s US PPI inflation data won’t do much to affect the market’s reaction to those figures. UK CPI inflation data for August is also expected to remain above 10% today, which will encourage the Bank of England to keep hiking. India: Trade data for August could show a slight narrowing in the trade balance which clocked up a $29bn deficit in July. Lower crude oil prices, which account for much of the deficit, and a slightly weaker domestic demand outlook should bring imports down. That said, with the external environment looking increasingly challenged, we don’t expect much help to come from the export side. What to look out for: China activity data Japan industrial production and core machine orders (14 September) Hong Kong PPI and industrial production (14 September) US PPI inflation (14 September) Japan trade balance (15 September) Australia labour market data (15 September) US initial jobless claims and retail sales (15 September) South Korea unemployment (16 September) Singapore NODX (16 September) China industrial production, retail sales and fixed asset (16 September) US University of Michigan expectations (16 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

How The EUR/USD Market Will React To Today's Economic Events

InstaForex Analysis InstaForex Analysis 14.09.2022 11:17
Analysis of transactions in the EUR / USD pair Euro tested 1.0160 at the time when the MACD was far from zero, which limited the upside potential of the pair. Sometime later, it tested 1.0125, but this time the MACD line was just starting to move below zero, which was a good signal to sell. This resulted to a price decrease of more than 130 pips. CPI and business sentiment in Germany came out almost the same as the forecasts, so it did not particularly disappointed traders. Then, in the afternoon, CPI in the US was released, which rose 8.3% y/y, maintaining price pressure at highs over the past 40 years. Such data is likely to force the Fed to continue aggressively raising rates, which will strengthen dollar. Today, a report on the volume of industrial production in the eurozone will come out, but it will be of little interest to the market. Attention will be paid to the speeches of ECB representatives instead, as their comments, although unlikely to return bullish sentiment, could at least limit temporarily the further fall of euro. In the afternoon, the US will release data on producer prices, which will likely turn out to be worse than expected. This will lead to a new wave of decline in EUR/USD. For long positions: Buy euro when the quote reaches 1.0003 (green line on the chart) and take profit at the price of 1.0040. Although there is little chance for growth today, traders can still open long positions when the MACD line is above zero or is starting to rise from it. Euro can also be bought at 0.9974, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0003 and 1.0040. For short positions: Sell euro when the quote reaches 0.9974 (red line on the chart) and take profit at the price of 0.9904. Pressure will intensify if statistics from the US are disappointing. Also, take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can be sold at 1.0003, but the MACD line should be in the overbought area as only by that will the market reverse to 0.9974 and 0.9904. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.     Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321640
EUR/USD Pair Has Potential For The Downside Movement Today

The Euro To The US Dollar Pair Waiting For Upward Movement

InstaForex Analysis InstaForex Analysis 14.09.2022 11:32
Trend analysis (Fig. 1). The euro-dollar pair may move upward from the level of 0.9966 (close of yesterday's daily candle) to the target of 1.0056, the 38.8% retracement level (white dotted line). When testing this level, a downward price movement is possible with the target of 1.0030, the 50.0% retracement level (red dotted line). After reaching this level, the price may move up with the target of 1.0116, the 50.0% retracement level (white dotted line). Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – down; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today the price may move upward from the level of 0.9966 (close of yesterday's daily candle) to the target of 1.0056, the 38.8% retracement level (white dotted line). When testing this level, a downward price movement is possible with the target of 1.0030, the 50.0% retracement level (red dotted line). After reaching this level, the price may move up with the target of 1.0116, the 50.0% retracement level (white dotted line). Alternative scenario: from the level of 0.9966 (close of yesterday's daily candle), the price may move downward with the target of 0.9942, the 76.4% retracement level (red dotted line). After testing this level, an upward movement is possible to test 1.0056, the 38.2% retracement level (white dotted line).     Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321628
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Will The Bears Regain Their Dominance In The EUR/USD And The GBP/USD?

InstaForex Analysis InstaForex Analysis 14.09.2022 11:44
EUR/USD Higher timeframes Testing of the weekly trend line and the reinforced resistance zone turned into a rebound formation yesterday. Bears regained their positions, recovering most of the current corrective rise. If the mood persists and the bearish sentiment continues to strengthen, then the bears, updating the minimum extremum (0.9864), will try to restore the downward trend. The attraction is currently exerted by the area of the psychological level of 1.0000. The most important resistance is still the zone 1.0116 – 1.0176 – 1.0203 (daily cross + lower border of the daily cloud + weekly short-term trend + trend line). H4 – H1 Bulls lost their advantage yesterday as the opponent managed to organize a decline below the key levels of the lower timeframes. Key levels are holding the line today, consolidating around 1.0040 (central pivot point + weekly long-term trend). Reference points for further decline within the day are now at 0.9894 – 0.9819 – 0.9673 (classic pivot points). *** GBP/USD Higher timeframes Bears dominated the market yesterday. They realized a rebound upon meeting the daily resistance (1.1737). After that, the main task for the bears is to break through the historical support (1.1411) and restore the downward trend. Next, the focus will be on lowering and testing the psychological barrier of 1.0000. If there is a slowdown now, the daily short-term trend (1.1570) may become the center of attraction and consolidation. H4 – H1 As a result of the pair's return to the key levels, the advantage of the lower timeframes again shifted to the side of the bears. Today, the key levels are resistances and are located at the turn of 1.1573 (central pivot point + weekly long-term trend). The reference points for continuing the decline within the day are the support of the classic pivot points at 1.1405 – 1.1322 – 1.1156. *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)       Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321644
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

As A Result Of The Fight Against Inflation, The Appetite For Risk Has Decreased

InstaForex Analysis InstaForex Analysis 14.09.2022 11:59
Euro and pound collapsed as inflationary pressure in the US jumped again. Risk appetite noticeably fell because the Federal Reserve is likely to continue its aggressive increase of interest rates in order to curb inflation. This may occur as early as next week, during the September meeting of the central bank. In fact, in the most recent speech of Fed Chairman Jerome Powell, another 75 basis point rate hike is said to be possible, following the increases in June and July. He said the decision will depend on the data collected. Chicago Fed chief Charles Evans, who in the past has been dovish, also noted that a soft landing could be achieved for the economy without triggering a recession. He reasoned that unemployment is now 3.7%, so the central bank will be able to meet the targets and keep it at about 4.5% by the time the fight against high inflation is finished. He added that the danger of excessive tightening of policy will increase only when rates reach 3.5%. Of course, rising inflation is not only a concern for the Federal Reserve, but also for the Biden administration as his Democratic Party moves closer to the midterm congressional elections. High gas and food prices earlier in the year have seriously undermined the president's popularity and the Democrats' prospects for maintaining control of Congress. Talking about the forex market, a collapse was seen in EUR/USD, which forces buyers to cling to 1.0010. Only its breakdown will lead to a rise towards 1.0040 and 1.0090, or to 1.0120. In case of a further decline, sellers will become more active in the market, which will result in a price decrease towards 0.9880 and 0.9810. In terms of GBP/USD, quotes fell below the 15th figure, indicating the sellers'persistence to return to the September lows. Only the return to 1.1560 will prompt a rebound towards 1.1610 and 1.1660, or possibly 1.1720. If pressure continues, the pair will drop below 1.1460 and head towards 1.1405.     Relevance up to 09:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321656
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

The Currency Market Is Getting Ready For A Recovery

InstaForex Analysis InstaForex Analysis 14.09.2022 12:24
Markets collapsed on Tuesday after the release of consumer inflation data in the US. The report has indicated that inflation increased by 0.1% m/m and 8.3% y/y in August, instead of a decline that economists have been expecting. Of course, traders reacted negatively to the news, primarily because it is likely that the Fed will continue raising rates aggressively in order to curb high inflation. But if the figure declines, albeit gradually, the Fed may consider not a 0.75% rate hike, but a 0.50%. That would return risk appetite and lead to a decrease in both Treasury yields and dollar. So, positive market sentiment will return, perhaps starting today as an upward movement is seen in European and US stock indices. A rebound is also brewing in the forex market, prompted by the slight weakening of dollar. That being said, attention should be paid to the data on manufacturing inflation in the US as a slowdown will increase positive market sentiment. Forecasts for today: AUD/USD The pair is trading below 0.6725. If negative trends continue in the markets, the quote will continue to decline towards 0.6685. EUR/USD The pair is consolidating above 0.9965. Further buying pressure will push it to 1.0100. Relevance up to 08:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321648
Inflation Rising Again In The Eurozone, Positive GDP In The Great Britain

The ECB's Comment On Interest Rates Revived The EUR/USD Pair

TeleTrade Comments TeleTrade Comments 14.09.2022 12:43
ECB's Herodotou: No forgone conclusion on final level of interest rate   The European Central Bank's (ECB) latest decision to hike the key rates does not mean there has been a forgone conclusion on the final level of interest rate, ECB policymaker Constantinos Herodotou said on Wednesday, as reported by Reuters. Market reaction EUR/USD preserves its recovery momentum following these comments. As of writing, the pair was trading at 1.0015, where it was up 0.5% on a daily basis. Meanwhile, the Euro Stoxx 600 Index is down 0.4% on the day, pointing to a cautious market mood.
PLN Soars to Record Highs Ahead of NBP Decision

EUR/USD Pair: The Pair’s Bearish View Is Expected

TeleTrade Comments TeleTrade Comments 14.09.2022 14:32
EUR/USD reclaims part of the ground lost on Tuesday’s sell-off. Further rebound should target the multi-month line near 1.180. EUR/USD regains some poise and manages to trim part of the weekly pullback following Tuesday’s slump in the wake of the release of US inflation figures. If the recovery picks up extra pace, then the interim hurdle comes at the 55-day SMA at 1.0125 prior to the key 7-month resistance line, today near 1.0180. A move beyond the latter is needed to mitigate the downside pressure and allow at the same time a visit to the interim 100-day SMA at 1.0325 prior to the more relevant August high at 1.0368 (August 10). In the longer run, the pair’s bearish view is expected to prevail as long as it trades below the 200-day SMA at 1.0741. EUR/USD daily chart  
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

"Rate hike has been well transmitted to money market rates."

TeleTrade Comments TeleTrade Comments 14.09.2022 14:37
European Central Bank (ECB) Chief Economist Philip Lane said on Wednesday that the current transition will require the ECB to continue to raise interest rates over the next several meetings, as reported by Reuters. Additional takeaways "Encouraging market intermediation of government deposits remains desirable in the long term." "Most measures of longer-term inflation expectations currently stand at around 2%." "If energy costs were to decline or demand were to weaken over the medium term, it would lower pressures on prices." "Rate hike has been well transmitted to money market rates." "Eurozone inflation drivers are of a different nature compared to demand-driven overheating dynamics." "The appropriate monetary policy for the euro area should continue to take into account that the energy shock remains a dominant driving force." "Inflation dynamics associated with the energy shock component, to which the euro area is particularly exposed, are of a different nature compared to demand-driven overheating dynamics." Market reaction EUR/USD is struggling to preserve its recovery momentum after this report and was last seen gaining 0.25% on the day at 0.9995.
bybit-news1

Forex: Could GBP/USD Fall Below 1.05? US Dollar (USD) May Gain 5%

Alex Kuptsikevich Alex Kuptsikevich 14.09.2022 13:07
Yesterday we wondered whether the dollar retreat was a correction or a reversal. But the reaction of the financial markets to the US inflation report has put everything in its place by confirming that we are still in a bull market for the dollar. Very often, though not always, this means a bear market for equities. The Dollar Index's corrective pullback from the extremes over the past week allowed players to accumulate liquidity for a new strike, which did not take long to come. Dollar bulls took advantage of a rather average occasion - a slowdown in inflation to 8.3% instead of the expected 8.1% - to cause the DXY to strengthen by almost two per cent – the strongest one-day move since March 2020. Similarly, the stock market crash recalled the worst moments for the market at the start of the pandemic. That said, the inflation surprise (difference between fact and expectation) was not the most significant during this time. The money markets have shifted markedly in their expectations for next week's rate hike, laying down a 100% chance of a 75-point increase and a 34% chance of a 100-point rise at once. The previous day, we talked about less than 90% for 75 points and 0% for 100 points. However, an even bigger shock to expectations in July did not cause commensurate market turbulence. EURUSD reversed below this line with a decisive move In our view, yesterday's move was purely technical. The dollar bulls proved that they hold control of the market, protecting the DXY from any severe test of the 50-day moving average. This was most telling in the EURUSD, which reversed below this line with a decisive move. Usually, such strong moves at key levels will break the resistance of the second side for a long time. In other words, we could now see more of a dollar march in the coming days and weeks with the potential for a renewal of the DXY global highs. A further rise in the dollar could deprive the EURUSD of support near parity, sending it in search of a bottom lower in the area of 0.95-0.96. We have seen quite a few reversals and accelerations in this area throughout the synthetic euro's existence. GBP/USD Reaching 1985 Lows? The GBPUSD would then risk a renewal of the lows from 1985, going down to 1.1000. For now, we consider a move below that year's low (below 1.05) in an unlikely extreme scenario. For the USDJPY, the road to 150 seems to be opening up. However, we are cautiously looking at the potential for further gains. There are now reports that the Bank of Japan is preparing for currency interventions. Generally speaking, the currency market values the dollar extremely highly, which could trigger a weakly controlled domino effect in the markets, which is hardly in the interest of the financial and monetary watchdogs. Simply put, the dollar could easily add around 5% to current levels in the coming days and weeks. Still, one has to watch the rhetoric of the G7 authorities at the abovementioned levels very closely.
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

Markets Look Like Battlefields After The US Inflation Print. S&P 500, Dow Jones And Nasdaq All Plunged. Forex: Will BoJ Intervene?

Conotoxia Comments Conotoxia Comments 14.09.2022 15:22
Yesterday's presentation of inflation data in the United States shook financial markets. Investors, looking by the reaction in many markets, seemed to expect inflation to fall faster than the estimation presented. The markets were shaken. US inflation - a powerful blow to financial markets The August consumer price index report showed that inflation rose 0.1 percent on a monthly basis, despite forecasts for a 0.1 percent decline, while the annual rate of consumer inflation fell less than expected in August to 8.3 percent (consensus 8.1 percent). The higher-than-expected U.S. inflation reading and slower pace of decline may have given rise to speculation that the Fed may deliver a larger interest rate hike than 75 bps. The game may now be on for a 100 bp hike next week. Read next: Great Britain’s CPI Lower Than The Expected, Eyes On US PPI| FXMAG.COM At the end of Tuesday's session, the Dow Jones index was down 3.94 percent, the S&P 500 down 4.32 percent, and the Nasdaq Composite down 5.16 percent. All three major indexes broke a four-day streak of gains and posted their biggest one-day decline in more than two years. All sectors in the S&P index ended the session in negative territory, with communications services, technology and consumer products falling more than 5 percent.  Bitcoin had already fallen at one point, in a move initiated after the US data, to levels below $20000. This could mean a drop of more than 10 percent. The EUR/USD pair price, in turn, retreated below parity, recording a cumulative drop of more than 2 percent after the data. Such large changes in many markets could be fears of faster and larger interest rate hikes in the US. Source: Conotoxia MT5, US100 m30 How is the Fed's action priced in? According to the interest rate market, the chances of a 100bp hike on September 21 have risen to 34 percent. Previously, the market had not considered such a large US interest rate hike at all, and was considering a rate hike between 50 and 75 bp. The current pricing could lead to an increase in the range for the federal funds rate to between 3.25 and 3.5 percent, which in turn could mean that the market is pricing the end of the hike cycle no longer in the 3.9 percent region, but in the 4.2 percent region, which could also contribute to the strengthening of the USD. In the bond market, on the other hand, the yield on 2-year U.S. Treasury securities rose to its highest level since 2007, exceeding 3.7 percent. In the past, the level of 2-year bonds may have coincided with the target level of the federal funds rate for the hike cycle. Source: Conotoxia MT5, USDIndex D1 Yen struggles against dollar strength It seems that this morning only the Japanese yen is trying to fight the strength of the USD. This  might have to do with further news of possible intervention. Japan's Finance Minister Shunichi Suzuki said on Wednesday that currency intervention is among the options to combat the decline of the country's currency, the BBN news service reported.  "We are talking about taking all available options, so it is right to think that way," he said. - Suzuki told reporters after being asked if currency intervention in the form of yen buying was on the table. "Recent moves have been quick and one-sided, and we are very concerned. If such moves continue, we must respond, and we are not ruling out any options." - He added. A break of the 145 level by USD/JPY would   lead to intervention by Japanese authorities, David Forrester, senior FX strategist at Credit Agricole CIB, told Bloomberg. The problem facing the Ministry of Finance in the event of any FX intervention is that the upward movement of USD/JPY reflects the divergence between the Fed and BOJ, so the impact of any intervention would only be temporary, the Credit Agricole representative added. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
FX Daily: Testing the easing pushback

The Probability Of A Decline In The EUR/USD Pair Is Growing

InstaForex Analysis InstaForex Analysis 15.09.2022 08:25
The EUR/USD currency pair collapsed by almost 200 points on Tuesday and remained below the moving average line on Wednesday. Thus, a rather promising technical picture, which suggests further growth of the European currency, is still considered irrelevant. But we once again saw the inability of the euro to adjust by more than 400 points. What's next? Currently, the euro currency is located below the moving average, which means that the probability of a new pair falling is increasing with the update of 20-year lows, to which no more than 100 points remain to be passed. However, we would like to draw the traders' attention to the fact that the market was trading on momentum on Tuesday. A one-way movement of almost 200 points due to one report, the value of which was not shocking or discouraging, can hardly be considered an adequate reaction. Thus, we believe that the euro currency may well switch to a new "swing" mode in the near future. The fact that the Fed will continue to raise the key rate is no secret to anyone. Even if inflation had fallen more than the August report showed, it would not have changed anything in the state of things. Thus, there may be no further strengthening of the US currency since the divergence between the ECB and Fed rates promises to level off soon. There is a situation where the probability of further decline/growth of the euro is 50-50. The euro currency has been falling for too long and is clearly oversold now. The ECB is ready to aggressively raise the rate, which also works in the hands of the euro currency. But at the same time, the global downtrend persists, and both linear regression channels are still directed downward. Therefore, in the coming days and weeks, you need to be prepared for any development of events and pay increased attention to technical analysis. Inflation is the most difficult indicator to predict. Even before yesterday's publication of American inflation, we said it was not worth opening champagne ahead of time about its slowdown. Recall that in May, the consumer price index was already slowing down by a couple of tenths of a point, after which it resumed acceleration. About the same thing we are seeing now. After inflation slowed significantly in July, the slowdown was only 0.2% in August. At this rate, this indicator will return to its target of 2% in several years. Consequently, the Fed has no other option but to raise the key rate. And the faster they do it, the faster inflation will return to the target value. Inflation is such an indicator that it is influenced by monetary policy. A huge number of factors should be taken into account when forecasting. That is why we have always said that in the case of inflation, it is not the value of a single report that is important but the trend. If the indicator has been moving in one direction for several months, you can output the average value by which it changes in one month. So far, we have a decrease of 0.6% and a decrease of 0.2%, with a general increase in the key rate to 2.5%. For one month, the consumer price index slowed down by 0.4%. But who said that this was only the merit of the Fed? Maybe other factors played a role? We want to say that a further rapid fall in inflation, even with further tightening of the Fed's monetary policy, is far from obvious. Many experts say that the problem of high inflation has been a problem for many years. Inflation has been rising for more than a year after the Fed poured huge amounts of money into the economy out of nowhere during the two years of the pandemic. The QT program is already working, thanks to which about $95 billion is withdrawn from the economy every month. But "to break is not to build." If inflation rises to its maximum value for about a year, it will take two years to return to its original position. And this is provided that there are no new economic shocks and "waves" of the pandemic, along with "lockdowns." The average volatility of the euro/dollar currency pair over the last five trading days as of September 15 is 132 points and is characterized as "high." Thus, we expect the pair to move today between 0.9857 and 1.0121. A reversal of the Heiken Ashi indicator back to the top will signal a possible resumption of the upward movement. Nearest support levels: S1 – 0.9949 S2 – 0.9888 S3 – 0.9827 Nearest resistance levels: R1 – 1.0010 R2 – 1.0071 R3 – 1.0132 Trading Recommendations: The EUR/USD pair is trying to resume the global downward trend. Sell orders should now be considered if the price remains below the moving average line with targets of 0.9888 and 0.9857. Buy orders should be opened if the pair is fixed above the moving average, with targets of 1.0132 and 1.0193. Explanations of the illustrations: Linear regression channels – help determine the current trend. If both are directed in the same direction, then the trend is strong now. Moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which to trade now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 02:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321744
The Euro May Gradually Climb To The Target Level

The EUR/USD Pair Has Good Sings To Futher Decilne Of Price

InstaForex Analysis InstaForex Analysis 15.09.2022 08:43
As the market cooled down after an exciting Tuesday, the euro spent Wednesday in consolidation between the target levels of 1.0032 and 0.9950. The price did not even try to fight the resistance, which was also strengthened by the MACD indicator line of the daily scale. The signal line of the Marlin Oscillator turned down without an attempt to work out the border with the growth territory. This is a good sign of a further decline, which will be confirmed after the price breaks below the 0.9950 support. The nearest target is 0.9850, followed by 0.9752. The price consolidated under the MACD indicator line and balance lines (red) on the four-hour chart. Marlin shows intention to continue the decline after yesterday's own consolidation. The situation is completely downward. Relevance up to 04:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321752
At The Close On The New York Stock Exchange Indices Closed Mixed

On The New York Stock Exchange, The Securities Rose Yesterday

InstaForex Analysis InstaForex Analysis 15.09.2022 08:46
At the close in the New York Stock Exchange, the Dow Jones rose 0.10%, the S&P 500 rose 0.34%, and the NASDAQ Composite rose 0.74%. Chevron Corp was the top gainer among the components of the Dow Jones index today, up 3.86 points or 2.42% to close at 163.27. Quotes Johnson & Johnson rose by 3.33 points (2.06%), ending trading at 164.66. Merck & Company Inc rose 1.36 points or 1.59% to close at 86.95. The losers were shares of Honeywell International Inc, which lost 5.01 points or 2.71% to end the session at 179.97. 3M Company was up 2.44% or 2.94 points to close at 117.53, while Dow Inc was down 1.67% or 0.80 points to close at 47.07. . Leading gainers among the S&P 500 components in today's trading were Coterra Energy Inc, which rose 7.22% to hit 32.23, APA Corporation, which gained 6.72% to close at 41.74, and shares of Moderna Inc, which rose 6.17% to end the session at 139.40. The biggest losers were Nucor Corp, which shed 11.31% to close at 120.71. Shares of Centene Corp lost 6.79% to end the session at 83.92. Quotes of DISH Network Corporation decreased in price by 6.27% to 17.18. Leading gainers among the components of the NASDAQ Composite in today's trading were Avenue Therapeutics Inc, which rose 53.87% to hit 0.36, Aileron Therapeutics Inc, which gained 38.49% to close at 0.27, and also shares of Dawson Geophysical Company, which rose 41.44% to close the session at 1.57. The biggest losers were Neurobo Pharmaceuticals Inc, which shed 43.61% to close at 16.86. Shares of Vintage Wine Estates Inc shed 40.33% to end the session at 3.30. Quotes of Aditx Therapeutics Inc decreased in price by 38.22% to 11.43. On the New York Stock Exchange, the number of securities that rose in price (1,578) exceeded the number of those that closed in the red (1,506), while quotes of 124 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,956 stocks fell, 1,770 rose, and 254 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 4.07% to 26.16. Gold futures for December delivery lost 0.63%, or 10.90, to hit $1.00 a troy ounce. In other commodities, WTI October futures rose 1.68%, or 1.47, to $88.78 a barrel. Brent oil futures for November delivery rose 1.23%, or 1.15, to $94.32 a barrel. Meanwhile, in the forex market, the EUR/USD pair was unchanged 0.08% to 1.00, while USD/JPY fell 0.97% to hit 143.15. Futures on the USD index fell 0.15% to 109.36.   Relevance up to 05:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/292844
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

Low Demand For The Euro, The Price Of The EUR/USD Pair May Be Under Bearish Pressure Again

InstaForex Analysis InstaForex Analysis 15.09.2022 08:58
EUR/USD 5M The EUR/USD pair showed absolutely no interest in a strong move on Wednesday. After the pair had fallen by almost 200 points a day earlier, an absolutely sluggish movement began, within which the euro barely managed to correct to the extreme level of 1.0019. The pair could not settle above this level, just like below the Senkou Span B line. Therefore, the word "flat" is best suited to describe the environment. If you look at the calendar of macroeconomic events, this behavior of the market does not raise questions, since only one report was published during the entire day - industrial production in the European Union for July. Industrial production fell much more than expected, but the market did not consider it necessary to continue selling the euro. There was essentially no reaction. Thus, over the past day the technical picture has not changed at all. The bears need to overcome the Senkou Span B line so that the pair can continue to fall to its 20-year lows. In regards to Wednesday's trading signals, the picture was quite interesting due to the unforeseen flat. The first sell signal turned out to be false, as the price overcame the Senkou Span B line, but failed to continue moving in the right direction. Therefore, the transaction closed at a loss. But the next signal allowed traders to earn, as the price reached the nearest target - the level of 1.0019. A rebound followed from it, which should have been worked out, and the price returned to the Senkou Span B line, from which a rebound followed. The last buy signal should not have been worked out, since it was formed quite late, but it could also bring a small profit. Thus, one trade is unprofitable, two are profitable. Not bad for a flat. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 3,000, while the number of shorts decreased by 8,300. Accordingly, the net position grew by about 12,000 contracts. This is not very much, but it is still a weakening of the bearish mood among the major players. However, this fact is not of particular importance, since the mood still remains bearish, and the euro remains "at the bottom". At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 36,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new depreciation of this currency. Over the past six months or a year, the euro has not been able to show even a tangible correction. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 15. The strengthening of the ECB's monetary mood no longer worries anyone. The Fed is once again occupying the minds of traders. Overview of the GBP/USD pair. September 15. British inflation brought an unexpected, but expected, "surprise". Forecast and trading signals for GBP/USD on September 15. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H Bullish prospects are hanging by a thread on the hourly timeframe. The price failed to overcome the important Senkou Span B line, so theoretically, the upward movement may still resume. However, consolidating below this line will open the way to the level of 0.9877. We still believe that the probability of euro growth is increasing, but remains too low, and the pair may hit 20-year lows a couple more times this year. We highlight the following levels for trading on Thursday - 0.9877, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9971) and Kijun-sen (1 .0065). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. Industrial production, retail sales and jobless claims will be published in America. These are far from the most important indicators, and we do not expect a strong market reaction to them. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 02:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321740
Bank of England Faces Rate Decision: Uncertainty Surrounds Magnitude of Hike

Hold On Tight Forex! US Dollar (USD) May Be Fluctuating Today As Industrial Production, Retails Sales And Other Prints Are Released Today!

ING Economics ING Economics 15.09.2022 09:26
A fresh serving of US data should keep the market's expectations hawkish. The move in the interest rate differential plays in the dollar's favour and reduces the room for a recovery in the euro. The market is pricing in a near 75bp hike for next week's BoE meeting. And today we should hear more from Hungary about the negotiations with the European Commission USD: Plenty of data releases to watch today Most dollar crosses have stabilised after the large post-CPI moves on Tuesday. In the meantime, markets have progressed in pricing in more Fed tightening, and Fed funds futures are currently embedding a 3.4% peak rate in March 2023, which is likely offering a good floor to the dollar. Since the Fed has remained quite hawkish in recent commentaries and may not have any interest in pushing back excessively hawkish pricing at its September meeting (it has instead pushed back against rate cut expectations recently), it may mostly be up to the data to force any dovish re-pricing at this stage. There are quite a number of data releases to keep an eye on today: retail sales, industrial production, Empire Manufacturing, and the Philadelphia Fed Business Outlook. Jobless claims may also gather more attention than usual after a surprisingly big drop last week fuelled the hawkish narrative of a still very tight labour market in the US. We see a good chance that today’s data will not trigger any material re-pricing lower in Fed rate expectations, and the hawkish inertia into next week’s meeting means that the dollar can stay supported. Francesco Pesole EUR: Estimating impact of energy caps The EUR-USD 2-year swap rate differential has re-widened in favour of the dollar – now at -175/180bp versus 155bp last week – and while we have highlighted on multiple occasions how the rate differential is indeed playing a secondary role in EUR/USD dynamics lately, this has reduced the room for a euro recovery further down the road. There are no market-moving data releases to highlight in the eurozone today, but some focus will be on two ECB speakers: Luis De Guindos and Mario Centeno, normally some moderately dovish voices in the governing council. At this stage, it will be interesting to see how the ECB will factor in the freshly announced measures by the European Commission to cap energy prices. Like in other countries, there is still some uncertainty on whether the government’s efforts to freeze hikes in energy bills would have a predominantly dovish impact on central banks (as inflation would be lower) or a hawkish impact as the economic impact would be smaller and that allows more tightening. While markets wait for more clarity on this, the dollar’s resilience may keep EUR/USD at or below 1.0000 in the coming days. Francesco Pesole GBP: A break in data releases today In a very busy week for the UK economic calendar, we don’t get any major releases today. Yesterday, the inflation report showed some marginal slowdown in prices, but as noted by our UK economist here, we expect a peak at around 11% for headline inflation. However, this may not matter all that much for the Bank of England, which is looking at the latest labour and wage growth dynamics to gauge how entrenched inflationary pressures have become. Markets are currently pricing in 67bp of tightening at next week's BoE meeting, and we see a good probability of markets fully pricing in a 75bp hike in the coming days. That could offer a bit of help to sterling into the BoE announcement, but EUR/GBP looks unlikely to make any big moves outside its recent range for now. Francesco Pesole CEE: Negative noise around forint The final Polish inflation figures for August, which surprised to the upside in the flash estimate two weeks ago, will be published today. Also, as is the case every Thursday, the National Bank of Hungary sets the deposit rate. Although yesterday's drop in the forint attracted a lot of attention, today's meeting should be a non-event. Nevertheless, Hungary will remain in the spotlight within the Central and Eastern Europe region. After yesterday's negative headlines from the European Union, we should hear more from the Hungarian side today and more on Sunday or next week. As we mentioned on Monday, the negative noise around the forint was to be expected and after yesterday it is clear that the European Commission is playing hardball with the Hungarian government. However, part of yesterday's 1.5% fall in the forint can be attributed to higher gas prices, which saw their first increase in a week. For the days ahead, we expect that things will not get easier for the forint, but we believe that there will be a deal in some form, although it may include a conditional or partial release of EU money. Elsewhere in the CEE region, we have seen a reversal in rates to the upside after a long period of decline, compensating for higher gas prices and resulting in stable FX. From this perspective, we thus see current levels as fair, waiting for new market impulses. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
PLN Soars to Record Highs Ahead of NBP Decision

The EUR/USD Pair: The Longer Term Down Trend Is Still Here

InstaForex Analysis InstaForex Analysis 15.09.2022 09:33
Technical Market Outlook: The EUR/USD pair has been seen trading around the intraday technical support located at 0.9957, so the market stays below the parity.The level of 1.0000 will now act as a resistance for bulls, because the weak and negative momentum on the H4 time frame chart supports the short-term bearish outlook for EUR. The next technical support is seen at 0.9934 and 0.9901. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the longer term down trend is reversed. Please watch the USDX as the correlation between this two is directly opposite. Weekly Pivot Points: WR3 - 1.01483 WR2 - 1.01150 WR1 - 1.01017 Weekly Pivot - 1.00817 WS1 - 1.00684 WS2 - 1.00484 WS3 - 1.00151 Trading Outlook: Despite the recent relief rally towards the short-term support one, the EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated.     Relevance up to 08:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292864
Navigating the Inverted Yield Curve: Implications for Currencies and Central Banks User

Will The US Dollar Continue To Be Strong And To Keep Growing Or Maybe Situation Will Be Reversed

InstaForex Analysis InstaForex Analysis 15.09.2022 11:04
The US currency was swirled by a whirlwind of continuous movement, not giving it a break for almost a minute. The dollar has to be constantly in good shape to act ahead of the euro and other currencies. Against this background, experts fear the depletion of "dollar forces" and the subsidence of the USD in the long term. According to market players and analysts, the rally that led the greenback to the peak of the price since 1985 will continue. However, this causes great inconvenience to other currencies, up to their collapse. As a result, the means of payment of other countries are plunging against the USD or require a rapid increase in rates in order not to be at the bottom. The dollar's strong growth against a basket of currencies (by 15% in 2022) dealt a crushing blow to financial markets. The main victims were the euro and the yen, which collapsed to lows over the past 20 years. The pound had the hardest time, which fell to its lowest in 40 years. The catalyst for the widespread collapse of the market was the "hot" data on inflation in the United States. According to a report published on Wednesday, September 14, US inflation increased markedly in August, and decreased less year-on-year than the market expected. In the last month of summer, the consumer price index (CPI) increased by 0.1%. At the same time, experts expected the indicator to fall by 0.1% amid a steady decline in gasoline prices. However, this factor did not work due to a sharp increase in consumer spending in the United States. According to current data, the basic consumer price index in the country increased by 0.6%, which is twice as much as expected. At the same time, the annual core inflation rate soared from July's 5.9% to 6.3%. According to analysts, this is the highest value recorded after a 40-year high reached in March. In the current situation, gasoline prices in the United States fell by 10.6% on a monthly basis, but were partially neutralized by rising prices for LNG and electricity. However, in the future, the effect of cheaper energy came to naught due to the rapid growth of housing and medical care prices (they increased by 0.7% and 0.8%, respectively). Against this background, analysts' forecasts for a further rise in the interest rate by the Federal Reserve by 1 percentage point (pp) have intensified. Many experts began to lay such an increase at the Fed's next meeting, which is scheduled for September 20-21. Some of them expect an increase in a smaller volume (only by 0.75 percentage points). According to analysts, the current situation provides significant support to the dollar and at the same time is a challenge to global central banks. Many world central banks were faced with a choice: to observe the weakening of national currencies or slow down this process by selling USD and raising their rates. The current macro data from the United States turned out to be negative for the markets, experts summarize. At the same time, the Fed management recognizes that inflationary pressure in the country remains high and hinders economic growth. However, the central bank turned out to be a hostage to the situation, since in order for inflation to return to the 2% target, it is necessary to continue raising rates, and this should be done in an accelerated mode. Against this background, the US currency has steadily risen in price against the European one. The EUR/USD pair was trading at 0.9965 on Thursday morning, September 15. Since August inflation in the United States turned out to be higher than forecasts, market participants expect the Fed to raise the rate further (by 75 bps) at the upcoming meeting. Many experts are sure that now there are almost no factors that can prevent the dollar's growth. According to Rabobank's currency strategists, while US rates are rising, the greenback will strengthen. Analysts believe that this strengthening will continue until the end of 2022 and the beginning of 2023. The "tailwind" for the USD is the reliability and relative stability of the American economy. However, the prolonged strengthening of the greenback creates problems for US trading partners, as the growth in the value of imports denominated in dollars increases. This hinders the curbing of rampant inflation in a number of countries, experts emphasize. Asian countries, especially commodity importers, suffer the most in this situation. Against this background, the Japanese yen turned out to be the biggest outsider, which rapidly and sharply plunged. According to experts, the dollar rally will end sooner or later, but the timing of its completion is difficult to predict. According to economists, in the long term, a rate hike in the United States, which should slow down the economy, will play against the greenback. However, the Fed will have to take measures to slow down the national economy in order to reduce the current level of inflation. The result is a vicious circle, from which it is difficult for the dollar to get out. Currently, many market players are betting on USD growth, but analysts urge caution in this matter. In the short term, such tactics provide significant support to the greenback. At the moment, the market is in the process of reassessing expectations about the future course of the Fed's monetary strategy, especially regarding rates. Current economic reports from the United States increase the likelihood of a third consecutive Fed rate hike by 75 bps at the next meeting scheduled for September 20-21. Against this background, the markets allow an increase in the key rate by 100 bps at once, experts summarize.   Relevance up to 08:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/321776
EUR/USD Pair Has Potential For The Downside Movement Today

Will The EUR/USD Pair Keep Positive Sings And Will The Demand For The Euro Return?

InstaForex Analysis InstaForex Analysis 15.09.2022 11:12
Yesterday was one of those days where all the signals worked out in a good positive direction, and there were a lot of them. Let's take a look at the 5-minute chart and figure out what happened. I paid attention to the 0.9973 level and the 1.0014 level in my morning forecast and advised making decisions on entering the market. The bulls protecting support at 0.9973 resulted in an excellent signal to buy the euro in the morning, which resulted in an increase of more than 40 points to the 1.0014 area. I expected bears to be active. A false breakout at this level led to a short signal, which resulted in the pair falling back to 0.9973 after the US inflation data, allowing another 40 points of profit to be taken. A false breakout at 0.9973 in the afternoon, by analogy with the morning entry point, also gave a signal to buy, after which the euro moved up by 30 points. When to go long on EUR/USD: Producer prices in the US coincided with economists' forecasts, which allowed the market to remain balanced. However, trading below parity still indicates the bears' advantage, so the pressure on the pair can return at any moment - especially if the statistics for the euro area disappoint again, and as we know, there is nothing much to rejoice there. Expected data on the consumer price index in Italy and the balance of foreign trade in the eurozone. The speech by European Central Bank Vice-President Luis de Guindos will deal with the future of the euro area's monetary policy, which is clearly defined due to high inflation in the region. This may provide some support for the euro, similar to yesterday. In case the pair is under pressure again, it is best not to rush. The optimal buying scenario would be a false breakout near the new support at 0.9957, as the bulls failed to beat the parity yesterday. This will provide an entry point for an upward correction with immediate recovery target towards 0.9996. As I noted above, the statements of the ECB representatives can help the euro if it continues to aggressively raise interest rates. A breakthrough and a downward test of 0.9996 will hit the bears' stop orders, which creates another signal to open long positions with the possibility of a surge up to the 1.0038 area, just below which there are moving averages playing on the bears' side. A more distant target will be resistance at 1.0079, where I recommend taking profits. If the EUR/USD falls and there are no bulls at 0.9957, the pressure on the pair will increase. The optimal decision to open long positions in such conditions would be a false breakout near the low of 0.9922. I advise you to buy EUR/USD immediately on a rebound only from 0.9880, or even lower - in the area of 0.9849, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears managed to give an excellent rebuff to the bulls yesterday and retained control over the market. As long as the trade is below parity, the euro has every chance of a new wave of decline. The bears' main task for today is to protect the nearest resistance in the parity area of 0.9996, the test of which may occur in case of good statistics on the euro area. I expect large players to appear in the market from 0.9996. Together with a false breakout at this level, short positions will be opened in order to further move the euro down to 0.9957. A breakdown and consolidation below this range with a reverse test from the bottom up creates another sell signal with the removal of bulls' stop orders and a larger fall of the pair to the 0.9922 area. I recommend taking profit there. A more distant target will be a low of 0.9880, but this is in case the bulls lose all interest in the euro after good statistics on retail sales in the US in the afternoon. In case EUR/USD jumps during the European session, and the bears are not active at 0.9996, an upward correction will lead to the next resistance at 1.0038, just below which there are moving averages playing on the bears' side. In this scenario, I recommend opening short positions from 1.0041 only if a false breakout is formed. You can sell EUR/USD immediately for a rebound from the high of 1.0079, or even higher - from 1.0118, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT report) on September 6 logged a decline in short positions and a sharp increase in long positions. Considering that all this was ahead of the European Central Bank meeting, at which the central bank raised interest rates by 0.75% at once, such changes are not surprising. With an ever smaller gap in interest rates between the Federal Reserve and the ECB, the demand for the euro will gradually return, but you need to understand how difficult the European economy is now and how difficult it will be for this winter period - especially with such high energy prices due to the deficit. In the US, the Fed also plans to raise interest rates by 0.75% as early as next week, but quite a lot will depend on what inflation data comes out. If the growth rate of consumer prices remains at a high level, the central bank will not hesitate for a long time. The COT report indicated that long non-commercial positions rose by 3,019 to 205,277, while short non-commercial positions decreased by 8,308 to 241,626. As of the end of the week, the overall non-commercial net position remained negative, but rose slightly to - 36,349 against -487,676, which indicates the first prerequisites for building an upward correction for the pair and finding the bottom. The weekly closing price decreased and amounted to 0.9917 against 1.0033. Indicator signals: Moving averages Trading is below the 30 and 50-day moving averages, indicating a return to the bears' market. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of a decline, the lower border of the indicator around 0.9957 will act as support. In case of growth, the upper border of the indicator in the area of 1.0005 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 08:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321770
Escalating Russia-Ukraine Tensions Amplify Oil Supply Risks: The Commodities Feed

The Euro To The US Dollar Pair: Traders Expect A Downward Movement

InstaForex Analysis InstaForex Analysis 15.09.2022 11:45
Trend analysis (Fig. 1). The euro-dollar pair may move downward from the level of 0.9979 (close of yesterday's daily candle) to test 0.9942, the 76.4% retracement level (red dotted line). Upon reaching this level, an upward movement is possible to 1.0060, the 38.2% retracement level (white dotted line). From this level, the price may continue to move up. Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Bollinger bands – down; Weekly chart – up. General conclusion: Today, the price may move downward from the level of 0.9979 (close of yesterday's daily candle) to test 0.9942, the 76.4% retracement level (red dotted line). Upon reaching this level, an upward movement is possible to 1.0060, the 38.2% retracement level (white dotted line). From this level, the price may continue to move up. Alternative scenario: from the level of 0.9979 (close of yesterday's daily candle), the price may move downward to test 0.9912, the 85.4% retracement level (red dotted line). Upon reaching this level, an upward movement is possible to 0.9982, the 23.6% retracement level (white dotted line). From this level, the price may continue to move up.     Relevance up to 08:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321780
ECB press conference brings more fog than clarity

Reduction Of Public Debt And The Fight Against Inflation As The Priorities Of The ECB

TeleTrade Comments TeleTrade Comments 15.09.2022 12:45
European Central Bank (ECB) Governing Council member Gabriel Makhlouf said on Thursday that “raising interest rates is absolutely necessary.” “Reducing public debt 'should remain a key priority', Makhlouf added. He warned that “persistent inflation is damaging to economic stability.” Market reaction EUR/USD was last seen trading at 0.9986, 0.11% higher on the day.
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

How Reform Of The Electricity Market Can Support The Euro Exchange Rate?

TeleTrade Comments TeleTrade Comments 15.09.2022 14:51
EUR/USD continues to trade below parity on Thursday. Economists at OCBC Bank highlight the key technical levels to watch. Price cap for gas imports and windfall levy to support the EUR “Mild bullish momentum on daily chart shows tentative signs of fading but RSI was flat. Consolidative trades likely.” “Support at 0.9960, 0.9910 levels. Resistance at 1.0060.” “In European Commission President Ursula’s state of the union speech, she said that the EU will launch a ‘deep and comprehensive’ reform of the electricity market. A swift move to firm up on the proposals on price cap for gas imports and windfall levy could help to ease price pressures and provide further support for EUR.” 
EUR/USD Pair Has Potential For The Downside Movement Today

The Rise Of The Euro Against The Decline Of Other World Currencies Should Stop

InstaForex Analysis InstaForex Analysis 16.09.2022 08:12
The euro managed to grow by 0.14% yesterday while the dollar index rose by 0.07%. The price is approaching the target resistance at 1.0032, reinforced by the MACD indicator line on a daily scale. The Marlin Oscillator has penetrated into the positive area and now the price will try to overcome this resistance. Success will allow the euro to rise to 1.0150. But in fact, the price is still in the consolidation area (0.9950-1.0032), the general trend is downward, there is a volume exit from risk in adjacent markets - the S&P 500 lost 1.13% yesterday, and this morning the Japanese Nikkei 225 is down by 1.21%, yields on US government bonds are growing for the fifth consecutive day. Today's European CPI data for August is expected to remain unchanged - core CPI 4.3% y/y, headline CPI 9.1% y/y. In the US, the consumer expectations index from the University of Michigan for September is forecast to rise from 58.0 to 59.7. The euro's growth against the decline of other world currencies should stop and we are waiting for the quote at the target level of 0.9850. The price is consolidating under the MACD indicator line on the four-hour chart, although visually this consolidation looks like growth, because the MACD line itself is growing. Consolidation data are mainly signs of a further decline in the instrument in question. The final confirmation of the main downward scenario will be when the price overcomes the support level of 0.9950.     Relevance up to 04:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321865
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

Will The Euro To The US Dollar Pair Break The 1.0000 Level Today?

InstaForex Analysis InstaForex Analysis 16.09.2022 08:23
Technical outlook: EURUSD is still trading subdued below the 1.0000 handle for the last two trading sessions. The probability remains for the rally to continue towards 1.0400 and 1.0730 as projected on the daily chart. Only a drag below 0.9860 will confirm that bears are back in control and that prices are heading lower from here towards 0.9400-0.9500. EURUSD has already carved a larger-degree downswing between 1.2350 and 0.9860 since January 2021. The above drop is being retraced since the 0.9860 lows and the pair is expected to reach at least 1.0800 going forward. Also, note that 1.0800 is the Fibonacci 0.382 retracement of the above drop, hence strong resistance should be seen there. EURUSD has further carved a lower-degree upswing between 0.9860 and 1.0198 over the past few trading sessions. The same has been retraced just below the Fibonacci 0.618 mark (1.0000). A high probability remains for the trend to resume higher from here and push through 1.0800 in the next couple of weeks. Trading plan: Potential rally through 1.0800 against 0.9800 Good luck!   Relevance up to 06:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293031
The Euro May Gradually Climb To The Target Level

Despite The Rebound, The Euro Remains Under Bearish Pressure

InstaForex Analysis InstaForex Analysis 16.09.2022 08:38
Technical Market Outlook: The EUR/USD pair has been seen trading inside a narrow range located between the levels of 1.0019 - 0.9959 on the H4 time frame chart. The level of 1.0019 will now act as a resistance for bulls, because the weak and negative momentum on the H4 time frame chart supports the short-term bearish outlook for EUR. The next technical support is seen at 0.9934 and 0.9901. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the longer term down trend is reversed. Please watch the USDX as the correlation between this two is directly opposite. Weekly Pivot Points: WR3 - 1.01483 WR2 - 1.01150 WR1 - 1.01017 Weekly Pivot - 1.00817 WS1 - 1.00684 WS2 - 1.00484 WS3 - 1.00151 Trading Outlook: Despite the recent relief rally towards the short-term support one, the EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Relevance up to 07:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293047
The EUR/USD Pair Is Showing A Potential For Bearish Drop

Let's Check Out Comments On Forex - Euro, British Pound, US Dollar (USD) And More

ING Economics ING Economics 16.09.2022 09:03
Markets have continued to push their Fed peak rate expectations further, and now see 4.50% in March 2023. A more inverted yield curve has triggered a textbook reaction: fears of slower demand have hit oil and commodity currencies and offered a floor to the dollar possibly into Wednesday's FOMC. Today, the focus will be on Uni Michigan surveys and Lagarde Today we'll hear from ECB President Christine Lagarde, who is speaking at a student event in Paris   Monday 19 September will be a national holiday in the UK, the next FX Daily will be published on Tuesday 20 September.  USD: Hawkish re-pricing continues Despite some mixed data out of the US yesterday, markets have continued to push their hawkish bets on the Fed tightening further, and with 75bp fully priced in for next week’s meeting, March 2023 Fed Funds futures now trade at around 4.50%. This marks a 50bp+ increase in peak rate expectations since the start of September, which has translated into a 40bp rise in two-year Treasury yields. Ultimately, we’re observing a textbook FX reaction to the US yield curve inversion: a supported dollar, and heavily impacted pro-cyclical/commodity currencies; dollar-bloc currencies are down 1.6-2.1% in the week, and only NOK has performed worse (-2.5%) versus the USD. Slumping oil prices (third consecutive weekly drop) are all part of the equation and are mirroring how markets are factoring in a more aggressive tightening by central banks materially hitting global demand. In such an environment, risk sentiment is struggling to recover and this is just another factor delaying any correction in the dollar. Today, University of Michigan sentiment and inflation surveys will be watched (especially the latter), but we may need to see some significantly below-consensus reads to dent the ultra-resilient hawkish Fed expectations at this stage. We see the dollar staying on solid ground into Wednesday’s FOMC announcement. Francesco Pesole EUR: How will Lagarde address the energy bill caps? Today’s final CPI numbers for August in the eurozone are expected to confirm the preliminary 9.1% print, and there are no other data releases to watch meaning all attention will remain on: a) developments in the Russia-Ukraine conflict; b) gas prices and EU measures to cap energy bills; c) ECB speakers. About this last point, we’ll hear from ECB President Christine Lagarde, who will speak with Governing Council member Francois Villeroy at a student event in Paris this morning. So far, post-meeting comments by ECB officials have stayed on the hawkish side of the spectrum and we see no reason for Lagarde to derail from this narrative today. What we’ll be watching closely is how the recent measures by EU members to cap energy bills will be embedded into the ECB’s policy assessment, and this is a factor that may cause a further divergence between the doves and hawks within the Governing Council. We’ll also hear from Olli Rehn this morning. Either way, the euro has displayed a reduced sensitivity to ECB communication recently and the unstable risk environment mixed with a strong dollar may keep EUR/USD upside capped for now despite the recent decline in gas prices. The 1.0000 level could remain an anchor over the coming days. Francesco Pesole GBP: A last (grim) piece of data before the BoE This morning’s retail sales in the UK continued to show a deteriorating consumption picture in the UK, which emerged more from the continuation of a steady downtrend from last summer rather than the single grim data point in a rather volatile series. This has been the last important piece of data before the Bank of England meeting on Thursday and has hit the pound this morning. Despite the seemingly unstoppable re-pricing higher in Fed rate expectations, the BoE’s pricing has stalled, now around 65bp for the September meeting. We currently see a relatively high chance of a 75bp move next week, which could lend sterling some help, despite a general environment that remains rather unwelcoming for pro-cyclical currencies, and domestic growth fears that is likely set to keep a lid on a large GBP recovery. This morning’s EUR/GBP jump may struggle to extend beyond the 0.8750 mark. Francesco Pesole CEE: Polish core inflation hitting new record Today's calendar features core inflation in Poland and PPI in the Czech Republic. Our Warsaw team expects core CPI to jump from 9.3% to 10.0% YoY, the highest level since 2000, which could make for some headlines. In the Czech Republic, confirmation of the slowing trend of year-on-year numbers is expected, and moreover, it will be the last number before the September Czech National Bank meeting. However, we believe that even an upward surprise would not change the expected stability of rates. On the market side, the number one theme remains Hungary and the forint, which lost another 0.7% yesterday and nearly 3.0% for the week, reaching its weakest levels since late August. Of course, the main reason is the issue of EU money and negotiations with the European Commission. Moreover, yesterday we couldn't even blame gas prices, which fell again. As we mentioned earlier, we expect the forint to still have a tough time. The next deadline is on Sunday and in the second half of next week when we should hear more from the European Commission. Elsewhere in the CEE region, the Polish zloty and the Czech koruna remain strictly driven by the price of gas, which helps them overcome the negative impact of the EUR/USD below parity and the unfavourable development of the interest differential in both markets. On the other hand, their development makes it more unpredictable, and we must continue to closely monitor the next steps of the European Union in the gas story. Frantisek Taborsky Read this article on THINK TagsLagarde FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Is Still In A High Position On The 1H Chart

Increase in Fuel Prices And In Consumer Prices Have Negatively Affected The Euro, The US Dollar Is Rising

InstaForex Analysis InstaForex Analysis 16.09.2022 10:37
By the end of the week, the confrontation between the US and European currencies manifested itself most clearly. There is no obvious confrontation in the EUR/USD pair, but the dollar's efforts to consolidate within the existing borders are present. At the same time, the euro, overcoming the attraction of the downward trend, seeks to expand its zone of influence. On Friday, September 16, the greenback slightly "descended from heaven" and moved away from multi-year highs after a steady growth at the beginning of the week. At the same time, market participants expect the Federal Reserve to further raise interest rates to curb inflation. The current situation contributed to an increase in the yield of US Treasury bonds and raised the demand for USD. The catalyst for the growth of bond yields was strong macroeconomic reports from the United States, in particular positive retail sales data. The August consumer price index in America caused a shock in the markets, demonstrating an unexpected recovery in retail sales (by 0.3%). At the same time, the US Department of Labor reports that the number of initial applications for unemployment benefits decreased by 5,000, to 213,000. According to analysts, this indicates the strengthening of the American economy, which is able to withstand an increase in interest rates and derive tangible benefits from it. Against this background, investors have revised their expectations regarding the size of the rate hike. After a sharp increase in the US consumer price index, investors expect the Fed to raise the key rate by an additional 25 bps. The implementation of such a scenario will open up new opportunities for the greenback, giving it another impetus for growth. However, the strengthening of the European Central Bank's hawkish position will be an obstacle to the further rise of the USD. At the moment, the ECB is determined to raise rates and tighten the monetary policy in the region. In the current situation, it is becoming more difficult for the dollar to maintain the positions it has won, although the euro is still weak. However, the single currency seeks to expand the existing borders, trying to push the American rival. The EUR/USD pair was trading near 0.9983 on the morning of Friday, September 16, trying to go above parity. The euro was tripped up by the energy crisis in Europe and a powerful increase in fuel prices. The negative macro statistics in the euro bloc countries added fuel to the fire. In mid-summer, industrial production in the region fell by 2.3%, being twice as bad as forecasts. The growth of consumer prices has had an extremely negative impact on the euro's dynamics. Against this background, the dollar is steadily gaining momentum. In the near future, experts expect a new round of USD growth. An additional bonus for the greenback will be another increase in the Fed rate. Next week, the so-called "parade of central banks" is expected, many of which will hold their meetings on the key rate. At the moment, futures on Fed funds show a 25% probability of a rate hike by 100 bps. At the same time, the dollar will continue to strengthen in the near future. The Fed meeting scheduled for next week will be the biggest event for financial markets. However, important events will also take place at the regional level, namely central bank meetings in England, Japan, Sweden and Switzerland. Market participants expect them to raise the key rate. The implementation of such a scenario will strengthen the greenback's position and give it a head start over other currencies. According to analysts, there is little that can stop the strong USD, which has risen by 15% against a basket of major currencies. The current situation is favorable for dollar bulls, whose actions have pulled down the euro and the yen to the lows of the last 20 years, and the pound to the lowest level in 40 years. According to Commonwealth Bank of Australia currency strategists, the dollar will remain strong as long as the prospects for the global economy are weak enough.   Relevance up to 08:00 2022-09-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/321883
Norges Bank Takes Bold Steps: Signals Strong Tightening to Strengthen Weaker Krone

Financial Conditions Favorable To US Dollar And Unfavorable To Assets

TeleTrade Comments TeleTrade Comments 16.09.2022 10:45
The dollar continues to benefit from safe-haven flows on the last trading day of the week. Economists at MUFG Bank expect the greenback to stay on a solid foot. Mixed data, further curve inversion and asset price declines “Add to that the flow of data this week that indicates a slowing economy there are reasons for the Fed to stick to the current pace of tightening. Retail sales for August revealed no growth in Control Group sales while the July data was revised sharply lower. Manufacturing slowed markedly in August as well and manufacturing sentiment for New York and Philadelphia remained negative. We have not had housing data this week but the housing market is weakening sharply.” “With the Fed set to hike by possibly another 175 bps before year-end, we would expect financial conditions to remain unfavourable for assets generally and it clearly points to the US dollar being the primary beneficiary.”  “For 2s10s to break to new levels of inversion (beyond the Aug low of -58 bps) would take us to levels last seen in the early 1980’s. That would certainly likely mean a broadening of the strength of the US dollar.”
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

EUR/USD Pair: Will The Bulls Or The Bears Dominate In Today's Session

InstaForex Analysis InstaForex Analysis 16.09.2022 10:51
Several excellent market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 0.9957 level and the 0.9996 level in my morning forecast and advised making decisions on entering the market. Bulls protecting support at 0.9957 resulted in an excellent signal to buy the euro in the first half of the day, which resulted in an increase of more than 40 points to the 0.9996 area. I expected the bears to be active there. A false breakout at this level resulted in a signal to open short positions, and at the moment the pair collapsed by 25 points at once. After a surge in volatility in the afternoon, which occurred as a result of mixed fundamental statistics for the US, trading was mainly carried out around the level of 0.9996 and it was not possible to get clear signals to enter the market. When to go long on EUR/USD: Monthly growth in retail sales in the US and a rather large annual decline did not allow the US dollar to seize the initiative. As a result, the pair continued to trade in the narrow horizontal channel it has been in since Wednesday. This morning we have data on the consumer price index in Italy and the consumer price index in the euro area. The latter will be quite important. If inflation in the eurozone continues to grow in August, and according to economists' forecasts, the index should remain unchanged and amount to 9.1%, then the demand for the euro may return at the moment, as this will force the European Central Bank to continue a rather serious fight against inflation through higher interest rates. On the other hand, an increase in borrowing costs has never led the economy to develop, so it is safe to expect it to continue to slide into recession - this hurts the euro in the long run. In case the pair is under pressure again, it is best not to rush into long positions. The optimal scenario would be a false breakout near the new support at 0.9984, which is the middle of the horizontal channel. This will provide an entry point for a larger up correction with an immediate recovery target towards 1.0015. As I noted above, strong eurozone statistics could help the euro, so a breakthrough and test from 1.0015 would hit bearish stops, which would create another signal to open long positions with the possibility of a push up to the 1.0050 area. A more distant target will be resistance at 1.0084, where I recommend taking profits. If the EUR/USD declines and there are no bulls at 0.9984, the pressure on the pair will increase. The optimal decision to open long positions in such conditions would be a false breakout near the low of 0.9957. I advise you to buy EUR/USD immediately on a rebound only from 0.9922, or even lower - in the area of 0.9880, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears continue to control the upper limit of the horizontal channel, which coincides with the parity of the euro against the dollar, thereby controlling the entire market. The longer the pair is below 1.0000, the more likely it is that the euro would fall further along with the renewal of annual lows. And so the bears' main task is to protect the resistance of 1.0015, the test of which may occur in case we receive good statistics on the euro area. I expect big players to appear from 1.0015, so along with a false breakout, you can open short positions in order to further move the euro down to 0.9984. A breakdown and consolidation below this range with a reverse test from the bottom up creates another sell signal with the removal of bulls' stop orders and a larger fall of the pair to the lower border of the horizontal channel at 0.9957. I recommend taking profit there. A more distant target will be a low of 0.9922. If EUR/USD jumps during the European session, as well as the absence of bears at 1.0015, the demand for the euro will increase, and an upward correction will lead to the next resistance at 1.0050. In this scenario, I recommend opening short positions from 1.0050 only if a false breakout is formed. You can sell EUR/USD immediately on a rebound from the high of 1.0084, or even higher - from 1.0118, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT report) on September 6 logged a decline in short positions and a sharp increase in long positions. Considering that all this was ahead of the European Central Bank meeting, at which the central bank raised interest rates by 0.75% at once, such changes are not surprising. With an ever smaller gap in interest rates between the Federal Reserve and the ECB, the demand for the euro will gradually return, but you need to understand how difficult the European economy is now and how difficult it will be for this winter period - especially with such high energy prices due to the deficit. In the US, the Fed also plans to raise interest rates by 0.75% as early as next week, but quite a lot will depend on what inflation data comes out. If the growth rate of consumer prices remains at a high level, the central bank will not hesitate for a long time. The COT report indicated that long non-commercial positions rose by 3,019 to 205,277, while short non-commercial positions decreased by 8,308 to 241,626. As of the end of the week, the overall non-commercial net position remained negative, but rose slightly to -36,349 against -487,676, which indicates the first prerequisites for building an upward correction for the pair and finding the bottom. The weekly closing price decreased and amounted to 0.9917 against 1.0033. Indicator signals: Moving averages Trading is conducted in the area of 30 and 50-day moving averages, which indicates some market uncertainty. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of a decline, the lower border of the indicator around 0.9984 will act as support. In case of growth, the upper border of the indicator in the area of 1.0015 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 06:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321867
ECB press conference brings more fog than clarity

Will The EU Engage With the Middle East To Manage The Energy Crises?

TeleTrade Comments TeleTrade Comments 16.09.2022 11:33
Charles Michel, the President of the European Council said on Friday that the bloc must reduce energy consumption and increase supply. Additional quotes   The EU needs to engage with Algeria, Qatar, UAE and Saudi Arabia to manage the current crises. For most of these four countries its possible to increase supply, we need to determine conditions. Good proposals on energy prices are on the table in the EU, but more will be needed. We discussed with Qatar rerouting gas meant for Asia.   Related reads EUR/USD: Sellers to retain control if 0.9950 fails ECB’s Rehn: There is a case for frontloading the tightening cycle
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

It's Going To Be A Thrilling Week For Euro, Dollar And British Pound (GBP)! Bank Of England And Fed Decide On Interest Rates!

ING Economics ING Economics 16.09.2022 11:54
The prospect of lower near-term inflation takes some of the pressure off the Bank of England to move even more aggressively on Thursday. We expect a second consecutive 50 basis point rate hike, although it's a close call between that and a 75bp move Our Bank of England call We narrowly favour a 50bp hike on Thursday, taking the Bank Rate to 2.25%, although 75bp is clearly on the table and we would expect at least a couple of policymakers to vote for it. It's even possible we get a rare three-way vote – the first since 2008 – if dovish committee member Silvana Tenreyro votes for a 25bp hike as she did in August. If our call is correct, then we expect another 50bp move in November and at least another 25bp in December. That would take Bank Rate to the 3% area. It's a tough meeting to call... Next week’s Bank of England meeting is crucial. It will tell us not only how worried policymakers are about the slide in sterling and other UK markets, but also how the government’s decision to cap household/business energy prices will translate into monetary policy. It has also, undeniably, become a close meeting to call. Hawks at the Bank of England will undoubtedly be concerned about the independent sterling weakness we've seen recently (down 4% in trade-weighted terms), even if in practice it’s unlikely to make a huge difference to the big-picture inflation outlook. Both the Fed and ECB will have also done (at least) 75bp hikes by Thursday, and markets are increasingly concluding the BoE will do the same. But we’d caution against assuming UK policymakers will ramp up the pace of rate hikes simply because that’s what everyone else is doing – or indeed because that’s what markets are pricing. As recently as June, the BoE hiked by ‘only’ 25bp, despite the Fed having done 75bp the night before, and defying market expectations for more. Indeed, there are good reasons to think the Bank will ‘stick to its guns’ and simply repeat the 50bp hike it executed in August. Government energy price guarantee means inflation unlikely to go much higher Source: Macrobond, ING forecasts   One immediate consequence of the government’s decision to cap household electricity/gas bills this winter is that headline inflation should be dramatically lower. We now expect CPI to peak at 11% in October, only slightly above where it is now, compared to 16% in January had the government not intervened. It also means headline inflation should be back around the BoE’s 2% target at the end of next year, crazy as that sounds. All of that should help keep consumer inflation expectations in check, and in fact, we’ve already seen a noticeable pullback in long-term price expectations according to the latest BoE survey. Admittedly there appears to be a wide range of views at the BoE about how much all of this actually matters. But we know from recent comments, notably from hawk Catherine Mann, that some policymakers have had a keen eye on consumer expectations over recent months. By the BoE's own measure, consumer inflation expectations have dipped Source: Macrobond   The flip side, of course, is that extra government support potentially means higher medium-term inflation, even if headline rates are lower in the very near term. We think this is ultimately what most committee members will be more interested in. The hit to GDP this winter is likely to be more moderate than the 2% cumulative decline the BoE forecast in August, while the sharp rise in unemployment it projected is less likely to materialise too. With worker shortages proving to be a long-running issue in the jobs market, the risk is that higher wage growth could become a persistent feature that requires more central bank tightening. That doesn't necessarily have to manifest itself as a radically higher policy rate, and we still believe investors are overestimating the tightening to come. The swaps market is pricing a terminal rate in the region of 4.5% next year. Hiking by 75bp risks adding even more fuel to the fire, something we suspect the committee will be wary of doing, even if there are advantages in front-loading hikes. But even if the Bank doesn’t hike as far as markets expect, we do think the arrival of government stimulus means the BoE won’t be racing towards rate cuts next year, unlike some of its developed market counterparts. Gilts, looking for some clarity Gilts are looking for a much-needed reduction in uncertainty next week. Clearly, a 50bp hike would be a dovish surprise and help reverse some of the front-end’s weakness but even in the case of a 75bp move, the BoE clarifying its reaction function with regards to the energy package would be helpful. Fiscal and monetary policy competing with each other is an unnerving thought for bondholders. The Treasury’s fiscal event next week should also help answer any lingering questions about the size and financing of the energy support measures. Gilts should widen to 200bp against Bund on a generous fiscal package Source: Refinitiv, ING   Even if the gilt ‘fear factor’ eases next week, it doesn’t answer the key question: who will buy all these gilts? A deficit-financed energy package will add to supply and to the BoE reducing the size of its portfolio. Private investors will have to make up the shortfall. This is not impossible but they will likely be some reluctance initially given the amount of new debt released into the market. The BoE’s plan to start outright sales of gilts, albeit in small amounts initially, is an additional source of concern. On Thursday, the Bank is expected to vote in favour of starting this process, despite concerns about stress in the UK bond market. Divergence in the size and financing of energy packages in the UK and the eurozone means the spread between 10Y gilts and bund should widen to 200bp. Read this article on THINK TagsUK fiscal policy Inflation Central banks Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

Less Volatility In The Forex Market, The Huge Problems In The Global Economy

InstaForex Analysis InstaForex Analysis 16.09.2022 12:34
Consumer inflation in the US seems to have completely deprived the market of hopes that the Fed, after an aggressive rate hike next week, will continue to raise them less vigorously. This is because the weaker-than-expected decline in inflation on a yearly basis and its rise on a monthly basis have brought to life a new wave of forecasts. FedEx CEO Raj Subramaniam also said that the drop in traffic volumes around the world is a clear indication of the huge problems in the global economy. This led to a decline in the US stock market yesterday. Tesla CEO Elon Musk said the same thing, remarking that an aggressive increase in interest rates would cause irreparable damage to the US economy. But the US Central Bank is too determined to reduce inflation, believing that this is an important task and as long as the state of the economy allows tough measures to be implemented, they must be applied. Next week's meeting will show whether the Fed will give up or not. So far, the forex market, in contrast to the stock market, demonstrates noticeably less volatility. Traders are obviously waiting for the outcome of the Fed meeting, so there will be no noticeable changes until it ends. In this regard, the price movement of EUR/USD will stall for a while. But the Fed's continued tight stance on monetary policy will be a major downside, and even the expected increase in the ECB interest rate will not help euro. Most likely, it will drop to a local low of 0.8225 or under. Much will depend on the economic situation in Europe and the United States. If the Fed starts to soften its stance, the pair may hit 1.0200 or higher. Forecasts for today: USDCAD The pair is trading above 1.3250. Further buying pressure will raise the quote to 1.3370. GBP/USD The pair is trading at a local low of 1.1400. A decline below 1.1410 could serve as an impetus for its further fall towards 1.1310.   Relevance up to 08:00 2022-09-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321889
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

Mixed Macroeconomic Data And Behavior Of Currency Pairs

Saxo Bank Saxo Bank 16.09.2022 14:18
Summary:  The US dollar continues to drive higher together with the pricing for the Fed’s terminal policy rate reaching new highs near 4.50%. The JPY managed to hold the line and then some against a surging greenback as the market seems unwilling to challenge the Bank of Japan for now despite the higher US yields. Elsewhere, the descent in sterling is verging on scary, with GBPUSD staking out new record lows since 1985 below 1.1400 as EURGBP broke the range highs. FX Trading focus: Sterling descent getting scary after weak UK Retail Sales. USDJPY stays tame even with stronger USD and higher US treasury yields. The USD arched to new highs this morning versus a majority of G10 currencies, with USDJPY the notable pair not participating in the move as the market seems unwilling to challenge the Bank of Japan for now. One of the proximate triggers for a shift lower in risk sentiment late yesterday was the weak result and guidance from FedEx after US trading hours. As well, US short treasury yields continue to rise and provide plenty of pressure on markets. As for USDJPY, arguably longer yields are a more important coincident indicator, and US long yields have not yet broken to new cycle highs (3.50% for the US 10-year Treasury benchmark) although they are pushing hard on that level. The short end of the US yield curve, continues to rise apace even as the predictions for next week’s meeting pulled back slightly, meaning that the “terminal rate” for the cycle is getting priced higher – and has nearly hit 4.50%, more than a hundred basis points above where it was in early August. Data from the US yesterday was mixed. The headline US August Retail Sales report was slightly stronger than expected at +0.3% MoM vs. -0.1% expected, but July was revised down to -0.4% from 0.0%. The core Retail Sales data was slightly weaker than expected at +0.3% ex Autos and Gas, likewise with a negative revision (down to +0.3% for July after +0.7% was reported). Important to note that the US reports Retail Sales in nominal dollar changes, so this report suggests stagnating volumes. The latest weekly jobless claims data point yesterday was the lowest since late May, extending the recent falling trend. The UK August Retail Sales data this morning, on the other hand, was distinctly weak and set off an extension lower in sterling, as EURGBP broke above 0.8722 for the first time since early 2021 UK reports Retail Sales in volumes, not in nominal prices, and the month-on-month data developments were extremely weak, pointing to a steep real growth slowdown. Sales including petrol fell -1.6% MoM in August and -1.5% ex petrol. The August Ex Petrol volumes dip takes the data below the 2019 level in August, the first time that has happened in this calendar year. Waiting for the close of trade today for next steps as we have quarterly “witching” of massive derivatives exposures in the US today and with it, possibly erratic trading. Very interesting to see the combination of USDJPY unwillingness to move today together with USDCNH on the rise (so CNHJPY dropping), while EURUSD is also a bit stuck and backing up after trying lower in the European morning today. Some USD exhaustion creeping in at least within the G3? And if risk sentiment continues to deteriorate, will it remain always a function of the rising Fed expectations, or can it jump horses to concerns for the economic cycle? In other words, the eventual chief question may be: what happens to the USD if bond and stocks diverge in direction? Chart: GBPUSDGBPUSD declines took on extra energy this morning in the wake of the weak August UK Retail Sales data that showed a sharp contraction in volumes in August, a sign of real GDP contraction. This took EURGBP to new highs since early 2021 (pointing that out as an indication of isolate GBPS weakness), while GBPUSD drove down to record lows since the mid-1980’s. Not sure what can bring relief for sterling here save for a halt to the relentless rise in US yields and/or thawing risk sentiment after the steep plunge this week. As for next level, only round, psychological ones seem relevant as the 1985 lows near 1.0500 are impossible to compare in real effective terms after 37 years. Bulls will have to hope that sentiment shifts here and for a quick rejection of the new lows to confirm a divergent momentum scenario (stochastic indicator turning back higher after new price lows posted with indicator not at new lows). EURCHF hit new cycle lows yesterday below 0.9550, but these were rapidly rejected. Without any catalyst I could identify, this looks like possible intervention – perhaps as energy prices have calmed, meaning that the SNB wants to lean a bit the other way now? Very curious to hear the SNB next Thursday. Table: FX Board of G10 and CNH trend evolution and strength.The stronger euro beginning to stick out, as does the JPY resilience, as the smaller currencies and sterling have traded weakest. Gold hit the skids on breaking below the big range level around 1,680. CNH is on the weak side, which is interesting, given the strong US dollar, but let’s watch 7.20 in USDCNH to see if there is any real fireworks potential. Table: FX Board Trend Scoreboard for individual pairs.JPY has strengthened enough to have a go at flipping stronger versus NOP and NZD today. More interested in whether the CNHJPY rate flips negative next week. Upcoming Economic Calendar Highlights 1200 – Poland Aug. Core CPI 1215 – Canada Aug. Housing Starts 1400 – US Sep. Preliminary University of Michigan Sentiment Source: https://www.home.saxo/content/articles/forex/fx-update-sterling-descent-takes-gbpusd-to-historic-low-16092022
At The Close On The New York Stock Exchange Indices Closed Mixed

Fall Of Indices At The Close Of The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 19.09.2022 08:07
At the close on the New York Stock Exchange, the Dow Jones fell 0.45% to hit a monthly low, the S&P 500 index fell 0.72%, and the NASDAQ Composite index fell 0.90%. The leading performer among the components of the Dow Jones index today was Home Depot Inc, which gained 4.43 points (1.63%) to close at 275.97. Amgen Inc rose 3.48 points or 1.53% to close at 231.14. Johnson & Johnson rose 2.52 points or 1.53% to close at 167.60. The losers were Boeing Co shares, which fell 5.49 points or 3.67% to end the session at 144.29. Chevron Corp was up 2.60% or 4.17 points to close at 156.45, while Walt Disney Company was down 2.28% or 2.52 points to close at 108. 25. Leading gainers among the S&P 500 index components in today's trading were Iron Mountain Incorporated, which rose 3.35% to hit 55.29, Newmont Goldcorp Corp, which gained 3.09% to close at 43.71, and also Dollar Tree Inc, which rose 2.89% to end the session at 141.92. The biggest losers were FedEx Corporation, which shed 21.40% to close at 161.02. Shares of WestRock Co lost 11.48% to end the session at 34.15. Quotes of International Paper fell in price by 11.21% to 35.23. Leading gainers among the components of the NASDAQ Composite in today's trading were Panbela Therapeutics Inc, which rose 53.06% to hit 0.58, Applied Opt, which gained 50.40% to close at 3.76, and shares of Axcella Health Inc, which rose 29.57% to end the session at 2.41. The biggest losers were Aditx Therapeutics Inc, which shed 58.52% to close at 4.31. Shares of Esports Entertainment Group Inc lost 46.15% and ended the session at 0.18. Shuttle Pharmaceuticals Inc lost 45.94% to 8.99. On the New York Stock Exchange, the number of securities that fell in price (2294) exceeded the number of those that closed in positive territory (816), and quotes of 121 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,586 stocks fell, 1,158 rose, and 233 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.11% to 26.30. Gold Futures for December delivery added 0.38%, or 6.35, to hit $1.00 a troy ounce. In other commodities, WTI October futures rose 0.29%, or 0.25, to $85.35 a barrel. Brent oil futures for November delivery rose 0.81%, or 0.74, to $91.58 a barrel. Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.10% to 1.00, while USD/JPY fell 0.40% to hit 142.95. Futures on the USD index fell 0.02% to 109.43.   Relevance up to 05:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/293169
The Euro May Attempt To Resume An Upward Movement

How The Euro To The US Dollar Pair Starts The New Week?

InstaForex Analysis InstaForex Analysis 19.09.2022 08:19
EUR/USD hit two target levels last Friday. The first is 0.9950, while the second is 1.0032. The latter has once again become a resistance level because of the MACD line. Meanwhile, the Marlin oscillator is slightly above zero, but this does not prevent the pair from turning due to the strong resistance level. The oscillator's reversal and the price movement are synchronous. The first target is still the recent support level of 0.9950, while the next target is 0.9850. An alternative scenario is a consolidation above 1.0032 and subsequent growth to 1.0150. In the H4 chart, the pair is trying to fight the resistance level of 1.0032, which was reinforced by the MACD line. The Marlin oscillator is in negative territory, showing the intention to turn down. As such, it is likely that the price will decrease to the first target level of 0.9950.   Relevance up to 04:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321978
Gold's Hedge Appeal Shines Amid Economic Uncertainty and Fed's Soft-Landing Challenge

Chengdu Returns To Normal Life, The Entry Of Genting Group Into The Competition

Saxo Bank Saxo Bank 19.09.2022 08:30
Summary:  Sentiment in U.S. equities has been dampened by rising expectations of larger rate hikes for the rest of the year and profit warnings and depressed remarks from the management of heavy-weight companies about their business outlook and the economy. All eyes are on the FOMC meeting this Wednesday. China’s August industrial production, retail sales, and infrastructure construction surprised on the upside but housing market activities and home prices remained sluggish. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) are looking bearish again US equities closed off the week with the biggest loss since January after heavy-weight companies were hit by a series of company earnings and guidance woes, with their pain being compounded by rising bond yields. S&P 500 was down 0.7% on Friday and down 4.8% for the week and Nasdaq 100 dropped 0.6% on Friday and 5.8% for the week, wiping out the prior week’s gains. The Nasdaq 100 is now down 29% from its November 2021 peak and the technical indicators on the monthly chart tend to suggest further downside ahead. Big US stock movers   Last week there were a number of industrial titans, first Dow Chemical (DOW:xnys), Eastman Chemical (EMN:xnys), Huntsman (HUN:xnys), Nucor (NUE:xnys), and capped with FedEx (FDX:xnys) warning about grim demand outlook.  FedEx only missed EPS for the August quarter massively but also cut its Nov quarter EPS guidance and completely withdrew the FY2023 guidance, citing significantly worsened macroeconomic trends both internationally and in the US. FedEX tumbled 21.4% on Friday. Amazon (AMZ:xnas) declined 2.2%, following FedEx’ warning. General Electric (GE:xnys) warned the supply chain pressure is having a negative impact on profits.  Uber (UBER:xnys) dropped 3.7% after the ride-hailing services provider following a major data breach in its computer network caused by a hacker.  Amazon (AMZ:xnas) declined 2.2%, being dragged down by the woes in FedEx.  Adobe (ADBE:xnas) slid another 3.1% on Friday and a massive 19.4% in two days since the software maker announced a USD20 billion offer to acquire Figma, collaborated product design platform at 100x of the latter’s recurring revenue. For more discussion on FedEx and Adobe, please refer to Peter Garny’s note here.  Last Friday, over USD3 trillion notional of options expired on Friday and S&P3900 puts traded about 95,000 contracts.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) Trading in treasuries on Friday was mixed, with yields of -2-year and 10-year notes unchanged at 3.86% and 3.45% respectively as 5-year yields came off 3bps to 3.63%, and 30-year bonds underperformed for the first time during the week, seeing yield rising 4bps to 3.51%. Treasuries pared their early losses (higher yields) after the 5-10 year inflation expectations in the University of Michigan consumer sentiment survey fell to 2.8%, the lowest since July 2021.  The underperformance in the 30-year bonds was attributable to supply, including a USD12 billion 20-year treasury bond auction on Tuesday and expected corporate issuance of about USD20 billion this week.  The latest data shows that the holding of Japan, the largest foreign holder of U.S. treasury securities, fell USD2 billion to USD1.23 trillion and China, the second largest holder, saw its holdings increase by USD2.2 billion to USD970 billion in July.     Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Shares traded in Shanghai and Shenzhen plunged, with CSI 300 down 2.4%.  The General Office of the State Council issued guidelines to encourage securities firms, funds, and financial guarantee companies to lower fees.  Shares of brokerage firms fell across the board in mainland bourses by nearly 5%.  East Money (300059:xsec) tumbled 10.8%. Chinese brokerage companies listed in Hong Kong also plunged, with GF Securities (01776:xhkg) down by 8.6%, CITIC Securities (06030:xhkg) down by 5.0%, Huatai Securities (06886:xhkg) down by 4.8%.  Chinese property stocks fell in both the mainland bourses and Hong Kong bourse, following the report that new home prices 2nd to 4th tier cities fell sharply again in August despite the recent relaxation of home purchases in a large number of cities.  The weakness of the property sector in the fixed asset investment data in August and the news that the city of Suzhou resumed home purchase restrictions on non-residents in four districts added to the woes in the developer space.  Country Garden (02007:xhkg) tumbled 7.6%.  The EV space declined, falling from 1% to 4.5% following the Ministry of Industry and Information Technology’s Vice Ministry said that there are “blind investments” and overlapping projects in EV in some provinces and municipalities.  In the China internet space, Kuaishou (01024:xhkg) led the charge lower, down more than 7%, as Alibaba (09988:xhkg), Tencent (00700:xhkg), Meituan (03690:xhkg), and Bilibili (09626:xhkg) down from 1.5% to 4.4%.  Australia’s ASX200 has wiped out July’s rally. Focus will be on RBA minutes released Tuesday The ASX200 shed 2.3% last week, erasing July’s gain but faring better than US equities. The market woes have not only come after Australian 10-year bond yield rose to fresh highs, up 0.2% last week, while hovering in 8-year high neighbourhood. But secondly, market sentiment has also been capped as the Fed is set to aggressively hike rates, which pressures Australia’s tech stocks, with many Aussie tech companies making the majority of their revenue from the US. And thirdly, metal commodities have come under pressure again of late, as China’s demand continues to wane. In fact, fresh Chinese export data shows their rare earths and aluminium exports surged yoy. Meanwhile total China’s imports of steel plunged 16% yoy, corn fell 44% and wheat dropped 25% yoy. The trifecta of issues is seeing the ASX200’s technical indicators on the day, week and month charts flag further downside is ahead. Australian dollar on notice with the Fed to hike this week The AUDUSD is under pressure after hitting a new low last week, 0.6727 US cents, which is about a two year bottom. Despite already losing 7% this year, the commodity currency, the AUDUSD is on notice again this week with the Fed expected to hike by 75bps (0.75%) at its Wednesday meet, which will take the Fed funds rate to 3-3.25%. There is also a slim chance (25% chance) of a full percentage hike of 100bps (1%) after the hotter-than-expected August inflation. Either way, the fundamentals support the US dollar gaining momentum against the Aussie, especially as the RBA is limited in its hiking power and likely to only hike by 0.25% next month. Also consider a jump in the US 10-year yield will likely further bolster the USD. A slightly softer USD heading into the FOMC week The USD is slightly softer going into the FOMC week amid some profit-taking, but it still remains the haven of choice with massive amounts of policy tightening packed into the week. AUDUSD pared some of the recent losses amid China reopening optimism and RBA’s Kearns saying that Aussie home buyers could benefit from higher rates. USDCAD rose to near 2-year highs on Friday at 1.3308, partly oil induced, but also due to increasingly sour sentiment and perceptions that BoC-Fed policy will likely diverge in wake of the latest disappointing Canadian employment data vs still-tight US labor markets. USDJPY will be a key focus with both FOMC and BOJ meetings scheduled in the week, and possibility of another round of strong verbal intervention from the authorities is seen. EURUSD is back above parity, as ECB members stay hawkish, but risks remain titled to the downside in the near term. Crude oil (CLU2 & LCOV2) With massive central bank action scheduled in the week, it can be safely assumed that demand concerns will likely remain center-stage. A spate of rate hikes is aggravating concerns of an economic slowdown, but easing of restrictions in China’s Chengdu today will ease some of the concerns. Dalian will also exit restrictions today. Nevertheless, more supply disruptions remain a risk. Germany seized the local unit of Russian oil major Rosneft PJSC, including three refineries. One of those is now preparing for short-term restrictions in crude supplied via the Druzhba pipeline. WTI futures were seen higher above $85/barrel in early Asian hours, while Brent futures were close to $92. Gold (XAUUSD) Gold saw some recovery after touching support of $1660/oz on Friday as interest rate hike bets picked up following the hotter-than-expected August CPI in the US last week. Further resilience in economic data out of the US has further kept interest rates expectations on an upswing, while rising geopolitical and economic risks are doing little to entice haven buying as the US dollar still remains the prime safe-haven choice. Gold was back close to $1680 this morning in Asia. The risk of the FOMC sending the US economy into a recession before getting inflation under control is rising and, once that occurs, the dollar is likely to turn sharply lower, thereby supporting fresh demand for investment metals. What to consider? University of Michigan survey remains optimisticThe preliminary September University of Michigan sentiment survey saw the headline rise to 59.5 from 58.5, just short of the expected 60, but nonetheless marking a fourth consecutive rise. Notably, the rise in forward expectations was starker than in current conditions, with the former also coming in above consensus expectations. Also, key were the inflation expectations, which echoed what was seen in the Fed surveys last week. The 1yr slowed to 4.6% from 4.8% and the 5yr expectations slowed to 2.8% from 2.9%.   China’s August activity data improved better-than-expected China’s activity data for August came in at stronger than expected growth rates.  Industrial production grew 4.2% Y/Y in August beating the consensus estimate of 3.8% Y/Y and improving from last month’s 3.8% Y/Y.  Higher output in automobile and power generation offset the impact from slower activities in other industries such as pharmaceuticals and computers.  Retail sales grew 5.4% Y/Y in August, well exceeding the 3.3% Y/Y median forecast from the Bloomberg survey and the 2.7% YoY in July. A favourable base effect and stronger auto sales during the month boosted retail sales and more than offset the drag from tightened pandemic control measures and a slow housing market.  Fixed asset investment grew 6.4% Y/Y in August, notably accelerating from the 3.6% Y/Y in July, led by 14.8% Y/Y growth in infrastructure and 10.7% Y/Y growth in manufacturing investments while investment in properties slowed further to a decline of -13.9% Y/Y in August from July’s -12.1%.  China’s property prices in lower-tier cities continued to decline in August According to data released by the National Bureau, the weighted average of new home prices in the top 70 cities in China fell 1.1% Y/Y (vs -0.6% Y/Y in July), driven largely by declines in property prices in lower-tier cities.  The easing of home purchase restrictions by local governments has so not been able to stop the decline in property prices in lower-tier cities.  Sequentially, new home prices in Tier-2, Tier-3, and Tier-4 cities dropped by about 5% M/M annualized while new home prices in Tier-1 cities rose by 1.6% M/M annualized.  An unexpected seventh bidder for Macao gambling licenses created uncertainties about incumbent operators In a tender for the six 10-year casino operating licenses, the six incumbent casino operators faced an unexpected rival from the Malaysian Genting Group which submitted a bid into the tender.  As the maximum number of licenses remains at six, the entry of Genting Group into the competition may mean one of the incumbent license holders might be ousted. Chengdu exits lockdown Chengdu, the largest city in Western China ends its nearly 3-week-long lockdown today and allows its 21 million population to leave their home and resume most aspects of normal life.  Residents are required to do PCR tests at least once a week.  Hong Kong considers ending hotel quarantine for inbound travelers The Hong Kong Government is reviewing and considering plans to end the hotel quarantine requirements for inbound travelers.  Currently, travelers to Hong Kong are required to be quarantined in a hotel for 3 nights and followed by four-day medical monitoring at home and then another 3 days of self-monitoring without mobility restriction.  The news may lift the share price of travel-related stocks, such as Cathay Pacific (00293:xhkg).   For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-19-sept-2022-19092022
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

How Can Plan For The EUR/USD Pair Look Like For Today?

InstaForex Analysis InstaForex Analysis 19.09.2022 10:17
Previous trading tips for EUR/USD indicated a possible increase in prices after a false breakdown in the lower limit of the range 0.99500-1.00236. Plan: That happened on Friday, during the US trading session. Quotes rose sharply in price and broke through the limit of the range. Congratulations to everyone who followed the strategy! Euro moved by 800 pips. The trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 08:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321992
FX Daily: Testing the easing pushback

The Euro To The US Dollar Pair Will Have A Bullish Trend

InstaForex Analysis InstaForex Analysis 19.09.2022 11:13
Trend analysis EUR/USD quotes will decrease this week, starting from 1.0014 (closing of the last weekly candle) to 0.9864, which is the lower fractal (yellow dotted line). Then, it will move to the 14.6% retracement level at 0.9987 (yellow dotted line) and to the 23.6% retracement level at 1.0080 (yellow dotted line). Fig. 1 (weekly chart) Comprehensive analysis: Indicator analysis - uptrend Fibonacci levels - uptrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - downtrend Monthly chart - uptrend All this points to an upward movement in EUR/USD. Conclusion: The pair will have a bullish trend, with a first lower shadow on the weekly white candle (Monday - down) and no second upper shadow (Friday - up). So during the week, euro will fall from 1.0014 (closing of the last weekly candle) to the lower fractal at 0.9864 (yellow dotted line), then go to the 14.6% retracement level at 0.9987 (yellow dotted line) and 23.6% retracement level at 1.0080 (yellow dotted line). Alternatively, quotes could drop from 1.0014 (closing of the last weekly candle) to the support line of the downward channel at 0.9804 (thick white line), then go to the 14.6% retracement level at 0.9987 (yellow dotted line). The upward movement may continue from this level.   Relevance up to 08:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321996
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

What The Trading Plan Looks Like For The Major Currency Pairs (EUR/USD And GBP/USD)

InstaForex Analysis InstaForex Analysis 19.09.2022 11:51
Details of the economic calendar for September 16 Retail sales fell 1.6% on a monthly basis in August, according to the UK Office for National Statistics (ONS). This is the most significant decline since December 2021. On an annualized basis, sales fell 5.4% after falling 3.2% in July. The decline in retail sales is a negative factor, which is another sign that the economy is slipping into recession. The pound sterling was actively losing value during the publication of statistical data. In Europe, data on inflation accelerated from 8.9% to 9.1%. The final data coincided with the preliminary estimate. Rising inflation indicates that the ECB will once again raise the refinancing rate by 75 basis points. The expectation of further growth of the rate has a positive effect on the euro during the publication of inflation data. Analysis of trading charts from September 16 The EURUSD currency pair, despite the local manifestation of activity, is still moving within the sideways range of 0.9950/1.0030. This price movement indicates the process of accumulation of trading forces, which will most likely lead to a surge in activity during the completion of the side formation. The GBPUSD currency pair ended last week with an update of the local lows of the downward trend. As a result, the quote was at the levels of 1985, where overheating of short positions on the pound led to a technical pullback of about 90 points. Economic calendar for September 19 The new trading week starts with a blank macroeconomic calendar. Important statistics in Europe and the United States are not expected. While trading is closed in the UK due to the funeral of Queen Elizabeth II. Investors and traders will be guided by the information flow, identifying possible speeches / statements / comments regarding interest rates, inflation, and everything related to monetary policy. Trading plan for EUR/USD on September 19 In this situation, work within the established range is possible, but the outgoing impulse method is considered the most optimal strategy in terms of income and risk. We concretize the above: The downward movement will be relevant after holding the price below 0.9950 in a four-hour period. This move could result in a new downward trend low. An upward movement in the currency pair is taken into account in case of a stable holding of the price above the value of 1.0030 in a four-hour period. Trading plan for GBP/USD on September 19 Despite the current pullback, the market still has a technical signal about the oversold pound sterling. For this reason, the price movement above the value of 1.1450 will lead to the subsequent recovery of the British currency. At the same time, the update of the local low of the downward trend has led to the emergence of an inertial move on the market, where the speculative mood may well ignore all the emerging signals from technical analysis. In this case, keeping the price below the value of 1.1350 may lead to a subsequent increase in the volume of short positions in the pound sterling. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future. Relevance up to 10:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322028
NatWest Group Reports Strong H1 2023 Profits Amid Rising Economic Concerns

Will The Bears Continue To Put Pressure On The EUR/USD And The GBP/USD Pairs?

InstaForex Analysis InstaForex Analysis 19.09.2022 12:49
EUR/USD Higher timeframes Despite a fairly effective rebound upon meeting the resistance levels 1.0016-76, last week closed with a candle of uncertainty. The pair remains tied to the psychological level of 1.0000, while thinking about the future prospects. For the bulls in the current situation, the next important task is to break through the daily Ichimoku cross (1.0037 – 1.0066 – 1.0114 ) and gaining support from the weekly short-term trend (1.0116). For bears, the recovery of the downward trend (0.9864) is still of primary importance. H4 – H1 On the lower timeframes, consolidation and uncertainty have led the pair in the zone of attraction and influence of key levels—0.9999 (central pivot point of the day) - 1.0027 (weekly long-term trend). Breakdown and consolidation above can contribute to the activity of the bulls. The reference points for further upward move within the day are 1.0053 – 1.0091 – 1.0145 (resistance of classical pivot points). Meanwhile, the reference points for the decline are the classic pivot points (0.9961 – 0.9907 – 0.9869), the target for the breakdown of the H4 cloud (0.9897 – 0.9864) and the minimum extremum of the downward trend of higher timeframes (0.9864). *** GBP/USD Higher timeframes Last week failed to realize a close below the significant historical milestone of this area—1.1411 (minimum extremum of 2020). Therefore, for the appearance of new prospects for bearish players, first of all, it is important to overcome the met support. The immediate resistance of the higher timeframes is now the daily short-term trend of 1.1543. H4 – H1 The main advantage on the lower timeframes currently belongs to the bears. Among the reference points for continued decline today is the target for the breakdown of the H4 Ichimoku cloud (1.1342) and the support of the classic pivot points (1.1351 – 1.1286 – 1.1222). If the current correction develops, the key levels for bulls will be 1.1415 (central pivot point) and 1.1531 (weekly long-term trend). Consolidation above and reversal of the moving average will change the current balance of power. *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)     Relevance up to 10:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322030
Inflation Rising Again In The Eurozone, Positive GDP In The Great Britain

European Central Bank (ECB) And Fight Against Inflation

TeleTrade Comments TeleTrade Comments 19.09.2022 12:58
European Central Bank (ECB) Vice President Luis de Guindos said on Monday that “growth slowdown is not enough to ease inflation.” “Inflation expectations need to be well anchored,” the central bank policymaker said. Market reaction The shared currency is unfazed by the above comments, with EUR/USD losing 0.37% on the day to trade at 0.9971 at the time of writing.
US and European Equity Futures Mixed Amid Economic Concerns and Yield Surge

The European Commission Proposal On Emergency Power Supply

TeleTrade Comments TeleTrade Comments 19.09.2022 13:07
The European Commission proposed on Monday emergency power to avoid a supply crisis. Reuters reports after obtaining the European Union (EU) draft rules. Key highlights “Under draft rules, the EU is to ask companies to accept priority rated orders for critical products.” “Under EU draft rules EU countries may ask companies to expand or repurpose production lines.” “EU countries may have to build up stockpiles under EU draft rules.” Related reads EUR/USD looks offered, extends the downside below parity Bulgaria says Gazprom is ready to discuss gas supply proposals
Euro to US dollar - Ichimoku cloud analysis - 21/11/22

Digital Euro As A Facilitation Of Personal Payments In The European Union

InstaForex Analysis InstaForex Analysis 19.09.2022 13:33
The European Central Bank (ECB) has announced it has selected five new partners to help develop a digital euro prototype, with tech giant Amazon shortlisted. There were 54 candidates in total who were eager to help the ECB in its efforts, and the bank settled on Amazon, the European Payments Initiative (EPI), the Spanish multinational CaixaBank, the French payments platform Worldline and the Italian payments-focused bank Nexi. The ECB settled on these options because they best suited the specific opportunities needed to be used. Each of the selected companies will be responsible for different roles in prototyping. Amazon was tasked with developing e-commerce payments as part of the project. CaixaBank will be responsible for developing peer-to-peer online payments for the mobile app, while Worldline will be responsible for the offline version. EPI will manage payments at the point of sale from the payer, while Nexi will process them for the recipient. It is planned that new prototyping will begin in September and be completed by the end of December. The move comes amid a two-year ECB investigation into whether it should issue a digital euro as an alternative to central bank-issued cash. The current phase of research and prototype evaluation is expected to be completed by March 2023. The main purpose of creating a digital euro is to facilitate personal payments in the European Union. A formal decision on whether the ECB will issue it should be made in September 2023. More than 100 jurisdictions are actively exploring the launch of a central bank digital currency, with countries like China leading the way, while the US has yet to decide if a digital dollar is in the country's interests. However, this is likely to change as Friday's release to regulate cryptocurrencies in the US by the White House contained a section that specifically outlined the goals for the US CBDC system, which reflect the federal government's priorities.     Relevance up to 10:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322021
German Export Weakness In The Fourth Quarter Suggests That Recession Fears Are Real

It Is Expected That The German Economy To Get Smaller Significantly

TeleTrade Comments TeleTrade Comments 19.09.2022 13:21
The Bundesbank said on Monday that it expects the German economy to shrink markedly in the autumn and winter months amid reduced or rationed energy consumption, as reported by Reuters. German central bank further noted that that the economy would still likely contract even if outright rationing was avoided.  Market reaction Markets remain risk-averse during the European trading hours on Monday with Germany's DAX 30 losing nearly 1% on the day. Meanwhile, EUR/USD was trading at 0.9980 at the time of writing, down 0.4% on a daily basis.
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Situation Is Conducive To The Further Growth Of The Euro

InstaForex Analysis InstaForex Analysis 20.09.2022 08:20
The euro rose slightly on Monday, supporting the strong resistance of the target level of 1.0032 and the MACD indicator line coinciding with it. This morning the resistance was pierced, but it is unlikely that speculators will decide to develop the movement before tomorrow's Federal Reserve meeting. But the Fed meeting should be "soft" so that the counter-dollar market shifts to growth, and we do not expect a soft meeting, since the rate will be raised by 0.75%, according to the FOMC members themselves, and the committee's forecasts on inflation and future rates in light of the current situation is unlikely to be weak. We are waiting for the price to reverse from the achieved resistance to the nearest support at 0.9950. Next, we are waiting for the price to decline to the support of 0.9850. The Marlin Oscillator has penetrated into the growth zone, but this movement seems to be false so far. The price is trying to consolidate above 1.0032 on the four-hour chart, the Marlin Oscillator is in the positive area. Formally, the technical situation favors the euro's further growth, but before the Fed meeting, we will refrain from both buying and premature selling.   Relevance up to 04:00 2022-09-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322094
EUR/USD Pair Has Potential For The Downside Movement Today

Can The Euro To The US Dollar (EUR/USD) Pair Continue Trading Unchanged?

InstaForex Analysis InstaForex Analysis 20.09.2022 08:24
EUR/USD 5M The EUR/USD pair continued to trade in a flat on Monday, which began last week. At this time, the pair is located between the levels of 0.9945 and 1.0019, but if desired, the horizontal channel can be expanded to the boundaries of 0.9877 and 1.0072. The essence of this does not change, we have a flat and everything that follows from it. There was not a single significant report or fundamental event in the European Union and the United States on Monday. Therefore, the flat is even logical to some extent. However, let us recall that the pair has been in one or another horizontal channel for more than a month, each of which is located near the pair's 20-year lows. Therefore, it seems that the market is just waiting for the right moment to resume the downward movement, because this does not look like the end of the trend. In flat conditions, it is best to trade on a rebound from any of the boundaries of any channel or not trade at all, waiting for the resumption of the trend movement. There were no trading signals on Monday. The pair approached the extreme level of 1.0019 only by the end of the day, but this signal, whatever it was, was formed very late, so it was not worth working out. According to our recommendations, no deals should have been opened on Monday. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not give any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 20. No news, markets are waiting for the Fed meeting. Overview of the GBP/USD pair. September 20. The British pound is unwilling to react to a future rate hike by the Bank of England. Forecast and trading signals for GBP/USD on September 20. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The outlook for the bears remains very good on the hourly timeframe, despite the flat. They manage to stay near 20-year lows for a long time, not allowing the pair to even correct. The fact that the European Central Bank raised the key rate for the second time, as we see, did not have any positive effect on the euro. Thus, we are waiting for the resumption of falling quotes. And at the same time the results of the Federal Reserve meeting. We highlight the following levels for trading on Tuesday - 0.9877, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (1.0031) and Kijun-sen lines(1.0065). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. There will be no interesting events in America, and the speech of ECB President Christine Lagarde will take place in the European Union. It can be quite interesting, but it's what Lagarde has to say that matters, not the actual speech itself. Therefore, the market's reaction will depend on whether Lagarde will report anything important. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-09-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322082
The Upside Of The EUR/USD Pair Remains Limited

The Euro To The US Dollar Pair Has Potential For Growth

InstaForex Analysis InstaForex Analysis 20.09.2022 08:34
Technical outlook: EURUSD rose through 1.0050 intraday on Tuesday before pulling back. The single currency pair is seen to be trading close to the 1.0020 mark at this point in writing and is projected to resume higher towards 1.0450 and the 1.0750-1.0800 area in the near term. A drop below the 0.9950 potential support will drag prices lower to test 0.9860. EURUSD is carving lower-degree waves within a narrow range between 0.9950 and 1.0040-50 for a few trading sessions. A fundamental catalyst will be released tomorrow before prices break out toward the direction of trade. A consistent push above the 1.0050-60 mark will accelerate a climb towards 1.0750 to complete the counter-trend rally. EURUSD might have already carved a lower-degree upswing between 0.9860 and 1.0198 as discussed earlier. Furthermore, the above move has been retraced close to the 0.9940-50 area which is the Fibonacci 0.786 level. A high probability remains for a bullish reversal towards 1.0750 at least, until prices stay above the 0.9860 interim support. Trading plan: Potential rally towards 1.0750 against 0.9800 Good luck!     Relevance up to 07:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293355
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

The Major Currency Pairs On The Forex Market And Their Move Ahead Of Important Decisions

TeleTrade Comments TeleTrade Comments 20.09.2022 10:35
Here is what you need to know on Tuesday, September 20: Major currency pair trade in familiar ranges on Tuesday as investors move to the sidelines ahead of key central bank policy decisions. The US Dollar Index (DXY), which closed virtually unchanged on Monday, moves sideways slightly above 109.50 and the market mood improves modestly with US stock index futures rising between 0.2% and 0.3%. Later in the day, Building Permits and Housing Starts data for August will be featured in the US economic docket. Consumer Price Index (CPI) figures from Canada will also be watched closely by market participants. Wall Street Journal author Nick Timiraos, who correctly leaked the 75 basis points (bps) rate hike in July, published an article late Monday and refrained from suggesting that the Fed could raise its policy rate by 100 bps on Wednesday. The greenback lost some interest after this development and the DXY erased its daily gains. The benchmark 10-year US Treasury bond yield stays relatively quiet near 3.5% on Tuesday. Federal Reserve Preview: Forecasting 5% interest rates? Dollar to move on dot-plot, Powell's pledges. Earlier in the day, Sweden's central bank, Riksbank, announced that it raised its policy rate by 100 bps to 1.75%, compared to Reuters' estimate for a rate increase of 75 bps. With the initial reaction, EUR/SEK fell to a fresh daily low of 10.7305 but managed to recover to the 10.8000 area. During the Asian trading hours, the Reserve Bank of Australia's (RBA) September monetary policy meeting minutes showed that policymakers saw a case for a slower pace of rate increases as becoming stronger. AUD/USD's reaction to the RBA's publication was largely muted and the pair was last seen trading flat on the day at around 0.6730. Annual CPI in Canada is expected to decline to 7.4% in August from 7.6% in July. Ahead of this data, the USD/CAD pair trades in a tight range near the mid-1.3200s. EUR/USD managed to stage a rebound in the second half of the day on Monday and closed in positive territory above parity. The pair was last seen posting small daily gains near 1.0030. GBP/USD clings to modest daily gains at around 1.1450 early Tuesday. “There aren’t currently any negotiations taking place with the US and I don’t have any expectation that those are going to start in the short to medium term," British Prime Minister Liz Truss said regarding a potential trade deal with the US but these comments were largely ignored by market participants. The data from Japan revealed on Tuesday that the National CPI climbed to 3% in August from 2.6% in July. Although this print came in stronger than the market expectation of 2.6%, USD/JPY managed to hold its ground and was last seen rising 0.2% on the day at 143.50. Gold is having a tough time attracting buyers and trading in negative territory slightly above $1,670. The resilience of the 10-year US T-bond yield makes it difficult for XAU/USD to gather recovery momentum. Bitcoin shook off the bearish pressure late Monday but it's yet to reclaim $20,000. Ethereum gained nearly 3% on Monday but failed to preserve its bullish momentum early Tuesday. At the time of press, ETH/USD was down 1% on the day at $1,360.
The Euro May Gradually Climb To The Target Level

The EUR/USD Pair: In The Longer Run, The Pair’s Bearish View Is Expected

TeleTrade Comments TeleTrade Comments 20.09.2022 14:20
EUR/USD comes under pressure and challenges parity. Immediately to the downside comes the weekly low at 0.9944. EUR/USD triggers a corrective downside soon after hitting multi-session highs around 1.0050 on Tuesday. The pair seems to have embarked on a consolidative range ahead of the key FOMC event on Wednesday. Immediately to the upside comes the interim 55-day SMA at 1.0097 ahead of the key 7-month resistance line, today near 1.0150. A move beyond the latter is needed to mitigate the downside pressure and allow spot to confront the September high at 1.0197 (September 12) ahead of potential extra gains. In the longer run, the pair’s bearish view is expected to prevail as long as it trades below the 200-day SMA at 1.0716. EUR/USD daily chart  
US Dollar (USD) May Be Skyrocketing! Fed Decides On Interest Rate Shortly. Why 75bp Variant Is More Likely Than The 100bp Hike?

US Dollar (USD) May Be Skyrocketing! Fed Decides On Interest Rate Shortly. Why 75bp Variant Is More Likely Than The 100bp Hike?

Jing Ren Jing Ren 20.09.2022 13:41
Expectations for what the Fed will do at its next meeting have been on a bit of a rollercoaster. This has created some fluctuations in the dollar, as well as the stock market. But now that Fed officials are sitting down for the two-day policy rate decision, it seems like economists are finally coming to some kind of agreement on what to expect tomorrow. Four fifths of surveyed economists expect a 75bps hike, with the remainder still holding on for 100bps. That's a consolidation of agreement compared to just a week ago, when over a quarter of analysts were predicting a full percentage point hike. Part of that is due to actually digesting the CPI figures that came out last week. Why not 100bps? Last week's inflation figures were a bucket of cold water on the markets, as headline inflation was above expectations and core inflation continued to rise. Both pushed in the direction of the Fed keeping its aggressive hiking stance. But, the thing is, the Fed hasn't met since July, so expectations for what the Fed will do this time have to take into consideration the last two inflation reports. And July CPI figures were substantially better than the August ones. Taking into consideration all the data that has been released since the last FOMC meeting, there is still a bias towards aggressive hiking, but not so much as the last data indicates. Getting expectations in order In fact, one of the reasons that there was such a strong reaction to the CPI data was that it came as a surprise. July data was implying a possibility for the Fed to start moderating the pace of hikes. Prior to the release, the consensus was for 75bps, and dissenters were arguing for 50bps. The latest guidance from the Fed is that rates will be determined on a meeting-by-meeting basis based on the data. Which means now the focus is on whether the Fed will start giving hints for longer-term policy outlook. If the Fed does a "triple" rate hike, the third in a row, the very next question traders will be asking is, what's next? Tracing lines into the future Several Fed officials have said that interest rates are getting near "neutral", which is the point at which the Fed presumably will start moderating its aggressive hiking. It's estimated that it is around 3.5%. Another 75bps would not only push the rate above where it was in 2018, but up to 3.25%. If the Fed were to continue hiking for the rest of the year (there are two meetings left), then it might be in 25bps increments so as not to substantially go above the "neutral" rate. Therefore, there will be a lot of focus on the dot-plot matrix, which is the summary of where FOMC officials expect rates to be in the future. Up until now, rates were expected to remain high for at least the first quarter of next year. A change in those expectations could determine where the market goes after the FOMC meeting.
Is The Price Of The EUR/USD Pair Ready For A Fed Meeting

Is The Price Of The EUR/USD Pair Ready For A Fed Meeting

InstaForex Analysis InstaForex Analysis 21.09.2022 08:35
The euro continues to consolidate in anticipation of today's Federal Reserve meeting, but this time with one peculiarity - yesterday's closing occurred at the lower boundary of the 0.9950-1.0020 range, and not at the upper, as in previous days. As we expected, the resistance of the upper border got the most pressure yesterday. The signal line of the Marlin Oscillator returned to negative territory, now the market is ready for the Fed to raise the rate. Movement targets: 0.9850, 0.9752. On the four-hour chart, just like on the daily chart, the price turned down from the point where the target level coincides with the MACD line. The balance indicator line was also there at that moment. The Marlin Oscillator, as on the higher scale, returned to the downward trend zone. When the price overcomes the lower border of consolidation at 0.9950, the nearest target at 0.9850 opens. Relevance up to 04:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322226
The Outlook For The Bears Remains Very Good On The EUR/USD Pair

The Outlook For The Bears Remains Very Good On The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 21.09.2022 10:18
EUR/USD 5M The EUR/USD pair continued to trade in a flat on Tuesday, which began last week. At this time, the pair remains between the levels of 0.9945 and 1.0072, but if desired, the horizontal channel can be extended to the boundaries of 0.9877 and 1.0072. There is a minimal upward trend, but it certainly cannot be called a "trend". Thus, there is nothing left but to wait for the results of the Federal Reserve meeting, which, by and large, are already known to traders. It's no secret that with a probability of 80% the rate will rise today by 0.75%. The remaining 20% is given to the option with an increase of 1.00%. One way or another, we believe that such a decision should provoke a new growth of the dollar. However, there will also be a speech by Federal Reserve Chairman Jerome Powell, and the reaction of the market is absolutely impossible to predict. Therefore, we advise you to prepare for any movement and for the "swing". As before, the market's reaction to this event may persist for a day, so even this morning it will not be possible to say for sure that the market has fully worked out the FOMC meeting. In regards to trading signals, everything was quite simple, which is good news. The price bounced twice from the 1.0019-1.0031 area, so traders had to open one short position (signals duplicated each other). Subsequently, the price went down about 55 points (so the signal cannot be considered false), but failed to work out the nearest target at 0.9945. Therefore, the position had to be closed manually. One could manage to earn about 30-35 points. COT report The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not give any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 21. Is the Fed stalling on slowing inflation? Overview of the GBP/USD pair. September 21. The British pound is correcting and does not pay attention to the hawkish mood of the Bank of England. Forecast and trading signals for GBP/USD on September 21. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The outlook for the bears remains very good on the hourly timeframe, despite the flat. They manage to stay near 20-year lows for a long time, not allowing the pair to even correct. Therefore, we expect the continuation of the downward movement. Either today or later. But we certainly do not believe that the global downward trend is over. We highlight the following levels for trading on Wednesday - 0.9877, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (1.0031) and Kijun-sen lines (1.0003). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. There will not be a single interesting event in the European Union, and in the United States, as already mentioned, the results of the Fed meeting will be announced late in the evening, economic forecasts will be published and Powell will hold a press conference. Naturally, these events can have a very strong impact on the movement of the euro/dollar pair. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group. Relevance up to 02:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322214
The European Economy May Stagnate, Inflation Will Remain High

The European Economy May Stagnate, Inflation Will Remain High

TeleTrade Comments TeleTrade Comments 21.09.2022 11:10
European Central Bank (ECB) Vice President Luis de Guindos said on Wednesday, “inflation remains very very high.” Key quotes Recent data point to substantial slowdown. Risks to inflation are on the upside. Banks stand out in terms of resilience in financial sector. Determined to bring inflation back to target. The economy is likely to stagnate around year-end. Hikes to continue and data will determine the size. The value of neutral rate is unclear. Market reaction EUR/USD was last seen trading at 0.9901, down 0.63% on the day.
What Is The Situation Of The Euro To Us Dollar (EUR/USD) Pair Today

What Is The Situation Of The Euro To Us Dollar (EUR/USD) Pair Today

InstaForex Analysis InstaForex Analysis 21.09.2022 11:21
Technical Market Outlook: After making the local high at the level of 1.0050, EUR/USD reversed lower, broke the intraday technical support at 0.9950 and is heading lower. The market participants await the FED interest rate decision and press conference scheduled at 8:00 PM tonight. The nearest technical support is seen at 0.9934 and 0.9901. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the longer term down trend is reversed. Please watch the USDX as the correlation between this two is directly opposite. Weekly Pivot Points: WR3 - 1.01231 WR2 - 1.00595 WR1 - 1.00262 Weekly Pivot - 0.99959 WS1 - 0.99626 WS2 - 0.99323 WS3 - 0.98687 Trading Outlook: Despite the recent relief rally towards the short-term support, the EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Relevance up to 08:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293561
The EUR/USD Pair Is Showing Fresh Downside Momentum

The EUR/USD Pair Is Showing Fresh Downside Momentum

InstaForex Analysis InstaForex Analysis 21.09.2022 12:13
Technical analysis: EUR/USD has been trading downside this morning and I found the breakout of the multi day channel, which is good sign for further downside movement. Trading recommendation: Due to the breakout of the channel in the background and strong downside trend this year, I see potential for further drop Watch for the potential selling opportunities on the rallies with the downside objectives at the price of 0.9800 and 0.9655 MACD oscillator is showing fresh downside momentum, which is good sign for further downside movement. Key resistance is set at the price of 1.0050 Relevance up to 09:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293579
Pressure On The Euro Is Rising And The Dollar Is More Attractive

Pressure On The Euro Is Rising And The Dollar Is More Attractive

InstaForex Analysis InstaForex Analysis 21.09.2022 12:24
The US currency is still holding steady, gaining momentum before the Federal Reserve meeting, which cannot be said about the European one. The latter tries to gain a foothold in the positions won, but these efforts often do not meet expectations. Constantly rising inflation and unstable geopolitical background keep market participants and world central banks in suspense. Recently, many of them expected the Fed to raise interest rates by 50-75 bps at the next meeting. However, now the situation has worsened, so traders and investors expect the rate to rise by 75 bps and higher, that is, by 100 bps. Market participants expect that the Fed will announce its final decision on the rate on Wednesday, September 21. According to preliminary estimates, it is expected to increase by 75 bps, up to 3-3.25% per annum. At the same time, the central bank will present macroeconomic forecasts, followed by a press conference by Fed Chairman Jerome Powell. Against this background, the markets are in suspense about the Fed's future strategy. According to analysts, the central bank will continue to raise interest rates until it gets inflation under control. At the moment, futures show the probability of a rate hike above 4% by the end of 2022, which implies a further increase at two meetings of the Federal Open Market Committee (FOMC), which are scheduled for early November and mid-December. Against this background, the pressure on the euro is increasing and the dollar's appeal as a protective asset is growing. On the morning of Wednesday, September 21, the greenback remained near a two-decade high against most currencies, primarily the euro. At the same time, the EUR/USD pair was trading at 0.9952, almost without going beyond the current range. According to analysts, the Fed's interest rate decision will set the tone in the financial markets for the coming months. At the moment, the topic of quantitative tightening remains in the focus of the markets' attention. Central banks are withdrawing liquidity from the financial system and reinvesting less and less of the income received from the repayment of state bonds. It should be noted that the Fed, whose balance sheet reaches $9 trillion, has reduced the volume of reinvestments by $47.5 billion per month, starting in June 2022. According to preliminary calculations, by the end of September, this figure will increase to $95 billion. Market participants expect the European Central Bank to take similar actions, that is, to reduce its balance sheet, which is 8 trillion euros. However, in this matter, the ECB also falls behind the American one. According to ECB President Christine Lagarde, at the moment the introduction of quantitative tightening is impractical. However, despite such statements, the central bank is expected to consider this issue at the next meeting, which is scheduled for October. Against this background, the euro has lost part of its gains. Unlike the greenback, it is difficult for the single currency to gain a foothold in the current positions. As a result, the euro is constantly slipping into a downward spiral. The situation was not changed even by decisive measures on the part of the ECB, which sharply raised rates (by 50 bps and 75 bps) at the last two meetings. Thanks to these steps, high inflation does not put too much pressure on the euro, analysts believe. However, the US central bank began to raise interest rates earlier than the European one, having gained a head start in this matter. Currently, the Fed is raising interest rates more aggressively than other central banks. As a result, a sharp increase in Fed rates contributed to a significant strengthening of the greenback, which continues to grow. At the same time, the rise in the price of USD exacerbates inflation in other countries, since the lion's share of international settlements is made in the US currency. In the event of a fall in other currencies against the greenback, imports in most countries sink, as goods denominated in dollars become more expensive. The noticeable strengthening of the US currency worsens the prospects for the global economy, experts emphasize. First of all, developing countries suffer from this, whose economic growth opportunities are severely limited. In addition, the strong USD and the global economic downturn have a negative impact on the income of American companies abroad. The further expansion of the global crisis is pushing the authorities of a number of countries to introduce measures to curb the dominance of the USD, experts summarize. Relevance up to 08:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/322242
The Euro Has A Limited Downward Potential

The Euro Has A Limited Downward Potential

InstaForex Analysis InstaForex Analysis 21.09.2022 12:31
H4 chart of EUR/USD The euro sank ahead of the FOMC meeting. Still, I think the currency is heading in the wrong direction. The thing is that the euro has limited downside potential. Moreover, it is already hovering at extreme lows. Any dovish hints from the US Federal Reserve at the meeting today could trigger a surge in the euro. Long positions could be considered at 0.9970 after a breakout through yesterday's high. Relevance up to 09:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322256
How The Major Currency Pairs (EUR/USD AND GBP/USD) Look Like Today?

How The Major Currency Pairs (EUR/USD AND GBP/USD) Look Like Today?

InstaForex Analysis InstaForex Analysis 21.09.2022 13:55
EUR/USD Higher timeframes The situation is in favor of sellers as the pair continues to decline. The bearish sentiment will strengthen further if the psychological level of 1.0000 is broken and the quote heads under 0.9864. H4 - H1 The pair tested the support of S2 (0.9896) and moved towards the first target for the breakdown of the Ichimoku cloud in H4 (0.9897). It will continue to decline if the quote falls below 0.9864 and under 0.9837, which is the final support of the classic Pivot levels. The key levels today are resistances at the 0.9991 line (weekly long-term trend + central Pivot level of the day). *** GBP/USD Higher timeframes The pair closed below 1.1411 (2020 lows) yesterday. Most likely, the decline will continue, which will make the psychological support area of 1.0000 as a new benchmark. H4 - H1 Bearish players, having completed the next upward correction, are trying to go beyond the target level for the breakdown of the H4 cloud (1.1342). Key levels for a further decline are the support of the classic Pivot levels (1.1294 - 1.1231), while resistances are 1.1398 (central Pivot level) and 1.1440 (weekly long-term trend). The breakdown and consolidation above these levels are capable of changing the current trend. *** The following are used in the analysis above: Higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend) Relevance up to 11:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322280
US Dollar (USD) And Fed Decision: ING Economics Team Thinks 75bp Rate Hike Is Enough

US Dollar (USD) And Fed Decision: ING Economics Team Thinks 75bp Rate Hike Is Enough

ING Economics ING Economics 21.09.2022 10:58
So here we are. Another FOMC meeting, and another 75bp hike. But there is a rump going for 100bp, so 75bp could be positive for risk assets (albeit briefly). The dot plot will be watched, as the terminal rate is key for where market yields peak. A 75bp hike takes the effective funds rate up to 3.08%, but leaves the Fed with more to do as the 2yr heads for 4%. Expect a 75bp hike, although there is a rump positioned for 100bp Ahead of the Federal Open Market Committe (FOMC) meeting there has been some market flows positioning for a 100bp hike, but the dominant discount as we head into the meeting is for 75bp to be delivered. A 100bp hike would be an over-reaction, in our view, while 75bp would be enough to solidify a market discount that is already projecting a terminal funds rate north of 4.25%. Chair Powell's Humphrey-Hawkins testimony followed by a re-acceleration in core CPI inflation has been enough to push the market discount up by some 100bp in the space of a month. At this juncture the Fed does not need to do much more than deliver the 75bp hike, and maintain a hawkish bias. The Fed does not need to do much more than deliver the 75bp hike The dot plot will be important, but not critical, as the dots do move over time. We think the median dot will print above 4% for 2022 (to be read as end year), and the Fed may well choose to keep it above 4% for 2023. The Fed's dot plot does print a longer-run rate at 2.5%, which is deemed to be their neutral rate, and is broadly where the funds rate is now. So the 75bp hike, when delivered, moves the policy rate into a tightening stance for the first time in this cycle. The calls for 100bp area partly premised on the notion of pitching the funds rate 1% tight versus neutral in one go. But 75bp also tightens policy reasonably aggressively, and avoids unnecessary market consternation with respect to future intentions. The Fed's message is finally delivering tighter financing conditions Source: Refinitiv, ING The terminal funds rate remains key for the bond market Beyond this meeting, where the funds rate peaks is critical for pitching bond yields. Once the funds rate is hiked, the new reference for market rates is north of 3% (with the effective fund rate set to settle at 3.08%). A similar hike in November would then have the ceiling at 4%, an area that the 2yr Treasury yield is currently targetting. History shows that the 2yr will anticipate moves in the funds rate well in advance, but as we get towards the end of the rate hiking cycle, reaction from the 2yr yield becomes smaller. Based off the price action of the past few weeks we are not quite there yet. But if the funds rate peaks at 4.25% to 4.5%, we'd be surprised if the 2yr yield were to get much above 4.25%. Further out the curve the 10yr yield has more capacity to trade through the funds rate sooner than the 2yr. This is typical as the curve has moved into a state of inversion. In that sense longer tenor rates are being pulled higher by higher short tenor rates at this stage of the cycle. This is the opposite to what happened before rate hikes were discounted, as the curve steepened from the long end. Now the long end is waiting for the funds rate to come up and hit it. From there, likely around the 2 November meeting, the 10yr can trade flat to the funds rate (at around 3.75%, or slightly higher), and that would anticipate a peak in the fund rate at around 4.25% (actually 4.33%). Right now the Fed does not want any focus on a rate hike discount Once the peak in the fund rate is in with a reasonable degree of certainty, the 10yr can free itself from the shackles of terminal rate uncertainty, and can begin to trade well through the funds rate (anticipating cuts). Right now the Fed does not want any focus on a rate hike discount, but in fairness the market will tend not to aggressively discount a top until it actually sees it. This is where the value of a hawkish tone comes to the fore, as it helps to sustain that link with upward pressure on market rates generally. That said, with the 10/30yr spread now on the verge of inversion, expect any future peaking and fall in market rates to come earliest from the 30yr. The Treasury 10s30s slope is on the verge of inversion Source: Refinitiv, ING Today's events and market view Italy will exchange short-end bonds for issues in the 10Y and 15Y sectors worth up to €2bn. Germany will auction €4bn 10Y bonds. Austria mandated a new 4Y bond yesterday, which should be today's business. Luis de Guindos is the only European Central Bank official on the schedule. Both UK CBI prices and orders are expected to decline in September.. The FOMC meeting this evening looms large in an otherwise quiet session. The tone of the conference and quarterly economic and rates projections will be closely watched to shape future hike expectations. The thought leadership taken by the Fed, and the continued dollar rally, mean read-across to other rates markets is even greater than usual. Ahead of the FOMC, US releases to watch will comprise mortgage applications and existing home sales. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Construction Activity in Poland Contracts in May: Focus on Building Decline and Infrastructure Investment

US Dollar: Fed Is Like A Super Fast Ferrari - You're Not Sure, Where Is The Limit!

ING Economics ING Economics 21.09.2022 23:10
The Federal Reserve met expectations and hiked rates 75bp. With inflation proving to be far stickier than imagined, the Fed repeated that activity needs to slow much more with the door left wide open for a fourth consecutive 75bp hike in November. With recession looking virtually impossible to avoid, we see a strong chance of policy reversal later in 2023 Source: Shutterstock A very hawkish 75bp The Federal Reserve has hiked the Fed funds target range to 75bp in what was a unanimous decision and upped its forecasts for rate hikes aggressively. Year-end 2022 Fed funds is now expected at 4.4%, above the 4.2% rate implied by futures contracts ahead of this update, signalling the strong likelihood of another 75bp in November with a further 50bp or possibly even a fifth consecutive 75bp on the cards at the December Federal Open Market Committee (FOMC) meeting. It is important to note that there is a strong clustering within the dot-plots, showing all FOMC members are on board with this more hawkish narrative. More tightening is signalled for 2023 with the year-end rate at 4.6%, before it moves lower to 3.9% for 2024, 2.9% in 2025 with the longer run prediction remaining at 2.5%. To underscore the Fed's willingness to sacrifice growth to get inflation lower it has cut 4Q 2022 year-on-year GDP growth to 0.2% from 1.7% with 2023 cut to 1.2% from 1.7%. Core PCE is also revised up 0.2 percentage points to 5.4% for 2022 and 2023 is now 3.1% vs 2.7%. The Fed is effectively acknowledging that a recession is coming, but inflation will not fall quickly and there will be a lot of pain. Note the unemployment rate for next year is expected to reach 4.4% versus the current 3.7% and stay there through 2024 with only a very minor drop in 2025. The accompanying statement barely has any changes in it versus the one published in July – just a minor tweak regarding near-term “modest growth”. Federal Reserve forecasts September versus previous June predictions Source: Federal Reserve, ING Another 75bp in November with 50bp minimum in December Inflation has been stickier than the Federal Reserve expected and certainly more broad-based. To get it down the economy needs to run below potential, bringing demand into better balance with supply capacity. The only way the Fed can do that is to hike rates and keep policy restrictive until that is achieved. Given the Fed’s aggressive stance and the likelihood that inflation moves little over the next month while job creation remains firm, we expect the Fed to hike 75bp for a fourth consecutive time at the November 2nd FOMC meeting. Come the December FOMC meeting we are more hopeful that we will see clearer signs of moderating price pressure on the lead indicators, but we are also fearing weaker activity data that may be enough to convince the Fed to move more cautiously. 50bp is our call, which would leave the target range at 4.25-4.5%, but we certainly can't dismiss the possibility of a fifth 75bp hike. We still favour rate cuts as a theme for 2023 The Fed clearly disagrees, with the dot plot chart implying at least 11 FOMC members project higher rates in 2023, but we think December will mark the peak. On the inflation front there are encouraging signs on both market and household inflation expectations, and also corporate price plans which suggest inflation may not be as embedded as some in the market fear. Long-term price expectations have returned to what we might term “normal”, suggesting fears of a 1970s wage-price spiral are misplaced and there is confidence the Fed will indeed get inflation down. Meanwhile, the National Federation of Independent Businesses reported that the proportion of companies looking to raise prices over the next three months fell from 51% in May to 32% in August. This is a sizeable turn which, given the strong relationship with CPI over the past 40+ years, offers a signal that inflation rates could soon start to slow. As for the activity side, the geopolitical backdrop, the China slowdown story, the potential for energy rationing in Europe, the strong dollar, and fragile-looking domestic equity and housing markets point to clear recession risks. A more aggressive Federal Reserve rate hike profile and tighter monetary conditions will only intensify the threat. Remember too that shelter is the largest component of CPI and tends to lag behind swings in house prices by around 12-16 months. A housing downturn could have a dramatic impact on inflation in the second half of next year. Despite the hawkishness of the Fed today, the market is tentatively pricing in nearly 50bp of rate cuts in 2023. We think the Fed could swing aggressively to policy easing in 2H 2023. The average period of time between the last rate hike in a cycle and the first Federal Reserve rate cut has averaged just six months over the past 50 years. Given the risks to growth and the potential for lower inflation, we are forecasting rate cuts throughout the second half of 2023 with our best guess for where the Fed funds rate ends the year being 3-3.25% – more than 100bp below where the Fed is indicating. Market rates under pressure higher, chasing a higher terminal rate The big impact move was in the 2yr, which shot up to 4.1% post the hike, a full 10bp move. The elevated median dots for 2022 and 2023 were the dominant driver here, and especially the 2023 median dot which is now closer to 5% than to 4%. There is also a messaging there for the market that the Fed intends to maintain a tightening trajectory beyond the end of 2022 and into 2023, as least as telegraphed from the dots themselves. The 10yr yield now needs to consider a path towards 4% The 10yr yield now needs to consider a path towards 4% in the coming couple of months. History shows that the 10yr rarely trades more than 50bp through the funds rate before the Fed has peaked. And note that 50bp through is the exception. A more normal discount would be to see the 10yr 25bp through the funds rate ahead of a confirmed peak from the Fed. Real rates have come under rising pressure as inflation expectations managed to ease lower post the hike. This is good from the Fed's perspective. Higher real rates are required in order to tighten financial conditions, while an easing in inflation expectations tells us that the market ultimately expects the Fed to see inflation fall. The thing is, the case for big falls in inflation has yet to be proven. The dot profile points to rising official rates in 2023, and muddies the waters for the prognosis of falling market rates into the turn of the year. But if we are right and the Fed does in fact peak by year-end, then that fall in market rates anticipated through December/January is very much back on. FX Markets: Bracing for the descent The FOMC’s projections are very telling for global FX markets in that while the Fed has cut growth and raised unemployment forecasts the Fed wants to convey the message that inflation will still be higher than previous forecasts and that the policy rate could be as high as 4.60% by the end of 2023. Understandably this undermines Fed ‘pivot’ ideas still further and sees the FX market biased towards slow-down and recession. This playbook really favours the dollar over pro-cyclical currencies. Investors will therefore be in no hurry to quit the most liquid FX reserve currency – and one that pays 3.3% on one-month deposits – at a time of escalating war in Ukraine. In addition, comparisons to the early 1980s Paul Volcker period remain, when the Fed needed to take the US economy into recession to get inflation under control. The dollar soared during this period.  Further strength in the dollar will see trading partners respond as much as they can. The ECB is ‘attentive’ to EUR/USD weakness but is never going to be able to match the 4%+ Fed policy rates coming our way. Unlike the US economy, the eurozone went into this crisis with a negative output gap. EUR/USD has today traded to a new low for the year. After some profit-taking on EUR/USD short positions and given events in Ukraine, it is hard to rule out a further grind towards 0.95 over coming months. More pressing is USD/JPY which is again closing in on 145. Japanese authorities remain close to pulling the trigger on FX intervention. And we have a BoJ meeting early tomorrow. No change is expected from the dovish BoJ – but a tweak to the BoJ’s 10-year JGB target (0-0.25%) and intervention would certainly catch the market unawares. We think USD/JPY traded volatility is too cheap. Elsewhere, we think the Swiss franc can out-perform in Europe. And further inversion of the US yield curve can continue to weigh on commodity currencies and EM in particular over the coming months. Unsupportive for EMFX is the continued decline in the Chinese renminbi. On a trade-weighted basis this has fallen 3% since the summer and with USD/CNH now well through 7.00, the 2019/2020 highs of 7.20 come firmly into view. One final remark, tighter liquidity worldwide means higher FX volatility. So, forget FX carry trade strategies this autumn. Read this article on THINK TagsUSD US Recession Interest rates Federal Reserve Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
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Forex: Euro To USD (EUR/USD) - Technical Analysis - 21/09/22

InstaForex Analysis InstaForex Analysis 21.09.2022 23:55
  Overview : The US dollar's strong gains against the Euro have continued today ahead of the sturdy news. The common currency reached a high of more than three days earlier this morning. This technical analysis of EUR/USD looks at the one-hour chart. The highest price that EUR/USD reached for that period was 0.9961 (last bullish wave - top). The lowest price that the EUR/USD pair reached during that period was 0.9845 (right now). The bias remains bearish in the nearest term testing 0.9800 or lower. Immediate support is seen around 0.9800. A clear break below that area could lead price to the neutral zone in the nearest term. Price will test 0.9750, because in general, we remain bearish on Sept. 21st, 2022. Yesterday, the market moved from its top at 0.9961 and continued to drop towards the top of 0.9814. Today, on the one-hour chart, the current fall will remain within a framework of correction. However, if the pair fails to pass through the level of 0.9961 (major resistance), the market will indicate a bearish opportunity below the strong resistance level of 0.9961 (the level of 0.9961 coincides with tha ratio of 38.2% Fibonacci retracement). The EUR/USD pair settled below 0.9961 and is testing the support level at 0.9800. RSI and Moving averages continue to give a very strong sell signal with all of the 50 and 100 EMAs successively above slower lines and below the price. The 50 EMA has extended further below the 100 this week. Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength below the moving average (100) and (50). An alternative scenario is a final consolidation below MA 100 H1, followed by growth arund the area of 0.9905. The one-hour chart favors a downward extension, as the pair broke below its 50 and 100 EMAs, both gaining downward traction. Support from MAs comes initially from the value zone between the 50 and 100 EMAs. Industriously, Euro Is Losing ground against U.S. Dollar around +175 pips. Since there is nothing new in this market, it is not bullish yet. Sell deals are recommended below the level of 0.9961 with the first target at 0.9814 so as to test the double bottom. If the trend breaks the double bottom level of 0.9814, the pair is likely to move downwards continuing the development of a bearish trend to the level of 0.9750 in order to test the weekly support 2. According to the previous events the price is expected to remain between 0.9905 and 0.9750 levels. Sell-deals are recommended below the price of 0.9905 with the first target seen at 0.9814. The movement is likely to resume to the point 0.9750. The descending movement is likely to begin from the level 0.9750 with 0.9725 and 0.9700 seen as new targets in coing hours. On the other hand, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1 USD. Relevance up to 22:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293692
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The EUR/USD Pair: The Price Continues To Decline

InstaForex Analysis InstaForex Analysis 22.09.2022 08:12
After the euro's decline by 134 points yesterday, the price continues to decline under the target level of 0.9850 in today's Asian session. The inertial decline may continue to the level of 0.9752, from which we expect a reversal into a correction. Correction from 0.9752 on the technical side may be due to the emerging extended convergence with the Marlin Oscillator. It also appears on the weekly chart. If the price still manages to consolidate under 0.9752, then the euro is waiting for the underlying levels of 0.9692 and 0.9625. In the long term, we look at the euro's fall to the levels of the winter 2002 area, to the 0.8600 area, which would correspond to a Fibonacci reaction level of 200.0% on the monthly scale chart. The price has consolidated below 0.9850 on the 4-hour chart, Marlin is in the negative area, but is already making the first attempts to slow down this decline. We are waiting for the price at the target level of 0.9752.   Relevance up to 05:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322355
The EUR/USD Price May Fall Under 1.0660

The EUR/USD Pair Outlook For The Bears Remains Very Good

InstaForex Analysis InstaForex Analysis 22.09.2022 08:26
EUR/USD 5M The EUR/USD pair sharply resumed its downward movement on Wednesday and dropped to the lower border of the 0.9877-1.0072 horizontal channel. This border was even overcome, that is, the pair again updated its 20-year lows. Moreover, all this happened even before the announcement of the results of the Federal Reserve meeting, which we deliberately do not consider now, since the market needs to be given time to fully work them out. Moreover, in any case, traders had to leave the market before the announcement of the results, since we do not recommend trading in the evening and at night. During the day, there were no important events either in the US or in the European Union, so we can't immediately explain the euro's new fall at first glance. However, at a second glance, everything is clear. In the morning, Russia announced a partial mobilization to participate in the military conflict in Ukraine. In the evening, rallies against mobilization were held throughout Russia, but it is clear to everyone that the geopolitical situation in Ukraine may worsen in the near future. And if geopolitics worsens again, then the euro and the pound again fall into the risk zone, since the dollar is in high demand in such situations. It should be noted right away that the Kijun-sen line fell to the level of 0.9967 during the past day, and it was from this level that the price rebounded during the European trading session. Therefore, the first sell signal was formed at the very beginning of the downward movement. Subsequently, the price overcame the level of 0.9945, and it was also possible to open short positions on this signal. As a result, by the middle of the US session, the quotes dropped to the level of 0.9877, where it was necessary to close positions in profit of about 65 points. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not give any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 22. Lagarde speech: "water" on "water". Overview of the GBP/USD pair. September 22. New geopolitical tensions in Ukraine, partial mobilization in Russia. Forecast and trading signals for GBP/USD on September 22. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The outlook for the bears remains very good on the hourly timeframe. Summing up the results of the Fed meeting and analyzing the final reaction of the market should be done only in the late afternoon, so we do not consider the movements that happened last night. However, in any case, the global downtrend persists, so the euro may update its 20-year lows more than once this year. We highlight the following levels for trading on Thursday - 0.9877, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (1.0031) and Kijun-sen lines (0.9958). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. Not a single important event is planned in the European Union and the Untied States on September 22. But even if they were, the market would hardly pay attention to them, since, most likely, it will be busy working out the results of the Fed meeting. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     search   g_translate     Relevance up to 02:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322343
The Euro May Attempt To Resume An Upward Movement

Technical Outlook Of The EUR/USD Pair After The Fed Meeting

InstaForex Analysis InstaForex Analysis 22.09.2022 08:36
Technical outlook: EURUSD dropped through the 0.9806 lows early hours of trade on Thursday. The recent sell-off can be accredited to the overall euro's weakness amidst the Fed interest rate hike by 0.75 bps on Wednesday.Technically, a long-awaited pullback rally should materialize any moment, pushing the process through 1.0800 at least. EURUSD has registered just a shallow low at 0.9806 delaying a pullback rally towards the Fibonacci 0.382 retracement of the entire drop between 1.2350 and 0.9800. It is still seen passing close to 1.00750 and 1.0800 as seen on the daily chart presented here. Immediate resistance is now seen at around 1.0200 and a push higher is required to confirm that the bottom is in place. We do not intend to speculate on whether a low is in place at 0.9806 but would certainly wish to bring to notice a strong bullish divergence on the daily RSI. With each swing low from 0.9950, the RSI has been printing higher lows as marked on the chart. A high probability remains for a bottom formation soon as the bulls prepare to be back in control. Trading idea: Get ready for a bullish reversal soon. Good luck!     Relevance up to 07:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293744
EU Gloomy Picture Pointing To A Gradual Approach To Recession

How Much Have European Governments Invested In Supporting Businesses And Consumers, The Demand For Copper And More

Saxo Bank Saxo Bank 22.09.2022 08:47
Summary:  The Fed’s 75bps rate hike came with a strong message emerging from the Dot Plot that rate hikes will continue despite risks of slower economic growth and higher unemployment rate. Clear focus remains on tightening the financial conditions, which was reflected in equities and other risk assets. Russia’s partial mobilization has raised geopolitical concerns as well, adding a risk-off bid to the US dollar. EURUSD appears to be heading for 0.98 even as pressure on the Japanese yen remains capped due to lower long-end US yields. Hard to expect Bank of Japan pivot today, but FX comments could be the highlight before focus turns to another jumbo hike from the Bank of England later. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) are looking bearish again The Fed managed to deliver a hawkish surprise without going for a 100bps rate hike, as the message was clear – rate hikes will continue even if economic pain worsens. While the initial reaction from equities was a negative one, some ground was regained with Powell’s presser, once again, lacking further hawkish surprises. However, Powell said in his concluding Q&A response that rates will likely get to levels seen in the Dot Plot, reigniting their signaling power after initially warnings against taking the Dot Plot as Fed’s plan. Whether that was the catalyst or not is hard to tell, but stocks went on to sustain new lows into the close. What’s for sure is the Dot Plot still gives a clearer message on the Fed’s path than Powell. S&P500 fell below 3800 to close down 1.7% while NASDAQ 100 was down 1.8%. General Mills (GIS:xnys) reported better-than-expected earnings and raised its outlook, which helped it to defy the broader market decline, while also lifting other food stocks such as B&G Foods (BGS:xnys) and Kellogg (K:xnys), and supporting the overall consumer staples sector. Another chemical manufacturer joined the chorus of negative pre-announcements. Chemours (CC:xnys) revised down its 2022 EBITDA by 7% from its previous guidance, citing weaker demand from Europe and Asia. Lennar (LEN:xnys), up by 0.9%, reported adj. EPS of USD5.18, beating consensus estimate of USD4.87, primarily due to a lower tax rate and an improvement on margins. Unit orders, however, fell 12% Y/Y, missing expectations of modest growth, signing moderating housing demand, especially in Texas and the West. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) After the Fed delivering a 75bps hike as expected but signaling a hawkish higher terminal rate of 4.6% in 2023 as well as projecting lower real GDP growth rates (0.2% in 2022, 1.2% in 2023, 1.7% in 2024) and higher unemployment rates (4.4% in 2023, 4.4% in 2024, 4.3% in 2025) than the long-run equilibrium levels (1.8% real GDP growth, 4% unemployment rate) anticipated by the Fed, the treasuries yield curve went further inverted, with 2-10 year spread closing at -54bps. Traders sold the 2-year notes, bring yields up by 7bps to 4.05% in response to clear “no pivot” message from the Fed. On the other hand, long-end yields declined on the Fed’s acceptance of slower growth and higher unemployment for longer as a price to put inflation under control. The 10-year yields fell 3bps to 3.53% and 30-year yields plunged 7bps to 3.50%. The U.S. yield curve’s trend to go deeper into inversion continues. The 3-month bills versus 10-year notes yield spread may go negative (inverted) as the 3-month rates keep rising on Fed tightening and the 10-year yield being anchored by improved inflation expectations. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Stocks in Hong Kong, Shanghai, and Shenzhen bourses continued to decline, with Hang Seng Index and CSI300 Index falling 1.8% and 0.7% respectively, and both making new lows.  Hang Seng Tech Index (HSTECH.I) lost 3%, dragged down by China Internet, tech hardware, and EV names.  Sunny Optical (02382:xhkg) tumbled 10.5% as analysts had concerns over a saturated smartphone market and increased competition in smartphone cameras.  Alibaba (09988:xhkg) and Tencent (00700:xhkg) declined 3.7% and 2.5% respectively.  While real estate stocks gained on the mainland bourses after some Chinese cities relaxed second-property buying restrictions, shares of Chinese developers traded in Hong Kong fell, with CIFI 00884:xhkg) tumbling 11.3%, Country Garden (02007:xhkg) sliding 4%.  The solar power space plunged from 5% to 8%.  Following the news of a partial mobilization in Russia to bolster armed forces, higher crude oil prices boosted the shares prices of energy companies, CNOOC (00883:xhkg) up by 2.2%, PetroChina (00857:xhkg) up by 1.2%.  %.  A tanker shipping company, COSCO Shipping Energy Transportation (01138:xhkg) soared more than 8%.  Bloomberg reported that Chinese refiners are applying for quotas from the Chinese government to export as much as 16.5 million tons of fuel oil, such as gasoline and diesel. A dry bulk shipping company, Pacific Basin (02343:xhkg) surged 7.9% after the Baltic Dry Index jumped over 11%.  The tanker shipping space and natural gas space gained and outperformed in A shares.  Asian markets to face risk-off after a hawkish Fed message Australia holds a National Day of Mourning to honour the Queen. Trading of ASX instruments will not occur as the ASX is closed. Trading resumes Friday September 23. Japan’s Nikkei 225 opened down 1.4%, eying the Bank of Japan meeting later today. Taiwan, Indonesia and the Philippines are also likely to raise rates today. AUDNZD and the NZ trade balance AUDNZD remained supported above 1.1320 and upside tests were seen with the relative current account balances in play. NZ reported August trade data this morning and imports accelerated while exports have declined. The deficit in NZ Trade Balance data has widened further to -$12.28B vs. the prior release of -$11.97B on an annual basis. Also, the monthly deficit has widened to -$2,447M against the former figure of -$1,406M. This is a contrast to Australia which is reporting fresh highs in trade balance due to its bulk of commodity exports. The next focus for AUDNZD is perhaps 1.1516, the high of 2015. EURUSD heading for 0.98 EURUSD broke lower to fresh 20-year lows of 0.9814 amid Putin’s partial mobilization and the strength of the dollar from the hawkish Fed signals. While the ECB stays hawkish as well, the relative hawkishness still tilts in favour of the Fed due to the harsh winter coming up especially for Europe as Russia has cut gas supplies. Stronger case of a recession also continues to bode for more downside in EURUSD in the near-term. Crude oil (CLU2 & LCOV2) Crude oil prices bumped up higher on Wednesday after Putin’s speech but gains faded later in the day amid a hawkish Fed boosting the US dollar and strengthening the case for a deeper economic slowdown. The EIA data saw a 1.1mn barrel build in crude stocks, similar to the private data, although given the 6.9mn barrel SPR release, that was a net 5.8mn draw. WTI futures slid below $83/barrel although some recovery was seen in early Asian hours, and Brent futures attempted to head back over the $90/barrel mark.   What to consider? Powell beats the hawkish drum louder The Federal Reserve delivered its third consecutive 75bps rate hike and showed no sign of easing its push into restrictive territory as it battles to cool inflation. This comes despite Fed’s latest projections showing slower growth and a rise in unemployment next year. The FOMC raised the benchmark rate to 3-3.25% and projected the terminal rate at 4.6% in 2023, suggesting Fed will remain committed to bring inflation down even if that means significant economic pain. Fed members estimate the economy will grow 0.2% in 2022, down sharply from a prior forecast of 1.7%. Growth forecasts were also revised lower for 2023 and 2024 to 1.2% and 1.7% from 1.7% and 1.9%, respectively. The central bank now sees the unemployment rate at 3.8% at year-end, up slightly from a prior forecast of 3.7%. But labor supply and demand may likely be restored in subsequent years, with unemployment expected to reach 4.4% in 2023 and remain unchanged the following year, according to the Fed's projections. That is above the prior June forecast of 3.9% and 4.1% unemployment in 2023 and 2024, respectively. Russia’s partial mobilization spurs risk off Russian President Putin, in his televised speech to the nation Wednesday morning, announced partial mobilization, calling up 300k reserves, whilst threatening the west with “All means of destruction, including nuclear ones”. Referendums in Donetsk, Luhansk, Kherson and Zaporozhye (15% of Ukraine territory) are scheduled September 23-27, and any fighting in these regions will eb considered as attacks on “Russian territory” and thus pave the way for a potential military escalation, justifying the use of mass destruction weapons. Looking out for some FX comments at the Bank of Japan meeting While it is still hard to expect a pivot from the Bank of Japan this week, given that Governor Kuroda remains focused on achieving wage inflation, the meeting will still likely have key market implications. There will likely be increased voicing of concerns by the authorities on yen weakness, and there is also some chatter around the Bank of Japan bolstering its lending programs to support the private sector as high inflation curbs spending. Also watch for intervention risks as highlighted here. Bank of England may tilt to hawkish despite recession concerns The BoE meets on Thursday after last week’s meeting was delayed by a week for Queen Elizabeth II’s funeral. Policymakers are expected to hike rates by another 50bps, which would bring the Bank Rate to 2.25%, although a 75bps hike is still on the table. Beyond September, analysts forecast a 50bps increase in November and 25bps in December, taking the Bank Rate to 3%, where it is expected to stay until October 2023. Also worth highlighting is the “fiscal event” delivered by new Chancellor of the Exchequer Kwasi Kwarteng on Friday. This will be his first statement on how he plans to deliver new Prime Minister Liz Truss' pledge to make the U.K. a low tax economy, which risks stoking inflation in the medium-term. However, short-term plans on energy support package suggests lower inflation to end this year, but that wouldn’t be enough for the BoE to go easy on its inflation fight. Rio Tinto joins BHP in saying Copper’s near-term outlook is challenged Rio Tinto’s CEO has joined a suite of companies, including BHP, saying copper’s short-term outlook faces pressure. From supply-chain issues to 30-year high inflation and restricted demand from China, the metal is seeing less demand, and supply is outpacing supply. However, that is not expected to be the case over the longer term. Goldman Sachs predicts copper demand will be greater than supply by 2025, and will push prices to twice their current levels. Copper is used in everything from buildings to automobiles, to wiring in homes and mobile phones. Chinese media called for Loan Prime Rate Cuts Although the Loan Prime Rates (“LPR”) were fixed at the same level earlier this week, leading Chinese financial newspapers, including the China Securities Journal and Shanghai Securities Journal are calling for LPR cuts in the coming months to boost the economy.  Temporary measures to shield European consumers from high energy prices are becoming permanent According to the calculations of the Brussels-based think tank Bruegel, European governments have allocated about €500bn to protect consumers since September 2021 (see the report). The exact figure is higher because Bruegel has not yet counted the most recent packages from the United Kingdom, Germany and Denmark. We would not be surprised if the total amount will reach at some point next year €1tr. But there is more. European governments have also allocated more to support utilities facing risk of liquidity crisis (several instruments are used including loans, bailouts and fully fledged nationalisation). This represents a total amount of €450bn (this is actually above half of the NexGenerationEU funding which was agreed after the Covid crisis). Dreadful growth forecasts for the eurozone We all know forecasting is a tricky task, even more so in the current macroeconomic environment (the impact of the energy crisis is tough to assess). Yesterday, Deutsche Bank revised downward its 2023 growth forecast for the eurozone, from minus 0.3 % to minus 2.2 %. This is a massive drop in GDP if it happens. It would actually be the third lowest euro area GDP growth since WW2 (behind 2009 and 2020, of course). This shows how expectations are low for the eurozone next year.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-sept-22-2022-22092022
PLN Soars to Record Highs Ahead of NBP Decision

Bears Control The EUR/USD Market After Yesterday's Meeting

InstaForex Analysis InstaForex Analysis 22.09.2022 09:05
Several fairly good market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the levels 0.9947 and 0.9902 in my morning forecast and advised making decisions on entering the market. A breakthrough and reverse test from below 0.9947 resulted in an excellent sell signal for the euro, which resulted in a drop of more than 40 points to the 0.9902 area. Euro bulls began to act more aggressively in that area, and speculative bears rushed to take profits ahead of an important Federal Reserve meeting, which led to a false breakout and a signal to buy the euro with a bounce up more than 30 points. Everyone was waiting for the Fed's meeting in the afternoon, at which there was a sharp fall in the euro at first, which led to a false breakout in the 0.9819 area and a buy signal. As a result, the upward movement amounted to about 70 points. The bears quickly became active during Powell's speech, and protecting the 0.9907 resistance provided a great sell signal, resulting in a 50 point decline. When to go long on EUR/USD: Fed Chairman Jerome Powell vowed yesterday that he would crush inflation by any means necessary after the Open Market Committee raised interest rates by another 75 basis points for the third consecutive time and signaled an even more aggressive policy than investors had expected. All this led to a surge in volatility and ultimately put serious pressure on the euro, which collapsed to another annual low in the 0.9813 area. Protecting this range will be the top priority for now, but it will be quite difficult to do this, as it is unlikely that the data on the eurozone consumer confidence indicator and the economic bulletin from the European Central Bank will be able to oppose the current policy of the Fed. Forming a false breakout at 0.9813 will provide an entry point to the market with the goal of an upward correction to the area of 0.9861 – the level formed on the basis of yesterday. It is possible that hawkish statements from ECB Executive Board member Isabelle Schnabel may help the euro in the morning, but only a breakthrough and test from top to bottom of 0.9861 will hit the bears' stops, which will create another signal to open long positions with the possibility of a dash up into the 0.9907 area, where the moving averages are, playing on the bears' side. A more distant target will be resistance at 0.9952, where I recommend taking profits. In case EUR/USD falls further, which is more likely, and the bulls are not active at 0.9813, the pressure on the pair will increase, which will lead to a continuation of the bearish trend. The optimal decision to open long positions in such conditions would be a false breakout near the low of 0.9770. I advise you to buy EUR/USD immediately on a rebound only from 0.9723, or even lower - in the area of 0.9684, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears are in control of the market after yesterday's meeting and will continue to pull down the euro, as there are no real reasons to buy risky assets yet. The risk of a further energy crisis in Europe and an increase in interest rates by the EXB - all this will continue to negatively affect the economy, pushing the euro to the downside. The best option for selling in the current conditions would be the pair's growth in the first half of the day and forming a false breakout in the area of 0.9861, which will lead the euro to re-update the annual low of 0.9813. A breakdown and consolidation below this range with a reverse test from the bottom up creates another sell signal with the removal of bulls' stop orders and a larger fall of the pair to the 0.9770 area. A more distant target will be the area of 0.9723, where I recommend taking profits. If EUR/USD jumps during the European session, as well as the absence of bears at 0.9861, the demand for the euro will return, but nothing terrible will happen to the bears. An upward correction will lead to the next resistance at 0.9907. In this scenario, I recommend opening short positions only if a false breakout is formed. You can sell EUR/USD immediately on a rebound from a high like 0.9952, or even higher - from 0.9996, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT report) for September 13 logged a decline in short positions and a slight increase in long positions. This suggests that the European Central Bank meeting and a sharp increase in interest rates immediately by 0.75% influenced traders who preferred to take profits at current levels even despite the approaching Federal Reserve meeting. This week, the Open Market Committee is likely to raise rates by at least 0.75%, but there are rumors in the market that some politicians are in favor of raising the rate by 100 basis points, or 1.0%. This will lead to increased bearish momentum and the euro's new collapse against the US dollar. Considering the US inflation data for August of this year, the development of such a scenario cannot be ruled out. However, it should be understood that the European Central Bank is also no longer "sitting on the sidelines" and is starting to catch up with the Federal Reserve, reducing the gap between returns. This plays on the side of long-term bulls of the euro, who are counting on a recovery in demand for risky assets. The COT report indicated that long non-commercial positions rose by 2,501 to 207,778, while short non-commercial positions decreased by 22,011 to 219,615. At the end of the week, the overall non-commercial net position remained negative, but rose slightly to -11,832 from -36,349, which indicates the continuation of the alignment of the upward correction for the pair and groping the bottom. The weekly closing price increased and amounted to 0.9980 against 0.9917. Indicator signals: Moving averages Trading is below the 30 and 50-day moving averages, indicating an attempt by the bears to regain control of the market. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of growth, the upper border of the indicator in the area of 0.9950 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders. Relevance up to 06:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322359
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The Price Of The Euro To US Dollar Pair May Move Downward

InstaForex Analysis InstaForex Analysis 22.09.2022 10:14
Trend analysis (Fig. 1). The euro-dollar pair may move downward from the level of 0.9836 (close of yesterday's daily candle) to test 0.9802, the 208% Fibonacci retracement level (blue dotted line). Upon reaching this level, an upward movement is possible to 0.9869, the 14.6% retracement level (white dotted line). From this level, the price may continue to move up. Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – down; Volumes – down; Candlestick analysis – down; Trend analysis – down; Bollinger bands – down; Weekly chart – down. General conclusion: Today, the price may move downward from the level of 0.9836 (close of yesterday's daily candle) to test 0.9802, the 208% Fibonacci retracement level (blue dotted line). Upon reaching this level, an upward movement is possible to 0.9869, the 14.6% retracement level (white dotted line). From this level, the price may continue to move up. Alternative scenario: from the level of 0.9836 (close of yesterday's daily candle), the price may move downward to test the historical support level of 0.9709 (blue dotted line). Upon reaching this level, an upward movement is possible to the lower fractal 0.9813 (white dotted line). From this level, the price may continue to move up.   Relevance up to 08:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322371
The South America Are Looking For Alternatives To The US Currency

Forex Market: Fed Floors It! EUR/USD Reaching Ca. 0.92 And USD/JPY Ca. 155? It's Not Impossible!

ING Economics ING Economics 22.09.2022 10:51
After the hawkish 75bp hike from the Fed, today sees close to 10 central bank policy meetings around the world. As the dollar breaks new ground to the upside, most central banks will respond with large hikes. Recession fears are building and with the Fed set to hike a further 100-125bp this year, this all points to an even stronger dollar USD: Now or never In spite of a market positioned for a hawkish outcome, the dollar still managed to rally 0.5-1.0% after last night's FOMC decision and a very hawkish set of Fed projections - both for inflation and the monetary policy response. James Knightley discusses these in detail here. Dollar bears tried to jump on remarks by Fed Chair Powell that it would take a 'meeting-by-meeting' approach to its policy decisions but he was reasonably explicit later that the Fed was split between tightening by 100 and 125bp in the remaining two meetings of the year. In response, the market pushed the terminal rate expectations some 15bp higher - now seen at 4.65% in May. A Fed pushing ahead with tightening while acknowledging recessionary risks has all the hallmarks (albeit smaller) of the early 1980s in the US when Paul Volcker was at the helm of the Fed. That period saw massive yield curve inversion as Volcker sent the economy into recession, and the dollar soared. If there were to be a mini-repeat of that environment, one would think the next 6-12 months would be it. And with the DXY now moving forward with some momentum, long-term charts do not point to much resistance before 120 - some 7%+ higher than current levels. That would equate to EUR/USD and USD/JPY trading near 0.92 and 155, respectively. Food for thought. Standing in the way of a move much higher in USD/JPY are Japanese government officials. They are openly discussing FX intervention now but have confirmed they have not intervened yet and could conduct stealth intervention. Given that the BoJ kept all its monetary policy levers on hold overnight (it is still pursuing Quantitative Easing!), we suspect Tokyo will struggle to get the FX intervention sign-off from Washington. This leaves Japan in the position of playing its weak intervention hand as noisily as possible. The market does not seem to be buying into this, where one month 25 delta USD/JPY Risk Reversals are suggesting the market is becoming less, not more concerned about intervention. In short, there seems no strong reason to think that 145 will prove a top for USD/JPY. For today, a myriad of rate meetings around the world will remain the focus. Expect the dollar to remain bid on dips as confidence grows that deposit rates for the world's most liquid currency will push above 4% over the coming months.    DXY is flying. Expect corrections to prove shallow. Chris Turner EUR: In the dollar's shadow EUR/USD continues to grind to new lows of the year. As we have been discussing recently, yield differentials have not been playing a big role in EUR/USD pricing. It is more about the overall environment. Here, the Fed is leading the world's major central banks into more hawkish policy settings and making recessions more likely. As a relatively open economy with a large manufacturing base - and a war on its doorstep - the eurozone faces some major challenges this winter. In addition, the eurozone ran close to a EUR20bn current account deficit in July - a huge swing from traditional surpluses. We suspect EUR/USD continues to grind lower to the 0.9650 area over coming weeks. Of the many central banks meeting today, the Swiss National Bank could be especially interesting. We are looking for a 75bp hike with a risk of 100bp. We think the SNB is managing EUR/CHF lower and if there is any spike in EUR/CHF back to 0.9550 today, we expect it to be sold into. Chris Turner   GBP: BoE to hike 50bp, sterling at risk The Bank of England is widely expected to hike 50bp today. The hawkish BoE has provided little support to sterling this summer. Instead, fiscal concern is growing in the UK and tomorrow's 'fiscal event' could prove the trigger for another round of Gilt and sterling selling. GBP/USD to continue grinding towards 1.10. And a difficult equity environment could see EUR/GBP edging back to the 0.88 area.  Chris Turner NOK: Norges Bank hike unlikely to turn the NOK around In Norway, Norges Bank is widely expected to deliver another 50bp rate hike today, after signalling in August that more tightening in September would likely be required. With core inflation having continued to press higher, we expect NB to signal more tightening ahead, and we currently forecast another 50bp rate hike in November. This may not have many implications for the krone’s short-term outlook, as external drivers (risk sentiment and commodity prices above all) should remain dominant. EUR/NOK has rallied since the start of September as NOK’s low liquidity left it highly exposed to risk sentiment swings, oil prices eased and Norges Bank announced a larger than expected daily sale of domestic currency for this month (NOK 3.5bn vs 1.5bn in August). We continue to see scope for a recovery in NOK around the turn of the year, but near-term downside risks remain significant, and a return to sub-10.00 EUR/NOK levels may not materialise for several more weeks.  Chris Turner Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The GBP/USD Pair Found Support And The EUR/USD Pair Is Slowly Recovering

InstaForex Analysis InstaForex Analysis 22.09.2022 11:33
Once again, the Federal Reserve raised interest rates by 0.75% and announced a similar one for the next meeting. Markets were a bit disappointed with this as they were counting on the easing of rate hikes amid a slowdown or deceleration of inflation. Aside from the rate increase, forecasts for median interest rates, personal consumption spending, GDP and unemployment were also released. A larger rise in rates is hinted, while consumption and GDP estimates have been lowered. The unemployment rate, on the other hand, has been lifted. Interestingly, with such forecasts, the Fed believes that the economy will be able to avoid falling into recession as GDP is likely to stay in positive territory. They said it will hit 0.0% to 0.2% at the end of this year. This tough stance resulted with sell-offs in stock markets, growth in treasury yields and strengthening of dollar. Most probably, this dynamics will continue and may even intensify even if the central banks of Switzerland and the UK also raise rates by 0.75%. Forecasts for today: GBP/USD The pair found support at 1.1220 and may correct upwards to 1.1300 amid the decision of the Bank of England to raise the discount rate by 0.75%. But then it will turn down and rush to 1.1115. EUR/USD The pair is weakly recovering on the wave of partial profit-taking after its fall the day before. It could rise to 0.9880, then resume falling towards 0.9780.   Relevance up to 07:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322367
It's not clear we find out the results of mid-term elections immediately. Binance to buy FTX

USA: Fed Decision Itself Wasn't Everything What Aroused Interest Yesterday

Alex Kuptsikevich Alex Kuptsikevich 22.09.2022 11:01
As most had predicted, the Federal Reserve raised the rate yesterday by 75 points to 3.00-3.25%. However, all participants' attention was drawn to the accompanying comments and forecasts, a change that underpinned the latest market movements and may explain its dynamics in the coming days. US Economy, What Can We Expect From GDP Print? The outlook for the economy has darkened considerably, with GDP forecasted to rise by a flimsy 0.2% in 2022 against June's projection of 1.7%. Unemployment is expected to grow from 3.7% now to 4.4% next year. Both of these forecasts point to a reversal of the economic cycle to a downturn. Perhaps most sensitive to the markets was the change in key rate expectations. For the end of this year, the Fed plans to raise the rate to 4.4% from 3.4% three months earlier. At the end of next year, the rate is projected at 4.6% versus 3.8% in June. Monetary Policy - What's Next? This outlook sets the markets up for another 75-point increase in November and another +50 points in December. The current Fed Funds Rate level is the highest since the beginning of 2008, breaking a trend of declining peaks over the last 40 years. A significant shift for markets is also Powell's comments calling for a recession to be seen as a price stability payment. This is a very bearish signal for markets that they may have to endure more pain, and the recent sell-off in equity and bond markets has not shaken confidence in their chosen path. Read next: In Switzerland And Japan, Rates Have Reached The Level Forecasted. What Will Be The Decision Of The Bank Of England ?| FXMAG.COM This potentially means more pressure on markets in the coming days and more demand for the dollar as a higher-yielding currency.
EUR/USD Pair Has Potential For The Downside Movement Today

The EUR/USD and The GBP/USD Markets Were Bearish Yesterday, Will It Be The Same Today?

InstaForex Analysis InstaForex Analysis 22.09.2022 13:30
EUR/USD Higher timeframes Bears were able to exit the 1.0000 area of attraction yesterday, update the low at 0.9864, and hold on to a close below this level. The continuation of the downward trend returns relevance to the following downward targets – 0.9000 (psychological level) and 0.8225 (minimum extremum of 2000). The nearest resistance is now the zone of 1.0000 – 1.0089, left behind yesterday and strengthened by many levels of the higher timeframes (psychological level + daily cross + weekly short-term trend). H4 – H1 The main advantage in the lower timeframes now belongs to the bears. However, at the moment, we are witnessing an attempt to implement a corrective rise. The pair retests the broken target at H4 (0.9864–97) and interacts with the central pivot point of the day (0.9875). The next most crucial resistance will be the weekly long-term trend (0.9966). This level is responsible for the current balance of power of the lower timeframes. The resistance of the classic pivot points R2 (1.0038) and R3 (1.0100) serve as further upward targets in the current situation. If the corrective recovery is completed, the bearish sentiment will return with targets at 0.9774 – 0.9712 – 0.9611 (classic pivot points). *** GBP/USD Higher timeframes The initiative yesterday belonged to the bears, who continued the development of the downward trend movement. The breakdown of the historical low 1.1411 (2020) at higher timeframes will allow us to consider the psychological level of 1.0000 as the next target for the decline. If the bears fail to confirm the breakdown on the weekly and monthly timeframes, then attention will be directed to the return to the passed minimum extremum 1.1411 and the subsequent development of a corrective rise. H4 – H1 As of writing, a corrective rise develops in the lower timeframes. Overcoming the key resistance at 1.1389 (weekly long-term trend) and a reversal of the moving average will change the current balance of power in favor of strengthening bullish sentiment. The resistance of the classic pivot points R2 (1.1443) and R3 (1.1503) can become additional targets within the day. If bears return to the market, the relevance will return to the support of classic pivot points (1.1207 – 1.1147 – 1.1059 ). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1- Pivot Points (classic) + Moving Average 120 (weekly long-term trend)     Relevance up to 11:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322411
FX Daily: Testing the easing pushback

A Slight Increase In The Euro To US Dollar Price Is Visible

InstaForex Analysis InstaForex Analysis 23.09.2022 08:10
Yesterday, the euro closed the day at the opening level. The closure occurred under the resistance of 0.9850 and formally this means consolidating under the level. But since there is practically no body of the candle, the consolidation itself is formless, weak. At the same time, convergence is also formed with the Marlin Oscillator. A slight increase in the price is visible this morning, with the intention to go above 0.9850. Consolidating above the level opens the way to 0.9950. It is possible to continue growth to the 1.0032 level. All this growth will occur in the general direction of the downward trend. Upon completion of the correction, a new wave of medium-term decline will begin to develop. In this case, the key level of 0.9752 that we noted will be overcome with more energy, the price will try to settle at 0.9692 and go below (0.9625). The strong growth of the Marlin Oscillator indicates the beginning of the correction on the four-hour chart. Consolidating above 0.9850, and with it the transition of Marlin to a positive area will create a technical basis for further growth to the target level of 0.9950. A little below the 1.0032 level is the MACD line. If the price rises, this line will turn up, press against the linear level, strengthen it and create tension by the end of the correction. It will also turn out that in the area of 1.0032, the MACD lines of both scales will coincide, which will also strengthen the resistance. A puncture of this level is possible to 1.0051, to the high of September 20, but this puncture will already be false. This is the main scenario. An alternative scenario allows the price to rise to the upper area of a prolonged and broad consolidation of August-September at 1.0150.   Relevance up to 04:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322469
At The Close On The New York Stock Exchange Indices Closed Mixed

Falls At The Close Of The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 23.09.2022 08:16
At the close of the New York Stock Exchange, the Dow Jones fell 0.35% to a 3-month low, the S&P 500 fell 0.84%, and the NASDAQ Composite fell 1.37%. Merck & Company Inc was the top performer among the components of the Dow Jones in today's trading, up 2.98 points or 3.53% to close at 87.51. Quotes Johnson & Johnson rose by 2.90 points (1.78%), ending trading at 166.18. Salesforce Inc rose 2.52 points or 1.71% to close at 150.15. Shares of American Express Company were the leaders of the fall, the price of which fell by 5.68 points (3.82%), ending the session at 143.03. Boeing Co was up 3.20% or 4.58 points to close at 138.71, while Goldman Sachs Group Inc was down 2.43% or 7.79 points to close at 312. .92. Among the S&P 500 index components gainers today were Eli Lilly and Company, which rose 4.85% to 310.87, Merck & Company Inc, which gained 3.53% to close at 87.51. , as well as shares of Bristol-Myers Squibb Company, which rose 2.63% to end the session at 71.29. The biggest losers were Caesars Entertainment Corporation, which shed 9.44% to close at 37.62. Shares of Ball Corporation lost 8.66% to end the session at 49.23. FactSet Research Systems Inc dropped 8.29% to 394.75. Leading gainers among the components of the NASDAQ Composite in today's trading were Spero Therapeutics Inc, which rose 167.74% to hit 2.20, Avenue Therapeutics Inc, which gained 105.90% to close at 0.44, and also shares of Panbela Therapeutics Inc, which rose 46.39% to end the session at 0.35. Top Ships Inc. was the biggest loser, shedding 44.06% to close at 0.12. Shares of Ecmoho Ltd lost 42.72% and ended the session at 0.10. Quotes of Pintec Technology Holdings Ltd decreased in price by 28.80% to 0.42. On the New York Stock Exchange, the number of securities that fell in price (2596) exceeded the number of those that closed in positive territory (546), while quotes of 120 shares remained virtually unchanged. On the NASDAQ stock exchange, 3,011 stocks fell, 765 rose, and 257 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.29% to 27.35. Gold futures for December delivery added 0.24%, or 4.00, to $1.00 a troy ounce. In other commodities, WTI crude for November delivery rose 0.54%, or 0.45, to $83.39 a barrel. Brent oil futures for November delivery rose 0.50%, or 0.45, to $90.28 a barrel. Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.04% to 0.98, while USD/JPY fell 1.14% to hit 142.40. Futures on the USD index rose by 0.65% to 111.07.   Relevance up to 05:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/293918
The Upside Of The EUR/USD Pair Remains Limited

The Euro Keeps Falling And The Bearish Outlook Remains Very Good

InstaForex Analysis InstaForex Analysis 23.09.2022 08:22
EUR/USD 5M The EUR/USD pair first plunged to the new 20-year low at 0.9813, therefore it adjusted slightly, and then returned to the level of 0.9813 for a reason or no reason at all. This time the pair did not overcome the level, but it should be understood that over the past day and a half, the euro has already fallen significantly. So we would say that everything is going according to plan. Recall that we have repeatedly stated that the current downward trend does not look complete, and the foundation and geopolitics do not provide a reason to expect the euro's growth. Moreover, there are no technical signals for growth. And the US central bank meeting, its results and Federal Reserve Chairman Jerome Powell's speech... the market for once worked them out absolutely logically. Monetary policy in the US will continue to tighten, so the dollar's growth is quite logical. Thursday's trading signals were not all right, but you should remember that the pair has not been at the current price values for more than 20 years, so there are simply practically no levels to trade. All the signals of the past day were formed around the level of 0.9877, which itself was recently formed. The first buy signal turned out to be false, but it could be ignored, since at the time of its formation, the price had already gone up 90 points. The next three sell signals could be worked out, but only with one short position, since the price went down more than 15 points only in the third case so that traders could set a Stop Loss to breakeven. However, it was not necessary, and the position should have bee COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not give any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 23. The euro is plunging again, but not hopelessly. The Fed raised the rate by 0.75% and promised to raise it by another 1.25%. Overview of the GBP/USD pair. September 23. Even the Bank of England's rate hike did not help the British pound. Forecast and trading signals for GBP/USD on September 23. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The bears' prospects remain very good on the hourly timeframe. Now it is already possible to sum up the results of the Fed meeting, and we see that the euro responded with a new fall, and the dollar – with growth. This trend, from our point of view, will continue in the future. Now the euro is (again) under pressure from geopolitics. We allocate the following levels for trading on Friday – 0.9813, 0.9877, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as the Senkou Span B (1.0031) and Kijun-sen (0.9930) lines. The lines of the Ichimoku indicator can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "bounces" and "breakthrough" levels - extremes and lines. Do not forget about placing a Stop Loss order at breakeven if the price went in the right direction of 15 points. This will protect you against possible losses if the signal turns out to be false. Business activity indices in the service and manufacturing sectors will be published in the European Union and the United States on September 23. These data will clearly be in the shadow of the Fed meeting, but still a small reaction of the pair may follow them. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322457
PLN Soars to Record Highs Ahead of NBP Decision

What Options Should Traders Consider When It Comes To The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 23.09.2022 09:17
Analysis of transactions in the EUR / USD pair Euro was unable to cling around 0.9900 so it quickly returned to yearly lows. The reason was the US jobless claims report yesterday, which reminded traders of why they bet on dollar in the current environment. For this, too high inflation is to blame as it forces the Federal Reserve to act more aggressively. A number of reports are due out today, such as the index of business activity in the manufacturing sector, the service sector and composite index of Eurozone countries. All of them do not carry anything good, so it is likely that a new wave of sell-offs will be seen in euro, which will push it beyond yearly lows. Similar data from the US will be released in the afternoon, but there the indices may surprise traders. This could lead to another rise in dollar, especially if Fed Chairman Jerome Powell talks about further rate hikes in his speech. For long positions: Buy euro when the quote reaches 0.9845 (green line on the chart) and take profit at the price of 0.9897. However, growth is unlikely especially if the Euro area reports weak economic statistics. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9816, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9845 and 0.9897. For short positions: Sell euro when the quote reaches 0.9816 (red line on the chart) and take profit at the price of 0.9771. Pressure will return amid a bad data in the US and continued hawkish policy by the Fed. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can be sold at 0.9845, but the MACD line should be in the overbought area as only by that will the market reverse to 0.9816 and 0.9771. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 08:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322487
The EUR/USD Price May Fall Under 1.0660

The Pressure On The Euro Clearly Persisted After The Recent Events

InstaForex Analysis InstaForex Analysis 23.09.2022 09:26
Several cool market entry signals were formed yesterday, which made it possible to make good money. Let's look at a 5-minute chart and figure out what happened. I paid attention to the levels 0.9813 and 0.9861 in my morning forecast and advised making decisions on entering the market there. The bears attempt to continue the euro's decline in the morning had failed. The test and forming a false breakout in the area of 0.9813 led to a signal for long positions on the euro, which resulted in growth by more than 40 points in the 0.9861 area. A breakthrough and reverse test of this range from top to bottom resulted in creating another signal for entering long positions, which allowed us to pick up about 20 more points. The euro was under pressure in the afternoon after we received good statistics on the US labor market, and a breakthrough and a reverse test from the bottom up of 0.9847 gave a sell signal. As a result, the pair collapsed into the 0.9813 area. As in the morning, the bulls were more active there, which led to a false breakout, a buy signal and growth back to 0.9847. When to go long on EUR/USD: The pressure on the euro has clearly persisted after recent statements by Federal Reserve Chairman Jerome Powell, who promised that he would crush inflation by any means after the Open Market Committee raised interest rates by another 75 basis points. Yesterday's labor market data only reinforced the descriptions that the Fed will continue to act quite aggressively. As for statistics, today there are quite a large number of economic indicators on activity in the eurozone, which is expected to fuel the decline, which is a consequence of the European Central Bank's policy, following on the heels of the US central bank. If the data on the index of business activity in the manufacturing sector of the eurozone, the index of business activity in the services sector and the composite index of business activity disappoint, do not be surprised if the euro goes to update annual lows. In such conditions, it is not necessary to count on the level of 0.9813. This area has already been tested twice and only another false breakout in the area of 0.9813 creates a new buy signal. The target of the upward correction in this case will be the level of 0.9853, formed by yesterday's results. Only a breakthrough and a top-down test of this range, together with strong statistics on the eurozone, will hit the bears' stop orders, creating another signal to open long positions with the possibility of a dash up to the 0.9898 area. A more distant target will be the resistance of 0.9952, where I recommend taking profits. In case EUR/USD falls further, which is more likely, and the bulls are not active at 0.9813, the pressure on the pair will increase, which will lead to the continuation of the bearish trend. The optimal solution for opening long positions in such conditions would be a false breakout near the 0.9770 low. I advise buying EUR/USD immediately for a rebound only from 0.9723, or even lower – around 0.9684, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: Bears control the market after yesterday's major sell-off from the 0.9900 level. Given that there are no special reasons to buy risky assets yet, I expect a further decline in the pair. The most optimal option for short positions in the current conditions will be after the pair grows in the first half of the day to the area of 0.9853 and a false breakout forming there. This will lead the euro to a repeated update of the annual low of 0.9813, the breakdown and consolidation below which, with a reverse test from the bottom up, will create another sell signal with the removal of bulls' stop orders and a larger fall of the pair to the area of 0.9770. A more distant target will be the 0.9723 area, where I recommend taking profits. In case EUR/USD jumps during the European session, as well as the absence of the bears at 0.9853, and there are moving averages playing on the bears' side, demand for the euro will return by analogy with yesterday, which will move the pair to the horizontal channel. However, nothing terrible will happen for them. An upward correction will lead to the next resistance of 0.9898. In this scenario, I recommend opening short positions only if a false breakout is formed. You can sell EUR/USD immediately on a rebound from the high of 0.9952, or even higher – from 0.9996, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT report) for September 13 logged a decline in short positions and a slight increase in long positions. This suggests that the European Central Bank meeting and a sharp increase in interest rates immediately by 0.75% influenced traders who preferred to take profits at current levels even despite the approaching Federal Reserve meeting. This week, the Open Market Committee is likely to raise rates by at least 0.75%, but there are rumors in the market that some politicians are in favor of raising the rate by 100 basis points, or 1.0%. This will lead to increased bearish momentum and the euro's new collapse against the US dollar. Considering the US inflation data for August of this year, the development of such a scenario cannot be ruled out. However, it should be understood that the European Central Bank is also no longer "sitting on the sidelines" and is starting to catch up with the Federal Reserve, reducing the gap between returns. This plays on the side of long-term bulls of the euro, who are counting on a recovery in demand for risky assets. The COT report indicated that long non-commercial positions rose by 2,501 to 207,778, while short non-commercial positions decreased by 22,011 to 219,615. At the end of the week, the overall non-commercial net position remained negative, but rose slightly to -11,832 from -36,349, which indicates the continuation of the alignment of the upward correction for the pair and groping the bottom. The weekly closing price increased and amounted to 0.9980 against 0.9917. Indicator signals: Moving averages Trading is below the 30 and 50-day moving averages, indicating an attempt by the bears to regain control of the market. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of growth, the upper border of the indicator in the area of 0.9875 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 08:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322477
The Upside Of The EUR/USD Pair Remains Limited

The Correlation Between The EUR/USD and USDX Markets Is Directly Opposite

InstaForex Analysis InstaForex Analysis 23.09.2022 09:35
Technical Market Outlook: The EUR/USD pair made another lower low as the sell-off continues. At the time of writing the article the local low was made at the level of 0.9771, but the target for bears is seen at 127% Fibonacci extension located at 0.9744. No nearest technical support in view, however, the resistance is seen at 0.9901 and 0.9867. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the longer term down trend is reversed. Please watch the USDX as the correlation between this two markets (EUR/USD and USDX) is directly opposite. Weekly Pivot Points: WR3 - 1.01231 WR2 - 1.00595 WR1 - 1.00262 Weekly Pivot - 0.99959 WS1 - 0.99626 WS2 - 0.99323 WS3 - 0.98687 Trading Outlook: Despite the recent relief rally towards the short-term support, the EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Please notice, there is plenty of room for the EUR to go down.     Relevance up to 09:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293952
Bank of England survey highlights easing price pressures

Yesterday's Decision Of The Bank Of England Did Not Help The Pound Rise

InstaForex Analysis InstaForex Analysis 23.09.2022 11:48
The British pound has already fallen below the 12th figure and is clearly not ready to stop there, as hard times are ahead with the continuation of the cost of living crisis in the UK, high inflation in the region of 10.0%, energy disruptions, and the economy sliding into recession - from which it will be quite difficult for the new prime minister to get out without another billion aid packages that are very expensive – given the current level of interest rates. Speaking of rates, yesterday the Bank of England voted to raise the base rate to 2.25% from 1.75%, as the central bank is striving with all the "fibers of its soul" to overcome high inflation exceeding five times the target. Yes, inflation in the UK fell slightly in August, but remained at 9.9% year-on-year, which is much higher than the BoE's 2% target. Energy and food prices have risen the most, but even core inflation, excluding these components, is still 6.3% year-on-year. By the way, this is the seventh consecutive time when the central bank raises rates, raising them to the level last seen in 2008. The press release explaining its decision points to the volatility of wholesale gas prices and the government's decision to impose restrictions on the payment of electricity bills, which, according to the central bank, will limit the further growth of the consumer price index. Nevertheless, the report says that since August there have been new signs of continued strengthening of domestic inflation, forcing the BoE to act ahead of the curve. "The labor market is limited, and internal costs and price pressures remain elevated. Although the electricity bill subsidy reduces inflation in the short term, it also means that household spending is likely to remain weaker than predicted in the August report," the report notes. BoE rate hike Five members of its Monetary Policy Committee voted for a 0.5 percentage point rate hike, and three voted for a 0.75 percentage point increase. One member voted for a 0.25 percentage point increase. Such a decision by the BoE could contribute to the pound's growth, but not in the current conditions, when the economy is leaping towards recession, the energy crisis is gaining momentum, and the new British Prime Minister Liz Truss is preparing another program of economic support. The Business Association of the British Chamber of Commerce, together with the BoE, expect that the UK will enter a recession before the end of the year. In addition to surges in energy prices, the country continues to face supply disruptions due to Covid-19 and Brexit, which reduces consumer sentiment and negatively affects retail sales. But the UK is not alone in raising interest rates. Most recently, the European Central Bank raised rates by 75 basis points, the Swiss central bank also raised rates by 75 basis points, as did the US Federal Reserve. GBP/USD As I noted above, the pound also collapsed to the 12th figure and the pressure on the pair is only maintained. Only after returning to 1.1270 will it be possible to expect bulls to become more active at the end of this week. This will create quite good chances for a larger upward correction, which will open a direct road to the area of highs: 1.1320 and 1.1360. The farthest target in the current bullish movement will be the 1.1400 area. If the pressure on the pair persists, bulls will have to try very hard to stay above 1.1215. Without doing this, you can see another major sale by 1.1160 and 1.1110. EUR/USD As for the technical picture of EURUSD, so far the bulls are resisting with all their might and do not want to surrender the market, but apparently this is inevitable. At the beginning of the European session, the euro has already returned to an annual low and clearly nothing good is expected in the near future. The bulls' task is to protect the support of 0.9810, but it is difficult to say how to do this amid weak statistics. A breakthrough of 0.9810 will push the euro lower at 0.9770, and a breakdown of this low will open up a real prospect for an exit at 0.9720 and 0.9660. It is quite difficult to talk about the prospects for the growth of risky assets in the current conditions. To begin with, the bulls need to return to 0.9860, which will allow them to reach 0.9900. It will be possible to talk about a return to parity only after a breakthrough of 0.9952 and 0.9996.       Relevance up to 09:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322501
The Forex Market Is Under Strong Pressure From Geopolitical Events And Statistics

The Forex Market Is Under Strong Pressure From Geopolitical Events And Statistics

InstaForex Analysis InstaForex Analysis 23.09.2022 12:47
Details of the economic calendar for September 22 The Bank of England, as expected, raised the rate by 50 basis points to 2.25%. At the same time, the regulator lowered its inflation forecast. According to their expectations, it may reach 11%, and inflation will peak in October. The market reaction was zero, because the rate increase by 50 bps has already been taken into account in the quotes. The pound sterling began to weaken. During the American trading session, weekly data on jobless claims in the United States were published, which recorded a decrease in their total volume. This is positive news for the US labor market. Statistics details: The volume of continuing claims for benefits fell from 1.401 million to 1.379 million. The volume of initial claims for benefits rose from 208,000 to 213,000. What is pushing the market? The first is the results of the September Fed meeting, where the regulator clearly indicated that the main goal is to curb inflation, and it is ready to further tighten monetary policy. The second factor is the Russia-Ukraine situation, where, at the moment, there is a large flow of information that puts speculators into action. Analysis of trading charts from September 22 The EURUSD currency pair, in the stage of a pullback from the low of the downward trend, locally returned to the previously passed level of 0.9900, where the price rebounded with a reverse move. The GBPUSD currency pair, after a short pullback, which was caused by a strong overheating of short positions, again moved to the decline. This movement indicates the prevailing downward sentiment among market participants who are in a stage of inertia. Economic calendar for September 23 Today, a preliminary estimate on business activity indices in Europe, the United Kingdom and the United States is expected to be published. Indices, except for the USA, are expected to decrease. Thus, the dollar may well receive support in the market. Time targeting: EU business activity indices – 08:00 UTC UK business activity indices – 08:30 UTC US business activity indices – 13:45 UTC Trading plan for EUR/USD on September 23 With the opening of European platforms, a new round of depreciation of the euro emerged, which led to the price holding below 0.9800. As a result, the speculative-inertial move continues to form, which allows the rate to decline to the subsequent control value of 0.9650, where the lower border of the flat 0.9650/1.0000 passed earlier in history. It should be noted that the market is already experiencing overheating of euro short positions, which allows for a new technical pullback. Trading plan for GBP/USD on September 23 The pound sterling, following the euro, continued to decline, which resulted to the breakdown of the level of 1.1200. A stable hold of the price below this level allows the subsequent weakening of the British currency towards the psychological mark of 1.1000. Also, do not forget about the overheating of short positions and possible technical pullbacks. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.     Relevance up to 10:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322511
Saxo Bank Podcast: US Equities Continue To Trade Up, Natural Gas In Europe, Bank of Japan Meeting Ahead And More

Podcast: The European Gas Market, Comments On Events At Central Banks

Saxo Bank Saxo Bank 23.09.2022 12:58
Summary:  Equities are sliding further yesterday and today as the market is rattled by sizeable upwards moves in the long end of the US yield curve with the US 10-year pushing beyond 3.7%. We also go through the series of central bank events yesterday from various rate decisions and most importantly the historic JPY intervention by the Bank of Japan. In addition we take a look at commodities and in particularly the European gas market which is set for its fourth straight weekly loss. Today's pod features Peter Garnry on equities, Ole Hansen on commodities, and John Hardy on FX and hosting. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-sep-23-2022-23092022
German labour market starts the year off strongly

The Weakening German Economy With No Positive Forecasts

TeleTrade Comments TeleTrade Comments 23.09.2022 13:34
German Manufacturing PMI arrives at 48.3 in September vs. 48.3 expected. Services PMI in Germany contracts further to 45.4 in September vs. 47.2 expected. EUR/USD accelerates declines towards 0.9750 on mixed German PMIs. The German manufacturing and services sectors’ contraction deepened in September as increasing energy costs weighed, the preliminary manufacturing activity report from S&P Global/BME research showed this Friday. The Manufacturing PMI in Eurozone’s economic powerhouse came in 48.3 at this month vs. 48.3 expected and 49.1 prior. The index tumbled to 27-month lows. Meanwhile, Services PMI dropped from 47.7 booked previously to 45.4 in September as against the 47.2 estimated. The PMI hit the lowest level in 28 months. The S&P Global/BME Preliminary Germany Composite Output Index arrived at 45.9 in September vs. 46.0 expected and August’s 46.9. The gauge also reached 28-month troughs. Key comments from Phil Smith, Economics Associate Director at S&P Global “The German economy looks set to contract in the third quarter, and with PMI showing the downturn gathering in September and the survey’s forward-looking indicators also deteriorating, the prospects for the fourth quarter are not looking good either.” “The deepening decline in business activity in September was led by the service sector, which has seen demand weaken rapidly as customers pull back on spending due to tightening budgets and heightened uncertainty about the outlook.” FX implications EUR/USD is accelerating the downside following the break of the 0.9800 level mixed German data. The spot was last seen trading at 0.9770, still down 0.60% on the day. 
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

The EUR/USD Pair Resumed Its Drop And Could Drop Deeper

InstaForex Analysis InstaForex Analysis 23.09.2022 14:17
EUR/USD Massive Drop! The EUR/USD pair resumed its drop after failing to jump above the 0.9881 - 0.9904 area. I've told you in my previous analysis that the currency pair could extend its downside movement as long as it stays under this area (former low) which represents an upside obstacle. Furthermore, the 0.9814 low was seen as a downside obstacle. You knew that dropping below this level activates more declines. Now, it stands right above the down channel's downside line which represents a downside obstacle. EUR/USD Trading Conclusion! Breaking below 0.9814 was seen as a selling opportunity. Now, the price could try to rebound from above the channel's downside line. After its massive drop, a minor growth could be natural. Temporary growth could bring new selling opportunities. EUR/USD could drop deeper as long as it stays under the 0.9814 former low. Dropping and stabilizing below the downside line may activate a further drop toward the 0.9700 psychological level.   Relevance up to 14:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294015
US Dollar (USD) Touched The 20-year High Level! What Makes EUR Less "Attractive"?

US Dollar (USD) Touched The 20-year High Level! What Makes EUR Less "Attractive"?

Jing Ren Jing Ren 23.09.2022 15:14
USDJPY consolidates post-BoJ intervention The Japanese yen clawed back some losses after the BoJ intervened in the FX market for the first time since 1998. The central bank has loaded up on its currency in an attempt to ease the imported inflation pressure. However, this symbolic move may only offer the battered yen relief and is unlikely to reverse the current trend. Policymakers have stuck to the loose policy to support the fragile recovery, in a contrarian move to the global race to tighten financial conditions. Diverging yields between Japan and the US may still favour the latter’s currency. August 1998’s high at 147.50 is the next hurdle and 139.00 the closest support. EURUSD slips as Fed stays hawkish The US dollar soared to a two-decade high after the Fed raised interest rates by another 75 basis points. Officials have signalled more similar hikes by the end of the year. An update on US rates projection shows a 4.4% by year's end, a full percentage point higher than last June’s forecast. In Europe, the economic slowdown, energy strains and an escalation in Ukraine could keep traders away from the single currency. This divergence mirrors the fate of other riskier currencies. In a world full of uncertainties, high yield and safety raise the dollar’s relative appeal. The pair is sliding towards 0.9600 after being capped at 1.0040. UKOIL softens as global growth at risk Brent crude struggles over geopolitical tensions and demand uncertainty. Russia announced a mobilisation of more troops in an escalating move in the Ukraine conflict. Additional sanctions could be expected from the west along with Russia’s retaliation in energy deliveries. Meanwhile, Washington signalled little progress in reviving the 2015 Iran nuclear deal. The stalemate could keep the tight market in check. However, the global race to stifle inflation makes growth a collateral damage. Lower demand and subdued risk appetite may continue to fuel the correction. The price is hovering above 84.00 and 105.00 is an important cap. NAS 100 struggles as rates see no ceiling yet The Nasdaq 100 slips further as the Fed reaffirms its restrictive roadmap. As the economy became second to monetary policy, investors fear that the window for a ‘soft landing’ might be closing. The question would shift from whether the recession is around the corner to how long it would last. The central bank reiterated that growth and jobs would be impacted. A solid labour market may act as a cushion, allowing policymakers to push the tightening agenda aggressively. Growth stock investors will need to remain patient as rate cuts are not expected until 2024. The index is hovering above 11100 with 12000 as the first resistance. Key data release (GMT time) Tuesday, 27 September 12:30 Durable Goods Orders 23:50 BoJ Monetary Policy Meeting Minutes   Wednesday, 28 September 01:30 Retail Sales     Thursday, 29 September 12:00 Harmonized Index of Consumer Prices 12:30 Gross Domestic Product Annualized   Friday, 30 September 06:00 Gross Domestic Product Retail Sales 09:00 HICP
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

The Rate Of Decline Of The EUR/USD Pair Is Slowing Down

InstaForex Analysis InstaForex Analysis 26.09.2022 08:14
The euro fell by 147 points on Friday. The price has overcome the important target level of 0.9752, having worked out the nearest target below it (0.9692). The 0.9752 target was set by the embedded line of the global hyperchannel of the monthly timeframe, the channel started on the July 2008 high. Now the price is heading towards the medium-term target along the embedded line of this channel to the area of 0.8960. We are waiting for the price here within a month. The price has set targets on the daily chart: 0.9625, 0.9520. The Marlin Oscillator is going down, the distance to the oversold zone is still significant. The rate of decline of the oscillator is slowing down on the four-hour chart. Probably, from the nearest support (0.9625) there will be a correction (back to 0.9692), then the decline will continue with renewed vigor.       Relevance up to 04:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322598
The EUR/USD Pair Is Still In A High Position On The 1H Chart

No One Is Even Thinking About Buying The Euro, The Bearish Mood Is Present

InstaForex Analysis InstaForex Analysis 26.09.2022 08:28
EUR/USD 5M Business activity indices were published in the European Union and the United States on Friday... We tried to make the beginning of this article as absurd as possible, since now hardly anyone is interested in business activity indices. The euro lost about 150 points on Friday and on Monday night within one hour it fell by another 130 points. This is all you need to know now about what is happening in the foreign exchange market and the state of its participants. This is no longer a reaction to the "foundation" or any macroeconomic events. It's just shock and panic. The euro has already almost reached the level of 0.9500, although a few months ago this level looked fantastic. We have repeatedly said that the collapse of European currencies may well continue, given the current geopolitical and fundamental background. Basically, this is exactly what we are seeing now. Yes, a rollback to the top followed at night, but what does it decide? The market is clearly not just running in a panic from risks... In regards to Friday's trading signals, everything was very, very good, since none were formed. We say this because the market is in a state of shock right now, and trading in such circumstances is not the best thing to do from our perspective. Yes, a clear trend movement was observed all day long, on which one could make very good money, but why open positions if there is not a single level at the current price values? If you are trading our Linear Regression Channels system on the 4-hour time frame, then everything is fine, as there is a Heiken Ashi indicator that shows entries for new falls in the pair. It is very difficult to trade on hourly and lower timeframes due to the lack of reference points and signals. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial traders, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not provide any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Forecast and trading signals for GBP/USD on September 26. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The prospects for bears remain just fine on the hourly timeframe, given that now no one is even thinking about buying the euro. To say now that the euro's new collapse was provoked by last week's Federal Reserve meeting is like blaming a train derailment due to rain. From our point of view, the market is in a panic, and it is hardly possible to say how long it will persist and how it will end. We highlight the following levels for trading on Monday - 0.9813, 0.9877, 0.9945, 1.0019, as well as Senkou Span B (1.0031) and Kijun-sen (0.9804). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. European Central Bank President Christine Lagarde will speak in the European Union on September 26, which is unlikely to affect anything. You should trade on a 4-hour or daily TF, who considers it necessary to do this in a panic on the foreign exchange market. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 05:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322600
GBP: Softer Ahead of CPI Risk Event

Technical Information On The Euro To US Dollar Currency Pair

InstaForex Analysis InstaForex Analysis 26.09.2022 08:40
Technical outlook: EURUSD dropped through fresh swing lows at 0.9552 in the early trading hours on Monday. Prices were quick to bounce back quickly to the 0.9650-60 area thereafter as the daily chart looks to be carving a Doji or Pinbar candlestick pattern. The single currency pair is seen to be trading close to 0.9630 at this point in writing as the bulls prepare to be back in control. EURUSD might have hit a major Fibonacci support level at 0.9652 during the Asian session. As projected on the chart here, it seems a potential target hit of a larger-degree downswing. Follow-through is required now to confirm a bullish reversal ahead. Immediate price resistance is now seen at about 1.0200 as seen here and a break there is needed to confirm that the bulls are back in control. EURUSD needs to stay above 0.9552 to relieve short-term selling pressure. The preferable strategy now is to stay aside for a while and wait for price confirmation of a potential bottom in place before committing on the long side again. A strong support zone is seen towards the 0.9500-50 area and the bulls are likely to come back in control soon. Trading plan: Preparing for a potential bottom and reversal from the 0.9500-0.9550 zone. Good luck!     Relevance up to 07:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294124
Turbulent Times for Currencies: USD Dominates, SEK Shines

S&P 500, Nasdaq, EUR/USD, Brent Crude Oil And Gold Trade Lower

ING Economics ING Economics 26.09.2022 10:05
A difficult start to the week beckons as Asian markets eye Friday's G-10 carnage Source: shutterstock Macro outlook Global Markets:  US stocks had a bad end to the week. Both S&P500 and NASDAQ dropped sharply, and despite some slight recovery towards the end of the session, equity futures remain negative today, likely setting the scene for Asia’s markets. EURUSD also continued its losing streak, dropping below 0.97, though Cable was the star underperformer in G-10 FX space, dropping to 1.0824. New all-time lows beckon. This is not exactly a ringing endorsement by markets of the new Truss government and budget proposals. The AUD fared better, but not much, falling to 0.6525 and the JPY is making tentative moves higher again after the BoJ intervened at the end of last week. It probably won’t remain below 1.45 for long. The US yield curve continues to invert more forcefully.  2Y US Treasury yields are now 4.20%, a rise of nearly 8bp on Friday, while the yield on the 10Y Treasury bond dipped by just under 3bp to 3.685%. UK 10Y Gilt yields were up 33.3bp on Friday, a worse performance than the weakest Eurozone member bond.  Asian FX has been outperforming its G-10 peers. Most Asian currencies fell less than one-percent against the USD on Friday, though there could be some more catch-up today. Crude oil joined the general slump on Friday, no doubt helped by the USD’s strength, and front-month Brent crude futures are back below USD90/bbl. Gold is also soft, at $1643/oz, with inflation fears being swamped by interest rate rises. G-7 macro: It’s a very quiet day in the G-10 for macro news after the slew of weak PMI data on Friday. Germany’s Ifo survey may be the main highlight for the day – further falls are expected.  Regional US Fed activity indices provide additional insight into the US economic condition. Otherwise, the OECD’s Economic Outlook will probably garner a few downbeat headlines, though there is a good chance any forecasts will already have been overtaken by events. Singapore: Industrial production data for August is due at 13:00 today. Weakness in the electronics segment is likely behind the consensus -0.6%YoY forecast. The earlier NODX numbers for August were, if anything, a bit weaker than this consensus view, so there may be some downside risk to these estimates. Korea: The foreign exchange authorities (the Bank of Korea, the Ministry of Strategy and Finance) and the National Pension Service have agreed to conduct FX swap transactions within a limit of $10 billion. This is the second FX swap agreement after the 2008 agreement. The maturity of each case is 6 months or 12 months with no rollover and either party has the right to early liquidation. Despite the authorities’ efforts to stabilize the FX market, the KRW depreciation will likely continue for a while given that the market impact of these transactions will be limited. The Bank of Korea will likely take a big step at its October meeting, concerned that the weak KRW will add more pressure on inflation. What to look out for : China PMI Japan Jibun PMI composite (26 September) Singapore industrial production (26 September) Hong Kong trade (26 September) US Dallas Fed manufacturing activity (26 September) South Korea consumer confidence (27 September) China industrial profits (27 September) US durable goods orders (27 September) US Conference Board consumer confidence and new home sales (27 September) Australia retail sales (28 September) Japan leading index (28 September) Bank of Thailand meeting (28 September) US mortgage applications and wholesale inventories (28 September)       South Korea business survey manufacturing (29 September) US initial jobless claims, 2Q GDP and core PCE (29 September) South Korea industrial production (30 September) Japan labour market data (30 September) China official and Caixin PMI manufacturing (30 September) India RBI meeting (30 September) Hong Kong retail sales (30 September) US personal income, personal spending and core PCE (30 September) US University of Michigan sentiment (30 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/AUD Pair May Have The Potential To Continue Its Decline

There Are Many Indications That The Euro-US Dollar Pair Is Moving Downwards

InstaForex Analysis InstaForex Analysis 26.09.2022 11:24
Trend analysis (Fig. 1). The euro-dollar pair may move downward from the level of 0.9688 (close of Friday's daily candle) to the target of 0.9503, the 208% Fibonacci retracement level (red dotted line). From this level, an upward movement is possible with the target of 0.9646, the 14.6% retracement level (white dotted line). After testing this level, the price may continue to move up to test 0.97401, the 23.6% retracement level (white dotted line). Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – down; Volumes – down; Candlestick analysis – up; Trend analysis – down; Bollinger bands – down; Weekly chart – down. General conclusion: Today the price may move downward from the level of 0.9688 (close of Friday's daily candle) to the target of 0.9503, the 208% Fibonacci retracement level (red dotted line). From this level, an upward movement is possible with the target of 0.9646, the 14.6% retracement level (white dotted line). After testing this level, the price may continue to move up to test 0.97401, the 23.6% retracement level (white dotted line). Alternative scenario: from the level of 0.9688 (close of Friday's daily candle), the price may move downward with the target of 0.9609, the lower limit of the Bollinger band indicator (black dotted line). After testing this level, the price may roll back up.   Relevance up to 08:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322604
The Upside Of The EUR/USD Pair Remains Limited

The Euro To US Dollar (EUR/USD) Pair: The Strong And Dynamic Sell-off Continues

InstaForex Analysis InstaForex Analysis 26.09.2022 11:29
Technical Market Outlook: The EUR/USD pair made another swing low as the strong and dynamic sell-off continues. The last swing low was made at the level of 0.9556, so the market is trading far away from the parity level. No nearest technical support in view as the market hits the multi-year lows, however, the resistance is seen at 0.9811. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the down trend reversal is confirmed. Please watch the USDX as the correlation between this two markets (EUR/USD and USDX) is directly opposite. Weekly Pivot Points: WR3 - 0.99372 WR2 - 0.97857 WR1 - 0.97189 Weekly Pivot - 0.96342 WS1 - 0.95674 WS2 - 0.94827 WS3 - 0.93312 Trading Outlook: The EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue far below the parity level, towards the new multi-year lows. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Please notice, there is plenty of down room for the EUR to go as the bears keep making a new, multi-year lows.     Relevance up to 09:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294173
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

Very Dramatic Moves In Forex Markets With The Euro (EUR) And The Pound (GBP)

Swissquote Bank Swissquote Bank 26.09.2022 11:13
The FX markets kick off the week on an extremely chaotic note. Both the pound and the euro are being severely punished for the political decisions that are taken in the UK and in Italy respectively. Elections in Italy As expected, the far-right candidate Giorgia Meloni won a clear majority in Italy at yesterday’s election, with Brothers of Italy gaining more than 25% of the votes. And Meloni’s right-wing alliance with Salvini’s League and Berlusconi’s Forza Italia got around 43% of the votes: the terrible consequence of the pandemic, the war and the energy crisis. Situation the major currency  The EURUSD has been shattered this morning. The pair dived to 0.9550. But it’s almost worst across the Channel, if that’s any consolation. Investors really hated the ‘mini budget’ announced in UK last Friday. Investors were expecting to hear about a huge spending package from Liz Truss government, but the package has been even HUGER than the market expectations. UK’s 10-year yield jumped more than 20% since last week, the FTSE dived near 2% and Cable tanked below 1.0350 in Asia this morning. Elsewhere, the US dollar index took a lift, and the dollar index is just crossing above the 114 mark at the time of talking. Stock market Outlook Gold dived to $1626 on the back of soaring US dollar. US crude oil plunged below $80 per barrel. The S&P500 fell to the lowest levels since this summer, whereas the Dow Jones fell below the summer dip. Happily, the European equities are better bid this morning, but investors remain tense and worried. Watch the full episode to find out more! 0:00 Intro 0:24 Italy turns right, euro gets smashed 4:15 UK assets treated like EM after the ‘MINI’ budget 7:45 USD rallies, XAU, oil under pressure 8:49 US stocks dive to, or below summer lows on Fed fear Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Italy #election #Meloni #UK #mini #budget #EUR #GBP #selloff #USD #rally #crude #oil #XAU #BP #APA #XOM #recession #energy #crisis #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Italian headline inflation decelerates in January, courtesy of energy

Italy: Giorgia Meloni Wins Italian Election. Could Alleged Political Differences Between EU And Italy Affect Market?

ING Economics ING Economics 26.09.2022 12:23
As largely expected, a centre-right coalition led by Giorgia Meloni has secured a clear victory in Italy's election. Meloni will now form a government which will count on a stable majority. For now, concerns about budget decisions and relationships with the EU are quite muted, and both Italian bonds and the euro have bigger short-term issues to deal with Giorgia Meloni secured a clear victory in Italy's election Centre-right got an ample majority in both branches of parliament For once, actual Italian election data broadly confirms what opinion polls had anticipated. According to preliminary data available as we write, the centre-right coalition has got an ample majority (44%), with the centre-left following some way behind (26%). The Five-Star Movement, which runs in isolation, has come third (15%), followed by the centrists of Azione/IV (7.7%). As expected, with the current electoral system attributing a third of seats under a first-past-the-post rule, the ability (or a lack thereof) to form a wide coalition was a decisive factor. The centre-right exploited it very well, mopping up an overwhelming majority of first-past-the-post seats. Based on preliminary data, the centre-right coalition should get a decent majority in both branches of the Parliament.  Meloni to get a mandate to form a government The undisputed big winner in this election was Giorgia Meloni, the leader of Fratelli d’Italia. With 26% of the votes, she prevailed in her coalition by a huge margin over Lega (9%) and Forza Italia (8%). There will be no leadership issue, and she will very likely get the mandate from President Sergio Mattarella to form a new government. This will not happen before mid-October, though, after the first gathering of the houses and the election of their speakers. A new Meloni government could thus be installed by the end of October. Italian election results Source: Italian Ministry of the Interior, ING A tight agenda awaits Meloni, with the budget at the top of the list The scope of Meloni’s lead within her coalition will likely give her the upper hand in many decisions, but we suspect she will be very careful not to humiliate her allies for the sake of stability. Still, on some crucial matters, such as the fiscal stance, she will likely be in a position to effectively oppose calls for more deficit from Matteo Salvini, the leader of Lega, who was a big loser in the polls. As the new budget will have to be approved before year-end, we expect the outgoing Mario Draghi government to set up the macro framework and, possibly, the Planning Document setting the budgetary framework. This should prevent any meaningful deviation from the set track in the short run. More critically, Meloni will over time have to clarify her stance on the international positioning of Italy. If adhesion to the Atlantic Pact seems not at stake, the relationship with Brussels and big eurozone countries will have to be clarified. If participation in the euro project is neatly reaffirmed in the programme, the notion of doing so while defending national interests has yet to be qualified. Not a very short-term issue, but a potential area of conflict for 2023, when the new European fiscal rules will be discussed.   Rates: too early to make long-term calls on policy Italian bonds largely shrugged off the goldilocks result of this weekend’s election: enough votes for the right-wing coalition to ensure stability but not too much so it can change the constitution with a two-thirds majority. Italian spreads tightened into the election in a sign that they have made peace with the prospect of an FdL-led government, for now at least. Focus is now on the early decisions that Meloni’s government will take, including the FinMin appointment, and on the 2023 budget. Longer term, this government’s policies, especially towards Brussels and fiscal discipline, are an unknown quantity. But markets aren’t well equipped to make long-term calls on policy, especially with contradictory near-term signals. Instead, the main driver of Italian bonds over the coming weeks and months is likely to be the broader tone in financial markets. In a context where central banks tighten monetary policy in unison, or even competing with each other in some instances, carry-oriented investors are understandably shy in picking up the additional yields offered by Italy’s bonds. The ECB’s newfound hawkishness is a particular worry, and so is the prospect of it reducing the size of its bonds portfolio through quantitative tightening. FX: Italy is not a short-term concern for the euro The Italian election results seem to have gone mostly unnoticed in the currency market. This is partly due to the predictability of the outcome, but may also denote how markets are giving Meloni the benefit of the doubt after a campaign where she firmly reiterated her intention to respect fiscal rules and maintain Italy’s foreign stance unchanged. Quite crucially, like for government bonds (BTPs), the euro has bigger concerns to deal with – Russia-Ukraine developments and the energy crisis above all – and is now also feeling some spill-over effect from the meltdown in the GBP market over the past two sessions. With the ECB’s hawkishness having blatantly failed to offer the euro any solid support and the dollar staying strong, EUR/USD downside risks remain quite elevated in the near term, even without Italian politics adding any pressure. We think that some Italy-EU confrontation on Meloni’s party's core themes (like immigration) may trigger some adverse market reaction further down the road, and that fiscal decisions may be scrutinised more if she presses forward with tax cut proposals, but it is simply too early for any risk premium to emerge on EUR/USD or even EUR/CHF.   Read this article on THINK TagsItaly elections Italy Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
USD Stable as Oil Prices Rebound Ahead of US CPI Report Release

The GBP/USD And The EUR/USD Currency Pairs Are On The Bearish Side

InstaForex Analysis InstaForex Analysis 26.09.2022 12:30
EUR/USD Higher timeframes Last week, the pair left the correction zone and resumed its decline. The benchmarks for a downward trend on higher timeframes can now be 0.9000 (psychological level) and 0.8225 (2000 low). In the event of another slowdown or corrective rise, resistance in the higher timeframes may be provided by the levels of the daily cross, which in the current situation went down to the lines of 0.9800 - 0.9876, as well as the strengthened area of 0.9961 - 1.0000 (weekly short-term trend + psychological level). H4 – H1 By now, bears have tested the second support of the classic pivot points (0.9552). The next reference point for the intraday decline is the third support of the classic pivot points (0.9437). Now the main advantage belongs to the bears. However, in the last few hours on the lower timeframes, the pair is in the zone of a corrective rise. The most significant reference points for the development of an upward correction today are the resistance of key levels—0.9736 (central pivot point) and 0.9877 (weekly long-term trend). The intermediate resistance in this range can be noted at 0.9805 (R1). When testing the indicated levels, an upward correction of the daily timeframe (0.9800 - 0.9876) will also be executed. Therefore, a breakdown of resistance and consolidation above can change the current balance of power not only in the lower timeframes. The overall situation, in this case, would be better assessed once again. *** GBP/USD Higher timeframes The downward trend has been restored and is developing. The next nearest target is the psychological support level of 1.0000. The levels passed earlier today rushed behind the price chart and formed the boundaries of resistance. So, the nearest resistance levels are now the levels of the daily Ichimoku cross (1.0172 - 1.1178), above there is a zone that combines several levels at once, 1.1324 - 1.1429 (weekly levels + broken level of the 2020 low). H4 – H1 The main advantage is on the side of the bears. However, before reaching the final support of the classic pivot points at 1.0262, the decline stopped. The pair is currently in the correction zone on the lower timeframes, which tends to develop. The most important benchmarks of the upward correction today can be noted at 1.0984 (central pivot point) and 1.1232 (weekly long-term trend). The intermediate resistance is at 1.1130 (R1 is the resistance of the classic Pivot levels). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Relevance up to 09:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322636
Bank of England survey highlights easing price pressures

The Collapse Of The Pound (GBP) And Lack Of Market Confidence In The New UK Government

InstaForex Analysis InstaForex Analysis 26.09.2022 14:20
Pound has already lost nearly 400 pips on Friday, then this morning sank further by 5%. The reason was the new Chancellor of the Exchequer Kwasi Kwarteng's vow to continue cutting taxes, which raised fears of another sharp increase in inflation and public debt. The decline was the biggest intraday drop since March 2020, when investors panicked over the emerging Covid-19 pandemic. A number of economists have urged the Bank of England to take actions, but this will only exacerbate the fears in global financial markets and put the administration of Liz Truss at risk as the UK continues to grapple with the cost-of-living crisis. Nevertheless, the collapse of the pound indicates that markets do not trust the new UK government, especially since the national currency is rapidly moving towards parity and there is a huge chance that the situation will only worsen further. Kwarteng laid out the UK's most drastic tax relief package since 1972 yesterday, cutting fees on both workers' and companies' wages in an effort to boost the long-term potential of the economy. He also lowered stamp duty on property purchases, lifted a cap on bank bonuses and reaffirmed support for households and businesses on rising electricity bills over the next six months. Although pound bounced up earlier, traders are set to further decline as the options market is currently showing a 60% chance of it weakening to parity against dollar this year. A massive sell-off is sure to force the Bank of England to act more aggressively, and if the situation continues to go downhill, there will be an extraordinary increase in interest rates between meetings. Pound has so far collapsed to an unprecedented level - 1.0360, which creates quite a few problems. A correction will occur only when buyers become more active this week. It will surely open a direct path to the highs of 1.0700, 1.0760 and even 1.0805. But if pressure continues, GBP/USD will fall to 1.0500 and 1.0430. In terms of EUR/USD, a lot depends on 0.9605 because a drop below it will push quotes lower to 0.9560, 0.9510 and 0.9455. Price will increase only when buyers manage to bring the pair to 0.9710, then push it to 0.9770, 0.9810 and 0.9860.   Relevance up to 09:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322632
The South America Are Looking For Alternatives To The US Currency

Could US Dollar Index (DXY) Decrease Below 107.40?

InstaForex Analysis InstaForex Analysis 26.09.2022 15:23
  US Dollar Index Chart - Where Is The Support? The US dollar index rose to fresh highs at about 114.35 during the early trading hours on Monday before finding resistance and reversing sharply lower. The index is seen to be trading close to 113.00 at this point in writing. It is expected to continue drifting lower towards 110.17 going forward. The bulls might have carved a potential top around 114.36 as the bears are getting ready to break below 112.85 now. Read next: The Statement By Elon Musk About Starlink May Cause Confusion | Leaders Must Take Action To Protect The Environment | FXMAG.COM The 1-hour chart presented here is indicating initial support at 110.17, followed by 109.00 and 107.40 levels. Potential resistance stays at 114.35 respectively. A break below 110.17 will confirm with respect to the price action that a top is in place and the bears are back in control. It is not shown here but a Doji/Pinbar candlestick pattern is being carved on the daily chart. DXY - What Can We Expect From The USD Index In The Near Future? The US dollar index might be setting up for a larger-degree corrective drop towards 107.40 and further in the coming weeks. We need to see a bearish candle formation on the daily chart to confirm the same. While it is early to confirm a bearish resumption, a high probability remains for a meaningful top to be in place at 114.35 so that the bears are back in control soon. Trading idea: Preparing for a potential drop against 114.35 soon. Good luck! Relevance up to 15:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294251
The EUR/USD Pair Is Showing A Potential For Bearish Drop

EUR/USD: Is There Any Premise Of The Euro To US Dollar Future?

InstaForex Analysis InstaForex Analysis 26.09.2022 16:10
  The wave marking of the 4-hour chart for the euro/dollar instrument still does not require adjustments, but it is undoubtedly becoming more complicated. We saw the completion of the construction of the next five-wave impulse descending wave structure, then one correction wave upward, after which the low waves of 5 were updated. These movements allow me to conclude that the pattern of five months ago was repeated when the 5-wave structure down was completed in the same way, one wave up, and we saw five more waves down. There is no question of any classical wave structure (5 trend waves, 3 correction waves) right now. The news background is such that the market even builds single corrective waves with great reluctance. Thus, in such circumstances, I cannot predict the end of the downward trend segment. We can still observe the pattern of a strong wave down "a weak corrective wave up" for a very long time. The goals of the downward trend segment, which has been complicated and lengthened many times, can be found up to 90 figures, and maybe even lower. The market should be blamed for the fall of the euro currency. At the moment, many analysts note that relations between Brussels and Rome may become seriously complicated The euro/dollar instrument fell by 130 basis points on Monday and then rose by 80. For the European currency, the first day of the week passed relatively calmly, as the pound sterling fell by 400 points simultaneously. On Saturday, I questioned the assumption that the business activity indices caused a strong fall in the euro and the pound on Friday. As we can see, Monday has already shown us this is the case. After the usual statistical data (and there was nothing terrible or beautiful in the indexes), the instruments do not pass by several hundred points. The normal reaction to the indices is a movement of 30-50 points. Even before Friday's reports, most indices were below the key 50.0 mark, meaning the market was not shocked by the sudden decline in business activity. Read more: The Statement By Elon Musk About Starlink May Cause Confusion | Leaders Must Take Action To Protect The Environment | FXMAG.COM I can say the same about another news background. For example, today it became known about the victory in the elections in Italy of far-right parties, which, to put it mildly, are not too focused on the European values that Brussels preaches. At the moment, many analysts note that relations between Brussels and Rome may become seriously complicated, but there is no word that Italy may leave the European Union or may now adhere to a radically different policy than the one that has been in recent years. The government has changed, but what has changed for the country itself if it still remains in the European Union, where all decisions are made collectively and at the highest level, which presupposes the consent of the majority of the alliance members? Therefore, I personally believe that the election results, which, by the way, were not yet known at night, are also not the reason for a new decline in demand for the euro currency. It seems to me that the foreign exchange market has been in a state of shock due to too much negative economic, political and geopolitical news. General conclusions. Based on the analysis, I conclude that the construction of the downward trend section continues, but can end at any time. At this time, the instrument continues to decline, so I advise careful sales with targets located near the estimated mark of 0.9397, which equates to 423.6% Fibonacci. I urge caution, as it is unclear how much longer the decline in the euro currency will continue. At the higher wave scale, the wave marking of the descending trend segment becomes noticeably more complicated and lengthens. It can take on almost any kind of length, so I think it's best now to isolate the three and five wave standard structures from the overall picture and work on them. One of these five waves can be just completed now, and the new one has begun its construction.   Relevance up to 15:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322690
The EUR/USD Price May Fall Under 1.0660

Will The Price Of The Euro-Dollar Pair (EUR/USD) Complete The Correction?

InstaForex Analysis InstaForex Analysis 27.09.2022 08:05
The euro fell by 80 points on Monday. The lower shadow of the daily candle slightly fell short of the target level of 0.9520. We are waiting for a second attack on this support, but first the price must complete the correction - it hesitated at the level of 0.9625. There are two possible correction options: working off 0.9695 and then moving to 0.9520, overcoming the level, and resuming the decline from the current levels, that is, from 0.9625. The signal line of the Marlin Oscillator is turning up, which means that the price is delayed at this level (0.9625) in time (if there is no continuation of growth). The H4 chart shows that the resistance level of 0.9695 was worked out yesterday, this circumstance increases the likelihood of a decline from the current levels, but if there is a length of correction in time, the formation of consolidation, then the price may have an opportunity to re-work out the upper resistance. The Marlin Oscillator is rising and is also helping the price.   Relevance up to 04:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322728
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

Perspective Of The Euro To US Dollar (EUR/USD) Currency Pair

InstaForex Analysis InstaForex Analysis 27.09.2022 08:17
EUR/USD 5M The euro/dollar immediately fell by 150 points on Monday. This was followed by recovery, corrections, which, however, were purely corrective in nature, that is, the current downward trend is not broken. The most important fact is this: despite the strongest fall in the euro in recent weeks, there is still no feeling that the downward trend is over, or even close to being over. The price even bounced up by one and a half hundred points on Monday, but then it resumed its downward movement anyway. Moreover, on Monday, except for the speech of European Central Bank President Christine Lagarde, there was absolutely nothing to highlight. In our fundamental articles, we have already analyzed why the elections in Italy are not related to the euro's collapse. Yes, and Lagarde herself spoke much later than the euro's overnight collapse and the subsequent rapid recovery. Thus, we believe that the market is simply fleeing in a panic from risky assets, and not from all of them, since bitcoin practically does not move. Not a single trading signal was formed on Monday, because the pair has not been at current price levels for more than 20 years. One new level has appeared - 0.9553 - and today signals can be formed around it, but we urge you to be careful with opening any positions, as the market is now clearly in a state of panic. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial traders, but at the same time, the euro fell steadily. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not provide any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 27. The euro continues to fall by inertia. The results of the elections in Italy have nothing to do with it. Overview of the GBP/USD pair. September 27. The pound finally has a real chance of completing a long downtrend. Forecast and trading signals for GBP/USD on September 27. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The bears' prospects remain just fine on the hourly timeframe, given that now no one is even thinking about buying the euro. To say that a new collapse of the euro was provoked by some one specific event simply does not make sense. From our point of view, the market is in a panic, and it is hardly possible to say how long it will persist and how it will end. We highlight the following levels for trading on Tuesday - 0.9553, 0.9813, 0.9877, 0.9945, 1.0019, as well as Senkou Span B (1.0002) and Kijun-sen (0.9786). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. Another speech by Lagarde will take place in the European Union on September 27, which is unlikely to affect anything, and a report on orders for durable goods will be published in the US, which is also unlikely to affect anything. The market may remain in a state of shock for several more days. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322716
PLN Soars to Record Highs Ahead of NBP Decision

The EUR/USD Pair: A High Probability Remains For A Bullish Reversal

InstaForex Analysis InstaForex Analysis 27.09.2022 08:55
Technical outlook: EURUSD dropped below the 0.9600 handle during the New York session on Monday before finding support around 0.9580. The single currency pair has bounced back and is seen to be trading close to 0.9640 at this time of writing. We cannot rule out the possibility of yet another low below 0.9552 but the probability remains for the bulls to take control soon. EURUSD seems to have carved a meaningful low at 0.9552 on Monday and a break above 1.0200 in the near term will confirm it. Please note that 1.0200 is initial resistance and that the bulls are eyeing that mark in the next few trading sessions. The much-awaited counter-trend rally is expected to gather pace thereafter and push the price through 1.0600 in the next several weeks. A major Fibonacci extension has been hit around 0.9698 as projected on the daily chart here. A high probability remains for a bullish reversal from current levels. The bottom line remains for the bulls to hold prices above 0.9552 interim support/low to keep the near-term structure valid. We should watch for a potential Engulfing Bullish reversal pattern on the daily chart for further confirmation. Trading plan: Preparing for a bullish reversal against 0.9500 Good luck!   Relevance up to 07:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294332
Forex: Jason Sen Comments On EUR/USD And GBP/USD

Forex: Jason Sen Comments On EUR/USD And GBP/USD

Jason Sen Jason Sen 27.09.2022 10:32
EURUSD we wrote: collapsed after the sell signal initially targeting 9810/9790 & 9720/00. Holding below here targets 9620/00. Target hit but we continued lower to 9565. GBPUSD crashed another 500 pips as soon as the market opened on Sunday to hit a new all time low at 1.0382. Today's Analysis. EURUSD first resistance at 9700/20. Shorts need stops above 9740. A break higher can target 9800/20. The only support is at 9580/60. Longs are so risky in the bear trend with momentum building to the downside. A break below 9540 signals further losses to 9490/80 & 9430/20. GBPUSD crashed to 1.03.84 then shot higher to first resistance at 1.0940/60 with a high for the day only 10 pips below. The resistance is lower today at 1.0900/20 today. Shorts need stops above 1.0940. A break higher can target 1.1100/20. Holding first resistance at 1.0900/20 targets 1.0740/20 perhaps as far as 1.0650/30. Obviously the only support we now have is at yesterday's all time low at 1.0400/1.0385. daytradeideas.co.uk
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

The Euro To US Dollar Pair Is Trading At Its Lowest Levels In 20 Years

InstaForex Analysis InstaForex Analysis 27.09.2022 12:54
On Monday, EUR/USD dropped to the retracement level of 423.6% located at 0.9585 on the H1 chart and then rebounded from it twice. So, the pair reversed in favor of the European currency and started to rise slowly towards 0.9782. Yesterday, the information background was mixed. On the one hand, there is news about parliamentary elections in Italy and the new UK Prime Minister. Some Conservative MPs are preparing to send letters of no confidence in Liz Truss. Yet, I doubt that such news could have hit the pound or the euro so hard. The speech by Christine Lagarde was far more important. She assured markets that the ECB would continue to raise the rate in order to slow demand even despite a decline in business activity and a high threat of a recession. This is a positive factor for the European currency as the EU regulator will pursue monetary tightening and may soon catch up with the US Fed. However, there was no significant rise, and the euro/dollar pair is trading at its lowest levels in 20 years. Therefore, bears are still in control of the market despite any news background. The recent COT report showed a rapid surge in buy contracts although this fact didn't support the euro in any way. This indicates that the overall market sentiment remains bearish and is not changing. Consolidation below the retracement level of 423.6% may push the price lower to 0.9000. The existing downward channel also confirms the bearish sentiment. This week, Christine Lagarde will give another speech as well as some FOMC members. Their rhetoric is unlikely to change, so traders won't have to choose a new strategy and adjust it to new approaches of the ECB or the Fed. On the 4-hour chart, the pair dropped to the retracement level of 161.8% located at 0.9581. A rebound from this level will activate the upside momentum of the euro and may send the price towards the upper line of the downward channel. Yet, I doubt that this upward movement will be strong as traders are convinced to sell the euro. A strong hold below 0.9581 will make a further decline more likely. Commitments of Traders (COT) report: Last week, traders closed 1,214 long contracts and 46,500 short contracts. This indicates that large market players became less bearish on the pair. The overall amount of opened long contracts stands at 206,000 while the amount of short contracts is 173,000. So, the market sentiment has become more bullish recently. Yet, the euro has failed to develop a sustainable uptrend. In recent weeks, there were some chances for the euro to recover. However, traders are hesitant to buy it and prefer the US dollar instead. The European currency has failed to show a proper advance over the past months. Therefore, I would advise you to focus on the main descending channels on the H1 and H4 charts. The pair may start to rise only when the price closes above these channels. Economic calendar for US and EU: EU - ECB President Lagarde speaks (11-30 UTC). US - Core Durable Goods Orders (12-30 UTC). On September 27, both economic calendars for the EU and US have one important event each. Today's speech by Christine Lagarde will most likely be similar to what she said yesterday. The impact of the information background on the market may be weak on Tuesday. EUR/USD forecast and trading tips: I would recommend selling the pair after its rebound from the level of 1.0173 (1.0196) on H4 with the targets found at 0.9900, 0.9782, and 0.9581. All these targets have already been tested. New short positions can be opened when the price closes below 0.9585. It is better to buy the pair when the quotes settle firmly above the level of 1.0173 on H4 with the target at 1.0638.   Relevance up to 10:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322766
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Look At The Euro-US Dollar (EUR/USD) And The Pound-US Dollar (GBP/USD) Pairs

InstaForex Analysis InstaForex Analysis 27.09.2022 13:00
The macroeconomic calendar was empty; no important statistics were published. Investors and speculators worked out the information flow of the past week. The UK Treasury yesterday commented on everything that is happening in the country's economy, the main theses: - The medium-term financial plan will be presented on November 23. - The budget plan will set out additional details, including ensuring that the share of UK debt to GDP falls in the medium term. At the same time, the Bank of England made its comments: - We closely monitor the market for significant revaluation of financial assets; - We will not hesitate to raise the interest rate to bring inflation back to the target level of 2.0%. According to media reports, traders are waiting for an unscheduled rate hike by the Bank of England amid the collapse of the national currency. Perhaps this was the reason for such a significant pullback. There is no confirmation of rumors regarding an unscheduled rate hike. If the regulator does not take any drastic action, the pound will continue to decline. Analysis of trading charts from September 26 The EUR/USD currency pair opened a new trading week with an update of the low of the downward trend. As a result, the quote reached the levels of June 2002, at 0.9553, relative to which the stage of technical pullback occurred. The GBP/USD currency pair has set several records at once. The absolute low was updated, the quote overcame the level of 1985, eventually reaching the value of 1.0345. The scale of the pound's collapse from last Friday to the beginning of Monday's trading amounted to almost 1,000 points, while the pullback caused by the fatal overheating of short positions on the pound was about 550 points. Economic calendar for September 27 Today, data on orders for durable goods in the United States will be published, which may decrease by 0.9%. This is a fairly strong reduction, which foreshadows a noticeable decline in consumer activity, which is the locomotive of the American economy. As a result, these negative data, if confirmed, can put pressure on dollar positions. Also, U.S. Federal Reserve Chairman Jerome Powell and ECB President Christine Lagarde are scheduled to give a speech. It is worth listening to what they will say, although everything has already been said before. Time targeting: Fed Chairman Jerome Powell Speech – 11:30 UTC ECB President Christine Lagarde Speech – 11:30 UTC U.S. Durable Goods Orders (August) – 12:30 UTC Trading plan for EUR/USD on September 27 At the moment, there is a characteristic stagnation, where the pullback stage has slowed down its formation despite the continuing technical signal about the oversold euro. In order for the pullback to be prolonged and become the starting point for a full-size correction, the quote first needs to stay above the value of 0.9700 for at least a four-hour period. At the same time, the downward scenario will become relevant again as soon as the current low is updated. Trading plan for GBP/USD on September 27 In this situation, there is still a speculative rush on the market, which allows new price jumps. In order to prolong the current pullback, the quote needs to stay above the high of the previous day at 1.0928. At the same time, the scenario of further decline will be considered by traders if the price holds below 1.0630. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.   Relevance up to 10:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/322762
Escalating Russia-Ukraine Tensions Amplify Oil Supply Risks: The Commodities Feed

The EUR/USD Pair Has No Sign Of A Major Low Or Major Reversal

InstaForex Analysis InstaForex Analysis 27.09.2022 15:03
Red lines- medium-term bearish channel Blue lines- short-term bearish channel EURUSD is trading around 0.9640 after making a low around 0.9554. Medium-term trend and short-term trend remains bearish. Price is inside both the medium-term and the short-term bearish channels. Price is bouncing off the lower channel boundaries and there is potential for a move towards 0.9775. With the RSI turning higher from oversold levels, there are increased chances that the next couple of sessions we see a bounce higher towards the channel boundary. A break above 0.9775-0.98 could imply that a bigger bounce towards 1.02 is possible. We continue to consider each bounce as a selling opportunity. Trend remains controlled by bears. There is no sign of a major low or major reversal.     Relevance up to 14:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294434
Eurozone: On Thursday, September 29th, Germany Releases Its Inflation Print And It's Quite Important To Keep An Eye On It

Eurozone: On Thursday, September 29th, Germany Releases Its Inflation Print And It's Quite Important To Keep An Eye On It

Jing Ren Jing Ren 27.09.2022 13:09
The ECB has only two more meetings for the rest of the year. Which means that the space to get inflation under control by the end of December is getting tight. The common bank is behind other major central banks in raising policy, which has kept the shared currency relatively weak. Therefore, there is a lot of expectation on what will happen with inflation. Though, it should be noted that the next ECB meeting isn't until late October, meaning that there is still another round of CPI data coming out before they meet. So, that is likely to have a much bigger impact on what the bank actually decides to do. On the other hand, the series of CPI figures expected later in the week are expected to shape interest rate expectations. And that, in the end, is the main driver of the currency. Restoring credibility A series of ECB officials have come out to talk in a way that suggests potentially stronger action. Rumors of a 75bps hike in October are starting to grow. This is because of the going theory among central bankers that inflation is shaped by the "credibility" of the central bank. That is, it's how confident the market is that it will raise rates as needed to get inflation down. Both Nagel and de Cos made comments to that effect yesterday. But they need to be contextualized within the ECB's Chief Economist Lane's views expressed also yesterday. That is, expecting a significant decrease in inflation through the course of next year. In other words, the ECB might be coalescing around the idea of a sharp rate hiking through the next couple of months to force CPI figures to turn around. It's out of their hands The thing is, while the ECB did expand the monetary base by around 10% during the pandemic, a larger chunk of the inflationary effects come from external factors. Higher energy costs, and increased cost of imported goods from China due to lockdowns, are the two main ones. That isn't something monetary policy can fix. On the other hand, China is seen relaxing some of the covid restrictions, and energy prices have been falling (although over fears of a pending global recession). That could contribute to lower inflation next year regardless of what the ECB does. So, it might come down to a matter of whether the ECB thinks it can control prices. What to look out for On Thursday, Germany reports Inflation figures, which are expected to set the tone for the rest of the shared economy. German September monthly inflation is expected to accelerate to 1.1% from 0.3% prior. That would contribute to annual inflation jumping to 9.5% compared to 7.9% prior. Then on Friday we get EuroZone headline inflation rate expected to move up to 9.6% from 9.1% in August. Of course what the ECB pays the most attention to is the core rate, which is also expected to accelerate, though not as sharply. Core September inflation is forecast at 4.7% compared to 4.3% prior.
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The EUR/USD Pair: There Is Nothing New In This Market, It Is Not Bullish Yet

InstaForex Analysis InstaForex Analysis 28.09.2022 08:00
Overview : Pivot : 0.9740. The US dollar's strong gains against the Euro have continued today ahead of the sturdy news. The common currency reached a high of more than three days earlier this morning. This technical analysis of EUR/USD looks at the one-hour chart. The highest price that EUR/USD reached for that period was 0.9961 (last bullish wave - top). The lowest price that the EUR/USD pair reached during that period was 0.9845 (right now). The bias remains bearish in the nearest term testing 0.9800 or lower. Immediate support is seen around 0.9800. A clear break below that area could lead price to the neutral zone in the nearest term. Price will test 0.9750, because in general, we remain bearish on Sept. 21st, 2022. Yesterday, the market moved from its top at 0.9961 and continued to drop towards the top of 0.9814. Today, on the one-hour chart, the current fall will remain within a framework of correction. However, if the pair fails to pass through the level of 0.9961 (major resistance), the market will indicate a bearish opportunity below the strong resistance level of 0.9961 (the level of 0.9961 coincides with tha ratio of 38.2% Fibonacci retracement). The EUR/USD pair settled below 0.9961 and is testing the support level at 0.9800. RSI and Moving averages continue to give a very strong sell signal with all of the 50 and 100 EMAs successively above slower lines and below the price. The 50 EMA has extended further below the 100 this week. Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength below the moving average (100) and (50). An alternative scenario is a final consolidation below MA 100 H1, followed by growth arund the area of 0.9905. The one-hour chart favors a downward extension, as the pair broke below its 50 and 100 EMAs, both gaining downward traction. Support from MAs comes initially from the value zone between the 50 and 100 EMAs. Industriously, Euro Is Losing ground against U.S. Dollar around +185 pips. Since there is nothing new in this market, it is not bullish yet. Sell deals are recommended below the level of 0.9961 with the first target at 0.9814 so as to test the double bottom. If the trend breaks the double bottom level of 0.9814, the pair is likely to move downwards continuing the development of a bearish trend to the level of 0.9750 in order to test the weekly support 2. According to the previous events the price is expected to remain between 0.9905 and 0.9750 levels. Sell-deals are recommended below the price of 0.9905 with the first target seen at 0.9814. The movement is likely to resume to the point 0.9750. The descending movement is likely to begin from the level 0.9750 with 0.9725 and 0.9700 seen as new targets in coing hours. On the other hand, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1 USD.   Relevance up to 01:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294502
The Euro May Attempt To Resume An Upward Movement

The Euro To US Dollar Pari (EUR/USD) Is Ready To Continue Its Decline

InstaForex Analysis InstaForex Analysis 28.09.2022 08:22
The euro's consolidation at 0.9625 proved to be short-lived. Yesterday it closed under this level, which showed the price consolidating below it and revealed the euro's plan - to attack 0.9520 and try to reclaim 0.9404. The Marlin Oscillator has slightly corrected up and sideways, it is ready to continue its decline. On the four-hour chart, the price also looks fixed below the level of 0.9625, the Marlin Oscillator has discharged from the oversold zone, now it is ready to resume the local downward trend.     Relevance up to 05:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322848
PLN Soars to Record Highs Ahead of NBP Decision

The EUR/USD Pair: The Potential Downside Should Be Very Limited

InstaForex Analysis InstaForex Analysis 28.09.2022 08:31
EUR/USD tested the upper part of our target zone between 0.9507 - 0.9547. As long as resistance at 0.9709 is able to cap the upside, we could see EUR/USD trying to push lower towards the lower part of our target zone. However, the potential downside should be very limited from here. A break above resistance at 0.9709 will be a strong indication that wave II or B has completed and wave III or C will be unfolding for an ultimate break above the top of a wave I or A at 160.08.     Relevance up to 06:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294514
The EUR/AUD Pair May Have The Potential To Continue Its Decline

The Euro-Dollar Pair (EUR/USD) Pair Maintains A Downward Trend

InstaForex Analysis InstaForex Analysis 28.09.2022 08:46
The EUR/USD currency pair traded more calmly on Tuesday than on Monday. Volatility has fallen, so we can talk about the passage of the state of shock that was present on the market on Monday. In principle, the technical picture for the euro currency has not changed at all and has not changed for a very long time. On the 4-hour TF, the pair still shows some meager corrections from time to time, but if we switch to the 24-hour TF, we see a non-stop downward movement. It is very difficult to predict how long this movement will continue since it will largely depend on the geopolitical conflict in Ukraine, development, and various related factors. So far, the market, we can say, is still in a state of panic after Vladimir Putin announced the mobilization in Russia. A huge number of experts of various stripes immediately began to predict what all this would be. Not even for the Russian economy or the development of the conflict in Ukraine itself. What will this mean for the global economy? First, many have started talking about nuclear war again. It is not surprising since world leaders have begun to pamper us directly with regular statements that they are ready to press the "red button" if necessary. How should the markets feel if everything can end at any moment? Second, mobilization means that in the near future, there will be no peace talks, no freezing of the conflict, nor its transition into a sluggish confrontation, which the markets would certainly like. Third, the issue of referendums and the speech of the President of the Russian Federation on September 30, at which, most likely, the phrase about the annexation of all occupied territories to Russia will be heard. Kyiv and the West have already stated that Moscow can annex whatever it deems necessary. Still, from the point of view of international law, these lands remain Ukrainian, which means that the Armed Forces of Ukraine have every right to go on the offensive. At the same time, Moscow says that any attack on Russian lands gives grounds to use nuclear weapons to protect them. Thus, already in October, the geopolitical situation may seriously escalate. Of course, all this news is shocking for risky currencies, and we believe that the euro and the pound can safely continue their decline. Christine Lagarde's speech is nothing new. On Monday and Tuesday, two consecutive performances by Christine Lagarde took place at once. We have already said earlier that it simply does not make sense to expect any new statements from the head of the ECB now. At the September meeting, Lagarde made it clear that the regulator would continue to raise the rate at a high rate until the end of the year. It is from this phrase that we should start. This week, she said that the rate would rise in any case, even despite the decline in economic and business activity. Of course, such measures will be taken to suppress high inflation as quickly as possible. Nothing new. Lagarde also noted that the support for European households and businesses may have been too voluminous (probably referring to the QE program during the pandemic), so the return of inflation to 2% may take longer than expected. Thus, we can be sure that the rate will continue to rise, which would undoubtedly support the European currency if we did not clearly understand what is happening worldwide and in the markets. The ECB rate will remain below the Fed rate for a long time. This is the first factor in the further fall of the euro against the dollar. The geopolitical conflict, new sanctions against the Russian Federation, which work both ways, high oil and gas prices, and potential refusals of the European Union to purchase oil and gas in Russia will continue to put pressure on the euro, not on the dollar. The states are far away, at least self-sufficient in energy, and the European conflict does not threaten them in any way. Of course, in the event of a nuclear war, everyone will get it, but in this case, we will no longer sit and analyze the foreign exchange market. And while we are still doing this, we would say that the probability of the pair continuing to fall is very high. The average volatility of the euro/dollar currency pair over the last five trading days as of September 28 is 138 points and is characterized as "high." Thus, on Wednesday, we expect the pair to move between 0.9488 and 0.9764 levels. The upward reversal of the Heiken Ashi indicator signals a round of upward correction. Nearest support levels: S1 – 0.9521 Nearest resistance levels: R1 – 0.9644 R2 – 0.9766 R3 – 0.9888 Trading Recommendations: The EUR/USD pair maintains a downward trend. Thus, it would be best if you stayed in short positions with targets of 0.9521 and 0.9488 until the Heiken Ashi indicator turns up. Purchases will become relevant no earlier than fixing the price above the moving average with a target of 0.9888. Explanations of the illustrations: Linear regression channels help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) determines the short-term trend and the direction to trade now. Murray levels are target levels for movements and corrections. Based on current volatility indicators, volatility levels (red lines) are the likely price channel in which the pair will spend the next day. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 02:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322840
The Euro To US Dollar (EUR/USD) Pair Moved Without Panic But Now No One Is Thinking About Buying The Euro

The Euro To US Dollar (EUR/USD) Pair Moved Without Panic But Now No One Is Thinking About Buying The Euro

InstaForex Analysis InstaForex Analysis 28.09.2022 09:06
EUR/USD 5M The euro/dollar pair moved without panic on Tuesday. Volatility was already "medium" in strength, and there were no strong jerks and sharp reversals. We can see that the market is slowly moving away from the news of last week, but we would not advise you to relax. Now the situation in the world is such that you absolutely do not know and do not understand where the next "smart" news will come from, after which a new "storm" will begin. If we return from geopolitics to economics, the first two days of the week were remembered only by the speeches of European Central Bank President Christine Lagarde, who, in short, assured the markets of her readiness to continue raising the key rate in order to effectively and quickly fight high inflation. This could be great news for the euro if the market didn't care about macroeconomics right now. The minds of traders and investors are busy with geopolitics, the development of the conflict between Ukraine and Russia and a possible nuclear war. In this state, they can continue to sell all risky assets and currencies, to which the euro belongs. In regards to Tuesday's trading signals, the situation was as simple as possible, since not a single one was formed. It is even difficult to say whether this is good or bad, since the movements are now clearly uneasy and unstable. During the day, the pair did not approach either the critical line or the extreme level of 0.9553. There are very few levels in the current price area. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial traders, but at the same time, the euro fell steadily. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not provide any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 28. The euro still does not understand how to start growing. Geopolitics may still put pressure on the pair for a long time. Overview of the GBP/USD pair. September 28. Theresa May is out, Boris Johnson is out, now Liz Truss is out? How much longer will the political turmoil in Britain continue? Forecast and trading signals for GBP/USD on September 28. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The bears' prospects remain just fine on the hourly timeframe, given that now no one is even thinking about buying the euro. Therefore, with or without new data, with or without news, with or without reports, the euro may continue to fall. There may be some easing of tension after September 30, but there could also be a reverse effect. We highlight the following levels for trading on Wednesday - 0.9553, 0.9813, 0.9877, 0.9945, 1.0019, as well as Senkou Span B (1.0002) and Kijun-sen (0.9747). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. Lagarde will deliver another speech in the European Union, which is unlikely to affect anything, and there will be nothing interesting at all in America. However, the market is now waiting for news of a completely different kind, not economic. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322836
Market Sentiment and Fed Policy Uncertainty: Impact on August Performance

The Prospects Of Foreign Currencies Against The US Dollar (USD)

InstaForex Analysis InstaForex Analysis 28.09.2022 12:19
Hello, dear colleagues. The main event in September was an increase in the federal funds rate by 0.75%. Commenting on this decision, adopted unanimously, Federal Reserve Chairman Jerome Powell said that the US central bank is ready to continue raising rates until inflation starts to decline and the Committee receives data on the sustainability of the decline in inflation expectations. A few days later it became clear that the decision taken by the Open Market Committee could lead to serious, if not catastrophic, consequences for the entire global financial system and its most important element — the FOREX market. Before discussing the prospects of foreign currencies against the US dollar, let's discuss why a rate hike leads to a rise in the dollar and a decrease in the rates of its competitors? The answer to this question lies in one of the fundamental laws of the foreign exchange market — the Interest Rate Parity Theorem. The essence of the theorem is that assets with the same credit risk will be more attractive in the currency of the state where the rate is higher. In this case, investors will sell the currency with lower rates and buy the currency with higher rates in order to receive a large premium for their investment. Figure 1: The US dollar exchange rate against a basket of foreign currencies The increase in the dollar rate primarily hit currencies with low rates, including, first of all, the euro, the yen and the British pound, and this is the flip side of the US dollar. Moreover, if the yen and the pound have limited influence, then the euro is the second most important reserve currency in the world. The economic problems associated with rising energy prices have further aggravated the situation in the eurozone economy, and the slowness of the European Central Bank has led to the fact that the difference in interest rates has become large enough for a massive outflow of capital from Europe. This has become especially relevant for energy-dependent industries, such as metallurgical companies and aluminum production. At the same time, the situation in the British pound and the Japanese yen is no better than that of the euro, and even worse in some ways. The British pound updated the historical low on September 26. The yen updated the 30-year low a little earlier. There is another circumstance that puts pressure on exchange rates, this is the decline of the US stock market, which adds an additional growth driver to the dollar. Thus, the dollar is at the peak of its power in relation to the currencies of the bloc. The Chinese yuan is also under pressure, although much less than the nearest US satellites. This week, the yuan has updated the low and is now trading at 7.14 yuan per dollar, but the level of 8 yuan per dollar, the low from 2006, is still far away. The depreciation of the yuan is rather a forced measure in response to the decline in the currency of the main competitor in the Asia-Pacific region — the Japanese yen. Further narration requires answering the question of how high the US dollar can grow, and whether it is worth selling it against other currencies now. First of all, it should be noted that the dollar's growth is not over yet, although it has achieved its initial goals. At the same time, it should be remembered that the movement never develops in a straight line, and the dollar has now turned out to be sufficiently overbought to make a correction to its rising trend from a technical point of view, which will give us the opportunity to consider buying it, if, of course, there is a desire and, most importantly, a signal from the trading system. However, in the context of what is happening, a very significant reservation should be made. Even if we assume that the US dollar has reached its high, it will take at least three months to reverse it. Now the ECB and the Bank of England have rushed after the Fed, trying to somehow stop the inflationary spiral. However, it is not so easy to do this, given the pace set by the US Fed, and it takes time. The chronology of events can be presented as follows. The Fed will raise the rate at least once more at its next meeting, which will be held on November 1 and 2, by 0.75% points. Before this event, the ECB will also raise the rate by 0.75% at the end of October, thereby keeping the difference in rates between the euro and the dollar at the current value. Of course, the ECB may surprise and raise the rate by 1% at once, but then we will know about it in advance from the comments of officials, but now such an increase looks unlikely. Based on the logic of this assumption, it is safe to say that at least until the end of October 2022, the euro's exchange rate will not change its direction and may continue to decline. Fig.2: Technical picture of the euro/US dollar exchange rate The technical picture of the EURUSD exchange rate assumes a similar dynamics and now completely coincides with the fundamental calculations (Fig.2). The euro is in a downward trend. At the same time, the exchange rate reached the first target, located at 0.96, which was determined by the width of the previous range of 0.99-1.02, 300 points. It is logical to assume that after achieving the first goal, the course will grow a bit, or, in other words, go into correction. The main postulate of technical analysis is the rule: the movement will continue until we get the opposite. This means that we need to assume that the exchange rate of the euro will decline until the condition of a trend change is met. For the current situation, the condition for a trend change is an increase above the 1.02 level, before that, any increase in the EURUSD rate should be considered as a correction to the current downward trend. Fig.3: Technical picture of the USDJPY course In my subjective opinion, the situation in the Japanese yen is even sadder than with the euro. The Bank of Japan remains the only key central bank that has abandoned the policy of raising rates. This has a rather serious impact on the yen exchange rate, which leads to the fact that the BOJ, under pressure from allies dissatisfied with the devaluation, is even forced to intervene. However, this does not help much and may lead to the fact that the Japanese currency will test the level of 150 and even 155 yen per US dollar (Fig.3). Therefore, if any feeling that you take for intuition suggests that you sell the USDJPY pair here and now, then throw this thought out of your head. It will not lead to anything good. It will be possible to do this no earlier than the pair drops below the 140 level, and even then with great caution and a minimum lot size. With the British pound, everything is somewhat more complicated. The fact is that the BoE began to raise the rate earlier than the ECB began to do it, besides, the maintenance of the national currency rate is written in its charter. Previously, if necessary, the central bank did not disdain to resort to interventions, including not only verbal ones. Therefore, I wouldn't guess the depths at the level of parity of the pound and the dollar, although such a decline looks quite likely. Summing up, it should be noted that the US dollar continues to remain in an upward trend, supported by high interest rates and a decline in stock indices. The S&P 500 index updated the local low on Tuesday, September 27. The previous level was at 3631. If the month, quarter and fiscal year are closed below the 3600 mark, the fate of the US market in the 4th quarter will be very sad. With a high degree of probability, of course. Be careful, cautious and most importantly — follow the rules of money management!   Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322832
ECB press conference brings more fog than clarity

Can We Expect Better Movements In The European Currency (EUR)?

InstaForex Analysis InstaForex Analysis 28.09.2022 12:54
The EUR/USD pair resumed the falling process on Tuesday, returned to the corrective level of 423.6% (0.9585), and today – it consolidated under the level of 0.9585, simultaneously updating its low for 20 years. Thus, after literally a one-day rest, bear traders went to business again and continued to get rid of the euro. In the first two days of the week, I would single out only two speeches by ECB President Christine Lagarde from the important events. You can say as much as you like that the ECB was late at the beginning of the fight against high inflation, but still, it has raised its interest rate twice and promised that there would be several more increases in 2022. From my point of view, this is "hawkish" rhetoric that could support the European currency. But how can you expect something positive from the euro currency if there are no bulls on the market and bears continue to sell daily? Thus, Lagarde's words that the ECB will continue to raise rates, continue to adhere to the course of price stability, and influence high demand did not affect traders. And this means that the European currency will most likely continue to do so, which updates its lows in a day. It can also be assumed that the comments of the FOMC representatives force traders to continue selling euros. In particular, James Bullard said yesterday that the rate should be raised to at least 4.5%. However, when the dollar has been growing without stopping for months, it is unlikely to receive specific information support every day. Bullard's speech may or may not have had a favorable effect on the dollar. There is no difference since the US currency continues to grow anyway. But the news about possible sabotage on the Nord Stream pipeline could cause new sales of the euro currency, as it puts the heating season in the European Union under even greater threat. It is unclear who is behind this sabotage and whether it was a sabotage, but now gas supplies to Europe have been stopped through this pipeline. On the 4-hour chart, the pair dropped to the corrective level of 161.8% (0.9581). Rebounding from this level will favor the EU currency and some growth in the direction of the upper line of the downward trend corridor. However, how strong will this growth be if the information background tells traders to do only one thing – sell euros? Fixing the pair's exchange rate below the level of 0.9581 will increase the chances of continuing the euro fall even more. Commitments of Traders (COT) Report: Last reporting week, speculators closed 1,214 long contracts and 46,500 short contracts. This means that the "bearish" mood of the major players has weakened and ceased to be so. The total number of long contracts concentrated in the hands of speculators now stands at 206 thousand, and short contracts – 173 thousand. So now the mood of the major players is bullish, but do you see the euro showing growth? In the last few weeks, the chances of the euro currency's growth have been gradually growing, but traders are more actively buying the dollar, not the euro. The euro currency has not been able to show strong growth in the last few months. Therefore, I would now bet on important descending corridors on the hourly and 4-hour charts. I recommend expecting the growth of the European currency after closing the quotes above them. News calendar for the USA and the European Union: EU - ECB President Lagarde will deliver a speech (07:15 UTC). US - speech by the head of the Fed, Mr. Powell (14:15 UTC). On September 28, the calendars of economic events of the European Union and the United States contain one interesting entry each. A new performance by Christine Lagarde and a new performance by Jerome Powell. The influence of the information background on the mood of traders today may be average in strength. EUR/USD forecast and recommendations to traders: I recommended selling the pair when rebounding from the level of 1.0173(1.0196) on a 4-hour chart with targets of 0.9900, 0.9782, and 0.9581. All these goals have already been worked out. New sales – at closing under 0.9585. I recommend buying the euro currency when fixing quotes above the level of 1.0173 on a 4-hour chart with a target of 1.0638.   Relevance up to 11:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322910
NatWest Group Reports Strong H1 2023 Profits Amid Rising Economic Concerns

The Tightening Of Monetary Policy Will Continue For Some Time

InstaForex Analysis InstaForex Analysis 28.09.2022 13:01
Details of the economic calendar for September 27 Orders for durable goods in the United States decreased by 0.2% during the period of August. This is not the best indicator, but they expected a reduction of 0.9%. The divergence of expectations served as a stimulus for the growth of dollar positions. At the same time, data on new home sales in the US were also published, which recorded a strong growth of 28.8% in August. In addition to macroeconomic statistics, there were quite a lot of comments from the Fed, where everyone unanimously talks about the risks associated with inflation. Chicago Fed President Charles Evans: - The average forecast for the interest rate at the end of the year is between 4.25%–4.5% and 4.6% by the end of next year. - For us, task number 1 is to bring inflation under control. - The tightening of monetary policy will continue for some time. - 4.5% unemployment in the United States is still a good level. - At some point in time there will be a need to reduce the rate of interest rate increases. But now it needs to be further improved. - This year, our forecasts for an objective increase in interest rates by another 100–125 basis points. - We see long-term inflation expectations at acceptable levels. - I expect that the level of inflation will noticeably decrease within two years. - I expect a slight increase in GDP this year. Former New York Fed President William Dudley: - The Fed has made it clear that it intends to fight inflation. - During the September meeting, the regulator clearly indicated that they are ready to raise the interest rate in order to return inflation to an acceptable level. - Based on the forecasts of the Fed, GDP growth is expected in the coming years. - It looks like there is no clear consensus among the Fed representatives on how long they will continue to fight inflation. St. Louis Fed President James Bullard: - We have serious problems with inflation in the country. - The credibility of the inflation targeting regime is under threat. - The labor market is very strong, which gives us the opportunity to fully focus on inflation. - We must correctly and timely respond to inflation. - At subsequent meetings, we certainly must continue to raise the interest rate. - The possible maximum interest rate is about 4.5%. - We'll probably have to stick with the high stakes for a while. Minneapolis Fed President Neel Kashkari: - We believe that the markets understand what the Fed is doing. - Representatives of the Fed are united and committed to reducing inflation. - We are moving at a fast pace, it is dangerous. - The Fed is working to bring inflation back to 2%. We need to keep raising interest rates. - We need to further tighten monetary policy to see evidence that we are succeeding in reducing inflation, and move on to slow down. - I'm not sure that the current monetary policy is tight enough. Philadelphia Fed President Patrick Harker: - We are working to achieve an acceptable level of inflation in the country. - The housing market is a key segment in the growth of inflation - Inflation in the country is very high in many categories San Francisco Fed President Mary Daly: - Our goal is to return inflation to the level of 2.0%. - The level of inflation is very high, we must properly assess the current situation. Conclusion based on the comments of the Fed representatives Based on the above material, a clear "hawkish" approach is visible. The regulator intends to fight high inflation by all possible means, which they point out in their statements. For this reason, we see a further decline in the US stock market, as well as an increase in the value of the dollar against other currencies. Analysis of trading charts from September 27 The EUR/USD currency pair resumed its decline after a short pullback. As a result, the local low of the downward cycle at 0.9553 was updated, which indicates the prolongation of the main trend. The GBP/USD currency pair ignores the fact that it is treading water at historical lows. In fact, the technical signal of oversold is covered by a high rush for short positions on the part of speculators. Economic calendar for September 28 Today the macroeconomic calendar is empty, all hope is for the information flow, where speeches by the Fed and ECB representatives are expected again. Trading plan for EUR/USD on September 28 Stable price retention below 0.9550 will lead to a subsequent decline. In this case, the technical signal about overheating of short positions can be ignored by market participants. A possible prospect of a move is a decline towards the lows of 2001 and 2000. An alternative scenario of market development is considered by traders in the form of another price rebound from the 0.9550 value area, as it happened at the beginning of the trading week. Trading plan for GBP/USD on September 28 In this situation, keeping the price below the 1.0600/1.0630 area in a four-hour period may well lead to a subsequent decline towards the recent local low. It is worth noting that with such overheating of short positions, spontaneous consolidations may occur, which, in turn, will lead to a technical pullback. Until the quote is stable below the control area, the risk of the subsequent formation of the amplitude of 1.0630/1.0930 remains. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.   Relevance up to 10:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322890
Behind Closed Doors: The Multibillion-Dollar Deals Shaping Global Markets

High Prices Continue To Put Pressure On National Economies

InstaForex Analysis InstaForex Analysis 28.09.2022 13:06
Markets tried to recover from the recent sharp sell-offs, but failed. And after a highly volatile trading session, European and US stock indices ended with mixed dynamics. The main reason is the confidence of investors that not only the Fed, but also a number of other world central banks will aggressively raise interest rates, trying to tame galloping inflation. In fact, Bank of England Member Huw Pill and Fed members Neel Kashkari and James Bullard spoke about the need to fight high inflation by any means because high prices continue to put pressure on national economies. This indicates that the two central banks are not putting their utmost priority on economic growth, but on curbing inflation. That is why it will not be surprising if interest rates continue to increase in the foreseeable future, which will cause further sell-offs in stock markets and rise in dollar. The upcoming inflation data in the Euro area will also stir up the markets again, especially if there is a slight slowdown in growth or an increase. It will lead to a new wave of sales in euro in the forex market. Forecasts for today: AUD/USD The pair is currently trading at 0.6375. A consolidation below may lead to a further decline to 0.6245. XAU/USD Gold is testing the level of 1621.00. A drop below it could cause a price drop to 1600.00.   Relevance up to 09:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322868
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

Forex: Oh My... Euro (EUR) To US Dollar (EUR/USD) Has Decreased By Almost 5% This Month So Far...

Kenny Fisher Kenny Fisher 28.09.2022 15:02
The euro is in negative territory today, after posting six straight days of losses. EUR/USD is trading at 0.9553 in Europe, down 0.41%. Referendums, Nord Stream explosions weigh on euro September can’t end fast enough for the euro, which has declined a massive 4.8% against the dollar. Earlier today, EUR/USD fell to 0.9536, its lowest level since June 2002. With the war in Ukraine escalating and Nord Stream reporting that its pipeline was deliberately damaged, it’s hard to be optimistic about the euro’s outlook. The sham referendums in Russian-occupied Ukraine have ended and predictably, the vote to join Russia was close to 100%. Moscow is expected to declare on Friday that the territories are being annexed to the Russian Federation, sparking fears that Russia could resort to nuclear weapons to defend what it claims is Russian territory. There was a further escalation in the Ukraine war last week, as explosions at the Nord Stream 1 and 2 pipelines are suspected to have been sabotaged. Nord Stream 2 has been shelved and Nord Stream 1 has been shut down for weeks, and any faint hopes that Russia might renew gas exports through Nord Stream have been dashed. European natural gas prices have jumped in response to the news. The US dollar continues to rally, and 10-year Treasury yields pushed above 4.00% earlier today, for the first time since 2008. The markets are showing a healthy respect for Fed hawkishness, even after inflation weakened in the past two inflation reports. There is some optimism that the current rate-tightening cycle is reaching its end, with Fed member Evans stating that it will be appropriate to slow the pace of tightening at some point. For now, the US dollar has momentum, driven by an aggressive Fed and weak risk appetite. Euro To USD Technical EUR/USD is testing support at 0.9554. Next, there is support at 0.9419 There is resistance at 0.9640 and 0.9711 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. EUR/USD falls to new 20-year low - MarketPulseMarketPulse
The EUR/USD Pair Is Showing A Potential For Bearish Drop

Forex: Euro To US Dollar - What Can We Expect? On Wednesday EUR/USD Touched 0.9535!

FXStreet News FXStreet News 28.09.2022 15:33
EUR/USD Current Price: 0.9578 Russia has menaced once again to cut gas supply to the EU, fueling natural gas prices. US Treasury yields maintain the upward pressure and trade near multi-year highs. EUR/USD is technically bearish, although extreme oversold conditions start to weigh. The EUR/USD pair reached a fresh multi-year low of 0.9535 on Wednesday, holding nearby as US traders reach their desks. The greenback strengthened during the Asian session after White House economic adviser Brian Deese said that USD vigor reflects the relative strength of the US economy, dismissing the possibility of an adjust to the currency value. Treasury Secretary Janet Yellen suggested that there was little cause for concern with current moves in financial markets. Meanwhile, the poor performance of European equities provided additional support to the safe-haven currency. In addition, concerns related to energy prices in the Union, as natural gas prices soared following a new Russian menace to halt supply, undermined the market sentiment. Major indexes, however, trimmed part of their early losses, putting a temporal cap on the dollar’s demand. Government bond yields keep marching north. In the US, the 10-year Treasury note yielded as much as 4.019% ahead of the opening, while the yield on the 2-year note peaked at 4.316%. Read more: Tim Moe (Goldman Sachs) Comments On USD And Turbulent Times For Markets In General, Ole Hansen (Saxo)Talks Nord Stream | FXMAG.COM On the data front, Germany published the Gfk Consumer Confidence Survey, which plunged in October to -42.5 from -36.8 in the previous month. As for the US, the country has just published the August Goods Trade Balance, which posted a deficit of $87.3 billion, better than anticipated. On the other hand, Wholesale Inventories rose 1.3% in the month. Later in the American session, the country will release August Pending Home Sales, while US Federal Reserve chief Jerome Powell is due to deliver opening remarks in a pre-recorded video at the Community Banking Research Conference. EUR/USD short-term technical outlook The EUR/USD pair trades in the red for the seventh consecutive day, and technical readings show extreme oversold conditions but little hints of a potential bounce. In the daily chart, technical indicators barely decelerated their declines within extreme readings, as the pair continues to develop far below strongly bearish moving averages. In the near term, and according to the 4-hour chart, the risk skews to the downside. The current candle has a long upward wick which indicates sellers are still willing to add on spikes. The Momentum indicator retreats from its midline, and the RSI consolidates around 31, also reflecting bears’ dominance. Finally, the 20 SMA extended its slide below the longer ones and now provides dynamic resistance at around 0.9630. Support levels: 0.9505 0.9470 0.9420 Resistance levels: 0.9590 0.9630 0.9685
The Markets Still Hope That The Fed May Consider Softer Decision

Technical Analysis Of The Movements Of The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 29.09.2022 08:19
Yesterday there was a sharp and strong correction in the yields of US government bonds. Yields on 5-year bonds fell from 4.19% to 3.97%, returning to levels of the 23rd. Following the yields, the stock market also corrected – the S&P 500 grew by 1.97%. Oil and gold rose. The euro added 143 points. The price reached the target level of 0.9752, reversed from it and is now breaking through the support at 0.9695. We believe that the correction has ended due to the large price growth and strong resistance. The signal line of the Marlin Oscillator turned down. We are waiting for the price to overcome the supports 0.9625, 0.9520 and reach the level 0.9404. We expect a longer correction from this level. It is close to the February 2000 low (0.9399), which, taking into account the error in the 22-year history, can be taken as coinciding levels. On the four-hour chart, the price is trying to consolidate below the level of 0.9695. The Marlin Oscillator is trying to move back into negative territory. We also note that yesterday's growth occurred under the balance indicator line (red), which indicates a purely corrective nature of this movement.     Relevance up to 04:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322982
Escalating Russia-Ukraine Tensions Amplify Oil Supply Risks: The Commodities Feed

Will The European Currency (The Euro) Fall Indefinitely?

InstaForex Analysis InstaForex Analysis 29.09.2022 08:32
The EUR/USD currency pair continued its decline for most of Wednesday. In principle, almost every day, the article can be started with the same words because if a couple of weeks ago we often drew traders' attention to the almost daily fall of the euro, now this currency is updating its 20-year lows every day. Thus, if someone thought that the meetings of central banks were left behind and it was possible to breathe more freely for a while, he was mistaken. Recall that most factors that brought the euro currency so low continue to be relevant. And some are also increasing their pressure on risky assets. The market very cheerfully ignores the news and data that could provide hypothetical support for the euro currency. That is, we get a situation where there are plenty of reasons for the fall of the euro currency, and those factors that could provide support do not affect the mood of traders. Almost a stalemate. From the technical side, everything is also clear. We see strong downtrends on almost all timeframes. If some correction or rollback occurs from time to time on the smallest TF, then on the older TF, it is already as rare as the New Year. And what do we get in the end? The European currency is practically worthless and falling non-stop. We have already said that if we try to take a sober look at the economic situation in the EU and the US, the picture turns out to be not so unambiguous in favor of the dollar. The recession has already begun in the US, and the Fed will not end its aggressive monetary approach. In the European Union, recent quarters have been positive, although GDP growth has been small. However, it was, so all the talk about the "energy recession," about the freezing of Europe this winter, the shutdown of many enterprises, and the popular revolt due to high prices for electricity and heat are just reflections, reasoning out loud. All this may be avoided. But again, the market does not even consider the hypothetical possibility that everything in Europe may not be so bad (we are not talking about some backward African country). Christine Lagarde's speeches – the "hawkish" attitude persists. The betting situation is also ambiguous. A few months ago, when the Fed was actively raising its rate and the ECB was impressively preparing for the first increase in 11 years, it was possible to understand why the euro currency was falling. But now, the ECB has already raised the rate twice and will actively and aggressively raise it at all the next meetings this year. That is, the gap between the rates, at least, has stopped growing. But the euro is still falling, and the dollar is still rising. European inflation is not higher than American inflation, but the euro is still falling, and the dollar is growing. What if, as a result, the Fed rate rises to 4.5% and the ECB rate rises to 4.25%, the European currency will fall indefinitely? From our point of view, the main problem with the European currency is geopolitics. And not only the European currency. We are ready to repeat this daily because all other factors no longer look as significant as geopolitics. Maybe someone does not believe in a global war, but this option is allowed by the markets, investors, and traders. If geopolitical tensions increase, then market participants try to transfer their capital to the most stable and secure currency (or asset). That is why we see the endless growth of the dollar because now there is more talk about nuclear war (or a war between Russia and NATO) than any other news. What kind of mood should traders be in with such a background? Moreover, the dollar is not just the world's reserve currency. The States (the issuer of the dollar) are located very far from the conflict. Everyone remembers that during the Second World War, the US economy practically did not suffer, so it had the opportunity to actively support its allies by providing them with weapons and equipment. The same thing can happen now. The European Union is too close to the war zone and may even accidentally become involved in the conflict (history has also seen such examples). In any case, it is in Europe that the military conflict is now. Therefore, Europe is suffering first of all. The average volatility of the euro/dollar currency pair over the last five trading days as of September 29 is 128 points and is characterized as "high." Thus, on Thursday, we expect the pair to move between 0.9525 and 0.9776 levels. The reversal of the Heiken Ashi indicator downwards signals the resumption of the downward movement. Nearest support levels: S1 – 0.9644 S2 – 0.9521 Nearest resistance levels: R1 – 0.9766 R2 – 0.9888 R3 – 1.0010 Trading Recommendations: The EUR/USD pair maintains a downward trend. Thus, new short positions should now be considered with a target of 0.9521 if the Heiken Ashi indicator is reversed. Purchases will become relevant no earlier than fixing the price above the moving average with a target of 0.9888. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. Moving average line (settings 20.0, smoothed) identifies the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Based on current volatility indicators, volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator—its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 02:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322974
JPY: Assessing the FX Intervention Zone and Market Conditions

There Are Not Any Grounds For The Euro's (EUR) Growth

InstaForex Analysis InstaForex Analysis 29.09.2022 08:49
EUR/USD 5M. The euro/dollar again showed very high volatility on Wednesday. The second test of the 0.9553 level took place, which is currently a 20-year low, but was a failure. After that, a fairly strong growth of the euro began, which theoretically could become the beginning of a new trend. If you remember, we said that a new trend should start abruptly and strongly, not imposingly. However, at the moment the price is still below both lines of the Ichimoku indicator, so the downward trend still remains. What caused the euro's growth. From our point of view, such a statement of the question is absolutely incorrect. After the euro has lost over 2500 points, a 100-150 points upward move could be a simple pullback. The pair cannot fall forever, there must be at least some pullbacks, and we don't even remember the corrections anymore. Possibly, this pullback was provoked by Federal Reserve Chairman Jerome Powell's speech, although we do not believe that he has changed the vector of his rhetoric dramatically. In any case, a rebound from the critical line will provoke a new round of decline. In regards to yesterday's trading signals, the situation was difficult. Traders tried to break through the level of 0.9553 throughout the European trading session, but failed to do so. Because of this, a fairly large number of signals were formed, most of which turned out to be false. What matters here is how traders interpreted these signals. They could be "seen" as buy signals or sell signals interspersed with buy signals. Long positions could eventually bring a good profit. In the second option, it was necessary to work out the first two signals, and they turned out to be false. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial traders, but at the same time, the euro fell steadily. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not provide any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 29. The euro is falling down ahead of September 30 and amid the general geopolitical background. Overview of the GBP/USD pair. September 29. Theater of the absurd with Nord Stream. Forecast and trading signals for GBP/USD on September 29. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The bears' prospects remain just fine on the hourly timeframe, given that the pair continues to remain below the key Ichimoku lines. Yesterday's rise should not be misleading. Now, if Senkou Span B and Kijun-sen are overcome, then it will be possible to speak of an upward trend, at least a small one. But so far it hasn't. We highlight the following levels for trading on Thursday - 0.9553, 0.9813, 0.9877, 0.9945, 1.0019, as well as the Senkou Span B (0.9804) and Kijun-sen (0.9714) lines. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. Several speeches by representatives of central banks will take place in the European Union and the United States, and only secondary macroeconomic statistics are scheduled for today. In any case, the euro continues to be traded in a very volatile manner, so traders clearly do not need help now. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322970
The EUR/AUD Pair May Have The Potential To Continue Its Decline

Will A New Impulsive Rise Of The EUR/USD Pair Develop?

InstaForex Analysis InstaForex Analysis 29.09.2022 09:08
In yesterday's post, we said that a break above minor resistance at 0.9709 would be the first indication that the corrective decline from 1.6038 had been completed. We have now seen that break above. If the break was as significant as we expected, then a new impulsive rally would develop and it should ultimately break above the peak of wave I or A at 1.6038. This is a very long-term picture and of course, this will not be in a straight line. So we will have to break it up in baby steps. The first small part was the break above 0.9709 and if this count is valid, the low at 0.9535 will not be broken at any time. The next minor step is a break above resistance at 0.9907 and more importantly a break above resistance at 1.0051 that really will be a sound foundation under our long-term count.   Relevance up to 07:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294747
The EUR/USD Pair Is Showing A Potential For Bearish Drop

The Euro-Dollar Market: In The Current Situation It Is Hardly Possible To Say That The Situation Has Stabilized

InstaForex Analysis InstaForex Analysis 29.09.2022 09:33
Several market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 0.9556 level in my morning forecast and advised making decisions on entering the market there. The German data was ignored and the bulls' return above 0.9556 at the beginning of the European session occurred without a normal reverse test, after which the level was smeared. The bears tried to protect 0.9586 in the afternoon and even formed a sell signal, but it never came to a major downward move. Only a false breakout in the area of 0.9699, to which the euro rose amid weak statistics on the US, made it possible to get an entry point for short positions. But even there the downward correction did not exceed 15 points. When to go long on EUR/USD: Another series of speeches and interviews by representatives of the European Central Bank is expected today. Little depends on their statements, since the central bank's strategy is clear and understandable to everyone, especially after ECB President Christine Lagarde yesterday once again confirmed her hawkish attitude towards future policy. ECB Executive Board Member Fabio Panetta and ECB Vice President Luis de Guindos are speaking today. Much more interesting will be the data on the indicator of consumer confidence in the euro area, which is likely to decline over the reporting period, which will put even more pressure on the euro. The increase in the consumer price index in Germany in September this year, on the contrary, may trigger the euro's growth, as this will mean a direct increase in interest rates in the future. In case the pair goes down, only a false breakout in the area of 0.9646 creates a new buy signal. There are also moving averages, playing on the bulls' side. The target of the upward correction in this case will be the level of 0.9695, which was formed following the results of today's Asian session. A breakthrough and test from top to bottom of this range, along with strong statistics from Germany, could hit the stops of speculative bears, forming an additional signal to open long positions with the possibility of a surge up to this week's high at 0.9745. A more distant target will be resistance at 0.9807, where I recommend taking profits. In case EUR/USD falls, which is more likely, and the bulls are not active at 0.9646, the pressure on the pair will increase, which will lead to the continuation of the bearish trend. Strong US statistics will help push the euro to new yearly lows. In this case, the best decision to open long positions would be a false breakout around 0.9596. I advise you to buy EUR/USD immediately on a rebound only from 0.9540, or even lower - in the region of 0.9490, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears missed the market, but in the current situation it is hardly possible to say that the situation has stabilized. Demand for risky assets in the face of growing geopolitical tensions will continue to be limited, and the prospects for the European economy will certainly not add confidence to investors in the next six months of the year. The bears' initial task is to protect the intermediate resistance at 0.9695. Forming a false breakout at this level will provide an excellent entry point for short positions, and weak data from Germany will allow for a sharper movement of the pair down to the 0.9646 area. A breakdown and consolidation below with a reverse test from the bottom up of this range creates another sell signal with the removal of bulls' stop orders and a larger fall to the 0.9596 area. A more distant target will be the area of 0.9540, where I recommend taking profits. If EUR/USD jumps during the European session, and there are no bears at 0.9695, the demand for the euro will return, which will lead to a more powerful upward correction. In this case, I advise you not to rush into short positions. The growth of EUR/USD will give a chance to test the resistance of 0.9745. In this scenario, I recommend opening shorts only if a false breakout is formed. You can sell EUR/USD immediately for a rebound from the high of 0.9807, or even higher - from 0.9853, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT report) for September 20 logged a decline in both short and long positions. These data already take into account the September meeting of the European Central Bank and a sharp increase in interest rates immediately by 0.75%, which affected the alignment of positions. However, it must be understood that these data do not take into account the Federal Reserve's recent meeting, which made a similar decision, which kept the gap between central banks' interest rates, increasing pressure on the euro. And in general: everything that is happening now with the eurozone economy is clearly reflected in the euro's rate, which has already fallen to the level of 0.95 and is not going to recover yet. The deterioration of the geopolitical situation in the world, which to a greater extent concerns the eurozone, will greatly slow down the European economy in the autumn-winter period and will surely lead it to recession in the spring of next year. It is not yet possible to talk about medium-term growth prospects for the euro. Even if bad fundamental data comes out in the US, and they will, it will not help the euro especially, as investors will still give preference to safe-haven assets and the US dollar. The COT report indicates that long non-commercial positions decreased by 1,214 to the level of 206,564, while short non-commercial positions fell immediately by 46,500 to the level of 173,115. At the end of the week, the total non-commercial net position became positive and increased from -11,832 to 33,449. This indicates that investors are taking advantage of the moment and continue to buy cheap euros below parity, as well as accumulate long positions, counting on the end of the crisis and the pair's recovery in the long term. The weekly closing price increased and amounted to 1.0035 against 0.9980. Indicator signals: Moving averages Trading is conducted above the 30 and 50-day moving averages, which leaves bulls a chance for a correction. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of growth, the upper border of the indicator in the area of 0.9790 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 08:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322992
USD Stable as Oil Prices Rebound Ahead of US CPI Report Release

The Euro Is Still Under The Strong Bearish Pressure

InstaForex Analysis InstaForex Analysis 29.09.2022 09:38
Technical Market Outlook: The EUR/USD pair has made another lower low at the level of 0.9539, but the bulls bounced strongly about 2.25% towards the level of 0.9750. No nearest technical support in view as the market hits the multi-year lows, however, the resistance is seen at 0.9811. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the down trend reversal is confirmed. Please watch the USDX as the correlation between this two markets (EUR/USD and USDX) is directly opposite. The short-term outlook for the EUR remains bearish. Weekly Pivot Points: WR3 - 0.99372 WR2 - 0.97857 WR1 - 0.97189 Weekly Pivot - 0.96342 WS1 - 0.95674 WS2 - 0.94827 WS3 - 0.93312 Trading Outlook: The EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue far below the parity level, towards the new multi-year lows. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Please notice, there is plenty of down room for the EUR to go as the bears keep making a new, multi-year lows.     Relevance up to 08:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294763
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Events On The Pound (GPB) Market Continues To Affect Other Currencies, Such As Euro (EUR)

InstaForex Analysis InstaForex Analysis 29.09.2022 10:55
UK Prime Minister Liz Truss and Finance Minister Kwasi Kwarteng's plan to support the economy met with an unexpected rebuff not only from British banks, but also from the Bank of England itself. The International Monetary Fund (IMF) also expressed concern that its implementation could trigger the onset of a global financial crisis, similar to what happened in 2008. In the end, even the House of Commons, where the majority of seats belong to the conservative party headed by Liz Truss, subjected this plan to the most severe criticism and demanded its total revision. All of these convinced investors that it will not be implemented in the version it is now, which somewhat calmed the markets and became a reason for a local rebound. But if the Cabinet of Ministers insists on going with the plan, the situation will quickly develop into another political crisis, which will have a negative impact on pound. If the plan is revised, then a correction may continue. The scale of what is happening with pound is so huge that it continues to affect other currencies, such as euro. EUR/USD hit a new local low, but sellers failed to hold on to this new value, prompting a rebound of about 200 pips. Nevertheless, the trend remains bearish, moreso since short positions surged after the recent price movement. Volatility was high in GBP/USD. It first fell below 1.0600, then returned to weekly highs. Even so, market mood is bearish, and there is a huge chance that it will remain trading within 1.0600/1.0900.   Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322988  
Bank of England Faces Rate Decision: Uncertainty Surrounds Magnitude of Hike

PBoC Talks CNY And Forex Market. Check How Have US Stocks, EURUSD And Other Assets Been Performing Recently

ING Economics ING Economics 29.09.2022 11:08
Bank of England Gilt intervention shakes up despondent markets Source: shutterstock Macro outlook Global Markets: US stocks rallied hard yesterday, though the catalyst for this seemed more to do with the Bank of England (BoE) deciding to prop up the ailing Gilts market with an offer to buy unlimited bonds, rather than anything US-related. And this is a bit odd, because we don’t get the sense that international markets were all that worried by the UK’s economic and market problems before yesterday, so the rally probably had more to do with markets that had been looking oversold anyway, and month and quarter end re-positioning than the BoE’s move itself. Indeed, the day started exceptionally well for the USD, following White House remarks that seemed to rule out a plaza-style agreement to stem USD strength. But EURUSD swung violently the other way after the BoE move taking EURUSD back up to 0.9721 currently. Most Asian currencies haven’t reflected this swing yet, so early trading today is likely to be positive, especially for the likes of the KRW and THB which were down more than 1% yesterday. The BoE’s actions took 10Y Gilt yields down by just under 50bp, to 3.999%, and US Treasuries and Bund yields also dropped sharply, though by less. The 10Y US Treasury yield is now 3.73%, and German 10Y Bund yields are 2.11% by comparison. G-7 Macro: Yesterday’s macro releases included a slightly narrowing US trade deficit, falling (pending) US new home sales, but rising US retail inventories in what looks like a mixed to slightly positive bag for 3Q US GDP. Today, preliminary September German inflation data will set the scene for the Eurozone figures released shortly, and the forecasts look for sharp increases in the annual rate driven by month-on-month gains of 1.5% that make talk of the ECB potentially hiking 75bp at their next meeting (both Martin Kazaks, and Robert Holzmann yesterday) look inadequate even as they are intended to calm market concerns.  US data is dominated by the third release of 2Q22 GDP, which isn’t likely to be met with much interest. China: The PBoC stepped up its efforts to limit the CNY's slide yesterday, bolstering stronger daily fixes with advice from a regulatory body governed by the PBoC warning banks against one-way bets on the yuan, which pushed as high as 7.25 yesterday (though is back to just over 7.20 currently). Banks were told to respect the daily fixing in what looks like a warning that we may see even stronger fixes if current trends persist. The PBoC also made a statement that "The foreign exchange market is of great significance and its stability is the top priority", making it pretty clear that further CNY weakness will be resisted.   Vietnam: Vietnam delivers a large data dump today, which will include 3Q22 GDP, September CPI, industrial production, retail sales and trade data. The gist of the consensus expectation is that this dynamic SE Asian economy will continue to show decent strength in economic activity while keeping inflation relatively well managed, which could provide some support for the VND, which year-to-date remains one of the region’s strongest currencies.   Read next: Tim Moe (Goldman Sachs) Comments On USD And Turbulent Times For Markets In General, Ole Hansen (Saxo)Talks Nord Stream | FXMAG.COM What to look out for: Fed speak and China PMI South Korea business survey manufacturing (29 September) US initial jobless claims, 2Q GDP and core PCE (29 September) Fed Presidents Mester and Daly speak at separate events (29 September) South Korea industrial production (30 September) Japan labor market data (30 September) China official and Caixin PMI manufacturing (30 September) India RBI meeting (30 September) Hong Kong retail sales (30 September) US personal income, personal spending and core PCE (30 September) US University of Michigan sentiment (30 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Spain: Price Pressures Higher Up The Production Chain Are Starting To Ease

Macroeconomics: Eurozone - September Spanish Inflation Print May Catch You By Surprise!

ING Economics ING Economics 29.09.2022 12:29
Spanish inflation fell in September to 9% from 10.5% in August, marking the second consecutive month of decline. These figures fuel hopes that the peak in inflation is now behind us While inflation in Spain is falling, it will nevertheless remain high until the end of the year Spanish inflation falls for the second consecutive month Spanish inflation fell to 9.0% in September from 10.5% a month earlier. This is now the second month in a row in which inflation has fallen. Core inflation, excluding more volatile energy and food prices, also fell slightly to 6.2% from 6.4% last month. The decline in headline inflation is mainly due to base effects that are starting to kick in. We are now comparing energy prices to a period when energy prices started to rise in 2021. Increasing base effects will further weaken year-on-year comparisons. Encouragingly, core inflation has also cooled slightly, suggesting that the strength of second-round effects is waning, mitigating the risks of entering a wage-price spiral. In the coming months, the cooling demand will ease inflationary pressures as it will become more difficult for companies to pass on new price increases to the end customer. Nevertheless, inflation will remain high until the end of the year. For the whole of 2022, we forecast inflation to come out around 9%. In 2023, inflation will gradually start to come down, reaching 4.5%. From 1 October, the Spanish government will reduce VAT on gas from 21% to 5% to soften the inflation shock. However, this will have only a marginal effect on the CPI. According to our calculations, the VAT cut on gas will reduce inflation by only 0.1 percentage point in October. Despite cooling off, ECB will continue its policy of interest rate hikes Despite the cooling trend, inflation remains historically high across the eurozone. Therefore, the current high inflation figures are unlikely to prompt the ECB to ease its monetary tightening policy. Judging from ECB officials' latest speeches, their first priority is to reduce inflation as soon as possible, rather than looking at inflation expectations or medium-term inflation. A 9% inflation rate is still well above the ECB's 2% target. Even with an upcoming recession, we think it likely that the ECB will opt for another 75 basis point rate hike in November as well. Read this article on THINK TagsSpain Inflation Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Euro to US dollar - Ichimoku cloud analysis - 21/11/22

Macroeconomics: Eurozone Economic Sentiment Went Down! Let's Check How Much

ING Economics ING Economics 29.09.2022 14:26
The drop from 97.3 to 93.7 in the eurozone economic sentiment indicator indicates a likely contraction in the economy in the third quarter. Selling price expectations have been on the rise again, increasing the risk of a longer period of stagflation in the eurozone economy Selling price expectations are increasing again as businesses face higher energy costs Is Recession Already Here, In The Eurozone? The eurozone economy is slowing rapidly as high prices reduce business activity and dampen consumer demand. We expect that a recession could, therefore, have already started. For industry, production expectations dropped sharply in September. Backlogs of work have fallen as new incoming orders disappointed in recent months and in some industries production is reduced as high energy costs impact the profitability of production. With energy costs still at unsustainably high levels for some industrial sectors, this is adding to the bleaker outlook for industrial production. For the services sector, confidence fell even more as the post-pandemic catch-up demand is fading and the purchasing power squeeze is starting to bite. The services indicator dropped from 8.1 to 4.9 as businesses indicate that demand has recently weakened and they are becoming gloomier about demand in the months ahead. Read next: Tim Moe (Goldman Sachs) Comments On USD And Turbulent Times For Markets In General, Ole Hansen (Saxo)Talks Nord Stream | FXMAG.COM  Despite the clear slowing of the economy, selling price expectations are increasing again as businesses face higher energy costs again due to the spike in prices in August. This is particularly worrisome as it could prolong a period of stagflation in the eurozone economy. For the ECB, the path is already quite clear: the central bank is set to hike in the coming meetings regardless of a slowing economy. The increase in selling price expectations will only strengthen that view for the October meeting. Read this article on THINK
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

Eurozone: German Inflation Shocks! What Could It Mean For The Euro And European Central Bank?

ING Economics ING Economics 29.09.2022 15:00
German inflation reached another peak in September, providing more ammunition for the ECB to hike by 75bp at the October meeting The inflation peak in Germany could be around 13%   German inflation just reached unprecedented double-digit levels coming in at 10.0% year-on-year in September, from 7.9% YoY in August. The HICP measure increased to 10.9% YoY, from 8.8% YoY in August and 8.5% in July. The fact that monthly inflation (1.9% month-on-month) is far above the historical average for September also illustrates that inflation is running red hot in Germany. Inflation will continue to increase We knew that the September numbers would be the first inflation reading without the dampening effect of the government’s energy relief package over the summer months. The end of the so-called €9 ticket for public transportation and the end of a gasoline rebate alone would have pushed up inflation. But inflationary pressure is all over the economy. Looking ahead, the only way for German inflation is up. With high wholesale gas prices now reaching people’s homes and pockets as well as more inflationary pressure in the industrial pipeline – with producer price inflation at 45% YoY – inflation will test even higher levels. It will take until next Spring before headline inflation could start to move down as negative base effects kick in. Based on today's numbers, peak inflation could come in at around 13%. ECB to hike by 75bp in October and more to come For the ECB, today’s German inflation data will add to the long list of arguments in favour of a 75bp rate hike at the October meeting. Since the late summer and probably marked by Isabel Schnabel’s Jackson Hole speech, the ECB’s reaction function has clearly changed. Following in the Fed’s footsteps, the ECB has increasingly focused on actual inflation and to a lesser extent on inflation expectations. It is hard to see how the ECB cannot move again by 75bp with headline inflation still on the rise. In this context, the discussion on whether or not the ECB can actually bring down headline inflation is no longer relevant for the central bank. Even if the unfolding recession is not enough to slow down the ECB’s process of rate normalisation. It clearly is an experiment with a risk of becoming a policy mistake, but for the time being the ECB looks fully determined to continue on the path of aggressive rate hikes. The first real test of how sustainable the consensus within the ECB is will only come at the December meeting. Then, a new round of staff projections is likely to show further downward revisions to growth and could show 2025 inflation at 2%, tempting some of the newly self-declared tough inflation fighters to blink. Unless we see more central banks performing a major U-turn as the Bank of England had to do this week, we expect the ECB to hike rates by some 150bp until early 2023 and the risk is currently rather tilted to more rather than fewer rate hikes. Still, it is not the ECB that can provide short-term relief against inflation, but governments. However, the idea that governments can completely offset all inflationary pressures should also be discarded after this week's developments in the UK. Read this article on THINK TagsInflation Germany Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Price May Fall Under 1.0660

Forex: Euro To Us Dollar Is A Really Attractive Asset These Days. What Can We Expect From EUR/USD?

InstaForex Analysis InstaForex Analysis 29.09.2022 15:57
The EUR/USD pair retreated a little today after reaching 0.9750. After its strong growth, a temporary retreat was natural. Now, the rate seems strongly bullish again as the Dollar Index ended its rebound. DXY's deeper drop should push EUR/USD towards new highs in the short term. As you already know from my analyses, the fundamentals could be decisive today. The US Final GDP may report a 0.6% drop while Unemployment Claims could come in at 215K in the last week above 213K in the previous reporting period. Furthermore, the Canadian GDP is seen as a high-impact event and it could have an impact on the USD as well. Read next: Tim Moe (Goldman Sachs) Comments On USD And Turbulent Times For Markets In General, Ole Hansen (Saxo)Talks Nord Stream | FXMAG.COM EUR/USD Retested The Buyers!     EUR/USD came back to retest the 0.9670 former high which stands as support. Its failure to stabilize under this level signaled strong upside pressure. Now, it is challenging the lower median line (lml). The next strong upside obstacle is represented by the 0.9750 former high. Technically, failing to take out the confluence area from around 0.9550 followed by the aggressive breakout through the downtrend line signaled a new swing higher in the short term. EUR/USD Forecast! Jumping and closing above 0.9750 could activate further growth and brings new long signals. If this scenario takes shape, the rate could move towards the median line (ml) again. Relevance up to 13:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294849
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

Forex: Euro To US Dollar (EUR/USD) - Let's Have A Technical Look - 29/09/22

InstaForex Analysis InstaForex Analysis 29.09.2022 16:02
  Euro To US Dollar - Technical outlook: EURUSD rose through the 0.9750 highs during the New York session on Wednesday after testing the levels close to the 0.9535 lows earlier. The daily chart has confirmed a Morning Star bullish reversal pattern, which could push prices through 1.0200 at least. The potential remains for a push towards 1.0600 which is the Fibonacci 0.382 of the earlier bearish drop between 1.2350 and 0.9535. EURUSD has hit major Fibonacci support close to the 0.9550-0.9600 area as projected on the daily chart here. A significant target has been met just above the 0.9500 handle and the price could also produce a sharp bullish reversal. The bulls are now looking poised to hold prices above the 0.9535 mark and push through the 1.0200 initial resistance at least. Read next: Tim Moe (Goldman Sachs) Comments On USD And Turbulent Times For Markets In General, Ole Hansen (Saxo)Talks Nord Stream | FXMAG.COM EURUSD has interim support just above 0.9500 while resistance is seen at 1.0200, followed by 1.0365. Looking at the daily chart, a break above 1.0200 would signify that the bulls are under control and are looking to push through 1.0600. Only a consistent break below 0.9535 from here will bring back bears into the picture. Trading idea: Potential rally towards 1.0200 and up to 1.0600 against 0.9500 Good luck! Relevance up to 13:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294851
PLN Soars to Record Highs Ahead of NBP Decision

The Euro-Dollar Pair (EUR/USD): Market Is Waiting For The Price To Drop

InstaForex Analysis InstaForex Analysis 30.09.2022 08:06
Unfortunately, high-range fluctuations in currencies did not stop. Yesterday, the euro traded in a range of 180 points (the pound in a range of 350 points), closing the day with an increase of 81 points. This morning it reached the 0.9850 target. The technical situation has become even more complicated. Now the price may continue rising to a stronger level at 0.9950, strengthened by the MACD indicator line, or reverse from the current levels to the nearest support of 0.9752 and further to 0.9695. The Marlin Oscillator of the daily scale does not provide any hints on this account, it can turn around now, without reaching the zero line, it can turn around directly from it, which will mean the price will work out the resistance at 0.9950. The four-hour chart does not clarify the situation. Formally, the trend is upward, as the price has settled above the balance and MACD indicator lines, but Marlin is turning down, the price exit above the indicator lines may turn out to be false. Consolidating under 0.9752 will most likely mean the end of the correction. Next, we are waiting for the price to drop to the levels: 0.9695, 0.9625, 0.9520.   Relevance up to 04:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323082
Behind Closed Doors: The Multibillion-Dollar Deals Shaping Global Markets

CarMax Inc And SolarEdge Technologies Inc Are The Biggest Losers At The Close In The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 30.09.2022 08:09
At the close in the New York Stock Exchange, the Dow Jones fell 1.54%, the S&P 500 fell 2.11% and the NASDAQ Composite fell 2.84%. The leading gainers among the components of the Dow Jones index today were The Travelers Companies Inc, which gained 1.76 points (1.15%) to close at 154.68. Visa Inc Class A rose 0.88 points or 0.49% to close at 180.06. Merck & Company Inc shed 0.14 points or 0.16% to close at 86.64. The losers were Boeing Co shares, which lost 8.11 points or 6.08% to end the session at 125.33. Walgreens Boots Alliance Inc was up 4.97% or 1.65 points to close at 31.55 while Apple Inc was down 4.91% or 7.36 points to end at 142. .48. Among the S&P 500 index components gainers in today's trading were Everest Re Group Ltd, which rose 3.07% to 267.41, STERIS plc, which gained 2.76% to close at 167.29, and also shares of W. R. Berkley Corp, which rose 2.73% to end the session at 65.18. The biggest losers were CarMax Inc, which shed 24.60% to close at 65.16. Shares of SolarEdge Technologies Inc lost 8.27% to end the session at 235.56. Quotes of Royal Caribbean Cruises Ltd decreased in price by 7.91% to 43.64. Leading gainers among the components of the NASDAQ Composite in today's trading were Senti Biosciences Inc, which rose 50.71% to hit 2.11, Avalon Globocare Corp, which gained 25.85% to close at 0.70, and also shares of TuanChe ADR, which rose 25.31% to close the session at 3.07. The biggest losers were Atlis Motor Vehicles Inc, which shed 54.82% to close at 33.95. Shares of Lion Group Holding Ltd lost 49.25% and ended the session at 1.01. Quotes of Twin Vee Powercats Co decreased in price by 29.01% to 2.52. On the New York Stock Exchange, the number of securities that fell in price (2631) exceeded the number of those that closed in positive territory (530), while quotes of 112 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,842 stocks fell, 956 rose, and 224 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 5.50% to 31.84. Gold futures for December delivery lost 0.07%, or 1.20, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 0.55%, or 0.45, to $81.70 a barrel. Futures for Brent crude for December delivery fell 0.55%, or 0.48, to $87.57 a barrel. Meanwhile, in the Forex market, EUR/USD rose 0.70% to hit 0.98, while USD/JPY edged up 0.21% to hit 144.46. Futures on the USD index fell 0.36% to 112.11.  Go to dashboard   Relevance up to 05:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/294915
FX Daily: Testing the easing pushback

The Euro To US Dollar (EUR/USD) Trend Has Finally Begun To Change

InstaForex Analysis InstaForex Analysis 30.09.2022 08:19
EUR/USD 5M The euro/dollar was again trading very volatile and growing for no apparent reason on Thursday. From our point of view, this is a very positive moment for the euro, as this currency showed a convincing growth for the first time in a long time, which can now turn into a new upward trend. Better yet, traders were buying euros at a time when there were no fundamental or macroeconomic reasons to do so. And even more so geopolitical. This may indicate that the bears have had enough of selling and are now leaving the market. The rollback from the achieved 20-year lows is quite fast, sharp and strong, which also speaks in favor of the beginning of a new trend. In addition, the price managed to consolidate above the important lines of the Ichimoku indicator. Thus, now we could say that for some time the euro has gone into growth. Of course, the situation on the markets is now so unstable that the fall can resume at any moment, especially if new disappointing geopolitical news arrives. Nevertheless, if the growth continues today, this will be a strong step forward for the euro. In regards to Thursday's trading, everything was in order. The movement was again almost one-way and strong. Two buy signals were formed when breaking and rebounding from the critical line. The first one was closed by Stop Loss, as the pair managed to go up only 40 points. The second brought a profit of at least 70 points, and the position had to be closed manually in the late afternoon, on the way to the Senkou Span B line. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial traders, but at the same time, the euro fell steadily. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not provide any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 30. We understand the reasons why the euro can resume its fall.Overview of the GBP/USD pair. September 30. The British pound, as usual, has a lot of problems.Forecast and trading signals for GBP/USD on September 30. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The trend has finally begun to change to an upward one on the hourly timeframe. Despite the fact that almost all types of backgrounds remain a failure for the euro, as well as the economic prospects of the European Union, the market still cannot sell the euro forever. Perhaps now we are entering a 2-3 month period of growth. The main thing is that the pair manages to stay above the Senkou Span B. We allocate the following levels for trading on Friday - 0.9553, 0.9813, 0.9877, 0.9945, 1.0019, as well as the Senkou Span B (0.9804) and Kijun-sen (0.9689). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union will publish a report on inflation for September, which, according to experts, will grow to 9.7%. It is strange, but in the current circumstances, this report may support the euro, as it will further increase the likelihood of new European Central Bank rate hikes, and the market is now favorable to long positions on the euro. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 06:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323084
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

The GBP/USD Currency Pair Traded Almost Identical To The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 30.09.2022 08:23
GBP/USD 5M The GBP/USD currency pair traded almost identical to the EUR/USD pair again on Thursday. Thus, the British currency has been growing for a whole week. With what exactly is growing, and not pretending to grow. From the lows of the current week (and at the same time the absolute lows), the pound has already managed to rise in price by 800 points. We spoke about such a movement in the context of the question of the beginning of a new upward trend. Now we can only hope that in the near future the market will not face a new portion of disappointing statistics or news. There was practically no important data yesterday. It is unlikely that a strong move up, which lasts four full days, can be linked to the US GDP report in the second quarter in the third assessment. GDP fell by 0.6%, but traders already knew that this would be the case. The American economy has been in recession for two quarters, but the dollar has already won back all conceivable and unimaginable factors of its own growth. Now the dollar's growth can only happen in case we receive new shocking news of a geopolitical nature. There were no problems with yesterday's trading signals. The first two signals in the form of rebounds from the Kijun-sen line were false. In both cases, the price went down by about 20 points, so Stop Loss should have been placed at breakeven on both short positions. At the same time, some of them might not work. In any case, the third buy signal should have been worked out. Perhaps it was risky, but the risk was worth it, given that for the first time in a long time, the pound began to rise. The pair then broke through the 1.0930 level and the Senkou Span B, moving up about 230 points in total through Thursday evening. This is the level of profit that traders could get by working out this signal. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group closed 11,600 long positions and opened 6,000 short positions. Thus, the net position of non-commercial traders decreased by another 17,600, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new decline, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its decline has completely resumed and multi-year lows are updated almost every day, so the bearish mood of major players can only intensify in the near future. The non-commercial group now has a total of 109,000 shorts and 41,000 longs open. The difference is again almost threefold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, one should not forget about the high demand for the US dollar, which also plays a role in the fall of the pound/dollar pair. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 30. We understand the reasons why the euro can resume its fall. Overview of the GBP/USD pair. September 30. The British pound, as usual, has a lot of problems. Forecast and trading signals for EUR/USD on September 30. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair, as we see it now, has broken the downward trend on the hourly timeframe, as all key levels and lines have been overcome. We can only hope that now the pound will consolidate above the Senkou Span B line at least for a week. In this case, we can expect the formation of a new upward trend. Reasons for it are no longer required, since the pound is heavily oversold. For September 30, we highlight the following important levels: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442. Senkou Span B (1.0972) and Kijun-sen (1.0778) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. The UK will publish a report on GDP for the second quarter, but given how briskly the pound is currently trading, we believe that this report will not affect the pair's movement in any way. In the US, we only have secondary reports, such as personal income and expenses of the American population and the consumer confidence index from the University of Michigan. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 06:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323086
The EUR/USD Pair Maintains The Bullish Sentiment

Will The Euro-Dollar (EUR/USD) Pair Start To Move Upwards?

InstaForex Analysis InstaForex Analysis 30.09.2022 08:27
We have seen the expected rally from the 0.9731 low. Now, the pair need to stay above support at 0.9635 and break above minor resistance at 0.9851 to add confidence to our bullish count. A failure to break above minor resistance at 0.9851 will make the rally from 0.9731 looks corrective. It could force a retest and likely even a slight break below this level for a test of the lower part of our target zone at 0.9707. A clear break above minor resistance at 0.9851 will on the other hand strengthen our bullish case calling for a continuation towards 1.0051 and more importantly a test of resistance at 1.0198 on the way higher.   Relevance up to 06:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294929
The EUR/USD Price May Fall Under 1.0660

The Euro (EUR) Is Still Under The Strong Bearish Pressure

InstaForex Analysis InstaForex Analysis 30.09.2022 08:44
Technical Market Outlook: The EUR/USD pair had bounced from the swing low seen at the level of 0.9539 and is approaching the key short-term technical resistance located at the level of 0.9867. The nearest technical support is seen at 0.9812 and 0.9749. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the down trend reversal is confirmed. Please watch the USDX as the correlation between this two markets (EUR/USD and USDX) is directly opposite. The short-term outlook for the EUR remains bearish until the swing high seen at 1.0389 is clearly broken. Weekly Pivot Points: WR3 - 0.99372 WR2 - 0.97857 WR1 - 0.97189 Weekly Pivot - 0.96342 WS1 - 0.95674 WS2 - 0.94827 WS3 - 0.93312 Trading Outlook: The EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue far below the parity level, towards the new multi-year lows. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Please notice, there is plenty of down room for the EUR to go as the bears keep making a new, multi-year lows.     Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294951
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

The Euro Will Strengthen, But Questions Remain About What To Do Next

InstaForex Analysis InstaForex Analysis 30.09.2022 09:00
The euro has strengthened its position against the dollar and continues to grow amid repeated statements by European politicians this week that the European Central Bank should raise interest rates by another 75 basis points at the next meeting, which is scheduled for October this year. Data on inflation in the eurozone will be released today, which will surely confirm the correct attitude of European politicians to the current situation, it was just necessary to act a little earlier – the Federal Reserve went too far, which led to such a gap in interest rates and a strong weakening of the euro against the US dollar. In his recent speech, member of the Board of Governors Martins Kazaks stated: "In the current situation, we can still do much more. The next step still needs to be quite large, because we are far from the rates corresponding to 2% inflation. I would support a 75 basis point increase — let's take a bigger step and raise rates." European Central Bank and rate The Latvian official said that this does not mean that 75 basis points are now the "golden mean", and that, probably, as soon as rates will be more in line with the inflation target, future steps need to be done more carefully. His calls for decisive action are supported by other officials from the Baltic region. European Central Bank President Christine Lagarde and other officials from the board of governors told us about something similar this week. The surge in prices caused by Russia's military special operation in Ukraine and the resulting energy crisis prompted ECB officials to start raising rates for the first time in more than a decade — this month rates were raised immediately by a historic three-quarters of a point. Now they are weighing how to proceed, as the price increase is accompanied by ever-increasing forecasts of a recession. Lagarde told European Union lawmakers this week that officials will start considering cutting trillions of euros worth of bonds it accumulated during recent crises only after rates reach that point. Traders estimate the probability of another 75 basis point move next month at 40%. An increase in this amount will double the deposit rate to 1.5% — the highest level since 2009. The opinion of a Latvian politician As for Kazaks' speech, in his opinion, the cost of borrowing will reach a "neutral" level, which does not stimulate or limit the economy by the end of the year. "Of course, we should discuss all the tools so that when it is necessary to make a tough decision, we are ready," Kazaks said. "The ECB should delay its balance sheet reduction program, or quantitative tightening, until next year." According to the Latvian politician, this will prevent the European crisis from flowing into recession. Given that the main source of inflation is the crisis in the energy market, which is of a geopolitical and structural nature, an extremely rapid tightening of monetary policy will simply push the economy into recession. The Technical Outlook  As for the technical picture of EURUSD, the bulls have regained their advantage and the market under their control, which they lost at the beginning of the week, and are now aiming to break through the nearest resistance of 0.9840. It is necessary to do this if they expect the upward correction to continue at the end of this month. A breakdown of 0.9840 will take the trading instrument even higher to the area of 0.9890 and 0.9950. But despite the good upward prospects, protecting the nearest support of 0.9780 is still an important task for the bulls. Its breakthrough will push the euro to a low of 0.9730, but there will be nothing critical in this situation either, since there is the lower boundary of the new ascending channel. Only after missing 0.9730 will it be possible to start getting nervous, as the pair will easily fall into the area of 0.9680 and 0.9640. The Pound (GBP) The pound continues to win back positions one by one thanks to the support of the Bank of England. Now bulls are focused on the 1.1200 resistance, the breakthrough of which will open up prospects for further recovery in the area of 1.1260 and 1.1320. It will be possible to talk about the return of pressure on the trading instrument only after the bears take control of 1.1070, but this will not cause serious damage to the bull market observed since the middle of the week. Only a breakthrough of 1.1070 will push GBPUSD back to 1.1010 and 1.0950.   Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323100
Rates Spark: Riding the hawkish wave while it lasts

Economists Are Concerned About The Future Fed Decision

InstaForex Analysis InstaForex Analysis 30.09.2022 10:09
Fast and furious tightening by the Federal Reserve risks plunging the economy into recession, and economists fear the central bank is making another mistake after a recent slow response to runaway inflation. A string of massive interest rate hikes of 75 basis points, with at least one more expected in November, according to experts, means that officials are not going to wait for the effect of their actions before acting again. The risk of an aggressive policy without analysis of the actions of Fed officials could drive the economy into a much deeper recession than expected. Given the lag of some inflation data, this is already a concern for many politicians. Let me remind you that Fed officials started raising rates from almost zero only in March, after the price pressure had already reached a significant level. After their delay, they are now ramping up the burden on the economy at a record pace to catch up, with the price of a mistake being the future economic pain caused by inflation-suppressing actions. The Fed has already raised rates by 3 percentage points this year, with the bulk of the increase coming in the summer, and has vowed to keep raising rates until it sees clear signs of lower inflation. According to the latest reports, inflation in the US resumed its growth in August, which forced the Fed to return to discussions on the topic of maintaining a further aggressive policy. The Fed's current actions have already pushed up the cost of borrowing on everything from home loans to cars, but the full impact of these moves on the economy will only be known in the next few months, given the time it takes for current changes to take hold across all areas. Experts say that without creating the respite that many traders and investors hoped for in the early fall of this year, politicians risk causing a larger slowdown in the economy than necessary, as well as potentially damaging the labor market more than anticipated. At their meeting later this month, Fed officials said they would raise rates by another 1.25 percentage points this year, which could mean another 75 basis point hike in November and a half-percentage increase in December. According to the Fed's median forecast, next year rates will rise by another quarter of a point. All this supports the dollar and puts pressure on risky assets, especially in the face of a deteriorating geopolitical situation. As for the technical picture of EURUSD, the bulls have regained their advantage and the market under their control, which they lost at the beginning of the week, and now they are aiming to break through the nearest resistance at 0.9840. This is necessary if they expect a continuation of the upward correction at the end of this month. The breakdown of 0.9840 will take the trading instrument even higher to the area of 0.9890 and 0.9950. But despite the good upward prospects, the bulls' main task is to protect the immediate support of 0.9780. Its breakthrough will push the euro to a low of 0.9730, but in this situation there will be nothing critical, since the lower border of the new rising channel passes there. You can start to get nervous only if you miss 0.9730, as the pair will easily fall to the area of 0.9680 and 0.9640. The pound continues to win back positions one by one thanks to the support of the Bank of England. Now the bulls are focused on the resistance at 1.1200, the breakthrough of which will open the prospects for further recovery in the area of 1.1260 and 1.1320. It will be possible to talk about the return of pressure on the trading instrument only after the bears take control of 1.1070, but this will not cause serious damage to the bull market observed since the middle of the week. Only a breakthrough of 1.1070 will push the GBPUSD back to 1.1010 and 1.0950.   Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323102
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

The Euro (EUR) And The British Pound (GBP) Continue To Strengthen Their Positions Against The US Dollar (USD)

InstaForex Analysis InstaForex Analysis 30.09.2022 10:47
And while the euro is gaining ground against the US dollar, and the British pound is making its way to another weekly highs amid increased optimism, supported by the actions of the Bank of England, the president of the Federal Reserve Bank of Atlanta, Rafael Bostic, said he supports raising rates by another 1.25 percentage points by the end of this year to counter inflation, which turned out to be worse, than he expected. "The lack of progress so far makes me think much more that we should take a moderately restrictive position," he told reporters during a conference call. "For me, acceptable rates are in the range from 4.25% to 4.5%. I prefer that we get to this level by the end of the year." Such aggressive statements by representatives of the Fed are not news this week. Fed officials raised interest rates by 75 basis points at the September 21 meeting, bringing the federal funds rate target from 3% to 3.25%. Immediately after that, policymakers continued to prepare the markets for further changes in the cost of borrowing, and median forecasts already show that Fed officials are laying on a rate of 4.5% by the end of this year. "Inflation is still high and too high and not moving fast enough back towards our 2% target," Bostic said, adding that he expected to see an improvement in supply chain imbalances in early summer that would help ease price pressures. "The forecasts did not come true, and the situation on the energy market has not changed, which forced me to adjust my political thinking," he said. The head of the Federal Reserve Bank of Atlanta still hopes that the US economy will be able to avoid a recession or a much higher unemployment rate. According to his forecasts, unemployment will rise to about 4.1% from 3.7% — a small increase that will continue to keep the labor market at a fairly strong level. "I still don't think the recession is a settled issue. Yes, we may have some weakening in the economy, but I don't think that at this stage it will lead us to a historical crisis." Despite such hawkish statements by other American politicians, the euro and the British pound continue to strengthen their positions against the US dollar, taking advantage of sufficient optimism after the recent intervention of the BoE in the situation on the currency and bond market. As for the technical picture of EURUSD, the bulls have regained their advantage and the market under their control, which they lost at the beginning of the week, and are now aiming to break through the nearest resistance of 0.9840. It is necessary to do this if they expect the upward correction to continue at the end of this month. A breakdown of 0.9840 will take the trading instrument even higher to the area of 0.9890 and 0.9950. But despite the good upward prospects, protecting the nearest support of 0.9780 is still an important task for the bulls. Its breakthrough will push the euro to a low of 0.9730, but there will be nothing critical in this situation either, since there is the lower boundary of the new ascending channel. Only after missing 0.9730 will it be possible to start getting nervous, as the pair will easily fall into the area of 0.9680 and 0.9640. The pound continues to win back positions one by one thanks to the BoE's support. Now bulls are focused on the 1.1200 resistance, the breakthrough of which will open up prospects for further recovery in the area of 1.1260 and 1.1320. It will be possible to talk about the return of pressure on the trading instrument only after the bears take control of 1.1070, but this will not cause serious damage to the bull market observed since the middle of the week. Only a breakthrough of 1.1070 will push GBPUSD back to 1.1010 and 1.0950.       Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323104
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The Growth Of EUR/USD And GBP/USD Pairs Will Be Limited As The Economic Situation In Both Europe And The UK Are Not Good

InstaForex Analysis InstaForex Analysis 30.09.2022 11:26
The rebound in financial markets was short-lived due to unstable support from statistics. Also, market sentiment noticeably worsened as the UK bond market collapsed amid the government's plan to launch a new program to stimulate the economy. This caused pound to fall to 1985 lows, while bond yields jumped to 2008 levels as fears of a more vigorous rate hike increased. Now, with the potential rate hike, GBP/USD rose above 1.1000 and traded at 1.1140. EUR/USD also increased as rising inflation in Germany point to more aggressive climb of ECB rates. Reportedly, the consumer price index in the country rose to 10% y/y and 1.9% m/m. The expected rate hike may intensify if consumer inflation in the whole Euro area rises to 9.7%. But growth will be limited as the economic situation in both Europe and the UK are not good. Although the energy crisis, decline in production and incomes of citizens could develop a decrease in inflation, these regions are poorly attractive for investment. As such, demand for dollar will continue, while risk appetite will go down, which is negative for euro and pound. Forecasts for today: GBP/USD Although demand rose because of potential rate hikes by the Bank of England, growth will be limited, especially if the pair does not rise above 1.1180. And if it falls below 1.1070, the price will collapse to 1.0915. EUR/USD Demand surged because of the potential rate hike by the ECB. If inflation in the Euro area turns out to be higher than expected, the pair will hit 0.9875, then fall to 0.9700.   Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323108
The EUR/AUD Pair May Have The Potential To Continue Its Decline

EUR/USD: What Stands Behind THAT HIGH Eurozone Inflation?

Kenny Fisher Kenny Fisher 30.09.2022 16:24
The euro is showing limited movement today, after a two-day rally. In the European session, EUR/USD is trading at 0.9759, down 0.55%. It has been a week of swings for the euro, which has traded in a 300-point range. The euro has been under strong pressure, and is down 2.5% in September, as the euro continues to drop further away from the psychologically-important parity line. Eurozone inflation hits 10% The number 10 is not at all pretty when referring to inflation, but that is today’s story, as eurozone CPI jumped to 10.0% in August, up from 9.1% in July and above the consensus of 9.7%. This is the highest rate ever recorded since the euro was introduced back in 1999. Inflation is well supported, as all broad categories reflected price increases, and core inflation rose to 4.8%, up from 4.3% and higher than the 4.7% estimate. Germany, the powerhouse of the bloc, saw inflation accelerate even higher, to 10.9%. The chief driver of soaring inflation is energy prices, which have skyrocketed as Russia has sharply reduced energy exports to Europe. The latest ominous development was a series of explosions at the Nord Stream pipelines this week. Although the pipeline system had already been shut down, the explosions, which were likely sabotage, have sent natural gas prices even higher. Read next: Differences In Wealth Per Adult, Disney Park Re-Opened And Retirement Theme| FXMAG.COM The ECB showed up very late to the rate-tightening dance, and the current benchmark rate of 1.25% lags behind other central banks and will not have much impact on soaring inflation. The central bank appears to have little choice other than to deliver a second-straight rate increase of 0.75% at the October meeting. With eurozone inflation hitting double digits and showing no sign of peaking, it is no surprise that confidence levels are sinking among consumers and businesses. The European Commission economic sentiment index slipped to 93.7 in September, down from 97.3 in August. German GfK Consumer Confidence fell to -42.5 in September, down from -36.8 in August, and lower than the consensus of -39.0 points. The economic picture in the eurozone is bleak, and the ailing euro will be hard-pressed to make any headway against the surging US dollar. EUR/USD Technical EUR/USD is testing support at 0.9554. Next, there is support at 0.9419 There is resistance at 0.9640 and 0.9711 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. EUR/USD falls as inflation jumps - MarketPulseMarketPulse
The Markets Still Hope That The Fed May Consider Softer Decision

Will Today's The Manufacturing PMI Data Affect The Euro (EUR)?

InstaForex Analysis InstaForex Analysis 03.10.2022 08:10
Last Friday, the euro traded within the range of target levels 0.9752-0.9850, closing the day down 12 points. The daily Marlin Oscillator turned sideways – to the neutral state, even though it is in the negative territory. A debt crisis is brewing in Europe, which began with a rise in yields on British medium-term government bonds, in particular, on 3-year securities over the last ten days of September, it jumped from 3.05% to 4.74%. For German 3-year bonds, during this time, the yield increased from 1.54% to 1.80%. Given the European Central Bank's intention to raise rates sharply at the October meeting, anxiety will only intensify. But maybe not today or tomorrow. The eurozone is expected to have a neutral PMI in the manufacturing sector for September - that is, it will remain at its previous value of 48.5 points, while the US ISM Manufacturing PMI is forecast to weaken from 52.8 to 52.2. As a result, we expect some more delay for the euro in the range of 0.9695-0.9850. Perhaps, having the price settle under 0.9695, that is, under the close on September 23, when the euro collapsed by 150 points, the trend will strengthen in a new downward momentum. On the H4 chart, the price settled above the balance and MACD indicator lines, which also indicates the possibility of the price staying in the side short-term trend. The Marlin Oscillator has turned down, but not enough yet, given the overall technical picture, for the effectiveness of such a signal. The probability of continuation of the correction to the level of 0.9950, which has already reached and significantly strengthened the MACD line of the daily scale, is 35%. We will allocate 50% for sideways movement and 15% for downward reversal.   Relevance up to 04:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323210
FX Daily: Testing the easing pushback

The Euro-US Dollar (EUR/USD) Pair: Sales Will Become Relevant Again

InstaForex Analysis InstaForex Analysis 03.10.2022 08:15
The EUR/USD currency pair was trading upwards on Friday, as it had been for the previous two days. It can be seen that traders made a pretty good leap up, but are they ready to continue buying the euro currency, or was it only a partial fixation of short positions by bears? So far, the euro has managed to rise in price by "as much as" 300 points, which is very little to talk about the beginning of a new upward trend. So formally, the trend changed to an upward one. Still, we recall that before the beginning of the last round of the upward movement, the euro currency fell significantly, so now we can talk about another round of technical correction. If this is the case, the fall of the euro currency may well resume since the fundamental global background has not changed for the euro and the dollar, and the geopolitical one has worsened, which is primarily dangerous for the euro currency. The pair had previously been fixed from time to time above the moving average, but this did not even lead to significant corrections. We still believe that it will be possible to count on the serious growth of the euro currency no earlier than the end of 2022, when the Fed, in theory, should announce a slowdown in the increase in the key rate or a refusal to increase it further. In this case, there will be fundamental reasons to expect a rise in the euro. But at the same time, we do not know and cannot know what will happen to geopolitics by that time. We have already mentioned that three of the four strands of the Nord Stream pipeline were blown up last week. It is still unclear who is behind this terrorist attack. One thing is clear – the European Union will suffer from it. Gas supplies from Russia have been stopped and are unlikely to be resumed in the near future. Recall that the main plan of Brussels was to fill gas storage facilities as much as possible before gas supplies from the Russian Federation stopped to spend the current winter without problems and then solve the problem with gas over the next year. However, either the Kremlin has escalated the "gas conflict," or Washington has thus decided to accelerate the increase in LNG supplies from the United States to the EU. Still, the fact remains that the Nord Stream is not functioning, and if it is not repaired in the near future, it will never function. The European economy will start to stall without Russian gas. There will be practically no macroeconomic statistics in the EU next week. Of the relatively important events, we can single out only the indices of business activity in the service and manufacturing sectors, another speech by Christine Lagarde, and a report on retail sales. The market is now primarily interested not in macroeconomics but in geopolitics. Therefore, it will play an important role in the prospects of the euro/dollar pair. From our point of view, the situation may deteriorate dramatically in October. First, Moscow and Kyiv have taken the path of escalation of the military conflict. The Kremlin said that any strike on the territory recognized by it would be regarded as an encroachment on the integrity and security of the Russian Federation, so a tactical nuclear strike could follow in response. Kyiv immediately responded with an application to join NATO, and NATO itself announced the principle of an open door. The AFU took the strategically important city of Liman the next day, so, as we see, the Ukrainian side continues to go on a counter-offensive. Consequently, the deterioration of the geopolitical situation is a very likely development of events, given the mobilization of several hundred thousand Russians. And this means that there will be new missile strikes, bloody battles, new Western sanctions, and so on. In addition, the European Union energy crisis may become a catastrophe when gas supplies from the Russian Federation can only be carried out by sea and through Ukraine. It is unclear how long the pipeline, which passes through Ukrainian territories, will live now, given the terrorist attacks in the North Sea. But one way or another, the EU may be left without gas this winter, which will affect its industrial production, GDP, and the satisfaction of European citizens. Based on all of the above factors, we believe that the euro currency may resume depreciation against the US currency. The average volatility of the euro/dollar currency pair over the last five trading days as of October 3 is 160 points and is characterized as "very high." Thus, on Monday, we expect the pair to move between 0.9644 and 0.9964 levels. A reversal of the Heiken Ashi indicator upwards will signal a new round of upward movement. Nearest support levels: S1 – 0.9766 S2 – 0.9644 S3 – 0.9521 Nearest resistance levels: R1 – 0.9888 R2 – 1.0010 R3 – 1.0132 Trading Recommendations: The EUR/USD pair has consolidated above the moving average line and may continue to move up. Thus, now we should consider new long positions with targets of 0.9888 and 0.9964 if we see a price rebound from the moving average and a reversal of the Heiken Ashi indicator upwards. Sales will become relevant again no earlier than fixing the price below the moving average with a target of 0.9644. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) identifies the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Based on current volatility indicators, volatility levels (red lines) are the likely price channel in which the pair will spend the next day. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 02:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323202
Declines At The Close Of The New York Stock Exchange, The Drop Leaders Were Nike Inc Shares

Declines At The Close Of The New York Stock Exchange, The Drop Leaders Were Nike Inc Shares

InstaForex Analysis InstaForex Analysis 03.10.2022 08:21
At the close of the New York Stock Exchange, the Dow Jones fell 1.71% to hit a 52-week low, the S&P 500 fell 1.51% and the NASDAQ Composite fell 1.51%. Shares of UnitedHealth Group Incorporated were among the leaders of gains among the components of the Dow Jones index today, which lost 3.79 points (0.74%) to close at 505.04. Walgreens Boots Alliance Inc fell 0.15 points or 0.48% to close at 31.40. Dow Inc shed 0.23 points or 0.52% to close at 43.93. The drop leaders were Nike Inc shares, which lost 12.21 points or 12.81% to end the session at 83.12. Boeing Co was up 3.39% or 4.25 points to close at 121.08, while Walt Disney Company was down 3.20% or 3.12 points to close at 94. 33. Leading gainers among the S&P 500 index components in today's trading were Charles River Laboratories, which rose 3.57% to hit 196.80, Weyerhaeuser Company, which gained 2.92% to close at 28.56, and shares of Twitter Inc, which rose 2.74% to end the session at 43.91. The losers were shares of Carnival Corporation, which fell 23.31% to close at 7.03. Shares of Norwegian Cruise Line Holdings Ltd lost 18.11% to end the session at 11.35. Quotes of Royal Caribbean Cruises Ltd decreased in price by 13.14% to 37.91. Leading gainers among the components of the NASDAQ Composite in today's trading were FingerMotion Inc, which rose 82.16% to hit 3.37, SAITECH Global Corp, which gained 43.36% to close at 3.24, and shares of Avenue Therapeutics Inc, which rose 39.03% to end the session at 10.08. The biggest losers were Atlis Motor Vehicles Inc, which shed 39.91% to close at 20.40. Shares of Aterian Inc lost 37.06% and ended the session at 1.24. Quotes of Edesa Biotech Inc decreased in price by 34.66% to 0.92. On the New York Stock Exchange, the number of securities that fell in price (1,758) exceeded the number of those that closed in positive territory (1,354), while quotations of 117 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,139 companies fell in price, 1,583 rose, and 228 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.69% to 31.62. Gold futures for December delivery added 0.11%, or 1.80, to $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 1.87%, or 1.52, to $79.71 a barrel. Futures for Brent crude for December delivery fell 2.13%, or 1.86, to $85.32 a barrel. Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.08% to 0.98, while USD/JPY advanced 0.23% to hit 144.77. Futures on the USD index fell 0.09% to 112.10. Relevance up to 05:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/295131
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The EUR/USD Pair: All Types Of Backgrounds Remain A Failure For The Euro (EUR)

InstaForex Analysis InstaForex Analysis 03.10.2022 08:27
EUR/USD 5M The EUR/USD pair tried to overcome the Senkou Span B line on Friday, but it failed to do so on the first attempt. Now the euro, which has been growing for only a few days so far, faces an important dilemma: either overcome the Senkou Span B line and count on some additional growth, or resume the fall. The European Union published a rather important September inflation report on Friday. Traders obviously did not expect to see the consumer price index rise immediately by 10%, but for some reason they rushed to sell the euro, and not buy it after the release of the data. From our point of view, each subsequent increase in inflation raises the likelihood of further European Central Bank rate hikes. Therefore, it would be logical to assume that the euro should show growth, not fall. But the market judged in its own way, the euro fell by 100 points, and during the rest of the day it almost completely won back these losses. The euro's prospects remain rather vague due to the fundamental and geopolitical background, but growth can also continue for some time on bare "technique". In regards to Friday's trading signals, the situation was not the best. There was no pronounced flat that day, but all signals formed in the area of 0.9804-0.9813. The first buy signal was false, as the price was able to go up only 15 points. The position was closed by Stop Loss at breakeven. Then an ultra-inaccurate buy signal was formed, after which the price went up 23 points. The position again closed at breakeven. The next two sell signals should have been ignored, but even if traders tried to work them out, they still would not receive profits, since the price never reached the target level. COT report: The Commitment of Traders (COT) reports on the euro in 2022 can be entered in the textbook. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. Then they showed a bearish mood for several months, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have said, because the demand for the US dollar remains high. Therefore, even if the demand for the euro is growing, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group increased by 2,000, while the number of shorts decreased by 1,800. Accordingly, the net position grew by about 200 contracts. This is very small and this fact does not matter much, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of long positions is higher than the number of shorts for non-commercial traders by 34,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 3. Geopolitics can bring down the euro with renewed vigor. Overview of the GBP/USD pair. October 3. The clouds are gathering over Liz Truss. Will she follow in the footsteps of Boris Johnson or become the new "Margaret Thatcher"? Forecast and trading signals for GBP/USD on October 3. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The trend began to change to an upward one on the hourly timeframe. Despite the fact that almost all types of backgrounds remain a failure for the euro, as well as the economic prospects of the European Union, the market still cannot sell the euro forever. Perhaps now we are entering a 2-3 month period of growth. The main thing is that the pair manages to settle above the Senkou Span B line. Without this, it will be difficult to count on growth. We highlight the following levels for trading on Monday - 0.9553, 0.9813, 0.9877, 0.9945, 1.0019, as well as the Senkou Span B (0.9804) and Kijun-sen (0.9695) lines. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union and the United States will publish indexes of business activity in the manufacturing sector. The US ISM index is more significant, we expect some market reaction to it, but everything will depend on the deviation of the actual value from the forecast. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323198
Why India Leads the Way in Economic Growth Amid Global Slowdown

The GBP/USD Pair Gained Bullish Pace, September PMI Indices And Continued Volatility In The Markets

TeleTrade Comments TeleTrade Comments 03.10.2022 10:10
Here is what you need to know on Monday, October 3: Markets stayed relatively quiet during the Asian trading hours on Monday but volatility picked up in the early European morning. Political developments in the UK are watched closely by market participants ahead of S&P Global's final September PMIs for Germany, the euro area, the UK and Canada. The US economic docket will feature the ISM September Manufacturing PMI later in the day. Several FOMC policymakers, including Kansas City Fed President Esther George and New York Fed President John Williams, will also be delivering speeches in the second half of the day. After having registered modest gains on Friday, the US Dollar Index turned south and broke below 112.00. US Stock index futures are trading mixed in the European session and the benchmark 10-year US Treasury bond yield loses over 1% below 3.8%.  During the Asian trading hours, the data from Japan showed that the Tankan Large Manufacturing Index declined to 8 in Q3, missing the market expectation of 11. On a positive note, the Non-Manufacturing Index edged higher to 14 in the same period from 13. Meanwhile, Japanese Finance Minister Shunichi Suzuki reiterated that they continue to watch FX moves with a strong sense of urgency. USD/JPY showed no reaction to Suzuki's comments or the data releases and it was last seen moving sideways slightly below 115.00. GBP/USD gathered bullish momentum and jumped to its highest level in over a week near 1.1300. Reports suggesting that the UK government is expected to roll back the proposed scrapping of the higher rate of income tax helped the British pound gather strength. British Finance Minister Kwasi Kwarteng confirmed these reports by announcing that the government will not go ahead with a plan to scrap a 45% rate of income tax. Following the initial bullish reaction, the pair returned to the 1.1200 area, where it was up around 0.3% on the day. EUR/USD is having a difficult time making a decisive move in either direction and trading in a narrow range near 0.9800.  Gold snapped a two-week losing streak on Friday and edged higher toward $1,670 early Monday. Although XAU/USD returned to the $1,660 area in the European morning, it managed to hold its ground amid retreating US Treasury bond yields.  Bitcoin closed in negative territory on Saturday and Sunday but found support near $19,000. Ethereum fell nearly 4% over the weekend and dropped below $1,300 before staging a rebound early Monday. ETH/USD was last seen rising 1% on the day at $1,290.
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The Euro (EUR) Is In A Stable Channel And The Pound (GBP) Has Little Chance Of Falling

InstaForex Analysis InstaForex Analysis 03.10.2022 11:02
December futures for both Brent and WTI continue to trade below $90 per barrel. Several factors are to blame, and all of them are related to the current global economic slowdown. In addition, world central banks are competing to see who can raise rates faster, while demand is declining very rapidly. The record growth in US oil inventories also prevents any possible price increase. To address this, OPEC members are having a meeting on October 5. They will likely discuss the issue of cutting production by 1 million barrels per day, which, if approved, will make everyone realize that a recession may come much earlier than expected. In terms of dollar, the current environment will provoke high volatility, which will maintain the stability of the currency. Any decline will be a correction rather than a development of a new trend. EUR/USD Inflation in the Euro area has reached a record high. A number of countries said theirs exceeded 20%, while Germany reported that theirs has come close to 11%. Considering that measures to support the economy are being completed, and the energy crisis is gaining momentum, there is every reason to believe that the current level will be updated several times during the winter months. In terms of positioning, net long positions of euro slightly corrected, which is surprising given the high inflation, gas crisis and geopolitical tensions on the region. Even so, demand remains strong, and it is likely that the recent decline below parity is just short-term. This means that a correction is not long in coming, and bullish momentum may develop amid any positive news from Europe. The settlement price is above the long-term average. Euro is in a stable channel and there is no reason to expect a reversal. But if a correction develops, then 0.9863 will be the nearest target, and rising above it will open the way towards the border of the channel at 0.9960/80. There is little chance of hitting the low, but growth will also be limited. GBP/USD UK markets were highly volatile last week due to the government's plan to cut taxes in order to offset households' electricity bills. Pound hit a new record low, while bond yields soared. The Bank of England was also forced to intervene in the stock market to avert a liquidity crunch among local pension funds. There is growing pressure on the government to adjust its fiscal plans, but so far there is no sign of a change in policy. On the bright side, latest economic data looks very decent as the final estimate of GDP for the 2nd quarter was raised to 4.4% y / y. The housing price index slowed down from 10% to 9.5% y / y, while the number of applications for mortgages significantly exceeded the forecast. Consumer lending does not decrease. In terms of positioning, net short positions in pound slightly decreased, and it seems that sell-offs in the currency are about to stop. The settlement price is well above the long-term average, which indicates that last week's fall is not supported by the changes in the futures market. There is a high chance of a reversal. Most likely, pound will trade around 1.0345 for some time, then go for a rebound. The nearest targets are the 23.6% retracement level at 1.1264 and the upper limit of the channel at 1.1670/1720. There is little chance of a decline below 1.0345, but if it happens, buying pressure will surge, which will continue the correction.   Relevance up to 09:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323220
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

How The EUR/USD And GBP/USD Currency Pairs Look Like Today

InstaForex Analysis InstaForex Analysis 03.10.2022 13:19
Details of the economic calendar for September 30 The final data on UK GDP for the second quarter brought a pleasant surprise. GDP for the second quarter grew by 0.2% compared to the previous forecast of -0.1%, and in annual terms increased to +4.4% against the previous estimate of 2.9%. Surprisingly, Britain is not in a technical recession based on GDP data. The publication of data on Eurozone inflation was considered the main event, which reached a double-digit record. Eurozone consumer prices rose by 10% in September, a new all-time high, according to the European Union Statistical Office. The reason for such unprecedented performance lies in the sharp rise in energy prices. As inflation rises, the ECB will continue to tighten monetary policy, which will lead to a sustained rise in interest rates. Analysis of trading charts from September 30 The EURUSD currency pair, during the corrective movement, reached the resistance level of 0.9850, relative to which there was a reduction in the volume of long positions on the euro. As a result, there was a price rebound in the market. The GBPUSD currency pair ended last week in the stage of lateral amplitude, while the price range was quite wide, about 200 points. Economic calendar for October 3 Today, data on the business activity index in the manufacturing sector in Europe and the UK have already been published, where the indicators came out worse than the preliminary estimate. Details: Eurozone manufacturing PMI fell from 49.6 to 48.4 in September. UK's manufacturing PMI in September rose from 47.3 to 48.4 against the forecast of 48.5. There was practically no reaction due to the fact that the market played out the information noise. During the American trading session, the United States manufacturing PMI is also expected for publication, which may rise from 51.5 to 51.8. As for the information flow, the Fed will hold a closed meeting. Expect news from the media regarding what the board of governors discussed. Time targeting: US Manufacturing PMI (Sept.) – 13:45 UTC Trading plan for EUR/USD on October 3 To prolong the current correction on the market, the quote must be kept above the resistance level for at least a four-hour period. In this case, buyers of the euro will have high chances to return the quote to the parity area. An alternative scenario considers the completion of a corrective move, where holding the price below 0.9750 in a four-hour period could lead to a phased decline. Trading plan for GBP/USD on October 3 Since the opening of the new trading week, the sideways formation has been broken in an upward trajectory. The movement was accompanied by high speculative interest, during which there was inertia on a scale of more than 180 points. The reason for such a heavy movement was the rumor that the UK plans to cancel the plan to reduce the tax rate from 45% to 40%. Subsequently, this rumor was officially confirmed by the British government. UK Finance Minister Kwasi Kwarteng confirmed the change on Twitter. "We get it, and we have listened," he wrote. Returning to the technical analysis, a stable holding of the price above the high of the last week at 1.1233 may well lead to the subsequent strengthening of the pound towards the price range of 1.1410/1.1525. Otherwise, the quote will continue to move within the previously passed amplitude of 1.1050/1.1200. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.       Relevance up to 10:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323236
FX Daily: Testing the easing pushback

The Euro-Dollar (EUR/USD) Has Pair A Potential For Further Growth?

InstaForex Analysis InstaForex Analysis 04.10.2022 08:32
The euro spent the entirety of Monday, like Friday, between the target levels of 0.9752-0.9850. So far, our forecast about the short-term development of sideways movement is justified, but if this sideways movement drags on, then most likely the growth will continue and the level of 0.9950 will be overcome. In the current situation, we are waiting for the price to fall below 0.9752 and the price to return to the downward trend. The daily Marlin Oscillator is turning down, pushing the price towards this scenario. On the four-hour chart, the price also found support on the MACD indicator line yesterday, at the point of its intersection with the target level, the quote rebounded upwards. This is a signal for further growth. This signal will be confirmed by consolidating above 0.9850. The 0.9950 target will become available, although it may not be reached (the resistance of the MACD line of the daily scale will interfere).   Relevance up to 04:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323302
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

Will The Scenario Of The EUR/USD Pair For A New Impulsive Growth Prove True?

InstaForex Analysis InstaForex Analysis 04.10.2022 08:34
EUR/USD still needs to break clearly above minor resistance at 0.9851 to add confidence in our preferred scenario that a long-term corrective bottom is in place at 0.9536. A break above minor resistance at 0,9851 and more importantly a break above resistance at 1.0051 will confirm the low being in place and that a new impulsive rally in wave 3 or C is unfolding. Ultimately, this impulsive rally will break above the peak of wave 1 or A at 1.6038. However, for now, let's take the rally from 0.9536 in baby steps and look for a break above minor resistance at 0.9851 as the first good indication that the corrective decline from 1.6038 has been completed.   Relevance up to 06:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295288
The EUR/USD Pair Maintains The Bullish Sentiment

The Trend Of EUR/USD Pair Began To Change To An Upward One

InstaForex Analysis InstaForex Analysis 04.10.2022 08:46
EUR/USD 5M The EUR/USD pair again tried to continue moving up on Monday, although it also managed to show a round of downward movement. Nevertheless, if we consider the last three trading days, it turns out that the pair fell into a horizontal channel. At least, it failed to overcome the level of 0.9844 from several attempts, and there are not so many of these attempts so far to talk about overcoming this level in any case sooner or later. It should be noted that despite the flat, the pair traded surprisingly logically, as a weak EU manufacturing business activity index came out in the morning, and a weak US manufacturing business activity index came out in the afternoon. Accordingly, first the euro fell, then the dollar. Of course, we did not expect that far from the most significant reports would be worked out, but the market was blatantly surprised on Monday. It should also be noted that the price did not clearly settle above the Senkou Span B line. There was no consolidation above the critical line on the 24-hour timeframe. Therefore, unlike the pound, we believe that the euro may resume its decline. In regards to Monday's trading signals, the situation was sad. There were already signs of a flat at the European trading session, and the price formed four signals near the area of 0.9804-0.9813. Naturally, most of these signals turned out to be false. Therefore, traders could try to work out the first two signals, but most likely received a loss on both transactions. It's okay, bad days are also an integral part of the trading process. All subsequent signals in the same area should not have been worked out. COT report: The Commitment of Traders (COT) reports on the euro in 2022 can be entered in the textbook. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then they showed a bearish mood for several months, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have said, because the demand for the US dollar remains high. Therefore, even if the demand for the euro is growing, the high demand for the dollar does not allow the euro itself to rise. During the reporting week, the number of long positions for the non-commercial group increased by 2,000, while the number of shorts decreased by 1,800. Accordingly, the net position grew by about 200 contracts. This is very small and this fact does not matter much, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 34,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 4. It is still very difficult to wait for a strong growth from the euro. Overview of the GBP/USD pair. October 4. The political absurdity in the UK persists. Forecast and trading signals for GBP/USD on October 4. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H On the hourly timeframe, the trend began to change to an upward one, but the most important and significant levels and lines have not yet been overcome. We believe that until the Senkou Span B line is confidently overcome on the current TF and the Kijun-sen line on the 24-hour TF, it is not necessary to talk about a more powerful growth of the euro currency. The euro, of course, has taken a significant step towards the end of the downtrend, but we recall that so far the upward movement is only a little more than 300 points. On Tuesday, we highlight the following levels for trading - 0.9553, 0.9844, 0.9945, 1.0019, as well as the Senkou Span B (0.9804) and Kijun-sen (0.9695) lines. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also auxiliary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "overcoming" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect against possible losses if the signal turns out to be false. On October 4, ECB President Christine Lagarde will speak in the European Union, whose rhetoric is unlikely to change from three speeches last week. Therefore, we do not expect a strong market reaction. There are no major events or publications scheduled in the US today. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323290
PLN Soars to Record Highs Ahead of NBP Decision

The Bullish Trend Is Currently Very Strong For The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 04.10.2022 14:21
Overview : The bullish trend is currently very strong for the EUR/USD pair. As long as the price remains above the support levels of 0.9764 and 0.9823, you could try to take advantage of the bullish rally. Over the past week, the price of the EUR/USD pair has been plummeting with strong bullish momentum, resulting in a break above the 50-day and 100-day moving averages lines on the daily timeframe, indicating that the bulls are presently in control of the market. The euro's strong gains against the US dollar have continued this week ahead of the NFP. The common currency reached a high of more than two years earlier this morning GMT at 0.9900. Signs of progress toward new fiscal stimulus in the USA and the dollar's general weakness have been key factors despite weak economic data affecting both currencies. This technical analysis of the EUR/USD pair looks at the one-hour chart. The resistance of the EUR/USD pair has broken; it turned to support around the price of 0.9823 last week. Thereby, forming a strong support at 0.9764. The direction of the EUR/USD pair into the close this week is likely to be determined by trader reaction to 0.9823 and 0.9950. The EUR/USD pair climbed above the level of 0.9823 before it started a downside correction. The EUR/USD pair set above strong support at the level of 0.9764, which coincides with the 61.8% Fibonacci retracement level. This support has been rejected for three times confirming uptrend veracity. Hence, major support is seen at the level of 0.9764 because the trend is still showing strength above it. The level of 0.9764 coincides with the golden ratio (61.8% of Fibonacci retracement) which is acting as major support today. Another thought; the Relative Strength Index (RSI) is considered overbought because it is above 60. At the same time, the RSI is still signaling an upward trend, as the trend is still showing strong above the moving average (100), this suggests the pair will probably go up in coming hours. The first bullish objective is located at 0.9904. The bullish momentum would be revived by a break in this resistance (0.9904). Buyers would then use the next resistance located at 0.9950 as an objective. Crossing it would then enable buyers to target 0.9950. Be careful, given the powerful bullish rally underway, excesses could lead to a short-term rebound. If this is the case, remember that trading against the trend may be riskier. It would seem more appropriate to wait for a signal indicating reversal of the trend. Accordingly, the market will probably show the signs of a bullish trend. This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend In other words, rebuy orders are recommended above 0.9950 level with their third target at the level of 1 USD. From this point, the pair is likely to begin an ascending movement to the point of 0.9904 and further to the level of 0.9950. The price of 1 USD will act as a strong resistance and retest the psychological price again. On the other hand, if a break happens at the support of 0.9764, then this scenario may become invalidated. This content is for information purposes only and in no way constitutes investment advice or any incentive whatsoever to buy or sell financial instruments. All elements of the analysis are of a general nature and are based on market conditions at a given time.     Relevance up to 13:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295395
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

The EUR/USD Pair: The Bulls Have Difficulty In The Monthly Price Consolidation

InstaForex Analysis InstaForex Analysis 05.10.2022 08:13
The euro rose 160 points yesterday on the back of continued risk appetite in the stock markets. The US S&P 500 added 3.06%. Yields on government bonds also fell - on 5-year bonds from 4.06% to 3.88%. The level of accumulation of stop losses in the area of 1.9870 was overcome and the euro was able to overcome the technical resistance - the level of 0.9950 we defined and the MACD line of the daily scale. The price stuck in the range of monthly consolidation on August 22-September 20 at 0.9950-1.0050. Yesterday's surge in the stock markets is unlikely to repeat today, and on Friday there will be data on labor in the US for September. The forecast for new jobs in the non-farm sector is 250,000, which is very good and could add to the worries about the rate. At the upper border of the specified range (1.0050), the price will most likely reverse downwards, with the price returning below 0.9855. The price may not reach 1.0050. The main sign of a reversal will be consolidation under 0.9950. Divergence is already visible on the four-hour timescale. It can be smoothed out in the next 24 hours, but this is a visual indication of further difficulties for the bulls in the monthly price consolidation zone. Albeit with difficulty, but the price can still consolidate under the level of 0.9950. We are waiting for the development of events. Relevance up to 04:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323439
The Euro May Attempt To Resume An Upward Movement

The Euro To US Dollar (EUR/USD) Pair Continued Its Upward Movement

InstaForex Analysis InstaForex Analysis 05.10.2022 08:48
EUR/USD 5M The EUR/USD pair continued its upward movement on Tuesday and managed to add about 150 points. It is hardly worth saying that this is high volatility and strong growth for the euro. There were no grounds for such growth, since there were no important macroeconomic reports for either the US or the European Union. European Central Bank President Christine Lagarde only spoke in the evening, but for obvious reasons it could not affect the pair's movement during the day. Thus, the euro continues to use the chance given to it and rises as long as possible. Despite the current already quite strong growth, we still believe that this may just be a strong correction. Also, not so strong, if you look at the 24-hour timeframe. However, it is undeniable that both the euro and the pound are now rising, and these could be new upward trends. European currencies will not fall forever. However, as we have already said, the fundamental and geopolitical backgrounds can bring bears back to the market. In regards to Tuesday's trading signals, the picture was rather complicated. The first buy signal was formed during the night when it rebounded from the Senkou Span B line and the level of 0.9813. At the opening of the European trading session, the price went close to the signal formation level, so long positions could be opened. Unfortunately, a false sell signal was formed during the European trading session (when the price consolidated below 0.9877), which ruined everything. I had to close a long position with a profit of about 20 points and open a short position, which brought a loss of 28 points. However, a new buy signal near 0.9877 was strong, and the position should have been closed manually in the late afternoon with a profit of at least 80-90 points. COT report: The Commitment of Traders (COT) reports on the euro in 2022 can be entered in the textbook. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then they showed a bearish mood for several months, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have said, because the demand for the US dollar remains high. Therefore, even if the demand for the euro is growing, the high demand for the dollar does not allow the euro itself to rise. During the reporting week, the number of long positions for the non-commercial group increased by 2,000, while the number of shorts decreased by 1,800. Accordingly, the net position grew by about 200 contracts. This is very small and this fact does not matter much, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 34,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 5. The world is on the brink of a nuclear catastrophe. The stakes are going up. Overview of the GBP/USD pair. October 5. There are opportunities to restore the work of Nord Stream. Forecast and trading signals for GBP/USD on October 5. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The trend on the hourly timeframe began to change to an upward one and an ascending channel was formed, which visualizes well what is happening on the market. The euro may continue to rise, although there is no good reason for this. However, a technical correction is also the foundation. We highlight the following levels for trading on Wednesday - 0.9553, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, as well as Senkou Span B (0.9796) and Kijun-sen lines (0.9758). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union and the United States will release indexes of business activity in the services sector. They may be followed by a market reaction (remember Monday and business activity indices in manufacturing). A rather minor ADP report will also be released, which is considered the second most important report on the labor market. Friday - NonFarm Payrolls. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 02:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323427
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

Due To High Inflation In The Eurozone There Is No Chance Of A Increase In The Euro (EUR)

InstaForex Analysis InstaForex Analysis 05.10.2022 10:28
Several market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 0.9903 level in my morning forecast and advised making decisions on entering the market there. A breakthrough of 0.9850 passed without a reverse test from top to bottom, so I failed to get an entry point into long positions there. As a result of the pair's growth in the first half of the day, the level of 0.9903 was updated, where a false breakout gave a sell signal. The downward movement amounted to about 25 points, after which the demand for the euro returned. In the afternoon, a break of 0.9903 also occurred without a reverse test, so it did not work out to buy EUR/USD here either. All I could see was a false breakout and a small selloff from 0.9952 with an 18 pip move down. When to go long on EUR/USD: Risk appetite has risen significantly as traders began to bet on the completion of a series of interest rate hikes by the Federal Reserve before the end of this year. Given the attractive levels for buying the euro, the bulls quickly returned the pair back to parity, for which the main struggle will unfold. Today, a large set of statistics on activity in the eurozone countries is expected, which may cool the ardor of bulls, which will lead to a slight correction in the market - especially in conditions when the contraction in the services sector and in the composite PMI index for the eurozone for September of this year is forecast. If the pair goes down, I advise you to act from the level of 0.9952. Forming a false breakout there will be the starting point for building up long positions with the prospect of recovery back to the weekly high of 0.9996. A breakthrough and test from top to bottom of this range, together with strong statistics on the eurozone, on the contrary, will hit the stop orders of speculative bears, forming an additional signal to open long positions with the possibility of a surge up to the 1.0040 area. Consolidating above this level will be a serious victory for the bulls, as the bear market will gradually slow down in the medium term. A more distant target will be resistance at 1.0084, where I recommend taking profits. If the EUR/USD declines and there are no bulls at 0.9952, there is no need to panic. Although the pressure on the pair will increase, it will only lead to a fall to the 0.9909 area, where the moving averages are passing, playing on the bulls' side. In this case, the best solution to open long positions there would be a false breakout. I advise you to buy EUR/USD immediately on a rebound only from 0.9856, or even lower - in the region of 0.9807, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears have once again missed the market, and the observed upward correction has already turned into a good short-term bull market. The bears' initial task for today is to protect the new high of 0.9996, since releasing the pair above this level can further lose the initiative, which will jeopardize the existence of the trend. Forming a false breakout at this level, together with a weak eurozone services PMI for August, will provide an excellent entry point for short positions, allowing for a sharper movement of the pair down to the 0.9952 area. Surely a breakdown and consolidation below this level with a reverse test from the bottom up forms an additional sell signal already with the demolition of bulls' stop orders and a larger fall to the 0.9909 area, where the moving averages are passing, which are clearly capable of limiting the pair's downward potential. A more distant target will be the area of 0.9856, where I recommend taking profits. In case EUR/USD jumps during the European session, as well as the absence of bears at 0.9996, the demand for the euro will only increase, which will lead to a more powerful upward correction. In this case, I advise you not to rush into short positions. I recommend opening short positions only if a false breakout is formed at 1.0040. You can sell EUR/USD immediately on a rebound from the high of 1.0084, or even higher - from 1.0118, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT) report for September 27 logged an increase in both short and long positions. The meetings of the central banks have passed, and given that the euro withstood the pressure formed last week by the statements of European and American politicians, one can count on a gradual recovery of the pair in the short term. However, you shouldn't get too carried away. As is already known, inflation in the EU countries has already exceeded 10.0% and in the autumn-winter period the situation with this indicator will only worsen. For this reason, I would not bet on a strong euro growth. The deterioration of the geopolitical situation in the world, which to a greater extent concerns the eurozone, will greatly slow down the European economy in the near future and will surely lead it to recession in the spring of next year. In the near future, a number of important data on activity in the euro area is expected, the decline of which may significantly limit the further upward potential of the pair. The COT report indicated that long non-commercial positions rose by 2,172 to 208,736, while short non-commercial positions jumped by 1,824 to 174,939. At the end of the week, the total non-commercial net position remained positive and amounted to 33,797 against 33,449 This indicates that investors are taking advantage of the moment and continue to buy cheap euros below parity, as well as accumulate long positions, counting on the end of the crisis and the recovery of the pair in the long term. The weekly closing price collapsed and amounted to 0.9657 against 1.0035. Indicator signals: Moving averages Trading is above the 30 and 50-day moving averages, which indicates the euro's succeeding growth. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of growth, the upper border of the indicator in the area of 1.0015 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.       Relevance up to 08:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323449
ECB's Hawkish Move and Risk Appetite Propel Major Currencies, Leaving Dollar in the Dus

S&P 500 (SPX) And Nasdaq (NAS 100) Gained! EUR/USD Is Near 1.00, GBP/USD Close To 1.14

ING Economics ING Economics 05.10.2022 11:43
Asia market tone to start in a positive frame following the bounce in global markets on Tuesday. Lower Korean inflation sows seeds of possible future Bank of Korea rate hike moderation and the US non-mfg ISM employment index is the main one to watch today after the weak JOLTS survey Source: shutterstock Macro outlook Global Markets: Stocks had another positive day yesterday. Both S&P500 and NASDAQ gained by more than 3%. Prices opened the session up, and then held onto those gains in what looked like a much more convincing show of strength than anything at the end of the last quarter. Equity futures are suggesting that this may have gone a bit too far though, and both S&P500 and NASDAQ futures are pointing at a lower open today. Nonetheless, early trading in Asia is likely to be buoyed by these overnight moves. Part of the catalyst for the resurgence in risk sentiment may be the additional decline in bond yields. 2Y US Treasury yields dropped by 2.1bp while the yield on the 10Y UST was almost unchanged at 3.633%. There were further falls in bond yields across Europe yesterday. 10Y Bund yields were down 4.6bp to 1.862%. Currencies behaved as you might expect in this environment, and EURUSD has risen almost back to parity now, and Cable is back to 1.1460. The AUD looks less appealing and is roughly unchanged after the Reserve Bank of Australia disappointed markets with only a 25bp rate hike yesterday. The JPY continues to pull back from 145 and is at 144.10 currently. Asian FX was positive across the board yesterday, with the THB leading the charge (after PM Chan-Ocha resumed his duties following a constitutional court ruling), followed closely by the offshore Renminbi (China is out all week). Further gains look probable today. G-7 Macro: Service sector PMI data today is the dominant theme, and included the non-manufacturing ISM index which will also have its employment index closely examined ahead of Friday’s US payrolls release.  A sharp fall in JOLTS job openings yesterday could be viewed as a signal that the labour market is indeed cooling, which would suggest the Fed is winning its battle against inflation. Stocks and bonds should like that if so. So bad macro news may be good news for financial assets.   South Korea: Headline inflation inched down to 5.6% YoY in September (vs 5.7% in August and the market consensus) putting the 6.3% recent peak in July behind it. But the monthly gain rebounded by 0.3% MoM nsa (vs -0.1% in August) due to higher prices for food and other services and was only partially offset by lower oil prices. Thus, the core CPI, excluding agricultural products and oils, accelerated to 4.5% YoY (vs 4.4% in August). We expect headline inflation to rise again in October.  Gasoline prices will likely decline further, but city gas and power rates were raised at the beginning of October and fresh food prices will also probably rise ahead of winter. We believe this inflation outlook will lead to another 50bp hike by the Bank of Korea at its October meeting. However, weekly housing market surveys show that housing and Jeonse rental prices have been falling quite sharply. Thus, rental components of CPI (which accounts for about 10% of the CPI basket) will likely begin to drop in the coming months. This should cause inflation to cool off, and in turn, slow down the Bank of Korea’s hiking pace.   Philippines: September inflation is due for release today.  Price pressures continue to build and headline inflation is expected to accelerate to 7% YoY.  Inflation is expected to rise further in the coming months after the third round of transport fare hikes was implemented.  Meanwhile, crop damage from a recent strong storm will likely ensure food prices stay high.  Elevated price pressures should keep the central bank hawkish and we expect Bangko Sentral ng Pilipinas to hike by another 100bp before the end of the year.  Singapore: Retail sales for August will be reported today.  Market participants expect another month of double-digit gains, supported in part by favourable base effects.  Furthermore, retail sales may have been boosted by tourist arrivals with arrivals steadily increasing.  Gains however will be capped by surging inflation with headline inflation moving past 7%. What to look out for: Regional inflation and US ISM non-manufacturing data South Korea CPI inflation (5 October) Japan Jibun PMI services (5 October) Singapore PMI manufacturing (5 October) New Zealand RBNZ meeting (5 October) Philippines CPI inflation (5 October) Thailand CPI inflation (5 October) Singapore retail sales (5 October) US ADP employment, trade balance and ISM services (5 October) Fed’s Bostic speaking event (5 October) Australia trade balance (6 October) Philippines unemployment rate (6 October) Taiwan CPI inflation (6 October) US initial jobless claims (6 October) Fed’s Evans, Cook, Mester speaking events (6 October) South Korea BoP current account (7 October) Regional GIR data (7 October) US non-farm payrolls (7 October) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Central Banks' Rates Outlook: Fed Treads Cautiously, ECB Prepares for Hike

The Gas To Italy Will Flow Again, Gazprom Has Decided To Resume Deliveries

TeleTrade Comments TeleTrade Comments 05.10.2022 11:42
Russian state-owned energy giant, Gazprom, said in a statement on Wednesday, “we have resumed gas supplies to Italy via Austria.” “We have found a solution to resume gas supplies to Italy,” Gazprom said. Meanwhile, Russian media outlets report that President Vladimir Putin has formally signed the law annexing four Ukrainian regions. Market reaction The euro caught a fresh bid wave on gas supplies optimism, driving EUR/USD back towards parity. The spot is currently trading at 0.9985, modestly flat on the day.
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

There Were No Significant Changes In The Euro (EUR) Market Yesterday And The Risk Appetite Improved

InstaForex Analysis InstaForex Analysis 05.10.2022 12:34
Analysis of transactions in the EUR / USD pair The price test of 0.9846 happened when the MACD line was just starting to move above zero, which was a good signal to buy. This led to an increase of over 50 pips, and the continuation of the bull market. Some time later, short positions at 0.9895 were also a success as the pair fell by more than 30 pips. No other signals appeared for the rest of the day. Data on the Eurozone's producer prices coincided with forecasts, so there was not much change in the market yesterday. However, risk appetite did improve a little, so euro saw a new wave of growth in prices. Talking about rate hikes, many expect the Fed to raise rates by 125 basis points in March next year, up from the 165 points expected after a third three-quarter point hike last month. That is why the speeches of the Fed representatives were ignored. A lot of reports are scheduled to be released today, such as business activity indices in the services sector in Germany and the eurozone, as well as composite PMI indices. Weak data could hurt bullish sentiment, which will lead to a fall in euro in the morning. By afternoon, similar reports from the US will be published, followed by employment data from the ADP, report on foreign trade balance and a speech from FOMC member Raphael Bostic. If all these are better than expected, demand for the dollar will climb further, which will offset the recent losses against the euro. For long positions: Buy euro when the quote reaches 0.9984 (green line on the chart) and take profit at the price of 1.0034. Growth will occur if economic reports in the Euro area exceed expectations. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9930, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9984 and 1.0034. For short positions: Sell euro when the quote reaches 0.9930 (red line on the chart) and take profit at the price of 0.9860. Pressure may return if statistics from the Euro area are weaker than expected. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 0.9984, but the MACD line should be in the overbought area as only by that will the market reverse to 0.9930 and 0.9860. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 09:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323465
GBP: Strong June Retail Sales Spark Sterling Rally

Positive News For Ukraine And Softer Natural Gas Prices And Their Impact For Market

Saxo Bank Saxo Bank 05.10.2022 12:56
Summary:  With perfect hindsight, much of the recent aggravation of the USD spike was down to a troubled sterling as UK gilts markets were roiled by pension fund hedging after signals from the Truss government that fiscal prudence is a forgotten priority. With bond markets becalmed and sterling having come full circle from its level before the volatility event, we have now developed an additional narrative of a possible general central bank pivot to less tightening, driven by a couple of soft US data points and a dovish RBA. But can we get much more out of the pivot narrative here? FX Trading focus: We have neutralized the GBP wipeout and a central bank pivot narrative has partially broken out. Now what? Not much to add in today’s observations as yesterday saw an aggressive extension of trades aligning along the risk sentiment axis, particularly the US dollar lower, if mostly only against the European currencies. The lack of more pronounced breadth in the weakening greenback may be down to long US yields stabilizing ahead of the key 3.50% area in 10-year US treasury yield, but also down to the fact that the UK was at the center of the recent aggravated ramp up in the USD as treasury yields spiked. As well, positive news for Ukraine and softer natural gas prices in Europe are likely additional drivers for improved European FX sentiment. With GBPUSD trading back almost as high as 1.1500 this morning, the approximate kick-off area from where the UK gilt market melted down and took sterling with it starting after the September 22 Bank of England meeting, we now have to ask ourselves if there is more sustenance for a continuation of the move. Barring actual signals of a pivot from the Fed and/or energy and power prices in Europe dropping significantly further due to an actual visibility emerging on the longer term shape of Russian supplies, the answer is most likely “no”. Of course, a big miss in the September US ISM Services survey today (expected at 56.0 vs. 56.9 in August) and/or a bad miss on payrolls and earnings in the Friday US September jobs report could drive an extension of the “central bank pivot” narrative in the near term, with the US dollar on its back foot. But weaker global growth is no boon to risk sentiment at some point beyond the immediate relief from a cessation in the seemingly inexorable rise in yields. Chart: EURUSDParity in EURUSD an obvious psychological resistance line and was also the big, sticky round level that the exchange rate hugged for several weeks before the excursion to below 0.9600 that was mostly about the contagion (into a strong USD) from the sterling meltdown that was a traumatic liquidity event in the wake of the Bank of England meeting and the subsequent, deficits-be-damned moves by UK Chancellor Kwarteng. We are more or less back to square one, with the added narrative twist of a central bank pivot as noted above. Uniformly weak US data through Friday could drive an extension higher, but even a move to 1.0200+ may simply represent a larger scale consolidation within the massive downtrend, even if the downward channel denoted on the chart would be disrupted. A strong batch of US data and significant pull back higher in US yields would likely cap the action for now, although it will take some considerable work to get the downtrend back on track after this sharp back-up. The RBNZ hiked rates overnight by 50 basis points, as expected, and it was the fifth consecutive hike of that size from the Bank. Given the less dovish guidance from the RBNZ in its statement relative to the RBA’s more modest hike and guidance, the AUDNZD dropped quickly to sub-1.1250 levels overnight before rebounding considerably – an underwhelming performance. That 1.1250 area, with a bit of slippage, is arguably the bull-bear line for that pair, with commodity prices, particularly energy, a possible determinant of whether the pair reprices back higher toward 1.2000 as I have argued might be possible due to the relative change in fortunes for the two countries’ current accounts over the last couple of years. A more significant assessment of policy awaits at the final RBNZ meeting of the year on November 23 (expectations still solid for a 50 bps move then). EURCHF reached important resistance around 0.9800 after the thaw in risk sentiment and rumors of a troubled major Swiss bank helped Swiss government bond yields to drop far further than EU counterparts. Swiss yields have rebounded a bit this morning – hard to believe in a major reversal here unless we see a major further improvement in the European economic outlook. Table: FX Board of G10 and CNH trend evolution and strength. The USD uptrend is limping, if not yet reversed meaningfully in a broad sense. Note the weak commodity dollars -interesting to see if OPEC+ can pull off the threatened production cuts after its meeting today. Sterling has seen a mind-bending reversal over the last many days – maybe peak amplitude on that account for a while? Table: FX Board Trend Scoreboard for individual pairs.AUDNZD up-trend status in play here after the RBNZ reaction in favour of the kiwi has not stuck well. Note EURUSD trying to turn to a positive trend reading today – the ISM Services and ADP payrolls data the likely deciders there. Upcoming Economic Calendar Highlights Poland Central Bank Rate Announcement 1215 – US Sep. ADP Employment Change 1230 – US Aug. Trade Balance 1230 – Canada Aug. Building Permits 1230 – Canada Aug. International Merchandise Trade 1400 – US Sep. ISM Services 2000 – US Fed’s Bostic (non-voter) to speak 0030 – Australia Aug. Trade Balance Source: https://www.home.saxo/content/articles/forex/fx-update-we-have-neutralized-the-gbp-wipeout-now-what-05102022
RBA Pauses Rates as Australian Dollar Slides; ISM Manufacturing PMI in Focus

Most Fed Members Support A Hawkish Scenario

InstaForex Analysis InstaForex Analysis 05.10.2022 13:52
Euro continues to rise even though Fed officials said they are not going to change their stance on interest rates. Clearly, the bar for a less aggressive policy remains high in spite of the central bank already getting the signals it has long been counting on from the economy. On the other hand, the Reserve Bank of Australia surprised investors yesterday when it raised rates by less than half of what was forecasted. This fueled a rally in equity markets, as well as in risky assets such as euro and pound. Although senior Fed officials warned that the fight against inflation will take longer than originally planned and did not give any hint that a similar RBA-like adjustment could happen at the next meeting on November, market participants continue to bet on a less aggressive policy next year. They said the decisions will be influenced by two key indicators: the US Nonfarm Payrolls Report and the Consumer Prices Report due October 13th. These data can change the mood of market participants, which improve every day. Even so, most Fed members support a hawkish scenario, saying that the restoration of price stability could take some time and likely entail a period of below-trend gains. High inflation could also fuel household inflationary expectations. To continue the growth of EUR/USD, it is necessary to break through 1.0000, as only by that will the quotes climb to 1.0040 and 1.0085. Meanwhile, a drop below 0.9900 will push the pair to 0.9850, then to 0.9800 and 0.9760. In GBP/USD, a lot depends on 1.1500 because its breakdown will lead to a rise to 1.1540 and 1.1590. On the other hand, a fall below 1.1420 will push the pair to 1.1360, then to 1.1300 and 1.1230.   Relevance up to 10:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323477
Euro to US dollar - Ichimoku cloud analysis - 21/11/22

Euro Outlook: Why Price Caps Don't Matter

Jing Ren Jing Ren 05.10.2022 15:08
In the last couple of days, the Euro has been drifting higher, back towards parity. It comes at a somewhat curious juncture, considering the context in the UK. Though, it should be pointed out that yesterday markets jumped higher on expectations that the Fed would pivot sooner than previously expected. This isn't an unusual phenomenon for the markets, to get a dose of optimism after trending downward for over a month. US stocks hit a new low for the year, and bounced back. The dollar weakness would naturally help the Euro. But there's more going on here. Not all spending is the same Last week, the pound took a dive after the Chancellor announced plans for a fuel price cap that could cost up to £200B, and tax incentives that would potentially reduce the UK's tax revenue by £45B. This sent shockwaves through the market, affecting even the rate decision by the RBA, citing turmoil in the UK as one of the reasons for its surprise move to raise rates lower than anticipated. Yet at the end of the week, Germany announced an energy price cap in the order of €200B, while the EU struggles to deal with surging prices. Yet there was no proportional reaction in the markets. Germany reaffirmed its commitment to the debt brake, suggesting possible austerity measures next year. In fact, the Euro got stronger, and there was no hint that the ECB would have to step in. Germany can spend more The debt-to-GDP ratio is an important aspect in how inflationary government spending is likely to be. Germany has a ratio just below the Maastricht guidelines of 59.8% (that's before the pandemic). The UK was much higher at 85.4%. This puts a limit on how high the central bank can raise rates without the cost to service the government's debt significantly impacting the budget. Thus, traders aren't as worried about German government spending. The issue for the Euro, however, is the latest round of negotiations about expanding the capacity of other countries to maintain debt. Most EU countries are not only far from complying with Maastricht rules, but some are also over twice the allowed debt-to-GDP rate, such as Italy. When taken together, the Eurozone’s debt-to-GDP is higher than the UK's. The future trends While the ECB maintains a lower interest rate than the BOE, the debt issue isn't as noticeable. However, there are several indicators that rates will continue to rise, potentially more than in the UK. Inflation is still on the rise, the ECB is worried about "de-anchoring" expectations, and the Euro Zone's GDP grew by a healthy 4.1% last quarter, giving the central bank more headroom. In other words, depending on how the economy evolves, the Euro is not immune from a market reaction similar to what happened to the cable. Probably not in the near term. But, if through the winter the economic situation worsens, governments could seek to increase spending to support consumers and businesses. The EU likely won't have the same chaotic announcement with lack of details that drove a sudden drop in confidence, such as what happened in the UK. In other words, the move might not be as sudden, but it could be as large, and require intervention from the ECB.
On the New York Stock Exchange A Lot Of Shares Fell, The Biggest Losers Were Bit Brother Ltd And Avenue Therapeutics Inc

On the New York Stock Exchange A Lot Of Shares Fell, The Biggest Losers Were Bit Brother Ltd And Avenue Therapeutics Inc

InstaForex Analysis InstaForex Analysis 06.10.2022 08:07
At the close of the New York Stock Exchange, the Dow Jones fell 0.14%, the S&P 500 fell 0.20%, and the NASDAQ Composite fell 0.25%. The leading performer among the components of the Dow Jones index today was Nike Inc, which gained 2.46 points or 2.78% to close at 91.10. Visa Inc Class A rose 2.02 points or 1.09% to close at 187.67. UnitedHealth Group Incorporated rose 3.90 points or 0.75% to close at 527.07. The biggest losers were Goldman Sachs Group Inc, which shed 5.87 points or 1.86% to end the session at 309.00. Shares of JPMorgan Chase & Co rose 1.38 points (1.23%) to close at 110.39, while Dow Inc shed 0.56 points (1.20%) to close at 46 .06. Leading gainers among the S&P 500 components in today's trading were Illumina Inc, which rose 6.56% to hit 218.52, Schlumberger NV, which gained 6.26% to close at 41.57, and Gap Inc, which rose 5.19% to end the session at 9.72. The biggest losers were Lumen Technologies Inc, which shed 9.45% to close at 7.28. Shares of Enphase Energy Inc shed 9.25% to end the session at 261.60. Quotes Vornado Realty Trust fell in price by 6.38% to 22.47. The leading gainers among the components of the NASDAQ Composite in today's trading were Chardan Nextech Acquisition 2 Corp, which rose 102.63% to hit 21.54, Nauticus Robotics Inc, which gained 96.27% to close at 6.32. , as well as shares of Pineapple Holdings Inc, which rose 93.01% to end the session at 2.76. The biggest losers were Bit Brother Ltd, which shed 42.97% to close at 0.18. Shares of Avenue Therapeutics Inc shed 41.59% to end the session at 8.47. Quotes Scienjoy Holding Corp fell in price by 36.99% to 1.38. On the New York Stock Exchange, the number of securities that fell in price (2102) exceeded the number of those that closed in positive territory (991), while quotes of 107 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,313 companies fell in price, 1,443 rose, and 198 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.79% to 28.55. Gold futures for December delivery shed 0.28%, or 4.90, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery rose 1.76%, or 1.52, to $88.04 a barrel. Futures for Brent crude for December delivery rose 2.07%, or 1.90, to $93.70 a barrel. Meanwhile, in the Forex market, EUR/USD fell 0.96% to hit 0.99, while USD/JPY edged up 0.35% to hit 144.60. Futures on the USD index rose 1.00% to 111.08.   Relevance up to 04:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/295644
Breaking Business News: Aaron Rodgers' Shocking Exit, Google's Defense, and Central Banks' Inflation Battle

There Will Be A New Force For The Euro (EUR) To Go Down

InstaForex Analysis InstaForex Analysis 06.10.2022 08:27
The euro fell by 100 points yesterday, returning below the target level of 0.9950 and under the MACD indicator line of the daily scale. The lower shadow of the daily candle worked out the support of 0.9855. We also note that the price reversal occurred from the balance indicator line (moving red), which separates the interests of strategic bulls and bears. From the standpoint of this indicator, it can be seen that the entire growth of 4.5 figures of the last week had a corrective nature of the medium and long-term trends. Now, after the price goes under the nearest support of 0.9855, the next target level at 0.9724 will become available. The Marlin Oscillator is still in the positive area, the market is gathering strength to overcome the support of 0.9855. On the H4 chart, the price divergence with the Marlin Oscillator turned out to be effective. The signal line of the oscillator touched the zero line and lingered for some time in front of it. Leaving the price under 0.9855 will give new strength to the euro to move down.   Relevance up to 04:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323553
The EUR/USD Pair Chance For The Further Downside Movement

The EUR/USD Pair: Has The Euro (EUR) A Chance To Rise?

InstaForex Analysis InstaForex Analysis 06.10.2022 08:43
EUR/USD 5M The EUR/USD pair began to correct sharply on Wednesday. It had formal grounds for this, as a weak report on business activity in the service sector of the European Union was released in the morning, and in the afternoon we received pretty good data on the US labor market and good indexes of business activity in the service sector. Thus, all the reports of the past day were in favor of the dollar. However, we do not believe that only these reports have provoked a strong fall in the pair. First, the fall began an hour before the release of the first report. Secondly, all the reports of the day, except perhaps the ISM index, were not so strong and important as to provoke a fall of 150 points. We believe that after several days of strong growth, it is time to correct slightly, so the reasons are mostly technical. Despite the fact that the pair has consolidated below the rising channel, it remains above the lines of the Ichimoku indicator, so the upward trend continues. The channel has a very large angle of inclination and can change to a quieter angle. So far, we expect a new growth of the euro if the price manages to stay above the Kijun-sen and Senkou Span B. Two trading signals were formed on Wednesday, but both are quite strong. The first sell signal was not formed at the very beginning of the downward movement, however, it should have been worked out, because it was unambiguous. After opening short positions, the price managed to consolidate below the level of 0.9877, after which it returned to it. Somewhere in this area, it was possible to close the position manually, since there was no signal to buy. Profit amounted to at least 70 points. COT report: The Commitment of Traders (COT) reports on the euro in 2022 can be entered in the textbook. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then they showed a bearish mood for several months, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have said, because the demand for the US dollar remains high. Therefore, even if the demand for the euro is growing, the high demand for the dollar does not allow the euro itself to rise. During the reporting week, the number of long positions for the non-commercial group increased by 2,000, while the number of shorts decreased by 1,800. Accordingly, the net position grew by about 200 contracts. This is very small and this fact does not matter much, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 34,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 6. Washington may be behind the Nord Stream bombing. Overview of the GBP/USD pair. October 6. The Bank of England is finally confused: to stimulate or tighten? Forecast and trading signals for GBP/USD on October 6. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The upward trend is still preserved on the hourly timeframe due to the Ichimoku indicator lines, which are still below the price. This week there will be at least one more important report - NonFarm Payrolls on Friday - so the euro has a chance to fall below these lines. At the same time, weak US statistics on Friday may push the pair up, which is in line with the current trend. We highlight the following levels for trading on Thursday - 0.9553, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, as well as Senkou Span B (0.9796) and Kijun-sen lines (0.9828). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union will release a report on retail sales for August, and in the US we only have a report on applications for unemployment benefits. Neither the first nor the second are important, so reaction to them may be extremely weak or absent altogether. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323541
AUD Surges on Strong Employment Gains, RBA's Hawkish Outlook

The German Factory Orders Fell Short Of Expectations

TeleTrade Comments TeleTrade Comments 06.10.2022 10:14
German Factory Orders dropped 2.4% MoM in August vs. -0.7% expected. German Factory output fell 4.1% YoY in August vs. -11.4% expected. EUR/USD keeps its range near-daily highs of 0.9926 on the German data. The German Factory Orders fell short of expectations once again in August, suggesting that the manufacturing sector activity is losing additional momentum. Contracts for goods ‘Made in Germany’ fell by 2.4% on the month vs. -0.7% expected and -1.1% last, the latest data published by the Federal Statistics Office showed on Thursday. On an annualized basis, Germany’s Industrial Orders arrived at -4.1% in the reported month vs. -11.4% expected and -13.6% previous. FX implications The shared currency remains unfazed by the disappointing German factory data.  At the time of writing, EUR/USD is adding 0.33% on the day, trading at 0.9915.
Poland's Retail Trade Improves as Goods Inflation Eases: Outlook for 2023

The Pound To US Dollar (GBP/USD) Currency Pair Is Following The Euro (EUR)

InstaForex Analysis InstaForex Analysis 06.10.2022 11:20
The euro and the pound were declining throughout yesterday's trading day. At first, this was a banal rebound after the previous rapid growth. But then this trend was reinforced and strengthened by unexpectedly good employment data in the United States. Firstly, the previous data was revised upwards from 132,000 to 185,000. Secondly, employment increased by 208,000 against the forecast of 135,000. It seems that the American labor market does not intend to lose momentum and continues to grow. Which, of course, is an extremely positive factor contributing to the further strengthening of the dollar. Employment change (United States): Today, the dollar can continue to strengthen its positions—this time at the expense of European statistics. The rate of decline in retail sales in the euro area should accelerate from -0.9% to -2.2%. And this is a drop in consumer activity, which is the locomotive of the economy. Consequently, the European economy is steadily slipping into a recession, which may well turn out to be quite deep, and most importantly, prolonged. Naturally, against this background, the dollar looks much more attractive than the euro. Well, the pound will simply follow the euro. Retail sales (Europe): The EUR/USD currency pair was actively losing its positions during the past day. As a result, the price rebounded from the parity level, where the quote had recently approached. The pullback lasted until the previously passed level 0.9850, where a stop occurred. For the subsequent decline, the quote needs to stay below 0.9850 for at least a four-hour period. Otherwise, we will continue to move at the peak of the current corrective move. The GBPUSD currency pair, following the euro, entered the pullback stage, returning the quote below the level of 1.1410. At the moment, the pullback has slowed down the formation, but in order for sellers to get further incentive to decline, it is enough to stay below 1.1200. Until then, fluctuation along the level of 1.1410 is possible.   Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323573
Assessing 'Significant Upside Risks to Inflation': Insights from FOMC Minutes

Will There Be A Signal That The Fed May Reduce The Pace Of Rate Growth

InstaForex Analysis InstaForex Analysis 06.10.2022 11:28
Although the employment report from ADP showed that the number of new jobs in the US is increasing, indicating the strength of the economy, stock markets declined as this could mean that the Fed may not ease the pace of interest rate hikes in the coming months. Earlier, many have considered the idea that the state of the labor market could change the stance of the central bank regarding monetary policy. They believe that if the number of new jobs fall steadily, the Fed will see that the economy has slowed down enough for them to start turning down the pace of interest rate increases. But yesterday's data showed non-farm payrolls climbing to 208,000 in September, up from an estimate of 200,000 and August figure of 185,000. Of course, the values from ADP are not official and the market will really act after the release of data from the US Department of Labor tomorrow. But the growth in the number of new jobs will be perceived by the market as a signal that the Fed may reduce the pace of rate growth. In terms of today's market dynamics, there may be a consolidation until the employment data tomorrow show whether the US labor market is still strong or has already begun to experience problems amid high interest rates . Forecasts for today: EUR/USD The pair has not yet overcome the 1.0000 mark. It is likely that before the release of employment data in the US, there will be a consolidation around 0.9830-1.0000. AUD/USD The pair is trading above 0.6520. It may rise to 0.6580 if positive sentiment prevails on markets today.   Relevance up to 08:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323555
FX Daily: Asymmetrical upside risks for the dollar today

Forex: US Dollar May Go Up, EUR/USD Expected To Stay Below 1.00

ING Economics ING Economics 06.10.2022 11:59
The dollar downtrend appears to be running out of steam. In our view, a further USD recovery is likely from current levels as markets show reluctance to fully jump in on bets of a Fed pivot. We expect EUR/USD to remain below parity. Elsewhere, central banks in central and eastern Europe have continued to deliver hawkish and dovish surprises Source: Shutterstock USD: Room for further recovery As we had expected, the dollar downtrend has started to prove unsustainable, and we saw a counter-correction in DXY to the 111/112 area yesterday before a stabilisation at 111.00 during a good Asian session for risk. It’s hard to see a clear trigger for the reversal in risk sentiment yesterday, and it probably boiled down to markets not being ready to bet heavily on the Fed pivot story. Markets are also keeping an eye on some “test cases” in the central bank sphere. While the Reserve Bank of Australia slowed the pace of hiking on Tuesday, the Reserve Bank of New Zealand stuck to 50bp increases yesterday, signalling that a 75bp move was considered and that more hikes are on the way. In our view, the latter – hawkish – narrative should prevail for the Fed, ultimately capping the recovery in risk assets and offering widespread support to the dollar. The data calendar in the US is quite light today after yesterday’s ISM Services beat expectations (and partly offset the Manufacturing miss) and ADP labour numbers for September came in at 208k (exp. 200k). While that marks an acceleration from the revised 185k reading for August, it looks like the updated methodology still hasn’t closed the gap with the official payrolls figures, hence limiting the ADP’s predictability power. We have quite a long list of Fed speakers to keep an eye on today: Charles Evans, Lisa Cook, Christopher Waller and Loretta Mester are all set to touch upon the economic and monetary policy outlook in scheduled remarks. We don’t see why the Fed would want to endorse any of the recent dovish re-pricing in tightening expectations – if anything, we could see some comments aimed at pushing back against any pivot speculation. We expect a further dollar recovery into the weekend, with upside risks particularly concentrated around tomorrow’s payrolls release, when DXY may extend gains into the 112-113 area.  Francesco Pesole EUR: Parity is an increasingly relevant level EUR/USD showed some resistance at the 1.0000 level yesterday before falling back down on the dollar’s recovery. Despite the pair having crossed the parity line multiple times recently, that may have increasingly been interpreted as a benchmark level for the broader dollar trend. Considering the reluctance to turn more bullish on the euro into what should be a challenging winter for the eurozone, a sustained recovery to levels above parity in EUR/USD might now only be driven by markets buying more aggressively into the Fed pivot story and/or other drivers offering sustained support to risk assets. For now, we feel comfortable in reiterating our call for EUR/USD to stay pressured into the 0.90-0.95 in the last months of the year. The new pack of sanctions by the EU likely suggest a prolonged stand-off with Russia, while markets await more details on the proposed oil price cap. Today’s European Central Bank minutes will be quite interesting for European rates as they might shed some light on the quantitative tightening discussion and the size of the next rate hike. Still, the meeting-by-meeting approach may reduce the informative power of the minutes today. Francesco Pesole GBP: Tentative signs of normality It looks like the pound has continued to realign with the moves in other European and high-beta currencies, although still displaying residual signs of above-average volatility. If sterling absorbed a large share of the negative news during the post-tax event UK market turmoil, it now appears to be trading a bit too much on the strong side, especially considering that gilt yields and GB credit default swaps remain well above mid-September levels. Today, markets will keep an eye on the Bank of England Decision Maker Panel survey, which collects inflation expectations from company executives, and on a speech by MPC member Jonathan Haskel. We mostly see downside risks for cable from current levels, and expect a drop below 1.10 in the near term. In EUR/GBP, 0.8700 may emerge as an increasingly solid floor over the coming weeks. Francesco Pesole CEE: A region that never ceases to surprise The Polish central bank yesterday decided to leave rates unchanged at 6.75% despite market expectations of a 25bp rate hike. Given the hawkish expectations we discussed yesterday, the Polish zloty has come under pressure and we expect more to come today. The interest rate differential fell by 20bp during yesterday's session alone and we expect today's press conference by governor Adam Glapinski to confirm the dovish tone and increase pressure on FX. We expect the zloty to move higher into the 4.85-4.90 EUR/PLN range. Moreover, the global environment is also negative for the CEE. After a longer period of time, we saw gas prices rising again yesterday, which is not helping the whole region and EUR/USD moved lower again after briefly touching parity. The Romanian central bank, on the other hand, surprised on the hawkish side by delivering a 75bp hike to 6.25% instead of the expected 50bp. The published statement suggests that the central bank is concerned about higher inflation despite a slowing economy, the risks of which have moved up from the August meeting. On the FX side, the Romanian leu saw a slight strengthening in response to the decision, but we do not expect this to make a difference and expect a return to the standard level of just below 4.95 EUR/RON. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The delayed release of Germany's inflation data should confirm the slowdown seen across the rest of the continent amidst falling energy prices due to a relatively mild winter

Eurozone: German Exports Went Up, But The Trade Surplus...

ING Economics ING Economics 06.10.2022 12:30
German exports rebounded somewhat in August but high energy prices continue to shrink what was, until recently, still a notoriously high trade surplus Source: Shutterstock   German exports (seasonally and calendar-adjusted) rebounded in August, increasing by 1.6% month-on-month. On the year, exports were up by more than 18%. Imports also decreased, by 3.4% month-on-month, further lowering the trade surplus to €1.4bn. The war in Ukraine has succeeded in delivering what nothing else had managed before: letting the notorious German trade surplus disappear. However, unfortunately, it is not a ‘good’ disappearing of the trade surplus, driven by stronger domestic demand but rather a ‘bad’ disappearing, driven by high energy prices and structurally weaker exports. Also, when interpreting these trade data, don’t forget that they are seasonally and calendar-adjusted but not price adjusted. Even a weaker euro hardly helps Trade is no longer a growth driver but has become a drag on German growth. Since the second quarter of 2021, the growth contribution of net exports has actually been negative. In the past, the current weakness of the euro would at least have brought some smiles to German exporters’ faces. Like almost no other, German exports have often seen an asymmetric reaction to exchange rate developments. The negative impact of a stronger currency is cushioned by inelastic demand and high product quality, while the full price impact of a weaker currency normally adds to export strength. Not this time around. Export order books have weakened significantly in recent months as the global economic slowdown, high inflation and high uncertainty leave clear marks on (not only) German exports. Even if transportation costs have started to come down and global supply chains have improved somewhat, the outlook for the German export sector remains mixed, at best. Read this article on THINK TagsGermany Export Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ADP Non-farm payrolls jobs market data show a growth of 127K, much less than the previous print

US Indices - S&P 500 And Nasdaq Decreased A Bit. EUR/USD Was Quite Close To Touch 1.00. Fed Members Speak Today

ING Economics ING Economics 06.10.2022 12:42
Rising bond yields may cut short the recent rally in sentiment Source: shutterstock Macro Outlook Global Markets: The US equity rally ran out of steam yesterday just as equity futures had indicated. Both the S&P500 and NASDAQ fell by about 0.2%, but the initial fall on opening was mostly rallied away until late trading saw profit taking and a small fall at the close. Futures are looking positive again today, and that may be the dominant theme ahead of tomorrow’s payrolls. EURUSD got to 0.999, but didn’t have the conviction to push through to parity and came off to settle at 0.9895 now. The AUD was more or less flat at 0.65, though it looked more interested in going down than up, which may be the more likely direction of travel today. Cable has drifted back from nearly 1.15 yesterday to only 1.1336 now and the JPY is also slightly weaker at 144.48.  The KRW was Asia’s best-performing currency yesterday, dropping back all the way to 1410. Other Asian currencies made smaller gains. Bond yields rose again, which could start to sour market sentiment today. 2Y US Treasury yields rose 5.6bp, but 10Y US Treasury yields rose 12bp to 3.75%. There were more considerable increases in European bonds, German 10Y bund yields rose 16bp, and Italian 10Y bond yields rose 29bp. Anxiety about the ECB beginning quantitative tightening seems to be causing these jitters and Moody’s also warned that Italy needed pro-growth reforms. G-7 Macro: The main data focus yesterday would have been the ADP employment survey – the least bad of a bunch of monthly indicators for US non-farm payrolls. The headline figure was 208,000 jobs created, just ahead of the 200,000 forecast, and slightly up on last month’s 185,000. For what it is worth, the consensus estimate for payroll job growth tomorrow is 260,000. That would represent a small decline from the 315,000 job growth recorded in August, but would still represent fairly decent employment gains. The unemployment rate is expected to remain at 3.7%. Maybe of more interest than these employment figures was the September 30 MBA mortgage applications figure, which showed a 14.2% decline from the previous week, the biggest drop since pandemic-affected March 2020. Australia: Trade data for August delivered a smaller surplus than had been expected as imports grew by 4% from July, instead of the 1% decline predicted. Exports were slightly stronger, growing 3% MoM against expectations for a 2% gain. The surplus came in at AUD8.324m, slightly lower than July’s AUD8733m. The AUD has shrugged off the data. Philippines:  The August jobs report is out today.  Unemployment is expected to inch lower as economic activity improves. The underemployment rate, however, could stay elevated at double digits as workers seek higher wages. The improving jobs market could suggest robust consumption. But high inflation should cap spending ahead of the holiday season with inflation hitting 6% YoY in September.   What to look out for: US initial jobless claims Australia trade balance (6 October) Philippines unemployment rate (6 October) Taiwan CPI inflation (6 October) US initial jobless claims (6 October) Fed’s Evans, Cook, Mester speaking events (6 October) South Korea BoP current account (7 October) Regional GIR data (7 October) US non-farm payrolls (7 October) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Has A Potential For Drop

The EUR/USD Pair: The Euro (EUR) Is Falling Even Faster

InstaForex Analysis InstaForex Analysis 07.10.2022 08:19
Yesterday the euro successfully overcame the support of 0.9855 and rushed towards the support of 0.9724. The euro is declining even faster than its growth in recent days. Consolidation under 0.9724 opens the 0.9520 target. Marlin Oscillator fixed in negative territory. The US employment data for September will be released today. The forecast for new jobs in the non-agricultural sector is 250,000, which is a very good indicator with an unemployment rate of 3.7%. The markets are seriously tuned in to such data, as yesterday all dollar assets fell in price, including commodities and stocks. The price is preparing to attack the support of the MACD line on the four-hour chart. The MACD line itself is approaching the target level of 0.9724, so the price level is of key importance. The Marlin Oscillator is developing in the downward trend area.   Relevance up to 04:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323670
Asia Morning Bites: Focus on Regional PMI Figures, China's Caixin Manufacturing Report, and Upcoming FOMC Minutes and US Non-Farm Payrolls"

Chevron Corp Was The Top Gainer Among The Components Of The Dow Jones Index

InstaForex Analysis InstaForex Analysis 07.10.2022 08:31
At the close on the New York Stock Exchange, the Dow Jones fell 1.15%, the S&P 500 fell 1.02%, and the NASDAQ Composite fell 0.68%. Chevron Corp was the top gainer among the components of the Dow Jones index today, up 2.89 points or 1.82% to close at 161.42. Quotes of Caterpillar Inc rose by 0.43 points (0.24%), closing the session at 178.81. Home Depot Inc rose 0.54 points or 0.19% to close at 290.39. The losers were 3M Company shares, which lost 4.05 points or 3.52% to end the session at 111.12. International Business Machines was up 2.79% or 3.51 points to close at 122.23 while Walgreens Boots Alliance Inc was down 2.74% or 0.91 points to close at 32.25. Among the S&P 500 index components gainers today were DexCom Inc, which rose 4.53% to hit 95.21, APA Corporation, which gained 4.15% to close at 42.20, and Occidental Petroleum Corporation, which rose 4.07% to end the session at 70.50. The biggest losers were shares of Carnival Corporation, which shed 6.19% to close at 6.97. Shares of SolarEdge Technologies Inc lost 5.96% to end the session at 220.27. Shares of Generac Holdings Inc fell 5.59% to 168.69. Leading gainers among the components of the NASDAQ Composite in today's trading were Green Giant Inc, which rose 168.57% to 1.88, Atlis Motor Vehicles Inc, which gained 95.45% to close at 24.49. as well as shares of InVivo Therapeutics Holdings Corp, which rose 83.03% to close the session at 7.98. The biggest losers were Jowell Global Ltd., which shed 45.36% to close at 1.53. Shares of Cyclerion Therapeutics Inc lost 37.57% to end the session at 0.59. Quotes of Top Ships Inc decreased in price by 35.22% to 6.40. On the New York Stock Exchange, the number of securities that fell in price (2114) exceeded the number of those that closed in positive territory (997), while quotes of 125 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,093 stocks fell, 1,655 rose, and 252 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 6.90% to 30.52. Gold futures for December delivery added 0.07%, or 1.20, to $1.00 a troy ounce. In other commodities, WTI crude for November delivery rose 1.30%, or 1.14, to $88.90 a barrel. Futures for Brent crude for December delivery rose 1.57%, or 1.47, to $94.84 a barrel. Meanwhile, on the Forex market, EUR/USD fell 0.87% to 0.98, while USD/JPY edged up 0.35% to hit 145.13. Futures on the USD index rose 1.03% to 112.15.   Relevance up to 05:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/295838
The EUR/USD Price Failed To Exhibit A Strong Trending Movement

How Today's Reports May Affect The Euro-Dollar (EUR/USD) Pair

InstaForex Analysis InstaForex Analysis 07.10.2022 08:33
EUR/USD 5M The euro/dollar pair resumed its downward movement on Thursday and by the end of the day was near the Senkou Span B line. Thus, it is now separated from the resumption of the downward trend by one line, and on the 24-hour TF the euro did not overcome the critical line. More precisely, consolidation above Kijun-sen occurred, but the next day the pair returned to the area below this line. Therefore, as of the moment, the probability of the resumption of the downward trend is very high. No important statistics published in the US or the European Union on Thursday. And yet, the pair fell 140 points from the high of the day. Thus, traders successfully sold the euro even without any reason. And this is already a very bad sign for the euro. Recall that the fundamental and geopolitical backgrounds remain very bad for all risky assets and currencies, so we will not be at all surprised if the euro hits its 20-year lows a few more times this year. It again corrected to a value close to 400 points. Three trading signals were formed yesterday. First, the pair bounced twice from the level of 0.9877, and then overcame it and the critical line. Therefore, traders could open one long position, which closed at a loss of about 35 points, and one short position, which could be closed at a profit of about 50 points, as the price surpassed the level of 0.9813 and spent the rest of the day below it without forming buy signals. The Senkou Span B line kept it from falling further. COT report: The Commitment of Traders (COT) reports on the euro in 2022 can be entered in the textbook. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then they showed a bearish mood for several months, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have said, because the demand for the US dollar remains high. Therefore, even if the demand for the euro is growing, the high demand for the dollar does not allow the euro itself to rise. During the reporting week, the number of long positions for the non-commercial group increased by 2,000, while the number of shorts decreased by 1,800. Accordingly, the net position grew by about 200 contracts. This is very small and this fact does not matter much, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 34,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 7. The European Union has introduced the eighth package of sanctions against the Russian Federation. We are waiting for a new fall of the euro? Overview of the GBP/USD pair. October 7. Moscow is ready to resume gas supplies via the surviving Nord Stream line, Germany is against it. Forecast and trading signals for GBP/USD on October 7. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The upward trend is still preserved on the hourly timeframe due to the lines of the Ichimoku indicator. If the pair consolidates below the Senkou Span B, it is almost guaranteed to drop back to 0.9553 and renew its 20-year low. Of course, today the US statistics, in particular the NonFarm Payrolls report, can ruin everything, but it is not guaranteed to be bad! It can support the US currency or be neutral in value. We highlight the following levels for trading on Friday - 0.9553, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, as well as Senkou Span B (0.9796) and Kijun-sen lines (0.9867). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. There will be no important events in the European Union. But reports on unemployment (which may continue to grow) and Nonfarm (which may continue to decline) will be released in America. If the report values turn out to be worse than the forecasts, it will be possible to wait for the pair to roll back upwards. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323658
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

Today's US Employment Data May Influence The Fed's Actions

InstaForex Analysis InstaForex Analysis 07.10.2022 11:57
Investors coming up with a reason to buy risky assets do not stop. Earlier, before the Fed meeting in September, many actively discussed whether the Fed would ease the pace of rate hikes under market pressure. But what happened was the opposite as after the meeting, the central bank raised rates to the previously announced 0.75%. This caused the collapse of the US stock market and with it the European and other markets. And now, after the RBA did not raise the rate by the promised percentage, investors became excited again, deciding that it was the situation on the US labor market that could be the reason why the Fed will shift its stance on interest rates. But the employment report from ADP was not as expected since the number of jobs was above the forecast of 200,000, reaching 208,000. This caused the end of the two-day rally, and led to new declines in stock indices. For today, the upcoming employment data in the US will be important. Forecasts say there should be 250,000 new jobs in September against 315,000 in August. If the data turns out to be lower than expected, hopes that the Fed will reduce the growth of rates will surge, which may cause a local increase in stocks and a decline in dollar. Forecasts for today: EUR/USD The pair is trading below 0.9810. It may rise to 0.9920 if positive sentiment prevails today after a weak US employment data. USD/CAD The pair is trading above 1.3720. If the data on the number of new jobs in the US is below expectations, it may fall to around 1.3600.   Relevance up to 09:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323698
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

Fed Vice Chair Brainard Said Tighter Policy Will Not Stop

InstaForex Analysis InstaForex Analysis 07.10.2022 13:27
US Treasury Secretary Janet Yellen called on key central banks to continue the fight against inflation, pointing out the problems that await the global economy in the future. Fed members statement Yellen previously headed the Federal Reserve and was forced to change the course of policy in response to global changes in the world economy. Her comments now coincide with the proposed reforms by the World Bank and regional development banks, as well as with the views of several Fed representatives. Fed Vice Chair Lael Brainard also said recently that they won't shy away from tighter policy, but warned that there is a need to look at the spillovers that could have a negative impact on the financial system as interest rates rise. These words were perceived by investors as a signal for a softer policy next year, which provoked the weakening of dollar and a rally in the stock markets. In the futures market, expectations were revised even though most politicians tried to convince market participants that no one is going to loosen their grip and only the most effective fight against inflation is ahead. EUR/USD Talking about EUR/USD, a lot depends on 0.9810 because a break above it will lead to a rise to 0.9840 and 0.9880. Meanwhile, a fall below 0.9760 will ramp up pressure, which will result in a further decline to 0.9725, 0.9680 and 0.9640. GBP/USD In GBP/USD, a lot depends on 1.1190 because its breakdown will lead to a rise to 1.1250 and 1.1310. A fall below 1.1115, meanwhile, will result in a drop to 1.1030 and 1.0950.   Relevance up to 09:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323700
Riksbank's Potential Rate Hike Amid Economic Challenges: Analysis and Outlook

USA: Highly Awaited US NFP And Unemployment Rate Are Released Today!

Kamila Szypuła Kamila Szypuła 07.10.2022 10:32
The market is waiting for important reports. Most of the reports will be on the workforce. These types of reports can create confusion in currency pair situations. So what can we expect? Japanese Household Spending Japan released the Japanese Household Spending results at 1:30 CET. The reading was not as expected and was much lower. The current reading was -1.7%, while it was expected to drop from -1.4 to 0.2%. This is the second time in a row that the value of all expenditures by consumers decreased. This means that, once again, Japanese consumers have spent significantly less. The current reading is taken as negative. Switzerland Unemployment Rate n.s.a. At 7:45 CET, Switzerland published a report on the number of unemployed as a percentage of the workforce. The Unemployment Rate was expected to remain at the level of the previous reading (2.0%). The current reading is slightly better than expected, Unemployment Rate n.s.a. is 1.9% On the other hand, Switzerland Unemployment Rate u.s.a. reached the level forecasted, ie 2.1%. Forecasts for this indicator were that the level would remain. EU Leaders Summit The EU Leaders Summit will take place at 12:30 CET. EU leaders usually meet in Brussels, in the Europa building. This time the meeting will be held in Prague. The third of the four scheduled meetings is to provide strategic guidelines on euro area economic policy. he leaders of the EU member states are set to discuss the Russia-Ukraine conflict, the rising costs of energy and its economic ramifications. Check out our video comment: Speeches Today we are waiting for speeches from different banks. The Bank of England Monetary Policy Committee (MPC) Member David Ramsden will speak at 12:25 CET. His public engagements are often used to drop subtle clues regarding future monetary policy. The next speech will be on the other side of the ocean. FOMC Member Williams will give a speech at 16:00 CET. U.S. Nonfarm Payrolls The forecast for new jobs in the non-agricultural sector is 250K, which is a very good indicator with an unemployment rate of 3.7%. In March, Nonfarm Payrolls it reached its highest level, then it began to decline. Another highest level after declines was recorded in July and they will start to decline again at the same time. Also at 14:30 CET, a report will also appear on the percentage of the total work force that is unemployed and actively seeking employment during the previous month. The expectations for this indicator are that its level from the previous reading will remain, i.e. the unemployment rate will be at the level of 3.7% Canada’s Employment Change and Unemployment Rate Canada at 14:30 CET publishes data on the number of people employed. The recent reading was negative and expectations for the current reading are positive. This number is expected to increase from -39.7K to 20.0K Read next: Terra's Worker Arrested! White House Comment On The OPEC Decision And Success of Deutsche Bank | FXMAG.COM The next report from Canada will be on the unemployment rate. The last reading was at 5.4% and it is projected to be at this level again this time. Summary 1:30 CET Japanese Household Spending (MoM) (Aug) 7:45 CET Switzerland Unemployment Rate n.s.a. (Sep) 12:00 CET EU Leaders Summit 12:25 CET MPC Member Ramsden Speaks 14:30 CET U.S. Nonfarm Payrolls (Sep) 14:30 CET U.S. Unemployment Rate (Sep) 14:30 CET Canada’s Employment Change (Sep) 14:30 CET Canada’s Unemployment Rate (Sep) 16:00 CET FOMC Member Williams Speaks Source: https://www.investing.com/economic-calendar/
The South America Are Looking For Alternatives To The US Currency

Forex: NFP Is Almost Here. What Could Support US Dollar (USD)?

ING Economics ING Economics 07.10.2022 14:56
We expect today's US payrolls to decelerate from the August figure but to come in at around 200-250k, with the unemployment rate holding at 3.7%. This may be enough to let markets drift further away from any Fed-pivot rhetoric and keep the dollar supported. Jobs data will be published in Canada too, but the implications for the BoC policy should be limited USD: Staying bid on payrolls The dollar rebound has gained further steam into today’s nonfarm payrolls risk event. Along with a generalised narrative that continues to favour the dollar (a hawkish Fed, lack of alternatives to USD, choppy risk environment), the risks of an escalation in the US-OPEC+ stand-off on oil prices may have added to the market’s concerns about elevated inflation and the need for aggressive tightening by global central banks. Today’s focus will obviously be on the US, as investors will look for any hint that the jobs market is starting to turn. We think it’s too early for that, and our economists are in line with consensus in expecting the unemployment rate to stay at 3.7% with payrolls slowing but staying above 200k (consensus 250k). We think the dollar rally in the past two sessions was simply a reversal of the previous correction, and not necessarily linked to rising expectations around a very strong jobs report today. We therefore see more room for USD appreciation today after the payrolls release as markets drift further away from Fed-pivot speculation. DXY could find its way back into the 113.00-114.00 region. Francesco Pesole EUR: Downtrend has further to go The ECB minutes failed to materially stir the market’s rate expectations yesterday, and the OIS curve continues to indicate a 75bp rate hike is cementing as a consensus view for investors. After industrial production figures (which dropped more than expected) in Germany were released this morning, there are no major data releases to watch in the eurozone today, and we would expect little deviation from the current hawkish rhetoric by the two scheduled ECB speakers: Mario Centeno and Philip Lane. EUR/USD has broken back below 0.9800 as the USD recovery added pressure. Today, as we see upside risks for the dollar after the payrolls release, another leg lower in EUR/USD is our base case. We currently expect the downtrend in the pair will extend to the 0.95-0.96 area in the very near term, and to the 0.90-0.94 area by year-end. Francesco Pesole Elsewhere in Poland, National Bank of Poland governor Adam Glapinski yesterday announced a pause in the hiking cycle, following the Czech National Bank and National Bank of Hungary. He did not rule out further rate hikes, but the next decision will depend on the central bank's new macroeconomic forecast. Our Warsaw team expects further rate hikes later this year, but also in early 2023. For now, however, the main thing to watch will be the zloty, which is coming under increasing pressure with yesterday's move above 4.85 EUR/PLN. Moreover, global developments are not playing in favour of the CEE region either. EUR/USD is lower for the second day in a row and today's US payrolls may add to the pressure. Overall, the zloty is likely to test the 4.90 level, the weakest since March. Frantisek Taborsky GBP: Looking unsustainable above 1.10 While moving largely in line with other European currencies, the pound continues to show a higher beta to risk sentiment compared to only a few weeks ago. This is likely a legacy of the late-September meltdown that is there to stay.   We still deem the pound’s current levels as unsustainable given the fragility in the bond market and the UK’s deteriorated fiscal and current account position. A return to sub-1.10 levels in Cable is a question of when rather than if, in our view, and today’s US payrolls may favour a more rapid descent. The UK calendar is empty today, but markets will remain aware of any comments by government officials. Yesterday, Chancellor Kwasi Kwarteng held (emergency?) talks with UK lenders to help ease the strains in the mortgage market. A potentially fast acceleration in the UK housing market correction has surely become a more relevant theme for the government, and likely another downside risk for the pound. Francesco Pesole CAD: BoC to stay hawkish despite jobs jitter Bank of Canada’s governor Tiff Macklem delivered some quite hawkish remarks yesterday as he claimed the Bank is not ready for a more finely balanced policy, that there is still plenty to be done to curb inflation given lingering excess demand and largely accepting the prospect of a quite hard landing for the economy. The comments were likely aimed at curbing any speculation that the recent not-so-good data flow in Canada may warrant a less aggressive stance by the BoC on tightening. Like many other central banks now, the BoC is stirring away from any dovish turn given the risk of losing control of inflation expectations. In this sense, yesterday’s comments may have worked as a “hedge” against another potential job data disappointment today. After three consecutive negative payroll figures, the consensus is centred around a 20k increase for September, with the unemployment rate staying at 5.4%. We expect the US payrolls impact on USD to be larger than Canada’s jobs data impact on CAD, and see USD/CAD upside risks today even if Canada’s figures come in positive. A re-test of the 1.3830 highs in USD/CAD is a material risk over the coming weeks. Francesco Pesole Read this article on THINK TagsFederal Reserve Bank of Canada Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Is Showing A Potential For Bearish Drop

Forex: What To Expect From Bank Of England, European Central Bank, Fed And Others?

ING Economics ING Economics 07.10.2022 15:45
What our economists expect from central banks over coming months Major central banks: Our calls at a glance Source: ING Federal Reserve Our call: A fourth consecutive 75bp hike in November with a final 50bp hike in December. Rate cuts in 2H23. Quantitative tightening (QT) to continue until rate cuts begin. Rationale: Borrowing costs are rising rapidly throughout the economy with the housing market already showing clear signs of weakening and consumer spending plateauing more broadly. However, the jobs market remains tight and core inflation continues to surprise on the upside. We expect a further 75bp hike in November, but the economy’s loss of momentum suggests a more modest 50bp hike in December. We think this will mark the peak. Intensifying recessionary forces and falling inflation to prompt rate cuts in 2H 2023. Risk to our call: Two-way. On the one hand, the tight labour market and sticky inflation could force the Fed to keep hiking. Conversely, recession and a steep housing market correction may lead to steeper falls in inflation and earlier, more aggressive rate cuts in 2023. James Knightley European Central Bank Our call: 75bp hike in October, 50bp in December, 25bp in February. Rationale: What started off as a gradual normalisation process has become a hardcore fight against actual inflation. With eurozone inflation at 10%, it is hard to see how the ECB cannot move again by 75bp at the October meeting. Even an unfolding recession does not seem to be enough to slow down the central bank. This is clearly an experiment with a risk of turning into a policy mistake, particularly if the economy falters much more than the ECB currently expects. But for the time being, the central bank looks fully determined to continue on the path of aggressive rate hikes. That said, a new round of staff projections is likely to show further downward revisions to growth and could show 2025 inflation at 2%, tempting some of the newly self-declared tough inflation fighters to blink. Risk to our call: Gas rationing and higher energy costs trigger a deep recession. ECB hikes by 75bp in October but cuts rates by 25bp in February. A new euro crisis forces the ECB to intervene to contain spreads. Carsten Brzeski Bank of England Our call: 100bp hike in November and 50bp in December. Rationale: With markets pricing in another 300bp+ of tightening, the BoE has no good options. If it follows through on that, there’s a strong likelihood of housing market stress. Some price correction already looks inevitable with mortgage rates quickly climbing irrespective of BoE action. Under-delivery on rate hikes risks triggering further pound weakness at a time when the committee is already worried about inflation staying above target in the medium term. But that seems like the lesser of two evils. It’s a close call between 75bp and 100bp for November, but thereafter we expect the Bank to disappoint market expectations. Risk to our call: BoE hikes rates to 5% to force inflation lower. James Smith Bank of Japan Our call: No policy action is expected for a while. Rationale: Unlike other major economies, Japan’s CPI inflation is expected to peak at 3% this year and fall back to below 2% next year. Risk to our call: Recent data releases have been positive and the economy continues to recover. If this leads to wage growth, the Bank of Japan could reconsider its policy stance, though not in the foreseeable future. Min Joo Kang The rest of G10: Our calls at a glance Source: Macrobond, ING Bank of Canada Our call: A 50bp hike in October and a final 25bp hike in December with rate cuts starting in 2H 2023. Rationale: The Canadian economy has performed well, but there is increasing evidence that a slowdown is underway with the frothy housing market under pressure and the economy having lost jobs in each of the past three months. The central bank has already moderated the pace of hikes having raised rates by 75bp in September after July’s 100bp move, and we expect the Bank to shift to a 50bp move in October and 25bp in December. Inflation surprised to the downside last month and a recessionary environment could allow modest rate cuts from 3Q 2023 onwards. Risks to our call: Shifting more to the downside given the deteriorating jobs market and slightly softer inflation. A December hike may not happen and rate cuts could come sooner – the Bank of Canada has a history of changing its stance quickly. James Knightley Reserve Bank of Australia Our call: We anticipate the Reserve Bank of Australia (RBA) hiking 25bp at each of its monthly meetings until the year-end and continuing to tighten into the early part of 2023 at the same pace. That will take the cash rate target to 3.10% by the end of the year, and a peak of 3.35% by 1Q23. Rationale: The RBA confounded markets recently by hiking at a 25bp pace, down from its previous run of 50bp hikes. The RBA had been hinting for some time that it wanted to scale back the pace of tightening, though a “final” 50bp hike had been expected following strong labour market and retail sales data which showed little sign that the domestic economy was slowing. RIsk to our call: The accompanying statement made clear that the RBA views seriously the risk of overdoing the tightening on the way up, and contrary to other central banks like the US Fed, seems relatively relaxed about the inflation fight. The main risk to its view and our forecast will be that the economy takes longer to slow, and inflation longer to come back down towards its target, resulting in a higher-for-longer rate profile than our base case. Rob Carnell Riksbank Our call: 75bp hike in November and 50bp in February (3% peak). Rationale: The Riksbank’s massive 100bp September rate hike was coupled with a message that the committee won’t need to hike that much further. The committee is split between those concerned about further krona weakness, and those more concerned about damaging an already-fragile housing market. For now, we expect the hawks to win the battle, and Governor Stefan Ingves said in the latest minutes that the Riksbank needed to stay a “comfortable distance” in front of the ECB. With the ECB set for another 75bp hike in a few weeks, we would expect the same from the Riksbank – and given the latter only has one meeting left this year compared to the ECB’s two, we wouldn’t rule out an even larger move. Risk to our call: Desperate to support the krona, Riksbank hikes much more aggressively despite concerns about the housing market. James Smith Norges Bank Our call: 50bp hike in November and 25bp in December. Rationale: Norway’s central bank has been hiking consistently in 50bp increments throughout the summer, and we expect one more such move in November. But the message from the most recent interest rate projection is that the central bank is less than 100bp from the expected peak. With a preference for front-loading, we’d expect the anticipated 3% level to be hit by year-end. Risk to our call: More aggressive hikes from other central banks, perhaps coupled with higher oil prices, sees Norges Bank hike rates closer to 4%. James Smith Swiss National Bank Our forecast: 75bp hike in December and 25bp in March 2023, thereafter the rate will remain unchanged. Rationale: Swiss inflation fell in September to 3.2% from 3.5% in August and appears to have passed its peak. However, inflation remains above the SNB's target, which will prompt the Bank to raise rates again at its next quarterly meeting, following the 50bp hike in June and the 75bp hike in September. A 75bp increase seems likely for the December meeting. After that, the SNB could raise rates by another 25bp at its March 2023 meeting to 1.5%, but we believe that it will not go further and will then keep rates unchanged for a long period. This is because, by that time, inflation should have slowed significantly due to the global economic slowdown. Risk to our call: If the economic slowdown were to be more severe than expected or if the Swiss franc were to appreciate more significantly, inflation could slow more quickly than expected. This could lead the SNB to stop raising rates after December and not change its rate in March 2023. Charlotte de Montpellier CEE: Our calls at a glance Source: Macrobond, ING National Bank of Hungary Our call: Effective tightening continues with liquidity measures. Rationale: The National Bank of Hungary surprised markets at its September meeting, hiking the base rate by 125bp to 13% and announcing the end of the hiking cycle. With this move, it ended a long and extensive tightening cycle (16 months and 1,240bp). The goal now is to maintain strict monetary conditions, and the focus shifts to tightening liquidity and improving the monetary transmission. The new tools (1-week central bank bill, longer-dated deposit with floating rate and stricter reserve requirement regulation) need some time to take full effect, pushing the effective rates above the base rate in various submarkets. We see the central bank keeping the 13% base rate unchanged at least until mid-2023 when a window of opportunity might emerge to start easing. Risk to our call: The vulnerability of the forint from the energy crisis, the Rule-of-Law debate and the country's external financing needs might force decision-makers to re-think the policy of a permanent hold in rates. We also see upside risks to inflation which could also signal the need for higher interest rates in the short run. Peter Virovacz Czech National Bank Our call: Stable rates until the end of this year and the first rate cut in 1H23. Rationale: The CNB was the first in the CEE region to start hiking rates and the first to end the hiking cycle. After changes in the board in July, the CNB has turned more dovish and we do not expect further rate hikes. The central bank has started FX intervention to defend the koruna and we expect it to continue doing so at least until the end of the year. Risk to our call: Although we see the probability of an additional rate hike after the September meeting higher than in August, this is still far from our baseline scenario of stable rates. The CNB is focusing on wage growth, which is surprising to the upside, and the board has repeatedly signalled that it is prepared to hike rates if wages rise too fast, and create a wage-price spiral. However, the pain threshold has not been set and the next release of 3Q wage statistics is not until December when we believe inflation, and the economy will have already slowed and the window for rate hikes will close. The second risk is the increasing pressure on the koruna, which could increase so much in the coming months that the CNB may have to change its strategy. Frantisek Taborsky National Bank of Poland Our call: We believe the MPC will hike by 25bp in November (to 7%) and should end the tightening cycle without an official announcement. During 2023, we see cosmetic cuts to 6.5%, while in 2024 we will see a renewed fight against persistently high inflation and another tightening of the policy mix, either through rate hikes or a large tightening of fiscal policy. Rationale: The MPC reaction function has changed in the last few months. The de facto target is now to lower CPI with a soft landing in GDP. The actual target of 2.5% is less important now. Risk to our call: We see upside risks to our rates call. The economy is now experiencing a new wave of price rises due to the recent energy shock. CEE FX will be fragile given the strong dollar and that central banks in the region are trying to end their tightening cycles. In 2023, inflation should fall significantly from around 20% to below 10% by the end of the year), before spiking again in 2024. Our models indicate persistently high core inflation, and the removal of extraordinary fiscal measures will unleash 'deferred inflation', adding 4ppt to CPI in 2024. Rafal Benecki Central Bank of Turkey Our call: Interest rates remain on hold for the rest of the year. Rationale: Inflation has continued on a strong upward path but there have been some signs of a slowdown in core inflation lately. Increased pressure on the current account and subdued capital flows suggest a further drawdown in reserves is possible in the near term. In this environment, policymakers will be wary of another FX shock given the current global risk-off sentiment which could further weigh on key macro indicators. Thus, the central bank may be careful about any policy easing. We think any central bank action ahead will likely be determined by the path of the exchange rate and FX reserves. Risk to our call: There is a significant risk skewed towards more easing given i) President Erdogan’s call for further rate cuts to single digits by the end of the year ii) the CBT’s focus on supportive financial conditions so as to preserve the growth momentum in industrial production, and the positive trend in employment given recent signals of decelerating economic activity. Muhammet Mercan National Bank of Romania Our call: Terminal key rate at 6.75% in November 2022. Rationale: With the CEE3 central banks apparently done with rate hikes, inflation visibly decelerating into year-end and GDP growth plunging, the NBR will likely use its last policy meeting in 2022 for one more hike. Nevertheless, we don’t think that the Bank will announce an end to the hiking cycle, as the NBR has never pre-committed to a policy course. Risk to our call: The tail risks are significant both ways. A final 25bp hike in November (leaving the terminal rate at 6.50%) cannot be excluded given the weak macro environment. At the same time, a more sequential approach of a 50bp hike in November and 25bp in January (taking the key rate to 7.00%) would be much more consistent with the NBR’s usual approach and rhetoric. Valentin Tataru Asia (ex Japan): Our calls at a glance Source: Macrobond, ING People's Bank of China Our call: Policy rate cuts put on hold. Rationale: The PBoC has stated a few times that the current interest rate level is the neutral level. This suggests that the central bank is not going to cut interest rates any further. The main issues for the Chinese economy are ongoing Covid containment measures and a property crisis characterised by falling sales, developer defaults and mortgage boycotts as new homes are left unfinished. None of these issues can be resolved by simply cutting interest rates. The central bank could expand re-lending programmes to smaller firms and the agricultural sector. This would be useful to support the job market indirectly, with cheap loans for smaller firms particularly helpful. We don't think the central bank will easily decide on cutting the required reserve ratio (RRR), which would inject a lot of cash into the banking system. Frankly, there is not much demand for loans as economic activity has picked up only gradually. Risks to our call: If the economy turns down more than expected, mainly due to the real estate sector, then the central bank would act fast and may cut the RRR to ease the rise in interest rates from higher credit costs. Iris Pang Reserve Bank of India Our call: The last rate move by the Reserve Bank of India (RBI) was a 50bp hike taking the repo rate to 5.9%. We believe that the Bank will hike again in December, but by a smaller 25bp increment, and that that will mark the peak for rates, which will begin to slowly ease lower again in 2023 from the May meeting. Rationale: The main driver for rates currently is the inflation rate, which at 7%, and moving higher rather than lower, means the RBI needs to keep raising rates to close the gap between the policy rate and inflation (the negative real policy rate). Until it does this, the rupee will likely remain under weakening pressure. But inflation should begin to peak during 2023, helping to close that gap anyway – the economy is already showing some signs of a slowdown and we have recently revised down our GDP forecast below 7% for 2022. Risk to our call: Sticky high commodity prices is likely to be the main source of error to these assumptions – which could reflect either a Chinese recovery, escalation of geopolitical tensions, or adverse weather shocks.    Rob Carnell Bank of Korea Our call: A further 50bp hike in October, a 25 hike in November, then a cut in 4Q23. Rationale: We expect CPI inflation to stay above 5% in 4Q22, while GDP growth is likely to contract by year-end due to weak external and internal demand. We expect the BoK to end its hiking cycle this year at 3.25% but markets expect it to be 3.50%, reaching that point by 1Q23. Risk to our call: If inflation does not come down to below 5% by early next year, the Bank of Korea may hike by another 25bp in February. Min Joo Kang Bank Indonesia Our call: Bank Indonesia (BI) to deliver 75bp worth of rate hikes for the balance of the year.  Rationale: BI has been able to hold off from raising rates for most of 2022. But accelerating inflation finally prompted action from BI Governor, Perry Warjiyo, and his first hike surprised market participants. Headline inflation recently hit 6% after subsidised fuel prices were hiked and we can expect inflation to accelerate further in the coming months. Price pressures and a weaker currency will keep BI on a tightening path going into 2023. Risk to our call: A much more pronounced pickup in price pressures could prompt a more forceful response from BI. On top of supply-side pressures, domestic economic activity has been robust which could lead to additional price pressures coming from the demand side. BI could also double down on rate hikes should the Indonesian rupiah come under intense pressure in the coming months.   Nicholas Mapa Bangko Sentral ng Pilipinas Our call: Bangko Sentral ng Pilipinas (BSP) to hike a cumulative 100bp at its last two policy meetings in 2022.  Rationale: Inflation continues to heat up with price increases driven by a mix of demand and supply factors. Recent wage and transport fare adjustments were implemented, and domestic economic activity returned to pre-Covid levels. Meanwhile, food inflation remains elevated due to supply disruptions linked to storm damage. BSP is likely to retain its hawkish tone as the peso faces intense depreciation pressure, fanning imported inflation. BSP Governor, Felipe Medalla, vowed to retain his hawkish stance until he achieves his price stability objective so we expect further tightening in 2023. Risk to our call: The BSP governor has acknowledged that recent PHP weakness threatens the inflation outlook. Intensified pressure on the PHP could force BSP to hike more aggressively to close out 2022.   Nicholas Mapa Read this article on THINK TagsRecession Inflation Central banks Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
German industry rebounds in January

Supply Chain Issues And Rivers Status Affect German Industry Sector. Retail Sales Down (07/10/22)

ING Economics ING Economics 09.10.2022 17:23
Weak industrial production and retail sales provide further evidence that the German economy continues to slide into recession Industrial production declined... Germany continues to descend into recession. In August, production in industry in real terms was down by 0.8% on the previous month on a price, seasonally and calendar-adjusted basis, from an upwardly revised stagnation in July. Over the year, industrial production was up by 2.1%. Ongoing supply chain frictions as well as the low water levels in German rivers were the main reasons behind this drop in industrial activity. To make things worse, production in the energy sector was down by 6.1% month-on-month and the construction sector by 2.1%. According to the statistical office, production in the energy-intensive sectors was down by 2.1% MoM and by 8.6% compared with February this year. Retail sales in August were down by 1.3%, from an increase of 0.7% in July. Read next: Great Britain Expects Positive Results For Its Economy | FXMAG.COM More to come German industry and the entire economy have not come to an abrupt stop but are rather in the middle of a long and gradual slide into recession. Some examples? At the start of the year, production expectations were close to all-time highs but since the start of the war in Ukraine they have gradually come down, with no end currently in sight. Order books were richly filled at the start of the year and companies were filling inventories. Since then, new orders have dropped in almost every single month, and actual production has weakened since the summer. We don't need a crystal ball to see a further weakening of German industry in the coming months. The full impact of higher energy prices will only be felt in the last months of the year. It is not only the price effect putting a burden on German industry but also the lack of industrial input goods (including industrial gas). Today’s data are like a sneak preview of more to come. High energy prices will increasingly weigh on private consumption and industrial production, making a contraction of the economy inevitable. The only question is how severe such a contraction or recession will be. Read this article on THINK TagsIndustrial Production Germany Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair: There Are Still No Sell Signals

At The Moment The Trend Of The Euro To US Dollar Pair (EUR/USD) Is Down

InstaForex Analysis InstaForex Analysis 10.10.2022 08:13
Last Friday, the euro fell by 52 points, and this morning the price reached support for the most important line of the global price channel of the higher timeframe at around 0.9724. After the price settles below this line on a weekly scale, further downward movement of the price to the target level of 0.9338 is likely. The situation is similar on the daily chart - after consolidating under 0.9724, the price will go to the nearest support at 0.9520, that is, the price will try to renew the September 28 low. Here there is a risk of forming convergence with the Marlin Oscillator. Perhaps, before moving to 0.9338, the price will lie in a side trend for 1-2 weeks. At the moment the trend is down. On the four-hour chart, the price lingered on the technical price support lines and the MACD indicator line. Accordingly, consolidating below the level and on this time frame creates a downward momentum. Marlin is developing in its lower half - in the territory of a downward trend.   Relevance up to 05:00 2022-10-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323790
The Outlook Of EUR/USD Pair Is Downward In The Near Term

The High Demand For The US Dollar (USD) Does Not Allow The Euro (EUR) Itself To Grow

InstaForex Analysis InstaForex Analysis 10.10.2022 08:53
EUR/USD 5M Last Friday, the euro/dollar pair continued its downward movement and by the end of the day was below the Senkou Span B line. We said earlier that the Senkou Span B line is almost the last hope for the euro to protect itself from a new collapse, and now it turns out that it has been overcome, just like the Kijun-sen line on the 24-hour timeframe. Thus, right now one simple conclusion suggests itself: the euro will continue to form a long-term downward trend. There were reasons for the euro's fall on Friday. Reports from NonFarm Payrolls and unemployment in the US turned out to be quite strong, so the US currency continued to rise. It is strange that it rose by only 50 points, although in previous days, when there were no macroeconomic reasons for falling, it showed a firmer strengthening. But we have what we have. There will not be many important events in the new week, therefore, most likely, traders will turn their attention to geopolitics, which tend to only get worse over time. In regards to Friday's trading signals, the situation was unambiguous, but not easy. The first signal to sell - consolidating below Senkou Span B - turned out to be false, but the price passed in the right direction for more than 15 points, so Stop Loss at breakeven should have been set. According to it, the deal was closed . The second sell signal was formed for several hours, but finally formed when US statistics were being released. Since the statistics turned out to be strong, traders had reason to open short positions. But even in the case of opening, it was not possible to earn a lot, since an upward rollback began almost immediately. COT report: The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 9,300, and the number of shorts by 19,200. Accordingly, the net position grew by about 9,900 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 45,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 10. The key report for the coming week is US inflation. Overview of the GBP/USD pair. October 10. Liz Truss's ratings are falling, not having time to grow. Forecast and trading signals for GBP/USD on October 10. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The upward trend has finally been canceled on the hourly timeframe. This, of course, does not mean that now the euro will fall without a chance, but the technique is now signaling a resumption of the downward trend. Moreover, on all timeframes. It is quite possible that this week we will see the euro around the level of 0.9553. We highlight the following levels for trading on Monday - 0.9553, 0.9844, 0.9945, 1.0019, 1.0072, as well as the Senkou Span B (0.9767) and Kijun-sen (0.9864) lines. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. For today, there are no important events and reports planned in the EU and the US, so the day can be relatively calm. However, the euro may continue to fall. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-10-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323778
Mixed US Activity Picture: July Rate Hike Likely, Followed by a Pause

Hold On Tight! Forex: What Could Drive Euro, US Dollar And British Pound This Week?

ING Economics ING Economics 10.10.2022 13:45
We continue to favour a stronger dollar this week, as CPI numbers should show another acceleration in core inflation, Fed communication should remain hawkish and risk sentiment unstable. The late-September dollar highs are well within reach. Elsewhere, fiscal developments will remain key for sterling, and downside risks remain high USD: Main narratives point at stronger dollar Last week’s action in the FX market conveyed a clear message that it is too early to turn more structurally bearish on the dollar or bullish on pro-cyclical currencies. This week, markets may find further confirmation that this is the case, with a few key threads to follow. First, US CPI figures on Thursday should show a decline (we estimate from 8.3% to 8.1%) in headline inflation caused primarily by lower gasoline prices, but at the same time an acceleration in the core rate (we estimate from 6.3% to 6.5%), mainly driven by housing costs and recreation prices. This should all but endorse prospects of another 75bp rate hike in November, even if surveys like the University of Michigan should show an easing in long-term inflation expectations. Second, Fed communication. A 75bp hike for November and a 4.60-4.70% peak rate are now in the price, but additional hawkish comments – if backed by an inflation surprise for example – could encourage markets to speculate on larger hikes or a more prolonged tightening cycle. At this stage, we would see no obvious reason for the Fed to sound any less hawkish. The focus this week will be on the September FOMC minutes and a fairly long list of speakers, starting with Charles Evans and Lael Brainard today. Third, geopolitical and energy market developments. There have been signs over the weekend that any optimism over an imminent de-escalation in the Ukraine conflict may be misplaced. Meanwhile, fears of potential sabotage across European infrastructure appear to be rising, and with the new EU sanctions on Russia kicking in, it may be a rocky week for energy markets. OPEC+ recent cuts should keep showing their effect on crude prices, and offer some (we suspect, temporary) support to oil-sensitive currencies. US markets are closed for a national holiday today, so we could see a quieter than usual start of the week in markets. Moving on, we remain bullish on the dollar, as the underlying narrative of a hawkish Fed – paired with lingering geopolitical and energy prices concerns – should keep risk sentiment weak and safe-haven flows into the greenback strong. A re-test of the 114.76 September high in DXY is our base case over the next few days. Francesco Pesole EUR: Back to 0.95 soon? There are no major market-moving data releases in the eurozone this week, although Friday’s trade figures for August will be quite interesting to watch, and may trigger some market reaction. A trade surplus of €20bn per month turned into a deficit of around €40bn in July due to the rise in energy prices: our economists expect this deficit to have widened to €45bn in August. This is a testament to how the energy crisis is forcing a radical shift in the export-oriented economic framework of the eurozone, a theme - among others - that in our view will prevent a rapid return to above-parity levels in EUR/USD. After all, our BEER FX equilibrium model has consistently shown that the EZ-US terms of trade (price of exports divided by price of imports) differential is the primary determinant of real EUR/USD medium-term swings, and currently shows that the pair is not undervalued. On the ECB side, expect a plethora of speakers this week. President Christine Lagarde is scheduled to speak on Wednesday, but we’ll hear from Mario Centeno, Pablo de Cos and the chief economist Philip Lane today. Like the Fed, it’s hard to imagine the ECB would want to radically change its hawkish rhetoric at this stage. But unlike the Fed, tightening by the ECB is not helping its domestic currency, and we see EUR/USD staying offered into the 0.9540 September lows this week.   Francesco Pesole GBP: Eyes on Truss' reconciliation effort UK Prime Minister Liz Truss is set to attempt a reconciliation with the different groups of the Conservative Party after the fiscal-related market turmoil and a fall in opinion polls appear to have generated widespread discontent within the party. Markets will keep a close eye on whether this will lead Truss to backtrack on some of her other fiscal views (like a windfall tax on energy firms). Barring truly encouraging news on that front, sterling still looks on a slippery slope, as domestic and external deficit concerns as well as the risk of more turmoil in the gilt market have made GBP more exposed to adverse risk sentiment swings. Combining our view for a stronger dollar, we expect cable to easily slide through the 1.1000 support very soon, and to stay on a downward trend into the new year. On the data side, tomorrow’s jobs data will be the highlight of the week. Our economists expect the unemployment rate to notch a little higher again, but for now, the Bank of England will keep viewing this through the lens of worker shortages. We expect a 100bp hike in November. Francesco Pesole NOK: Inflation surprise no big help to the krone This morning’s data showed that Norway’s inflation unexpectedly accelerated from 6.5% to 6.9% in September, with underlying price pressures remaining significant (from 4.7% to 5.3%). Higher inflation and a stronger oil market may start to trigger speculation over a more aggressive hike by Norges Bank before the end of the year. For now, our view is that the Bank will stick to a 50bp increase for November, and decelerate to 25bp in December, but risks are clearly skewed to the hawkish side of the spectrum. NOK didn’t react strongly to the CPI figures this morning, and like for other pro-cyclical currencies, domestic rate expectations are not a primary driver of the currency at the moment. Recent OPEC+ action to support oil prices has offered some support to the krone, but should the net impact of higher oil prices be mostly detrimental to risk sentiment, expect NOK’s benefits to shrink rapidly. We expect EUR/NOK to remain above 10.40 in the near term, with risks tilted to the upside.   Francesco Pesole Read this article on THINK
The EUR/USD Pair Maintains The Bullish Sentiment

Be Like Federal Reserve: Would European Central Bank Introduce Quantitive Tightening?

ING Economics ING Economics 10.10.2022 14:10
The European Central Bank looks determined to follow in the Federal Reserve's footsteps. After the start of aggressive rate hikes, and with no end in sight yet, the next milestone is a reduction of its bond portfolio. However, we think the ECB's hawkishness might be premature. Quantitative tightening will come but not now QT is on the ECB's radar but still a distant prospect The minutes of the ECB's September meeting delivered a couple of interesting insights: the decision to hike rates by 75bp was not taken unanimously, so 75bp increments should not be the new normal. However, the ECB was clearly determined to continue hiking rates significantly. Also, looking beyond the configuration of the key ECB interest rates, the minutes underlined that the Eurosystem's large balance sheet was continuing to provide significant monetary policy accommodation by compressing term premia. The Governing Council felt it appropriate to reiterate that it stood ready to adjust all of the instruments within its mandate to ensure that inflation returned to its medium-term target of 2%. This is a clear signal that reducing the ECB's balance sheet has become an issue. Quantitative tightening (QT) - how to reduce the size of the balance sheet - was also apparently on the agenda at this week's non-monetary policy meeting in Cyprus. However, so far, no information has been leaked from this meeting. Bond yields have already increased significantly in recent months without any quantitative tightening A discussion is one thing, an actual decision another. Just a little more than a week ago, ECB President Christine Lagarde said that the ECB would only start to consider QT when the ECB had completed its monetary policy normalisation. At the same time, bond yields have already increased significantly in recent months without any QT. Also, given the very uncertain economic outlook and more pressure on governments to deliver additional fiscal stimulus, QT at the current juncture could trigger an unwarranted widening of bond spreads, a.k.a, a new euro crisis. This is something the ECB clearly does not want. A premature QT decision also has other risks. It could raise the bar for triggering the Transmission Protection Instrument (TPI) even higher, a development that could actually spark a new euro crisis. As such, an actual decision on QT is very unlikely as it would add to financial stress and uncertainty. However, it's good to at least have a plan for when this is really needed.             How the ECB's QT could work Though quantitative tightening currently looks unlikely, it will come eventually. Given the complicated structure of the ECB's bond purchases across countries, sectors and durations, an outright selling of the bond portfolio will not be an easy one without disturbing markets. Also, don't forget that the ECB's balance sheet not only comprises the bond portfolio but also the series of liquidity operations to support bank lending. These bank lending operations (TLTROs) will be repaid by banks, automatically reducing the balance sheet. Still, when financial markets think of QT, they think of reversing the ECB's asset purchases. In this regard, the option of gradually and more passively reducing its asset portfolio looks the most attractive.   The option of gradually and more passively reducing its asset portfolio looks the most attractive A possible first step would be to (gradually) stop the reinvestments of the Asset Purchase Programme (APP). One way to phase in QT would be to first cap APP reinvestments at 50% of their normal amount during, say, the second and third quarters before ending them in the fourth. In this scenario, the resulting balance sheet reduction would be a manageable €155bn in 2023, doubling to €300bn in 2024. The next step would be to end the reinvestments under the Pandemic Emergency Purchase Programme (PEPP). These would add to the balance sheet reduction in 2025, leading to a total reduction of €388bn (along with the APP reductions). In addition, the ECB could speed up the process with outright sales but we doubt peripheral bond markets would be able to stomach the impact (see next sections). In terms of timing, we take Christine Lagarde's recent comments for granted and expect a gradual end to the APP reinvestments between 2Q and 4Q next year. PEPP reinvestments will stop by the end of 2024. QT could reduce the ECB's balance sheet by €155bn in 2023 and €300bn in 2024 Source: Refinitiv, ING   Whenever it happens, we expect QT to be felt across three dimensions of rates markets: duration, credit (and sovereign) premia, and money markets (through the price of liquidity).  Impact on core yields: moderate at the start One of the channels through which QE influenced markets was by suppressing the compensation for a certain number of risks, including duration risk. At face value, this means that, when the ECB reduces its balance sheet, long-dated yields will rise. So far so good. There is empirical evidence for that. For reference, we find that a €155bn reduction in the ECB's bond portfolio size in 2023 would push 10Y Bund yields up by only 7bp, and a €300bn reduction in 2024 would reduce them by 14bp. If this sounds unimpressive, note that without the €5tn of ECB purchases, 10Y Bund yields would be 230bp higher by this, admittedly rough, estimate. Note also that QT would add to the amount of debt that private markets would have to absorb if European governments were to significantly increase their borrowing to finance energy support packages. This is another argument for a delayed start to QT. A €155bn reduction in the ECB’s bond portfolio size in 2023 would push 10Y Bund yields up by only 7bp What is much more difficult to track is the impact this will have on the shape of the yield curve. On paper, the longer the maturity point, the more QE suppresses yields. We're not expecting a re-steepening as a result of QT, however. The experience of the US and UK has shown that yield curves can invert even in the context of QT. The reason is that other factors have a greater influence, namely that base rates are going above their long-term neutral levels. In short, we're still expecting a German curve inversion next year irrespective of QT. Without QE 10Y German Bund yields would be over 200bp higher Source: Refinitiv, ING Sovereign spreads: adding fuel to the fire When one moves away from so-called ‘risk-free’ markets, the main impact of QE is suppressing credit compensation. In the case of sovereign bonds, QE was instrumental in suppressing eurozone break-up risk in the sovereign crisis of 2010-12, and in subsequent periods of market stress. Our analysis of German yields above implies that the stock, rather than the flow of purchases is the relevant variable to assess market impact. This isn’t so simple for sovereign spreads, where both variables matter. In plain English, we think the impact of QT on sovereign spreads will occur a lot faster than on core yields, once flows turn negative. This explains why spreads already started widening before QT was even discussed, as QE purchases drew to a close in mid-2022. We fear the ECB following through with QT would compound the worries of already stressed financial markets. We struggle to see how peripheral markets would cope with rising interest rates and QT at the same time We struggle to see how peripheral markets would cope with rising interest rates and QT at the same time. This is a key reason why we expect QT to start only once the phase of rising base interest rates is over. Additionally, the ECB keeping spread-support programmes, such as the TPI, at hand would go some way to reassuring markets. It would also mean a slower reduction in the ECB's bond portfolio if it is forced to temporarily buy peripheral bonds. QT will reduce excess liquidity and help widen money market spreads, such as Euribor Source: Refinitiv, ING Money markets: taking away the comfort blanket A large chunk of money market rates also has a credit and duration component, which we covered in the sections above. But the compensation in money markets is even more heavily suppressed by the tide of ECB Excess Liquidity (EL) introduced during successive rounds of QE and loans to banks (TLTROs). As QT begins, EL will shrink by the same amount. In 2023, the estimated €155bn reduction in excess liquidity from QT will pale in comparison to the nearly €2tn reduction coming from targeted longer-term refinancing operations (TLTRO) loan repayments. Each incremental reduction in liquidity will make money market rates more sensitive to other risk factors After that date, however, each incremental reduction in liquidity will make money market rates more sensitive to other risk factors. The widening of money market spreads, for instance Euribor fixings compared to overnight index swaps (OIS), is not linear. The first €2tn reduction will probably have little effect. After that, at the latest after mid-2023, the impact of EL reduction will accelerate. This effect could even be magnified if the ECB decides to effectively lock away a portion of EL using tiered bank reserve remunerations (see our article on that topic). Read this article on THINK TagsQuantitative tightening Interest Rates ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Is Showing A Potential For Bearish Drop

This Week USD May Be Fluctuating! Euro To US Dollar - Technical Analysis And More - 10/10/22

InstaForex Analysis InstaForex Analysis 10.10.2022 22:02
In the intermediate-term, the pair is just above the newly visited price levels around 0.9600 that haven't been visited since 2002. That's why, some bullish recovery was recently demonstrated especially around such an important psychological support. The nearest supply level was located around 1.0200 where bearish rejection and a short-term SELL Entry were anticipated. Hence, another bearish pullback to test the price levels of 0.9500 was recently executed. Intensive bullish price action was demonstrated around these price levels (the lower limit of the current movement channel). Initial bullish target around 1.0100 is about to be achieved. On the other hand, any quick bearish pullback towards the price levels of 0.9520 should be considered as a valid BUY opportunity. Relevance up to 18:00 2022-10-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/296189
The EUR/USD Pair Has Opportunities For Bullish Movement

The Overall Situation Of The Euro To US Dollar (EUR/USD) Pair Is Down

InstaForex Analysis InstaForex Analysis 11.10.2022 08:39
Yesterday, the euro overcame the support of 0.9724, but has not yet consolidated below the level. To settle below this area, you need to close today's candle below this level. Of course, there is such a possibility, but the signal line of the Marlin Oscillator is turning up, which already calls into question the further vigorous price decline. In case of reverse consolidation above the level of 0.9724, a corrective growth from the previous 4-day decline to the level of 0.9855 is possible. The condition for the continuation of the decline is to overcome yesterday's low of 0.9682. The price consolidated under the MACD line and under the price level of 0.9724 on the four-hour chart. The Marlin Oscillator is in negative territory. The overall situation is down, and unless there is some very positive news for the eurozone, the decline may continue. Aim for 0.9520.   Relevance up to 04:00 2022-10-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323921
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The Demand For The Euro (EUR) Is Rising But The US Dollar (USD) Situation Does Not Allow The Euro To Grow

InstaForex Analysis InstaForex Analysis 11.10.2022 08:52
EUR/USD 5M The EUR/USD pair continued its downward movement on Monday. Since both lines of the Ichimoku indicator have been overcome, we have formed a new downward channel, which emphasizes the current trend. The euro continues to steadily fall to its 20-year lows, to which only 150 points remain to go. Now we have no doubt that a new update of these lows is just around the corner. Of course, there will be several events this week that could change the mood of the market. For example, a report on US inflation, which will largely determine how much the Federal Reserve will raise the rate at the next meeting. Several important geopolitical events may also happen. However, if you look only at the technique, then the euro's fall does not raise doubts and questions. The pair's volatility decreased on Monday, which is not surprising, since there were no important events either in the US or in the European Union on that day. In regards to trading signals, the situation was as simple as possible, since not a single one was formed yesterday. We believe that this is not bad, since in conditions when the movement is not the strongest and volatility is not high, several false signals could have been formed. Therefore, it is better to be without profit than at a loss. COT report: The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 9,300, and the number of shorts by 19,200. Accordingly, the net position grew by about 9,900 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 45,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 11. This has never happened - and here you are, again! Overview of the GBP/USD pair. October 11. "Anti-British" sentiment continues to grow in Scotland. Forecast and trading signals for GBP/USD on October 11. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The upward trend has finally been canceled on the hourly timeframe. This week, we can observe a systematic decline in the pair's quotes, and even with the presence of important events and reports, we do not believe that the market mood will change dramatically. It is now clear that the last round of the upward movement was another correction within the global downward trend, which means that the pair has now resumed its march to the downside. On Tuesday, we highlight the following levels for trading - 0.9553, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9767) and Kijun-sen (0 .9840). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. There are no important events and reports planned in the EU and the US on Tuesday, so the day can be relatively calm. However, the euro may continue to fall. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group. Relevance up to 02:00 2022-10-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323909
The Drop In German Inflation Is Welcome News, But It Is Mean That Can We Say That Inflation Has Peaked?

Inflation Expectations Of The German Government

TeleTrade Comments TeleTrade Comments 11.10.2022 13:30
According to a German business newspaper, Handelsblatt, the country’s federal government expects a significant drop in inflation in 2023. The government expects inflation at 7% next year, the paper said. Meanwhile, the daily reported that the German government sees the 2022 inflation rate at 8%.  Market reaction EUR/USD is defending gains just above 0.9700 amid a quiet session so far this Tuesday.
Euro to US dollar - Ichimoku cloud analysis - 21/11/22

How Were S&P 500 And Nasdaq Doing In The Morning? EUR/USD Touched 0.9711, AUD/USD Reminds Us Of 2020

ING Economics ING Economics 11.10.2022 17:24
As equity sell-off slows, bond sell-off accelerates  Source: shutterstock Macro outlook Global Markets: Smaller falls in the US equity market yesterday suggest the selling momentum may be running out of steam again, with equity futures pointing to slight gains in the S&P500 and NASDAQ at today’s open. Asian bourses were mostly in the red yesterday, and they may slide further today judging by futures markets. Bond developments were once again dominated by a sell-off in the UK Gilts market, where fears about pension fund liquidity are leading to a vicious cycle of selling. The Bank of England’s bond purchasing scheme failed to calm markets yesterday, nor did a brought-forward date for the Chancellor’s fiscal plans or announcement of a new head for HM Treasury. 2Y Gilt yields rose 18.6bp, while those on 10Y Gilts rose a whopping 23.6bp to 4.465%, not far off Greece’s 4.845% yield, and almost double German 10Y Bund yields (2.331%), which also saw yields rising sharply as Chancellor Scholz apparently indicated his willingness to use common EU bond issuance to help solve the energy crisis. US Treasury markets return today.  EURUSD fell a little further yesterday, reaching 0.9711, and the AUD likewise lost further ground to stand at 0.629 currently, last seen just after the March 2020 pandemic lows of 0.55. Cable hasn’t fallen much further, surprisingly given the problems in Gilts markets, but the prognosis isn’t good. The JPY remains above 145 today, suggesting that the previous red line for the MoF may have been washed away. No one likes throwing money away.  Most of the Asian FX pack fell slightly yesterday, with median falls of about 0.3%. Though the THB dropped almost 1.4% to 37.92 as foreign funds sold Thai notes and equities.   G-7 Macro: There’s not much on the G-7 calendar today, though, given the problems in Gilts markets, the UK labour market data due out later may be of more than passing interest. The extent of the looming UK slowdown will need to be factored into taxation and spending assumptions and will help to determine whether the UK's soon-to-be-released amended spending plans stack up or not. The US releases NFIB data today, which has been painting a more encouraging picture of the inflation outlook recently. That may be today's glimmer of hope for those wanting to dabble with a positive risk outlook.  Philippines: August trade data is set for release this morning. Imports will likely post strong double-digit gains while exports are forecast to contract. Imports could expand by 22%YoY, driven partly by a bloated energy bill as well as by rising consumer imports as economic reopening continues.  Meanwhile, exports could contract for another month as global demand for electronics stalls.  The overall trade balance should test record lows, adding depreciation pressure on the Peso.     What to look out for: Philippine trade balance, US NFIB, Fed speakers Australia Westpac consumer confidence (11 October) Philippine trade balance (11 October) US small business optimism (11 October) Fed’s Mester and Kashkari speak (11 October) Japan machine orders (12 October) India PPI inflation (12 October) US PPI inflation (12 October) Bank of Korea decision (12 October) FOMC minutes (13 October) Japan PPI inflation (13 October) US CPI inflation and initial jobless claims (13 October) China trade balance, CPI and PPI inflation (14 October) Korea unemployment (14 October) US retail sales and University of Michigan sentiment (14 October) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Euro May Attempt To Resume An Upward Movement

The Current Level Of The EUR/USD Pair Is Strong And There Is No Chance To Change It

InstaForex Analysis InstaForex Analysis 12.10.2022 08:08
Yesterday, the euro traded in a solid range of 103 points, but the closing of the day was almost at the opening level and in fact the price settled on the daily chart, under the key level of 0.9724. As a result, now we are waiting for a more confident price decline to the level of 0.9520. Eurozone industrial production data for August will be released today. An increase of 0.6% and an improvement in the annual rate from -2.4% to 1.2% y/y are expected. Market participants will be drawn to today's release of the FOMC minutes from the last meeting - investors need to find out if their federal funds rates are justified in the 78% probability of a 0.75% rate hike at the Federal Reserve meeting on November 2. On the four-hour chart, the price consolidated under the MACD line and under the level of 0.9724 now after a false exit above these lines. We look forward to continuing the chosen course. Not far from the target level of 0.9520 is an intermediate target of 0.9554 – the low of September 26th. The level is strong, so the target of the movement can be defined as a range of 0.9520/54.   Relevance up to 04:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324037
The EUR/USD Pair Has A Potential For Drop

The Euro To US Dollar (EUR/USD) Pair And Expected Future Moves

InstaForex Analysis InstaForex Analysis 12.10.2022 08:14
We do believe, that we can see a final decline closer to 0.9507 as long as minor resistance at 0.9734 is able to cap the upside However, from 0.9507 or upon a break above 0.9734, we will be looking for a new impulsive rally in EUR/USD towards 1.3565 and ultimately above the peak of wave 1 or A at 1.6038.   Relevance up to 06:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/296417
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

The Euro/US Dollar (EUR/USD) Pair: There May Be An Upward Correction In The Hourly Timeframe

InstaForex Analysis InstaForex Analysis 12.10.2022 08:30
EUR/USD 5M The EUR/USD pair continued to trade rather indistinctly for most of Tuesday. A good growth only followed during the US session, which, however, quickly ended at the nearest line of the Ichimoku Senkou Span B indicator. Thus, the price continues to remain below the Ichimoku lines, and therefore the downward trend persists, despite the pair's exit from the downward channel. This channel was quite narrow, and its angle of inclination was too strong. Therefore, most likely, it will be rebuilt when a new price peak is formed. No important statistics were published either in the US or in the European Union on Tuesday, so traders had nothing to react to during the day. We still believe that the probability of the pair continuing to fall is much higher than the probability of growth. Nevertheless, overcoming the lines of the Ichimoku indicator may provoke a new round of growth by 200-300 points. No trading signals were formed on Tuesday. The pair only worked out the Senkou Span B line and rebounded from it by the end of the trading day, which could be interpreted as a sell signal, but in any case it formed too late to work it out. Formally, the downward movement can now continue both at night and in the morning, but we still do not recommend leaving positions open overnight when trading within the day. COT report: The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 9,300, and the number of shorts by 19,200. Accordingly, the net position grew by about 9,900 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 45,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 12. Sweden refuses to provide Russia with the results of the investigation into the Nord Stream explosions. Overview of the GBP/USD pair. October 12. The Liz Truss government is teetering on the brink. Forecast and trading signals for GBP/USD on October 12. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The downward trend is formally canceled on the hourly timeframe, but in practice, one or two upward corrections are likely to follow, after which the downward movement will resume, and the downward channel will take on a wider form. So far, we do not see any reason to expect a strong growth from the euro. We highlight the following levels for trading on Wednesday - 0.9553, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9767) and Kijun-sen (0 .9810). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union will publish a far from the most important report on industrial production, which is unlikely to cause a strong market reaction. European Central bank President Christine Lagarde's speech will be much more interesting. Recall that the ECB plans to raise rates by at least 0.75% again next month. The euro really needs hawkish rhetoric to show at least some growth. There will be nothing interesting in America today. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 06:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324039
South Korean exports shrank, but annual print shows a 6.1% gain in 2022

South Korean Won (KRW) And THB Decreased Yesterday. S&P 500 And Nasdaq Declined A Bit

ING Economics ING Economics 12.10.2022 09:37
Interesting day for Asia with Bank of Korea rate meeting plus Indian inflation ahead of FOMC minutes and US PPI inflation tonight Source: shutterstock Macro outlook Global Markets: The turmoil that threatened to spread across markets from the UK’s Gilts market looked marginally less ominous for a while yesterday. 2Y Gilt yields retreated to the tune of 14.9bp, though their 10Y counterparts fell only 3.4bp. 2Y German bond yields also fell 5.7bp and were down 4.1bp in the 10Y Bund. It remains to be seen whether this calm will hold, as Bank of England (BoE) Governor, Andrew Bailey, noted that the BoE Gilt buying programme would still end this Friday.  Many pension funds seem to think that this is not long enough to make the necessary adjustments to their funds and there is a lot of speculation that the Friday deadline will have to be extended. US Treasury yields did their own thing yesterday. 10Y US Treasury yields rose 6.6bp to 3.947%, bringing 4% back into play as a near-term target. 2Y US Treasury yields were little changed at 4.31%. The pound came under further selling pressure yesterday, dropping to 1.0975 as of writing. EURUSD has ended up virtually unchanged after a very choppy session in US trading. The AUD is now down to 0.6267 and the JPY is nosing up towards the 145.90 level at which the BoJ intervened in mid-September. It looks like this could be an interesting day. Most of the Asian FX pack lost ground to the USD yesterday, led by the KRW which has risen to 1435, and the THB, which is up to 38.12. The CNY made further small losses, rising to 7.1687. Stock markets don’t yet seem to have woken up to what is going on in bond markets, and there were only small losses in the S&P500 and NASDAQ yesterday.  Equity futures are pointing to a small gain at the open. G-7 Macro: Yesterday’s US September small firm business survey (NFIB) rose for a third consecutive month. Most notably, there were slightly lower plans to increase selling prices (51% down from 53% in August and the 65% peak in May). The UK’s labour market data released yesterday showed a faster slowdown than had been expected, which won’t make the fiscal arithmetic any easier for the UK government, trying to make their tax cut plans add up to something that won’t crash the pound or Gilts market. The monthly GDP figures for August in the UK due out today will likely also make for uncomfortable reading. US mortgage applications and PPI numbers ahead of the September CPI release tomorrow as well as the FOMC minutes from the last meeting, will help set the tone for the market for the next 24 hours.     China: China loan growth jumped by almost double from a month ago to CNY247bn. Government bond issuance also jumped. This indicates that government spending will support the GDP growth figure in 3Q22. But fiscal pressure is mounting. India: September CPI due out later tonight will show inflation pushing higher. The consensus is for a rise to 7.4% from 7.0%. We think there is some upside risk to these figures based on some higher food price data over the month. South Korea: The Bank of Korea (BoK)  holds a rate decision meeting today. Both we and the market expect the BoK to raise its base rate by 50bp, considering the faster-than-expected Fed rate hikes, sticky inflation exceeding 5%, and growing inflation risks from the weak won and rebounding global oil prices. Inflation eased down to 5.8%YoY in September and inflation expectations also came down slightly. But the BoK will be very careful in reading too much into the latest figures as inflation is expected to pick up again in October. The market has already started talking about the possibility of another 50bp hike by the BoK at the next MPC meeting in November. We have to listen carefully to Governor Rhee’s comments today, but we think that October CPI is the key for the BoK regarding the next decision. If inflation goes back up to 6%, then another 50bp hike is possible. If not, then they will likely normalize their hiking pace. Japan: The JPY passed 145.9 this morning and if the authorities step in again, it will be no big surprise. Machinery orders fell in August by -5.8% MoM sa (vs 5.3% in July and -2.8% market consensus). The weakness mainly came from foreign orders (-18.9%), pointing to the slowdown in the global economy. Domestic demand orders rose modestly (1.9%). We think that Japan’s economy will stay on a recovery path, boosted by reopening-induced domestic demand. What to look out for: Inflation reports and the FOMC minutes Japan machine orders (12 October) India PPI inflation (12 October) US PPI inflation (12 October) Bank of Korea decision (12 October) FOMC minutes (13 October) Japan PPI inflation (13 October) US CPI inflation and initial jobless claims (13 October) China trade balance, CPI and PPI inflation (14 October) Korea unemployment (14 October) US retail sales and University of Michigan sentiment (14 October) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Market May Continue To Buy The Pound (GBP) This Week

British Pound (GBP) Amid Latest News, Euro And US Dollar (USD) - ING Economics' Forex Market Commentary

ING Economics ING Economics 12.10.2022 10:12
The pound's elevated volatility looks set to stay as contradictory signals from BoE Governor Bailey and a media report about the extension of the emergency gilt-buying programme have left markets in limbo. More clarity may come from BoE speakers today, but the downside risks for sterling continue to prevail, and the spill-over can be seen globally USD: Fed minutes in focus The IMF delivered a warning signal yesterday as it cut its year-ahead world GDP forecast for the third time this year, from 2.9% to 2.7%. Interestingly, the theme of excessive tightening and the damage to the world’s economy has taken a more central role in the IMF report. It seems, however, quite far from the rhetoric of the Federal Reserve and most other central banks, which continue to point to the need to fight inflation while accepting a degree of economic damage. This is the narrative that is keeping the general trend in risk assets bearish and the dollar supported, and we do not expect it to change until 1Q23 at the earliest – as discussed in our latest monthly FX update. So far this week, extra US drivers have been more relevant for global markets and dollar swings, and most of the focus will remain on developments in a) the UK bond market and the GBP impact; b) the re-escalation in the Ukraine conflict; c) Asia’s tech stocks after fresh export restrictions by the US. Domestically, the US calendar includes PPI for September and the 21 September FOMC meeting minutes. The latter should, in our view, show some good degree of alignment within the committee around the need for another large (75bp) move in November, although diverging members’ expectations around the terminal rate may trigger some adjustments in the early/mid-2023 Fed funds pricing. Anyway, we don’t see any dollar correction being more than short-lived, especially considering the risk-averse developments in Europe and Asia. Francesco Pesole EUR: EU members indecision is not good news The highlight of the day in the eurozone is the speech by European Central Bank President Christine Lagarde at the IIF annual meeting in Washington. With two weeks to go to the October ECB meeting, markets are almost fully pricing in a 75bp hike (70bp embedded in the OIS curve) and a total of 230bp of tightening by mid-2023. There is a high probability that Lagarde will refrain from giving strong signals to the market, and in any event, the implications for the euro should not be very large given the currency has been significantly less sensitive to domestic monetary policy expectations lately compared to historic standards. We’ll also hear from Klaas Knot and Pablo Hernández De Cos later in the day. Read next: Elon Musk Is Getting Into Geopolitics| Russia And Another Attack| FXMAG.COM We think that the ongoing discussion among EU members about price caps on energy prices is set to have broader implications than the ECB rhetoric at this stage. It still appears that member states cannot agree on the design of an EU-wide measure, with proposals ranging from a radical cap on imported gas prices (here, the issues would be higher demand and issues with non-Russian suppliers), to a floating price corridor to avoid excessive volatility, to a less drastic support package to shield the economy from large energy bills (at the risk of straining public finances). Lingering indecisiveness is not good news for the euro, and we still see downside risks into the September lows in EUR/USD (0.9540) this week. Francesco Pesole GBP: Awaiting clarity on BoE emergency purchases The roller coaster ride in GBP looks far from over. Yesterday, Bank of England Governor Andrew Bailey surprised by announcing that emergency gilt purchases will be discontinued – as scheduled – at the end of this week, adding that pensions funds had only three days to close their liquidity positions. The remarks triggered a drop in the pound below the 1.1000 threshold and back-end gilts came under new pressure. UK markets are now assessing the credibility of a report by the Financial Times that the BoE communicated privately to banks that the emergency buying programme may actually be extended beyond this week. GBP rose on the news and is currently trading at the 1.1000 mark, but that appears to be a sort of "limbo" level where markets are awaiting more clarity on this theme. Our rates team notes that Bailey’s speech and the FT report are indeed contradictory but not entirely inconsistent, as the BoE is likely fearing that the pledge of longer-term intervention would discourage pension funds to de-lever. Today, speeches by MPC members Jonathan Haskel (0900 BST), Huw Pill (1235 BST) and Catherine Mann (1800 BST) will be very closely watched. It does appear that the extension of the emergency gilt buying is currently holding the key to averting another sharp sell-off in the gilt market and the pound. We should expect more volatility in the pound for today, and we continue to see the direction of travel as mostly negative, with cable set to drop to the 1.00-1.05 area by the end of the year. On the economic side, things aren’t offering much support either, as this morning’s data showed a surprise economic contraction by 0.3% month-on-month in August, paired with a large slump (-5.2% YoY) in industrial production. Francesco Pesole KRW: Rising dissent within the BoK The Bank of Korea hiked the 7-day repo rate by 50bp this morning. This was largely expected but for the first time since August 2021, the decision was not unanimous, with two members dissenting, which signals a widening of the hawk-dove spectrum as the inflation-growth dichotomy becomes increasingly relevant. While acknowledging a non-negligible risk of another 50bp rate hike in November, our Asian economics team expects a continued slowdown in pipeline prices to allow the BoK to normalise policy at a slower (25bp) pace next month. Our FX view remains unchanged: the fallout of China’s economic woes and a strong dollar should continue to put upside pressure on USD/KRW, and we forecast 1500 by year-end. Francesco Pesole Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Oil Prices Rise as OPEC Cuts Output and API Reports Significant Inventory Drawdown

Bank Of England (BoE) Interventions Ineffective | The USD/JPY Pair Spiked Above The 146 Level For The First Time In 24 Years

Swissquote Bank Swissquote Bank 12.10.2022 10:37
We are only Wednesday, and the Bank of England (BoE) already intervened twice this week, to cool down the unbearable negative pressure on the British sovereign bonds. But the BoE Governor Bailey’s lack of tact sent all efforts up in smoke. The UK sovereign and sterling remain under a decent selling pressure. All eyes are on FOMC minutes and the US inflation data Beyond Britain, all eyes are on FOMC minutes and the US inflation data. Today, the minutes from the FOMC’s latest meeting will reveal if some Federal Reserve (Fed) members are concerned about going ‘too fast’ in terms of rate hikes. US will also reveal the latest producer price index for the month of September. The US factory-gate prices are expected to have slowed from 8.7% to around 8.4%. Then tomorrow, we will have a better insight about the situation in consumer prices. The headline CPI is expected to have slowed from 8.3% to 8.1%, but core inflation may have spiked higher, which is bad news for those praying for the Fed to slow down the pace of its rate tightening. Elsewhere, the IMF cut its global growth forecast for next year to 2.7%, from 2.9% in July, and from 3.8% in January, and said that there’s 25% probability that growth will slow to less than 2%. In the euro area, the GDP could rise just 0.5% next year. Forex Market The EURUSD remains under a decent pressure of the strong dollar, and only a soft inflation data from the US could help the euro bears take a pause. In Japan, things are not necessarily better. The USDJPY spiked above the 146 level for the first time in 24 years, and investors couldn’t trade the 10-year JGBs for three days, because the BoJ broke the system by buying just too much of the 10-year bonds to conduct a yield curve control strategy. Swap traders are now betting that the BoJ can’t carry on with abnormally low interest rates for so long, and will be forced to hike its rates at some point. Watch the full episode to find out more! 0:00 Intro 0:37 It’s not time for a gaffe, Mr. Bailey! 3:31 Jamie Dimon sees another 20% drop in S&P500 4:23 But it all depends on US inflation and the Fed policy! 6:27 Intel crops jobs 7:32 IMF cuts global growth forecast 8:04 EURUSD under pressure 8:38 US crude slips below $90pb 8:47 BoJ will soon be forced to act on rates to stop yen depreciation Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #UK #GBP #gilt #Bailey #Liz #Truss #sovereign #crisis #FOMC #minutes #USD #inflation #PPI #CPI #crude #oil #Intel #IMF #growth #forecast #JPY #BoJ #FTSE #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
FX Markets React to Rising US Rates: Implications and Outlook

The Fed Is Ready To Sacrifice Whatever It Takes To Contain Inflation

InstaForex Analysis InstaForex Analysis 12.10.2022 11:07
Risk appetite continues to fall as expectations for softer policy are decreasing more and more. Cleveland Fed President Loretta Mester has recently said that the bank has a lot of work to do to curb inflation, so it currently sees no reason to slow the pace of interest rate hikes. Fight fed with inflation Fed officials are now raising interest rates at the fastest pace seen in decades. In this way, they are trying to suppress stubbornly high inflation, which continues to grow and is in the region of a forty-year high. And since the Fed raised rates by 75 basis points last month to a target range of 3.25%, most likely, it will hit 4.4% by the end of this year, which means that there will be 1.25% increase at the November and December meetings. Mester reiterated that the US central bank will have to raise rates slightly higher than expected as high inflation continues despite efforts. It is difficult to doubt this, especially after the recent report on the state of the labor market, where the unemployment rate has fallen to almost historical lows, and new jobs have been created and continue to be created. Nevertheless, lowering inflation is the top priority as many are now suffering from having to spend more money on necessities like gasoline and food. The Fed also stressed that they will do everything possible to curb inflation even if their efforts hurt the economy. So far, this is not so noticeable yet as retail sales remain at a fairly high level. Fed officials predict that the unemployment rate could rise to 4.4% from the current level of 3.5%. In addition to raising rates, the Fed is also getting rid of its bloated balance sheet. Mester thinks the process is going smoothly. EUR/USD Talking about EUR/USD, quotes have reached the support level of 0.9680, but now there is a slight correction ahead of an important inflation report in the US. To resume growth, it is necessary to break above 0.9730, as only that will push the quotes to 0.9775 and 0.9810. Meanwhile, a break of 0.9680 will restore pressure on the pair and push it to 0.9640, 0.9590 and 0.9540. GBP/USD As for GBP/USD, it continues to decline, so buyers are focused on defending the support level of 1.0930 and resistance level of 1.1050. Only the breakdown of the latter will open the path to 1.1120, 1.1180 and 1.1215. Meanwhile, a return of pressure and move under 1.0930 will push GBP/USD down to 1.0870 and 1.0800.   Relevance up to 09:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324075
European Markets Await Central Bank Meetings After Strong Dow Performance

Most Likely, Unemployment Will Surge Amid Tight Monetary Policy

InstaForex Analysis InstaForex Analysis 12.10.2022 11:36
Chicago Fed President Charles Evans has recently said that the central bank is sticking to its mandate to bring inflation down even if it means people will lose their jobs. This means that interest rates will remain at the highest possible level for a long time regardless of the economy slipping into recession, or the labor market deterioration. According to the data presented by the US Department of Labor, the number of non-farm payrolls increased by 263,000 in September, while the unemployment rate fell to 3.5%. This is quite good data, but Fed officials, including Chairman Jerome Powell, warned that the end result of the central bank's efforts to curb inflation could lead to the deterioration of the labor market. Most likely, unemployment will surge amid tight monetary policy. EUR/USD Talking about EUR/USD, quotes have reached the support level of 0.9680, but now there is a slight correction ahead of an important inflation report in the US. To resume growth, it is necessary to break above 0.9730, as only that will push the quotes to 0.9775 and 0.9810. Meanwhile, a break of 0.9680 will restore pressure on the pair and push it to 0.9640, 0.9590 and 0.9540. GBP/USD As for GBP/USD, it continues to decline, so buyers are focused on defending the support level of 1.0930 and resistance level of 1.1050. Only the breakdown of the latter will open the path to 1.1120, 1.1180 and 1.1215. Meanwhile, a return of pressure and move under 1.0930 will push GBP/USD down to 1.0870 and 1.0800.
From UFOs to Financial Fires: A Week of Bizarre Events Shakes the World

Mester's (Fed) Statements Are Generally Riddled With Pessimism

InstaForex Analysis InstaForex Analysis 12.10.2022 11:58
Fed officials expressed disappointment that the energetic increase in interest rates has not yet brought the desired effect. Cleveland Fed President Loretta Mester said the central bank should continue raising rates since the necessary progress in reducing inflation has not yet been made. Mester's statements are generally riddled with pessimism, including a potential recession, weak economic growth and strong increase in unemployment. But the US government seems to be avoiding admitting that a downturn or recession is already taking place, even though the latest GDP data makes this clearer with its negative readings. But even if the upcoming inflation data improves a bit in annual terms (from 8.3% to 8.1%), it is unlikely for the Fed to change its hawkish position. Thus, the current scenario in the forex market will continue, while a local rebound may occur in European and US stock indices. Commodity assets will halt ahead of news from the US. Strong movements will begin shortly before the release of inflationary indicators. Forecasts for today: EUR/USD The pair is consolidating in the range of 0.9670-0.9800 in anticipation of the release of inflation data in the US. If the figure turns out to be in line with forecasts or higher, the pair will resume falling to 0.9550 after it overcomes 0.9670. XAU/USD Spot gold is also consolidating in the range of 1660.25-1678.00. If tomorrow's inflation data from the US is in line with forecasts or higher, expect a breakdown of the support level and a drop in price to around 1643.40.   Relevance up to 08:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324059
bybit-news1

Inflation: The Time Has Come... There Are Two Crucial Releases In The USA This Week!

Conotoxia Comments Conotoxia Comments 12.10.2022 14:03
Financial markets, especially in the United States, which appear less affected by the energy crisis than Europe's, seem to be waiting for important inflation data. Today, information will be published showing the price increases faced by producers (PPI inflation), while tomorrow there will be data on consumer inflation (CPI). Inflation data and expectations Before we move on to the discussion of the latest inflation data or the market consensus for the current reading, we can take a look at several other data, the task of which may be to express an opinion on the expected future inflation. The Federal Reserve Bank of New York reported that the median of one-year inflation expectations fell by 0.3 percentage points to 5.4 percent, the lowest value since September 2021. A survey of consumer expectations conducted by the New York Fed in September 2022 also showed that the three-year inflation expectations rose by 0.1 percentage point to 2.9 percent, and the five-year one rose by 0.2 percentage point to 2.2 percent, the BBN website reported. Household spending expectations, on the other hand, have plunged sharply, recording the largest one-month decline since the franchise was launched in June 2013, the New York Fed wrote in a report. Source: Conotoxia MT5, XLY, W1 Limited disposable income and its possible impact on the market The US economy appears to be largely based on consumption, including consumption on credit. Currently , such consumption seems to be slowing down due to the increase in food prices or higher costs of maintaining a household. In turn, Americans' disposable income has decreased. This may mean that consumers shift their spending from goods that they do not need to live, towards basic necessities. This could be also seen in the strong weakness of the ETF DMA quotations on the XLY Consumer Discretionary, i.e. the ETF with exposure to companies producing so-called discretionary goods. In other words, they are goods without which we can live in worse times, and they make our lives easier in better times. XLY fell 35% from its peak to yesterday's close, more than the broad S&P500 index, which fell 25%. Source: Conotoxia MT5, W1 This may quite show that high inflation may inhibit purchases of unnecessary goods, and its fall could fuel this demand again. We will find out about inflation in the US in September tomorrow at 14:30 GMT + 2. This may be one of the most awaited macroeconomic data of the week. Today, in turn, apart from the publication of PPI inflation, the market will learn in the evening the minutes of the last FOMC meeting (20:00 GMT + 2). Daniel Kostecki, director of the Polish branch of Conotoxia Ltd. (Cinkciarz.pl investment service) The above commercial publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of April 16, 2014. It has been prepared for information purposes and should not constitute the basis for making investment decisions. Neither the author of the study nor Conotoxia Ltd. are responsible for investment decisions made on the basis of the information contained in this publication. Copying or reproducing this work without the written consent of Conotoxia Ltd. is prohibited. Read more on Conotoxia
The Outlook Of EUR/USD Pair For Long And Short Position

"Central banks that can print money can never fall short of money."

ING Economics ING Economics 12.10.2022 14:13
A look at monetary policy’s paradigm shift and the impact on central bank balance sheets Source: Shutterstock   Around the world, central banks have aggressively hiked interest rates in an attempt to tackle record-high inflation and to bring inflation expectations back to where they were at the start of the Covid-19 pandemic. In Europe, this shift in monetary policy implied a shift from negative interest rates to positive interest rates but still with abundant liquidity. As central banks are moving into a more ‘normal’ world for monetary policy, this also means that bank reserves will again be remunerated at positive interest rates. Some market participants might have forgotten about this, but this new normal has always been the reality. It is not that banks are suddenly getting remunerated for their deposits at central banks – they always have and there has hardly ever been any speculation about central banks going bankrupt because they only pay interest rates on bank reserves. Admittedly, the current situation is different from anything we have seen in the past as excess liquidity as a result of quantitative easing (QE) and negative interest rates is extremely high. In the period of asset purchases and negative interest rates, national central banks (NCBs) did not hedge their interest rate risk but built reserves to address these risks. Still, with the unexpectedly sharp rise in policy rates, potential losses are arriving faster and exceeding existing buffers. Eurozone central banks running down their buffers, and their equity turning negative, has now become a possible scenario for the years ahead.  Central banks that can print money can never fall short of money. Central banks can make losses but they don’t go bust. Instead, central banks can roll over losses into the next year, have reserves or need to be “bailed out” by the governments via capital injections or an increase in their own capital.  In the eurozone, losses by the European Central Bank (ECB) can first be absorbed by a strategic reserve. If this is not enough, losses will have to be paid by the national central banks according to their share in the ECB’s capital. The ECB’s capital can also be increased, as was the case during the euro crisis when it was increased from €5bn to €10bn. National central bank losses do eventually end up with taxpayers as they transfer their net profits to national Treasuries. In its June 2022 Convergence Report, which covers EU member states that are not yet members of the monetary union, the ECB states that “any situation should be avoided whereby for a prolonged period of time an NCB's net equity is below the level of its statutory capital or is even negative... Any such situation may negatively impact the NCB’s ability to perform its European System of Central Bank (ESCB)-related tasks but also its national tasks. Moreover, such a situation may affect the credibility of the Eurosystem’s monetary policy. Therefore, the event of an NCB’s net equity becoming less than its statutory capital or even negative would require that the respective Member State provides the NCB with an appropriate amount of capital at least up to the level of the statutory capital within a reasonable period of time so as to comply with the principle of financial independence.” A clear hint at how the ECB probably looks at the current situation with national central banks running the risk of negative equity. Credibility is obviously key when talking about potential negative capital cases of central banks. Particularly in a situation in which central banks are trying hard to restore their credibility as inflation fighters, negative equity would be counterproductive. Even more as in a phase of policy rate hikes, printing their own money will not work. The option to print money in order to offset central bank losses would mean purchasing assets while hiking rates. A combination that hardly works. What can be done to reduce excess liquidity Reversed reserve tiering. The ECB introduced a reserve tiering system to deal with the impact of negative deposit rates on banks. Banks were only required to put a fraction of their reserves in the ECB’s deposit facility, the rest could be parked at a zero interest rate in the ECB’s current account facility. Now, a reversal of such reserve tiering makes sense as it allows central banks to not remunerate all reserves. My colleagues Antoine Bouvet and Benjamin Schröder have written an excellent piece on the recent developments of excess liquidity and central banks' options for how to deal with it in the UK, Switzerland and the eurozone. Read it here: Tiers of joy: European central banks adjust their liquidity settings As mentioned in the piece, the Swiss National Bank (SNB) was the first European central bank to actually implement a reserve tiering system at its September meeting. In a nutshell, banks’ sight deposits at the SNB up to a certain threshold will earn the SNB policy rate, currently 0.5%, and 0% on balances above that threshold. This, however, is only part of the story. In parallel, the SNB announced it will conduct liquidity-absorbing operations (Open Market Operations or OMOs).  The question is how to determine the threshold. This could be done by either determining a fixed amount or a multiplier of the reserves (as the ECB did for its first tiering). ECB could change the terms of targeted longer-term refinancing operations (TLTROs). As policy rates rise, the interest banks earn by placing liquidity at the ECB will gradually rise above the rate they are paying on their TLTRO loans, presenting them with an interest rate gain. If this is the sole problem it is intending to solve, one option would be to retroactively change the TLTRO terms by raising the applied interest rate. The ECB would then ‘earn’ a higher interest rate than it has to pay on banks’ deposits. However, such a change in terms would be detrimental to the predictability and attractiveness of future TLTRO operations. With the brunt of TLTRO loans due to expire by the middle of next year, one could also question the need to come up with risky solutions to a problem that will disappear in nine months' time. A design similar to the one described above for the Bank of England, where a fixed amount earns 0% and balances above that threshold earn the policy rate, would guarantee some interest rate saving but wouldn’t provide an incentive for banks to repay TLTRO funds if the threshold is set low enough. If the threshold is set high, then the risk is that 0% becomes the marginal interest rate for many banks and that some countries end up being net lenders, and others net borrowers. The result would be a drop in money market rates in some countries and a rise in others. Reducing excess liquidity is the first step in avoiding negative central bank equity All in all, the rapid transition from negative to positive interest rates comes with unwarranted side effects, particularly as it (intently) coincided with ample liquidity. These side effects are losses for central banks which have triggered the first central banks to quickly withdraw excess liquidity and others are likely to follow. For the ECB, the easiest and least controversial way forward is a reversed tiering of the deposit facility. This option would not be as counterproductive to further rate hikes as offsetting potential losses by printing new money or asking governments for capital injections would be. Read this article on THINK TagsMonetary policy Eurozone ECB Central banks Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Euro Will Probably Continue Its Upward Movement In The Near Future

The Price Of EUR/USD Pair Is Still Consolidating Below The 0.9724 Level

InstaForex Analysis InstaForex Analysis 13.10.2022 08:19
Yesterday's publication of the minutes from the last Federal Reserve meeting showed a rather hawkish mood of the members of the monetary policy committee, but the markets practically did not react to it, if we do not take into account a brief revival at the time of the immediate release. Today the focus will be on US inflation data for September. Core CPI is projected to rise from 6.3% y/y to 6.5% y/y, headline CPI is expected to decline to 8.1% y/y from 8.3% y/y in August. If we add to these mixed forecasts the expected increase in initial jobless claims, which is expected to increase from 219,000 to 225,000, that is, with a jump above the one and a half month data, then preferences for long positions on the dollar will prevail. The price is still consolidating below the 0.9724 level on the daily chart. The Marlin Oscillator is growing, so it is undesirable for the bears to delay pushing through the euro, as the bulls can become more active and consolidate above the specified key level. And the 0.9855 target opens above it. The main scenario assumes a decline to support 0.9520. On the four-hour chart, the price is generally consolidating under the MACD indicator line. The Marlin Oscillator shows the intention to reverse down from the zero line. We are waiting for the price in the target range of 0.9520/54.   Relevance up to 04:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324165
Foreign exchange - Euro against US dollar - preview

The EUR/USD Pair Continues To Be Very Close To 20-Year Lows

InstaForex Analysis InstaForex Analysis 13.10.2022 08:23
EUR/USD 5M Yesterday, the euro/dollar pair corrected to the Senkou Span B line, after which it resumed its downward movement. The descending channel has been reshaped and now has a wider view and a smaller angle of inclination. The price continues to be below both lines of the Ichimoku indicator, so everything now speaks in favor of a further fall in quotes. We would like to note the following: this week there is an extremely small amount of macroeconomic statistics and important fundamental events. But even in this state of affairs, the euro can't do anything against the dollar. It would seem to be a great opportunity to at least adjust, but no! The pair slowly and inexorably continues to slide down. There were even grounds for a small increase in the euro. The EU industrial production report turned out to be better than expected, but even this did not make traders buy rather than sell. Everything remains as it was! There was complete boredom with trading signals for three consecutive days. Not a single signal was formed on Wednesday, and the price did not even approach any important level or line during the day. Therefore, traders did not have to be active yesterday. COT report: The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 9,300, and the number of shorts by 19,200. Accordingly, the net position grew by about 9,900 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 45,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 13. Emergency G-7 meeting and sixth Ramstein meeting. Overview of the GBP/USD pair. October 13. Bank of England: QT program postponed, asset purchases will continue at a double rate. Forecast and trading signals for GBP/USD on October 13. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The downward trend has resumed on the hourly timeframe as the downward channel has taken on a new look. The pair renewed its local low yesterday and continues to be very close to 20-year lows. Since we still do not observe any serious news in support of the euro, most likely, the fall in quotes will continue. We highlight the following levels for trading on Thursday - 0.9553, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9767) and Kijun-sen (0 .9788). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. There will be no important events and reports in the European Union. But the most important report of this week will be published in the US - inflation for September. As we said in our fundamental articles, we do not believe that inflation will somehow affect the outcome of the next Federal Reserve meeting, increasing or decreasing the likelihood of a 0.75% rate hike. However, today the market reaction to this report may follow. And the stronger the actual value will not correspond to the forecast, the stronger the reaction can be. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324153
Declining Industrial Activity and PPI in Poland Signal Potential Policy Easing

The Cabel Market (GBP/USD): Is Just A Pullback And Not A Resumption Of The Upward Trend

InstaForex Analysis InstaForex Analysis 13.10.2022 08:34
GBP/USD 5M The GBP/USD currency pair started a new round of correction on Wednesday, but again failed to gain a foothold above both lines of the Ichimoku indicator. Therefore, the downward trend continues, and we have formed a downward channel to visualize what is happening. Now both major pairs are inside the descending channels and keep high chances for further decline. Of course, the channels do not mean that now the euro and the pound will fall 100% for two or three days. An important inflation report will be published in the United States, which can significantly affect the movement. The pair may also consolidate above the critical line. But we still state that the vast majority of indicators are now pointing down, while the foundation and geopolitics continue to be very difficult for risky currencies and assets. Reports on GDP and industrial production will be released in the UK. Both turned out to be weaker than forecasts, so it would be logical to see the pound's fall yesterday. Instead, we saw tangible growth. Notable - not because the movement itself was strong, but because the volatility of the pound/dollar pair remains very high and any movement is tangible. Despite a pretty good movement during the day, the only trading signal was formed at night. The price bounced off the Senkou Span B line and the 1.0930 level, but at the time of the opening of the European trading session it had moved far enough away from the point of formation, so it was not necessary to open a position "to catch up". During the day there was not a single approach of the price to an important level or line. COT report: The latest Commitment of Traders (COT) report on the British pound showed minimal changes. During the week, the non-commercial group closed 17,700 long positions and 14,600 short positions. Thus, the net position of non-commercial traders decreased by 3,100, which is not a lot for the pound. We could assume that the actions of major players and the movement of the pound have finally begun to coincide, but the pound has already begun a new round of decline, which risks transforming into a continuation of the global downward trend. The net position indicator has been growing slightly over the past weeks, but the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 42,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 13. Emergency G-7 meeting and sixth Ramstein meeting. Overview of the GBP/USD pair. October 13. Bank of England: QT program postponed, asset purchases will continue at a double rate. Forecast and trading signals for EUR/USD on October 13. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair rolled back up again on the hourly timeframe, but so far this rollback is just a pullback, and not a resumption of the upward trend. If the pound manages to settle above the descending channel and the critical line, then the trend may change to a short-term upward one. But for now, everything says more about the fact that the fall will continue. In any case, there are no buy signals yet. We highlight the following important levels on October 13: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.1016) and Kijun-sen (1.1119) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. There will be no interesting events in the UK on Thursday, meanwhile, the US will release its inflation report. In fact, this report is the only event of the day, so all movements will pass through the prism of it. The reaction can be strong if the actual value is very different from the forecast. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324155
BSP Maintains Rates Amid Moderate Inflation; Eyes Further Tightening if Needed

US Stocks: S&P 500 And Nasdaq Decreased Slightly Yesterday Losing 0.33% And 0.09% Respectively

ING Economics ING Economics 13.10.2022 10:55
US inflation today's main macro risk event - UK Gilts market still troubling. Asia quiet.  Source: shutterstock Macro outlook Global Markets: Yesterday’s stock movements are probably as close to a “flat” day as you get these days, with the S&P500 down only 0.33% and the NASDAQ down just 0.09%. Equity futures look modestly positive, which seems a carefree stance just before US CPI data, where upside misses to the consensus view have been more common than risk-positive surprises on the downside. There isn’t all that much action in currency space either. EURUSD remains at the very lower end of 0.97, the AUD is also stuck at about 0.6275 though the JPY has pushed well above 145  to sit at 146.74 currently. There has been some recovery of sterling, and Cable has risen back to 1.1098. Short-dated UK bond yields retreated sharply yesterday as the Bank of England (BoE) bought up GBP4.56bn of bonds. The yield on 2Y gilts fell 20.3bp. At the longer end of the curve, big early losses were mostly, but not wholly erased by the BoE’s intervention. The BoE is still sticking to the line that they will cease supporting the bond market by Friday, however. It almost sounds as if they think they are in control. We will see. US Treasury yields also declined slightly, with the 10Y UST yield dropping to 3.896%, a fall of 5.1bp. Asian FX has been pretty quiet except for the KRW which gained following yesterday’s 50bp BoK hike, despite very vague forward guidance.   G-7 Macro: FOMC minutes released last night showed that members were more worried about doing too little to stamp out inflation than about doing too much. Here, there is a clear divergence between central banks in the APAC region, such as the Reserve Bank of Australia, which is taking the opposite approach. US September CPI tonight is forecast to show the headline inflation rate dipping to 8.1%YoY from 8.3%, but the core rate is expected to rise to 6.5% from 6.3%. There is certainly scope for surprises to this data with market reactions in either direction likely to be large. More weight will probably be given to misses on the core figure than the headline. China: The IMF published a note on China's housing issue, pointing to the lack of cash from sales and bond issuance (stemming from the three red line policy) and therefore is a problem if home sales continue to drop. Our forecast is that home sales could contract 45% in 2022 then another 15% in 2023. That should lead to more cross defaults of property developers’ bonds until potential buyers return to the market again. We have seen some home sales during the Golden Week but are unsure whether this can form a trend. The government is trying to replicate 2014-2017 policies to boost demand for homes, which includes shanty-town redevelopments. This time is complicated by a weaker economy (partly because of Covid measures). Yesterday, the government reiterated that dynamic Covid measures are here to stay. India: Inflation released yesterday evening came in at 7.41%, fractionally above the consensus 7.36%. For more details, see the linked note. The main takeaway is that as inflation should start to dip as soon as next month, the Reserve Bank of India can slow its tightening, and may be able to stop after a further 25bp December hike.  Japan: Pipeline prices in September rose more than expected, mainly due to the weak JPY and the rebound in global commodity prices. Producer price inflation rose 9.7%YoY in September (vs 9.0% in August and 8.9% market consensus). The main driver was commodity-related prices, but the weak yen also expanded price gains. This was confirmed by the sharp rise in import prices in yen terms. Import prices on a yen basis surged 48% YoY (vs 43.2 % in August) while import prices on a contract currency base only rose 21.0% YoY in September and decelerated from 22.3% in August.  We expect that Japan’s CPI inflation will rise further and stay above 3% for a considerable time. What to look out for: US inflation Japan PPI inflation (13 October) US CPI inflation and initial jobless claims (13 October) China trade balance, CPI and PPI inflation (14 October) Korea unemployment (14 October) US retail sales and University of Michigan sentiment (14 October) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Price May Fall Under 1.0660

"The ECB is also seeing the risk of fiscal policies pushing it towards more aggressive tightening"

ING Economics ING Economics 13.10.2022 11:06
It's been helpful to see core US inflation easing off the highs through the summer. However, the past month or so has seen a re-elevation. And today, the market expects US core inflation to get back up to the 6.5% peak that was seen in March. Market rates remain well below this, as is the Fed funds rate. Based off this alone, rising rates pressure is the upshot Rises in core US inflation can only pressure market rates higher When the Federal Reserve delivered its first 25bp hike in March, core consumer price inflation (CPI) was running at 6.5%. That in fact proved to be a peak, as it wandered to below below 6% in subsequent months. But, it rose last month, and the market is expecting it to have risen again for September (today's report), back up to 6.5%. That’s discouraging against a backdrop where the Federal Open Market Committee minutes paint a clear picture of an intention to keep rate hike pressure elevated until inflation has been tamed. A wider problem for the Treasury market has been the tendency for core measures of inflation to edge higher again in the past couple of months. We saw that from the US PPI report yesterday, with similar expected from the US CPI report today.  The Fed's target of 2% inflation remains quite deviant from the 6% handle that core inflation continues to cling to. And even though we expect inflation to fall in a precipitous manner in the quarters ahead on base effects, a recent tendency for core to remain quite elevated and sticky does not help. This maintains upward pressure on Treasury yields. The 10yr yield has popped above 4% twice in the past few weeks (for the second time yesterday), and seems reluctant to push on above. But in all probability should we see a 6.5% core CPI inflation reading confirmed today, it should provide enough ammunition for it to make the break above. Yes, it’s what is discounted. But confirmation still has real meaning. It’s these inflation numbers that continue to drive market rates, and even though real rates have moved solidly positive and breakeven inflation resolutely lower, the fact remains that market rates remain well below printed inflation rates, as does the funds rate (and the Fed knows it). 30Y GBP swap indicates gilt yields will soon rise above their pre-intervention peak again Source: Refinitiv, ING The BoE is trying to hold the line In the wake of the Fed pressing ahead on its aggressive tightening trajectory, tensions in other markets become more apparent. The UK rates market continues to be a large contributor to volatility as the Bank of England tackles the ongoing fallout from monetary and fiscal policy working at cross purposes. The BoE’s chief economist had signalled the need to raise rates significantly in November, also citing the likely inflationary impact of the government's budget plans as they currently stand. But the announcement of the medium-term fiscal strategy has been brought forward to 31 October, just days before the BoE is set decide on interest rates. Gilt yields only dropped back after the BoE accepted all bids in its daily buying operation Until then the BoE may well continue to play hard ball, at least to the extent that financial stability allows. For now the intervention in the long-end sector of gilts is set to expire by the end of this week, as much was confirmed by a Bank statement after mixed signals in the press. On that prospect the 30Y gilt yield had indeed briefly climbed above 5%, the level reached before the BoE first started long-end gilt purchases, and only dropped back after the BoE accepted all bids in its daily buying operation. The question remains whether two more days of BoE purchases will be enough to calm markets.       ECB quantitative tightening talk is becoming more concrete The European Central Bank is watching the BoE’s struggles closely. It is also seeing the potential risk of fiscal policies pushing it towards more aggressive tightening than otherwise. ECB President Lagarde urged cooperation between central banks and their governments. The remarks of the Dutch Central Bank’s Klaas Knot reflected some unease when he said that he was not sure whether all fiscal measures were targeted enough. Against that backdrop the pricing of rate hikes had already become more aggressive with the market pricing more than 125bp of hikes still this year and the 1y1y ESTR OIS forward close to 3%. The ECB is also seeing the risk of fiscal policies pushing it towards more aggressive tightening And looking beyond rate hikes, the talk of quantitative tightening is already becoming more concrete. President Lagarde confirmed yesterday that the Council had started deliberations on the topic. Other members have already been more specific about the ECB’s plans for its balance sheet. France's Villeroy reiterated that the balance sheet reduction should commence after the normalisation of rates, first with the repayments of the targeted longer-term refinancing operations, where a good part expires in the middle of next year, and then by a gradual reduction of the asset purchase programme portfolio as reinvestments are phased out. This could start before 2024. ECB QT will widen money market spreads, starting in 2023 Source: ECB, ING   Wary of the impact that already the communication surrounding quantitative tightening may have on markets, the ECB’s current messaging does appear more streamlined than we have experienced in the past. It was also Klaas Knot who remarked that bond markets had become more sensitive to debt sustainability issues, and thus “a process like QT – it should be predictable, it should be gradual, it should be even a little bit boring”. The key risk gauge is the 10Y spread between Italian and German government bonds, which temporarily rose some 8bp yesterday, though also amid greater market volatility spilling over from the UK. For eurozone bond markets the ECB's bond purchases have been instrumental in bringing down bond spreads, and with the excess liquidity injected also in the compression of money market. A reversal of the purchases is therefore all but boring. While the emerging outlines of the ECB's quantitative tightening plans are consistent with the assumptions we have made so far, we think there could still be a considerable effect on sovereign and money market spreads.   Today's events and market view Markets will continue to have one eye on the UK's and the BoE's buying operations – and any hint that the intervention could be prolonged. Gilt markets remain a major source of volatility, though today should also see US data taking the spotlight with the CPI data for September. It is the one release where a large surprise could potentially still swing the Fed away from another 75bp jumbo hike, which markets by now are fully discounting. The consensus is looking for the headline rate to be 8.1% year-on-year. In the core rate the focus should be on the anticipated decline in the monthly rate from 0.6% to 0.4%. In the eurozone primary market Italy will sell a new 3-year bond alongside reopenings of 7-, 15- and 30-year bonds for a total of up to €8.75bn. The US Treasury will reopen the 30Y for US$18bn.  Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Saxo Bank Podcast: A Massive Collapse In Yields, Fed's Tightening Cycle And More

The US Inflation Data Will Influence Fed Decisions

InstaForex Analysis InstaForex Analysis 13.10.2022 11:09
The Federal Reserve is faithful to aggressive monetary tightening despite cooling down in the labor market and a slowdown in the US economic growth. The Fed's minutes of the September policy meeting released on Wednesday confirms the case that the Federal Reserve would continue its aggressive monetary policy on track in the long term until inflation declines to the annual target rate of around 2%. In this context, the US inflation data which is due today will determine the next Fed's policy move in terms of the rate hike's degree. According to the consensus, the annual CPI is expected to edge down in September to 8.1% following an 8.3% increase in August. On the contrary, the CPI could have climbed 0.2% on month following a 0.1% uptick in August. The actual CPI readings will be on tap tonight. The factory inflation data released on Wednesday was dismal. Instead of the expected decline to 8.4% on year from 8.7% in the previous month, the actual PPI slipped to 8.5% in September. Besides, the PPI grew to 0.4% on month against the expected 0.2% rise. How are financial markets and the currency market in particular likely to respond to the data on consumer inflation? I assume that if the actual score reveals a similar dynamic as the factory inflation, namely a notably increase in September and the annual print higher than expected, the stock market will respond with a new wave of sell-offs. The commodity market will also be hit by selling. In contrast, the US dollar will again receive support as a safe haven asset. In turn, stock indices will creep down because stocks will come under pressure from rising borrowing costs. Commodities can be also weighed down by the fact that the global economy is on the verge of a recession. Yields of the benchmark 10-year Treasuries could surpass the landmark level of 4% and grow higher which is another serious factor to reinforce the greenback's strength. Intraday outlook EUR/USD The currency pair is consolidating slightly above 0.9670. The news of inflation acceleration in the US could boost demand for the US dollar. As a result, EUR/USD could break this level and fall to 0.9550. USD/CAD The currency pair is trading with minor fluctuations and might extend its growth to 1.3950 after the level of 1.3850 is broken after the release of the US inflation data.   Relevance up to 08:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/324181
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

Hold On Tight EUR/USD! US Dollar Index May Go For 115 If Today's Inflation Exceeds Expectations!

ING Economics ING Economics 13.10.2022 11:23
The dollar continues to consolidate barely 1% off its highs of the year. Last night's release of the September FOMC continued to reveal a very hawkish Fed operating the risk management strategy that the 'cost of doing too little outweighed the cost of doing too much'. Today's US September CPI release should again be a major market mover. USD to stay supported USD: September CPI to prove a major market mover The message from IMF meetings in Washington this week has clearly been a stagflationary one. Downside risks to growth and upside risks to inflation prevail and could be exacerbated by a deterioration in the energy crisis, further lockdowns in China, or the de-leveraging in the Chinese property sector leading to a Chinese-led financial crisis. Notably, the IMF backed central bankers in their fight against inflation and warned politicians against fiscal policy working at cross purposes to monetary (UK etc). The meetings have also been an opportunity for G7 and G20 central bank governors and finance ministers to get together. Support suggests that there will be no change in any of the key FX language in the communique, consistent with remarks from US Treasury Secretary Janet Yellen earlier this week that exchange rates should be market determined. We can forget about a Plaza 2.0 for the time being.     Last night saw the release of the September FOMC minutes. Admittedly we are reading them through our hawkish Fed/bullish dollar lenses, but a few points stood out: Fed staff 'significantly' revised down estimates of US potential output because of low productivity and weak labour force participation. The US economy is therefore seen operating above capacity until 2025. Arguably the Fed's battle against inflation became even larger. A 'sizable portion of economic activity' has yet to react to higher interest rates. Housing and business investment have started to respond, but not much else. The risk management approach was on display for all to see with the explicit strategy that the cost of taking too little action, outweighed the cost of taking too much The Fed looks unlikely to pivot anytime soon. That brings us to today's main event, which is the US September CPI release. All eyes will be on the core measures, where last month's 0.6% monthly reading crushed bonds and sent the dollar higher. Consensus expects 0.4% month-on-month today, taking the core year-on-year back to the 6.5% cycle high. Our US economist James Knightley sees the risks evenly balanced here. Rents and used car prices make up nearly 50% of the core basket. There are some anecdotal signs of rents starting to soften, but the timing of this feeding through the official data is uncertain. While any sub-consensus number could see the dollar briefly dip, we doubt it would alter expectations that the Fed hikes 75bp in early November and dollar weakness should prove temporary. An above consensus number should send the dollar back to the highs and sink both Treasuries (already softened by the Gilt debacle) and global equity markets. In practice, this should mean DXY losses are limited to the 111/112 area on a soft CPI print and test 115 on any above consensus number. Chris Turner EUR: Becalmed at low levels EUR/USD looks to be trading comfortably down at these low levels near 0.97.  The three-month risk reversal, the price of a euro put option over a euro call option is still trading at 2% - reasonably bearish. As above, we're bullish on the dollar and would expect any gains on a soft US CPI today to prove unsustainable above 0.98. Equally, a high CPI print could tip US equities over the edge and send EUR/USD back to the 0.9540 low. We have 0.92 targets for EUR/USD over the next two quarters. Chris Turner   GBP: Cross purposes As above, the IMF has warned that fiscal policy should not operate at cross purposes to monetary, risking financial stability. Of course, that is exactly what has been happening in the UK since late September, leaving the Bank of England (BoE) to pick up the pieces in the Gilt market. Reading between the lines of the BoE's Financial Policy Committee summary released yesterday, the BoE seemed to point to oversight issues of the Liability Driven Investment (LDI) community by the pensions regulator and the FCA.  Gilts had a strong rally late yesterday on news that the BoE had bought all the Gilts on offer (£2.5bn). At present, the BoE's emergency buying scheme will halt at close-of-business tomorrow, whereby the BoE is pressuring the LDI industry to raise as much cash as it needs to manage its margin exposures in Interest Rate Swap (IRS) derivative contracts. The risk of a cliff edge in the Gilt market remains for Monday and in this environment, we doubt many investors would want to go near sterling. Cable remains at risk of a move to the 1.08 area, while EUR/GBP could easily retrace all of yesterday's late losses from 0.8850. Chris Turner HUF: Looking for support EUR/HUF continues to plough ahead, having found no support from the National Bank of Hungary’s (NBH’s) larger-than-expected hike in late September nor its plan to remove excess HUF liquidity. Investors are probably concerned as to where the forint support is coming from given that the NBH has said that the tightening cycle is over at 13% (for both the base rate and the one-week deposit rate) and that it skipped a non-interest rate-setting meeting earlier this week. The NBH’s liquidity measures, such as central bank bill auctions and longer-term deposits, will take time to work, which leaves the forint waiting for some encouraging news on progress on EU fund disbursement. Hungary’s Finance Minister Mihaly Varga even floated the idea earlier this week that Hungary could seek participation in ERM-2 after it has received its funds from the EU! Until some concrete progress is made on the EU funds deal – or perhaps the NBH hugely surprises by continuing its tightening cycle – it is had to see what is going to turn the forint around over the near term. Chris Turner  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The South America Are Looking For Alternatives To The US Currency

The US Core Inflation Rate Beat The Record From 80s

ING Economics ING Economics 13.10.2022 16:07
US consumer price inflation surprised on the upside once again as rapid increases in housing costs, medical care, food and airline fares offset signs of moderation elsewhere. The Fed has admitted it is prepared to inflict economic pain to get a grip on inflation and today's report will ensure at least another 75bp rate hike in November and 50bp in December 6.6% Highest "core" inflation rate since August 1982   Sticky inflation means the Fed has more work to do Once again US consumer price inflation has come in higher than expected with headline prices up 0.4% month-on-month in September (consensus 0.2%) and core – ex food and energy – up 0.6% MoM (consensus 0.4%). This means the annual headline rate slows to 8.2% from 8.3% while core rises to 6.6% from 6.3%, having been down at "just" 5.9% in July. With core inflation heading in the wrong direction (and at its highest rate since August 1982) and yesterdays’ Fed minutes to the September FOMC meeting warning that doing too little to tame inflation is worse than too much, it confirms that a 75bp interest rate increase on November 2nd is the minimum expectation with markets now pricing in the slight possibility of a 100bp hike. Annual US headline and core inflation rates Source: Macrobond, ING 75bp the minimum for November, but 100bp is only a small chance Looking at the details, housing continues to big a major story with shelter (32.5% weighting) rising 0.7% MoM yet again. while medical care costs, which have been posting some solid price increases over the past six months, rose 0.8%. Airline fares were up 0.8% while food prices increased 0.8% on the month. On the softer side were gasoline (-4.9% MoM) while apparel prices declined 0.3% and used car prices fell for the third month in a row. Recreation and education/communication rose only 0.1% MoM each, weaker than we had expected. It is therefore a slightly more mixed picture than just looking at the headline and core MoM's with pricing power appearing to be softening in some components. Why we favour 50bp in December Nonetheless, the increase in the annual rate of core inflation is not a good story and the Federal Reserve has stated it is willing to inflict economic pain to get inflation moving back to the 2% target. 75bp is indeed the solid call for the November 2nd FOMC meeting, but we are still looking for the Fed to slow the pace to a 50bp in December (market is pricing just over 60bp, indicating a close call as to whether we get a fifth consecutive 75bp move). Our rationale is that the economy is slowing and there is more evidence pointing to weakening corporate pricing power. The National Federation of Independent Business survey shows the proportion of companies looking to raise their prices is moderating quickly to reflect the shifting growth outlook and rising inventory levels, that they don’t want left on their books. Corporate pricing power may be waning Source: Macrobond, ING   Moreover, we think used car prices have much further to fall based on the Manheim car auction price data (4% weighting in the inflation basket) while slowing global chip demand suggesting new vehicle production issues (new vehicles also have a 4% weight) are possibly moderating, paving the way for more supply and less inflation. Shelter could be key to lower inflation The key swing story is going to be shelter though given it is the largest component of inflation. Historically the shelter series lags behind movements in house prices by around 12-14 months, but over the past week rent.com, apartments.com and CoStar Group have all been reporting rent price falls in major cities. House prices only started falling in July so this could imply a quicker transmission. US rent CPI components lag turning points in house prices Source: Macrobond, ING   A possible reason is that rents have risen so much on top of a broad cost of living increase. This is leading to fewer “household formations” – basically people can’t afford rent so are cohabiting with friends/family leading to less demand for apartments and prices are already dropping. We will see how this develops, but like the corporate pricing and the vehicle stories we still think the risks are skewed towards inflation falling more quickly through 2023 than the consensus. Read this article on THINK TagsUS Recession Inflation Federal Reserve Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

After Yesterday's Reversal, What Is The Scenario For The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 14.10.2022 08:10
Yesterday was another day of high volatility. The euro traded in the range of 176 points, closing the day with an increase of 74 points. The price has moved above the resistance level of 0.9724, now the 0.9855 target is just ahead. The daily-scale MACD indicator line is approaching the level. According to the first version of the correction, the growth may end in this area. According to the second option, the growth may continue to the level of 0.9955 - to the low of July 14, which will create a false exit of the price above the MACD line. If later the price returns and settles under the MACD line, then the subsequent decline may be below 0.9520. The media cite arguments for the euro's growth: the market has fully priced in the Federal Reserve's November rate hike of 0.75% and even the "ceiling" of the rate of 4.85% in March next year. We allow such an interpretation and quote the euro at current levels at a rate of 4.85%, but then political factors should be removed from the components, including the latest event - sabotage at the Druzhba oil pipeline in Poland. Oil rose by 2.44% yesterday, the stock index S&P 500 by 2.60%. That is, there is a short-term return of market players to risk. At the same time, yields on US government bonds are not declining. So far, we are seeing a "shake-up" of the market on US inflation data. Yesterday, the core CPI for September showed an increase from 6.3% y/y to 6.6% y/y, while the overall CPI fell from 8.3% y/y to 8.2% y/y. On the four-hour chart, the price settled above the level of 0.9724 and MACD line. Growth stopped at the balance line, which shows the consolidation of the "bulls" for a short-term turning point in their favor. Marlin Oscillator is in the growth zone. We are waiting for the end of the correction either at the nearest level of 0.9855 or at 0.9950, which is more likely due to the nature of yesterday's reversal.   Relevance up to 04:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324288
The EUR/USD Pair Has A Potential For Drop

The Price Of The Euro To US Dollar Pair (EUR/USD) Has Managed To Gain A Foothold

InstaForex Analysis InstaForex Analysis 14.10.2022 08:16
EUR/USD 5M Yesterday, the euro/dollar pair tried to set a volatility record. It passed almost 170 points from the low to the high of the day and all 170 points after the US inflation report was published. The most interesting thing is that the report itself fully corresponded to the forecast value - 8.1-8.2%. However, for the market, the news that inflation in the United States has practically stopped slowing down (the decrease was only 0.1%) had the effect of a nuclear bomb. At first, the dollar grew (which is quite logical), because the dollar fell (which is completely illogical). Thus, we saw multidirectional movements that can only be tied to the inflation report. Another interesting fact is that virtually any September inflation reading would have had no effect on the Federal Reserve's monetary policy plans. There was virtually no chance for inflation to rise. Falling hard - there were chances, but the overall fall would still not be so strong that the Fed abandoned plans to raise the rate by 0.75% again. Thus, we would not be surprised if the market reaction to this report was weak. But it turned out differently. There were several trading signals on Thursday, but each of them was associated with high risks. The first and most adequate sell signal was formed half an hour before the release of the report, when the price rebounded from the level of 0.9747. This signal could be worked out by placing Stop Loss above 0.9747. Subsequently, the pair went down more than 100 points, but the nearest target level was very far away, so traders could close the position with excellent profit just 5 minutes after the report. The buy signal near the level of 0.9747 should not have been worked out, since it was formed late in time. COT report: The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 9,300, and the number of shorts by 19,200. Accordingly, the net position grew by about 9,900 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 45,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 14. "That's all folks". US inflation fell to 8.2%. Overview of the GBP/USD pair. October 14. The Bank of England is preparing for a new powerful rate hike. The pound rushed right off the bat without waiting for US inflation data. Forecast and trading signals for GBP/USD on October 14. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The downward trend still cannot be considered reversed on the hourly timeframe, despite a solid growth yesterday. The price has not really managed to gain a foothold above the Senkou Span B line yet, and the final fall of the dollar after the inflation report cannot be called logical, so the pair may fall back to its original positions today. On Friday, we highlight the following levels for trading - 0.9553, 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9767) and Kijun-sen lines (0.9722). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "overcoming" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. There will be no important events and reports in the European Union. We only have secondary statistics in America. The market, rather, will continue to work out the US inflation report. Strong movement can persist at night. The Europeans did not have the opportunity to work out this report, so a good movement can also be observed in the morning. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324272
At The Close On The New York Stock Exchange Indices Closed Mixed

Indices: S&P 500 Went Up By Over 2.5%, Nasdaq Gained 2.23%

ING Economics ING Economics 14.10.2022 09:58
The MAS tightens policy again, Korean labour data weakens, and China trade and inflation due out later and inexplicable US equity moves. What next? US retail sales take us into the weekend... Source: shutterstock Macro outlook Global Markets: There are no convincing ways to explain overnight equity moves in the US in the face of the higher-than-expected inflation release for September. The S&P500 and NASDAQ rose respectively 2.6% and 2.23%. But the September US inflation figure, which is detailed here by our US Economist, exceeded expectations on the headline, which dipped only modestly to 8.2% from August’s 8.3%, and the core rate rose to 6.6%, from 6.3%, even more than had been expected. So on almost every metric, these figures shout that the Fed will be raising rates faster, taking them higher and leaving them there longer than the market had been anticipating. And that raises the prospects of recession, even a bad recession. Equity futures aren’t even registering a substantial reversal today, though I think it would be foolhardy to expect these levels to persist for very long in the face of data like this. Asian markets will probably play catch-up in early trading today, but after that, they might do better to take a more cautious stance ahead of the weekend.  US Treasury yields at least responded according to text books. The 2Y yield rose 17.2bp to 4.464%, as futures markets fully priced in a 75bp hike in November, and almost fully priced in another for the December FOMC meeting, with the implied rate for May 2023 now just shy of 5%. 10Y US Treasury yields did a bit better and may have caught some assistance from the Gilts market, where it sounds as if the mini-budget that did so much damage is likely to be scrapped. 10Y UK Gilt yields fell 23.5bp, and the 30Y Gilt yield tumbled 26.1bp.  EURUSD went with the equity story, rather than rates, and finished up at 0.9773. The AUD has clambered back above 0.63 (just). The JPY keeps heading higher and is now at 147.27. USDJPY150 seems entirely reachable in the near term. And like the phoenix, Cable has risen from just under 1.11 this time yesterday to 1.1313 currently. Yesterday was a quiet day for most of the Asian pack, though unusually, the VND took an outsize dip along with the KRW (less unusually). Today, Asian currencies may look a little stronger following overnight G-10 moves, but it seems hard to imagine that these or the equity moves that seem to be propelling confidence can last. G-7 Macro: After yesterday’s excitement, the US September retail sales figure could stir things up a little more. Forecasters are looking for only a 0.2%MoM increase in sales, slightly down from the 0.3% registered in August.  And the “core” control group forecast is for a 0.3%MoM rise. This is definitely a figure where good news (i.e. retail sales strength) ought to be “bad” for markets (risk sentiment) as it would imply the Fed has more work to do to slow the economy. But given last night’s response to the CPI numbers, I’d have to say that anything is possible. There are a couple of Fed speakers on the agenda today (George and Cook). Their comments are unlikely to waver from the “whatever it takes to bring inflation down” mantra that we have become so used to hearing. China: We will see CPI and PPI data for September this morning. PPI inflation should be lower than that for CPI due to base effects. Within CPI, we should see that food inflation climbed in September due to adverse weather. The data set should reflect that China does not have the same high inflation issues faced by the US and Europe. We will also closely watch the international trade data released later today. This data is more important than the inflation data. It should indicate how China’s export season is doing. Our expectation is that high inflation in the West should limit the growth of exports. And the weak domestic economy, as well as high inflation in the export market, should lead to weak import growth in September. Korea: Today’s data releases deliver another headache to the Bank of Korea. Pipeline prices went up, mainly due to the weak currency while labour data showed signs of a slowdown.  The jobless rate rose a bit more than expected to 2.8% in September (vs 2.5% in August, 2.7% market consensus). Labour participation edged up to 64% (vs 63.9% in August) but other details were soft. By industry, manufacturing shed jobs for the first time in four months and construction also lost jobs quite significantly. Service sector employment gained, mainly due to the rise in hotel/restaurants and leisure-related jobs. But other major services, such as whole/retail sales, transportation, and financial cut jobs. By employment type, regular employment, considered a stable form of employment, declined for the first time since April 2021. We expect the jobless rate to climb up to the mid-3% level in the coming months as the reopening effects diminish and economic activity slows. Meanwhile, import prices in September rebounded for the first time in three months, mainly due to the weak KRW. Import prices in won terms rose 24.1% YoY in September (vs 22.9% in August). Global commodity prices including crude oil continued to decline but the weak KRW pushed up overall import prices. Import prices in contract currency terms stabilized at 7.5% YoY in September (vs 10.7% in August). The Bank of Korea made it clear that they will focus on price stability, so we believe that they will continue to hike, but the pace of rate hikes will be slower due to the labour market cooling and other activity data softening. Based on today’s data releases, we maintain our call that the Bank of Korea will raise rates by 25bp next month. But, the terminal rate might be slightly higher than our current forecast of 3.25%.  The possibility of an additional 25bp hike early next year has increased. Singapore: It has already been a busy day for Singapore with 3Q22 GDP and the Monetary Authority of Singapore (MAS) statement.  3Q GDP surprised on the upside (4.4%YoY) while the MAS tightened monetary policy by re-centring the currency band.   What to look out for: China inflation and trade data plus US sentiment and retail sales figures Singapore GDP and MAS statement (14 October) China trade balance, CPI and PPI inflation (14 October) Korea unemployment (14 October) Fed's Cook and George speak (14 October) US retail sales and University of Michigan sentiment (14 October) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ECB press conference brings more fog than clarity

The European Central Bank's (ECB) Decisions Will Depend On The Coming Data

TeleTrade Comments TeleTrade Comments 14.10.2022 09:47
European Central Bank (ECB) Vice President Luis de Guindos said on Friday, “our response will depend on how the data evolves in the coming months.” Key quotes “We are dependent on the data we receive.” “There is a very high level of uncertainty.” “Monetary policy has to adjust to these new structural features that may push inflation upwards.” “As a general recommendation, fiscal policy has to be compatible with the process of monetary policy normalization.” “We will do whatever is necessary to bring inflation back to our 2% target over the medium term.” “It is very difficult to determine the level of the terminal rate.” Market reaction The shared currency is unfazed by the above comment, with EUR/USD trading 0.14% higher on the day at 0.9787.
It's not clear we find out the results of mid-term elections immediately. Binance to buy FTX

The US Core Inflation Soars, Today's Retail Sales Data May Support US Dollar (USD)

ING Economics ING Economics 14.10.2022 11:53
The highest core US inflation since 1982 has seen expectations of the terminal Fed rate push close to 4.90%. Despite the wild and ultimately positive gyrations in asset markets yesterday, the core narrative will remain one of the Fed continuing to push real rates and the dollar higher. A strong US September retail sales figure today should support the $ USD: Highest core inflation in 40 years As James Knightley noted in his review of the September US CPI release, core inflation has not been this high since 1982. This suggests there will be no letup in the Fed's hawkish rhetoric and, consequently, markets are still searching for the terminal rate of this Fed hiking cycle. Those trying to pick a top in the cycle are continuing to be swept away. From pricing the Fed terminal rate at 4.45% barely two weeks ago, 23 March Fed fund futures now price the top near 4.90%. The poor inflation print saw some immediate bearish flattening of the US 2-10 year Treasury curve (US two-year Treasury yields are now 4.45% having started the year at 0.75%) and a broadly stronger dollar – yet the dollar rally quickly reversed as equities turned sharply higher. Presumably, positioning had something to do with this, where buy-side surveys show investors have: a) the most underweight equities ever and b) the most overweight cash (6%) since October 2001. More than $260bn has left equity mutual funds this year and we can only guess that some investors used the CPI event risk as an opportunity to feed money back into equities. Yet the core narrative remains that the Fed will want higher real rates for longer to fight the biggest inflation threat since the early 1980s, and the dollar should continue to find good support on dips. 111.50/112.00 may be enough of a correction for DXY and some decent US data later today may be enough to give the dollar a lift. We have September US retail sales and consumer confidence. James Knightley thinks that retail sales could come in on the strong side given good car sales data and lower gasoline prices. It was also interesting to see JP Morgan chief executive Jamie Dimon say that he felt that US consumer spending could hold up for nine more months, given high savings and low debt levels – sentiments echoed in the recent FOMC minutes. On the subject of US banks, today sees third-quarter earnings releases from JPM, Citi, Wells Fargo and Morgan Stanley. We're no equity strategists, but it seems hard to expect a sustainable equity rally from here given what the Fed is planning to do with real rates. Read next: Cheaper Netflix Is Here!| Jim Cramer Comments On The Shares| FXMAG.COM Chris Turner EUR: Led by sterling EUR/USD is currently being dragged around by UK asset markets and the pound. Reports yesterday that ECB staffers felt that the ECB terminal rate could be somewhere near 2.25% versus the nearly 3% priced by the market had little effect on EUR/USD. Instead, EUR/USD sits comfortably in a bearish channel that has guided it lower all year – running at roughly -5% per quarter! The top of that channel is now around parity and should be the extent of any unforeseen short squeeze here. There is not much eurozone data today but an expected August trade deficit of €45bn is a far cry from the €20bn+ surpluses run in early 2021 and is a reminder that the euro no longer has the backing of a large current account surplus. 0.9850/70 may be the extent of any intra-day EUR/USD correction. Chris Turner GBP: BoE holds government toes to the fire One cannot help but think the Bank of England (BoE) has played the poor hand it has been given quite well in potentially forcing the government into a U-turn on fiscal policy. There is no confirmation of such a policy shift yet, but no doubt Twitter will nearly break today on speculation of a shift in policy or personnel. Central bank independence is hard won and the BoE has clearly not wanted to succumb to accusations of government financing. GBP/USD continues to trade on a super-high one-week realised volatility near 20%. We suspect that GBP/USD may struggle to break the 1.15 area. Will it trade back to 1.20, where it was before fears of a Liz Truss government started to hit the Gilt market? Probably not. Equally, EUR/GBP was trading at 0.84 in early August and we would say the political risk premium and a difficult external investment environment will make it hard for EUR/GBP to sustain a move under 0.8550/8600. Chris Turner  CHF: What to make of USD/CHF at parity? Apart from (reasonably successful) currency floors in EUR/CHF and EUR/CZK over recent years, it is hard to think of any successful 'lines in the sand' in global FX markets. Global capital and trade flows are simply too large for central banks to defend one particular level – as we see with USD/JPY now grinding to 147.50, well above the Bank of Japan's 145.70 intervention level in late September. But what about the 1.00 level in USD/CHF? Yesterday was the third time this year that it reversed sharply from levels just above 1.00. Could the Swiss National Bank (SNB) be at work here? Recall that the dollar is the second-largest weight in the Swiss franc trade-weighted basket and a higher USD/CHF will naturally weaken the nominal trade-weighted Swiss franc – something the SNB wants to avoid as it battles inflation. In fact, SNB president Thomas Jordan is turning into one of the most ardent hawks in the central bank community. We have quite a forthright view on EUR/CHF at the moment that the SNB wants to guide it lower by 5% plus per year. The higher USD/CHF is making the trade-weighted Swiss franc even softer and if we are right in our analysis, the SNB should be even more inclined to drive EUR/CHF down to 0.95 and away from the near 0.98 levels at which spot EUR/CHF trades today. Chris Turner Read this article on THINK TagsFX Dollar CHF Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

The US Inflation Has Once Again "Upturned The Markets" | US Dollar (USD) Will Continue To Strengthen

InstaForex Analysis InstaForex Analysis 14.10.2022 11:58
Euro and US Dollar The US currency showed a powerful breakthrough after the release of impressive data on inflation in the US. Later, however, the greenback "slowed down" a bit, evaluating the results. This took advantage of the euro, which grew slightly. However, in the future, the chances of the EUR faded away, as the USD rallied again. A new round of upward  A new round of the greenback's upward spiral was recorded after the release of strong US inflation reports. On Thursday, October 13, the US Department of Labor released data on the Consumer Price Index (CPI) for September. Note that this indicator increased by 0.4% m/m, although it was expected to increase by only 0.2% m/m. At the same time, consumer prices in America soared by 8.2% in September, exceeding the forecast by 8.1%. The increase in consumer prices reflects the rising cost of housing, food and medical care, experts emphasize. At the same time, the increase in this indicator is partially offset by the fall in gasoline prices. US inflation data According to the report, the core consumer price index (Core CPI) in the US, excluding the cost of food and energy, rose by 0.6% in September. At the same time, analysts expected it to increase by 0.5% m/m. Note that the annual growth rate of Core CPI rose to 6.6%. An increase in the base CPI demonstrates an increase in the cost of housing, cars and medical care, as well as an increase in education fees. The US Department of Labor report focuses on the spread of high inflation in all areas of the national economy. In this situation, the standard of living of Americans plunged sharply. Against this background, citizens have to use their savings and credit cards to make ends meet. At the same time, experts expect a slowdown in consumer prices in the US. However, the current situation is unlikely to affect the Federal Reserve's plans for a further increase in the key rate. Following strong US inflation data, USD and Treasury yields surged, while US stock futures plummeted. Against this backdrop, expectations of another increase in the Fed's interest rate intensified. At the moment, the central bank is pursuing a hawkish strategy aimed at combating galloping inflation. At the same time, despite the slowdown in the US labor market, the department intends to continue to raise interest rates. At this rate, according to Commerzbank analysts, in the first quarter of 2023, the Fed rate will peak at 5%. EUR/USD Against this background, the dollar is confidently leading, habitually pushing the euro away from key positions. According to DBS Bank economists, the greenback will continue its upward trend until the end of 2022, and by 2023 it will reach the level of consolidation. The dollar is supported by a long-term increase in Fed rates, the bank emphasizes. As a result, on Friday, October 14, the EUR/USD pair was trading near 0.9784. Against this background, the greenback remained calm, and the euro tried to gain a foothold in the conquered positions. At the same time, the pair remained within the current range. Earlier, Credit Suisse economists believed that after strong US inflation data, the EUR/USD pair would test the 0.9500 mark, but this did not happen. Fed's reaction to inflation According to analysts' estimates, the current inflation in the US has once again "upturned the markets", threatening a new wave of tightening of the Fed's rhetoric. In the current situation, traders and investors expect the next rate hikes, as high inflationary inflation rates do not give a respite to the Fed. As a result, the central bank is forced to be "in an aggressive tightening mode," experts emphasize. According to analysts at Oxford Economics, by the end of 2022, the Fed will raise rates "by at least 125 bps". Most analysts (98%) are convinced that the central bank will raise the rate by 75 bps in November, up to 3.75-4% per annum. Recall that such an increase in rates could be the sixth in a row. Earlier, after three meetings of the Fed, it was raised by an additional 75 bps. At the same time, many investors are confident that core inflation will soon fall, and the Fed will soften its rhetoric a bit. However, this is unlikely, experts say. Against this background, the US currency is stabilizing, reacting to a short-term surge in risk sentiment, recorded at the end of the week. At the same time, large hedge funds still bet on the further growth of the USD. Geopolitical turmoil and fears of an economic downturn have further strengthened the greenback, prompting investors to abandon European assets. Many of them still consider the dollar the safest asset to protect their savings. According to analysts at Citigroup Global Markets Inc, the US currency will continue to strengthen until the global economic slowdown stops. If its growth accelerates, the dollar will give up its positions, experts are certain. However, now this is far away, and the benefits of owning USD outweigh the current risks, Citigroup notes.   Relevance up to 09:00 2022-10-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324316
German labour market starts the year off strongly

The German Economy Expects A Recession That Will Start This Quarter (Q4)

TeleTrade Comments TeleTrade Comments 14.10.2022 12:00
Germany’s Economy Ministry said in a statement on Friday that the “government expects recession spanning three quarters in a row, starting in Q3 2022.” “Economic indicators suggest the German economy is facing a difficult winter,” the Ministry added. Market reaction EUR/USD is extending losses below 0.9750, in the face of the renewed US dollar strengh and jittery market environment. The spot is down 0.23% on the day. The US Retail Sales and Consumer Sentiment data are awaited for fresh trading opportunities in the main currency pair.
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

The US Inflation Data Suggest Another Rate Hike | The Euro (EUR) And The British Pound (GBP) Have Regained Their Positions

InstaForex Analysis InstaForex Analysis 14.10.2022 13:38
Although the Federal Reserve is sure to extend its aggressive interest rate hike even longer than expected, the European currency and the British pound have regained their positions against the US dollar after yesterday's inflation report in the US. It overshadowed hopes for a rate cut by the end of next year. Initially, investors reacted to higher-than-expected consumer price levels by buying the US dollar. It emphasized that the Fed would raise rates by 75 basis points at its meeting next month, but then the pressure on risky assets decreased sharply. Nevertheless, futures prices show that the markets expect interest rates to be around 5% next year, which increases the pressure on the Fed even more. Despite the risk of a recession and a sharp spike in unemployment, the Federal Reserve System will continue to act aggressively. The measures it has taken since the spring of this year have not yet brought the desired result – the maximum that has been achieved is a slowdown in inflation growth around a 40-year high. According to a report by the Ministry of Labor published on Thursday, base prices, excluding food and electricity, rose in September by 6.6% compared to last year, which is the highest level since 1982. This continues to cause concern among politicians, as the index also accelerated in August. Yesterday's report also means that the regulator will raise rates by three-quarters of a percentage point at the last two meetings of this year. Several Fed officials have recently pointed to the August spike in core inflation as a sign of alarming rigidity, even among less volatile price categories. Nevertheless, even the most hawkish officials opposed the idea of raising rates by a whole percentage point or more at one meeting. It would be more difficult for the Fed to track the effects of its policy tightening on the economy, increasing the risk of triggering a more serious recession. "Observing how the economy reacts allows us to measure the dosage of future policy changes somewhat while simultaneously continuing to move aggressively," said Neel Kashkari, president of the Federal Reserve of Minneapolis. "If we just raised rates by 2%, 3%, or 4% at a time, it may well be that it would be too much, which would eventually lead to a financial crisis." As noted above, the Fed has been raising rates from zero since March of this year, and now the federal funds rate is at 3.25% – the highest level since 2008. As a result of the slowdown in inflation, albeit not as strong as economists predicted, demand for risky assets has returned, which leaves the same euro buyers to return to parity. EUR/USD As for the technical picture of EURUSD, the bears retreated a little, and the bulls reached the resistance of 0.9800. Before the important data on retail sales in the US, the upward correction of the pair may continue. To continue the growth, it is necessary to break above 0.9800, which will take the trading instrument to the areas of 0.9840 and 0.9880. However, the upward prospects will depend entirely on the US data. A break of 0.9755 will put pressure on the trading instrument and push the euro to a minimum of 0.9713, which will only worsen the situation of buyers of risky assets in the market. Having missed 0.9713, it will be possible to wait for the update of the lows in the area of 0.9680 and 0.9640. GBP/USD The pound continues to recover, but its further direction has not yet been determined. Buyers will focus on protecting the support of 1.1260 and the resistance of 1.1350, limiting the upward potential of the pair. Only a breakthrough of 1.1350 will open prospects for recovery to the area of 1.1420, after which it will be possible to talk about a sharper jerk of the pound up to the area of 1.1480 – the maximum of this month. It is possible to talk about the return of pressure on the trading instrument after the bears take control of 1.1260, which can happen quite quickly in the case of strong US statistics. This will blow the bulls' positions and completely negate the prospects of the bull market observed since September 28. A breakout of 1.1260 will push GBPUSD back to 1.1180 and 1.1100.   Relevance up to 09:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324322
Bank of England survey highlights easing price pressures

The Bank Of England (BoE) Will End The Emergency Credit Line

InstaForex Analysis InstaForex Analysis 14.10.2022 13:55
All the attention today is on the British pound, which could repeat the path of the end of September this year, when daily drops were 400-500 points. Yes, such a gloomy scenario is no longer worth counting on, but the chances of another collapse of the national currency of Great Britain are great again. No comment Yesterday, Andrew Bailey arrived at a meeting in Washington after the British government was refused a further extension of the emergency bond purchase program conducted by the Bank of England to save the financial market. When asked by reporters whether the government's rejection of plans for a large-scale tax cut package would end the turmoil in the UK financial markets, the governor of the Bank of England declined to comment but smiled broadly. However, the fact that the Chancellor of the Exchequer, Kwasi Kwarteng, has returned to London indicates that the Bank of England no longer intends to make concessions to the Ministry of Finance. Many experts said they did not remember the last time the British Chancellor left an early meeting of the International Monetary Fund. This again confirms the complexity of the situation in which Kvarteng is currently drawing up the annual budget. Complete an emergency credit The 63-year-old governor of the Bank of England, Andrew Bailey, said that the regulator would complete an emergency credit line for 65 billion pounds as predicted this Friday. Traders expected its extension and expect it to continue since there is no serious closure of short positions in the British pound yet. The British Finance Minister warned that if Bailey does not help the government, it will be on his conscience since the financial markets will be paralyzed again next week. Many analysts also predicted that Bailey would be forced to change course, which, as a result, would deal a serious blow to his credibility. Criticism of the Kvarteng plan Despite Kwarteng's bravado, officials formed a protective barrier around Bailey at the IMF meeting, squarely placing the blame for the market turmoil on the Chancellor and British Prime Minister Liz Truss. IMF Managing Director Kristalina Georgieva praised the Bank of England's support for bond purchases, saying that the actions were appropriate and timely, eliminating the risk to financial stability. She also stressed the need for coherence in the new policy, veiling criticism of the Kvarteng plan for tax cuts of 45 billion pounds, which was announced three weeks ago and the government abandoned. GBP/USD Against this background, the pound continues to recover, but its further direction has not yet been determined. Buyers will focus on protecting the 1.1260 support and the 1.1350 resistance, which limits the upward potential of the pair. Only a breakthrough of 1.1350 will open prospects for recovery to the area of 1.1420, after which it will be possible to talk about a sharper jerk of the pound up to the area of 1.1480 – the maximum of this month. It is possible to talk about the return of pressure on the trading instrument after the bears take control of 1.1260, which can happen quite quickly in the case of strong statistics in the United States. This will blow the bulls' positions and completely negate the prospects of the bull market observed since September 28. A breakout of 1.1260 will push GBPUSD back to 1.1180 and 1.1100. EUR/USD As for the technical picture of EURUSD, the bears retreated a little, and the bulls reached the resistance of 0.9800. Before the important data on retail sales in the US, the upward correction of the pair may continue. To continue the growth, it is necessary to break above 0.9800, which will take the trading instrument to 0.9840 and 0.9880. However, the upward prospects will depend entirely on the US data. A break of 0.9755 will put pressure on the trading instrument and push the euro to a minimum of 0.9713, which will only worsen the situation of buyers of risky assets in the market. Having missed 0.9713, it will be possible to wait for the update of the lows in the area of 0.9680 and 0.9640.     Relevance up to 09:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324312
ECB press conference brings more fog than clarity

The Eurozone Is Expected To Record Negative Growth | The Hawkish Fed Will Increase Pressure In The System

ING Economics ING Economics 15.10.2022 08:00
Strong dollar pressure tests the system One of the most important market developments over the last month has been the Bank of England intervening in the UK Gilt market on grounds of financial stability. That Gilts and sterling had to fall so far on UK fiscal concerns owed in part to the restrictive Federal Reserve conditions and the strong dollar. The hawkish Fed will increase pressure in the system still further into year-end – a move that will undoubtedly punish any poor policy choices. The Fed’s relentless and most aggressive tightening cycle since the early 1980s is starting to create a few casualties. Though the wounds in UK asset markets were selfinflicted, the occasion did show that the tighter liquidity conditions being created by the Fed are leaving no margin for error. There are still few signs of any ‘pivot’ in Fed policy coming through this year and we do not see that until 1Q23 at the earliest. As the Fed tightens into a recession and yield curves invert further, expect the dollar to stay bid. We could easily see further gains of 5-7% across the board. With the eurozone likely entering three quarters of negative growth, dollar strength can probably see EUR/USD building a new 0.90-0.95 trading range. Again, we would say the euro is not especially undervalued – having been damaged by the negative terms of trade adjustment. In Europe, heightened scrutiny on policy choices can see GBP/USD nearing parity later this year. The high beta Scandinavian currencies also look vulnerable as do some of those in Central and Eastern Europe (including the Polish zloty) where hiking cycles have been curtailed. In Asia, we think USD/CNY can rally further to 7.40, taking most of the region with it. And the commodity-centric Latam currencies also remain vulnerable as investors shun Emerging Market asset markets. EUR/USD Current spot: 0.9705 • EUR/USD realised volatility is now back to levels last seen in the early days of the pandemic. Tighter liquidity conditions as central banks raise rates and sell bonds typically do see volatility levels increase. This should be the story for this autumn. • Is the dollar about to top? From a risk management perspective, we would say ‘no’. The Fed looks set to push ahead with tightening into a recession (rates peaking 4.25-4.50% early next year), which should keep the dollar broadly bid. • The eurozone is just entering three consecutive quarters of negative growth. As a pro-cyclical currency, this is not the time for the euro to shine. We see a 0.90-0.95 trading range developing. USD/JPY Current spot: 145.44 • In late September, Tokyo confirmed that it had intervened to sell USD/JPY (seemingly from the 145.70 area). The amounts were a large $20bn and show that Tokyo means business. Importantly, the US Treasury said it ‘understood’ the need for intervention. Does the G20 FX Communique get altered on 12 October? • We doubt the Bank of Japan’s FX intervention will define the exact top for USD/JPY. The macro factors driving the rally – hawkish Fed/energy crisis are still with us. And we see intervention as more of a campaign that might slow a move towards 150. • Talk of a Plaza accord to reverse the dollar look premature, too. The BoJ will need to hike to support this – unlikely before 2Q23. This article is a part of a report by ING Economics available here. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

Price Of The Euro To US Dollar Pair (EUR/USD) Is Near Its 20-Year Low

InstaForex Analysis InstaForex Analysis 16.10.2022 09:33
Long-term perspective. The EUR/USD currency pair has lost about 30 points during the current week. Thus, after an unsuccessful attempt to overcome the critical line, the price remains lower and near its 20-year low. We have already said that strong trends usually end with a sharp departure in the opposite direction. What do we see in the euro currency now? It continues to trade in the same area as it has been doing lately. Thus, from a technical point of view, there is no reason to expect the end of the long-term global trend yet. There were practically no really important fundamental events this week. The only things we can note are several speeches by representatives of the ECB and the Fed, who assured the markets that they would continue to aggressively raise key rates. However, the European currency has not been helped by the ECB's two past rate hikes, so all subsequent ones may also not provide any support. The Fed's monetary policy is still a priority for traders, and at least 2-3 more rate hikes are expected in the US. And taking into account the latest inflation report, which showed only a minimal slowdown in September, we believe that the issue with the fourth consecutive increase of 0.75% has been resolved. This is again very good news for the dollar. Paired with geopolitics, which continues to escalate, the dollar still enjoys much more confidence than the euro or the pound. The same applies to the American economy and American treasuries. Who will buy European bonds when the entire bloc is a couple of hundred kilometers from the war zone? Who will buy European bonds if Europe is on the verge of an energy crisis? Of course, no one in the European Union will freeze this winter, but it will be necessary to save gas and energy very much, which can negatively affect industrial production, for example. COT analysis. COT reports on the euro currency in 2022 can be entered in the textbook as an example. For half of the year, they showed a frank "bullish" mood of professional players, but at the same time, the European currency was steadily falling. Then, for several months, they showed a "bearish" mood, and the euro currency also steadily fell. Now the net position of non-profit traders is bullish again, and the euro continues to fall. This is happening, as we have already said, because the demand for the US dollar remains very high against the backdrop of a difficult geopolitical situation in the world. Therefore, even if the demand for the euro currency is growing, the high demand for the dollar does not allow the euro currency itself to grow. During the reporting week, the number of buy-contracts from the non-commercial group decreased by 3.2 thousand, and the number of shorts increased by 2.9 thousand. Accordingly, the net position decreased by about 6.1 thousand contracts. This fact does not matter much since the euro remains "at the bottom" anyway. Professional traders still prefer the euro to the dollar at this time. The number of buy contracts is 38 thousand higher than the number of sell contracts for non-commercial traders, but the European currency cannot extract any dividends from this. Thus, the net position of the "non-commercial" group can continue to grow further, but it does not change anything. Even if you pay attention to the total number of buy and sell positions, their values are approximately the same, but the euro still falls. Thus, we need to wait for changes in the geopolitical and/or fundamental background for something to change in the foreign exchange market. Analysis of fundamental events. Nothing was interesting in the European Union this week except a report on industrial production and several speeches by Christine Lagarde. Lagarde said that the rate will continue to rise, as inflation remains at a high value and there is no other way. At the expense of the energy crisis, the panic subsides a little, since the European Union has managed to fill its storage by 90% or more. However, many experts say that maximum occupancy does not mean that there will be enough gas for the whole winter. Therefore, EU politicians are currently engaged in negotiations with other countries of the world on gas supplies. We will find out what comes out of this in the near future. In addition, we note that the official version of who is behind the explosions on the Nord Stream has not been presented. All parties to the conflict continue to blame each other for what happened. Moscow is ready to send gas to Europe via the surviving branch of the Nord Stream-2, but this pipeline is not certified, and Germany said that it would never be launched. Trading plan for the week of October 17 – 21: 1) During the 24-hour timeframe, the pair resumed their movement to the south. Almost all factors still speak in favor of the long-term growth of the US dollar. The price is located below the Ichimoku cloud and the critical line, so purchases are not relevant at this time. To do this, you need to wait at least for consolidation above the Senkou Span B line and only then consider long positions. 2) As for the sales of the euro/dollar pair, they are still more relevant now. The price is again below the critical line, so we expect a resumption of the fall with a target below the level of 0.9582 (161.8% Fibonacci). In the future, if the fundamental background for the euro currency does not improve, and geopolitics continues to deteriorate, the euro currency may fall even lower. Explanations of the illustrations: Price levels of support and resistance (resistance/support), Fibonacci levels – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators(standard settings), Bollinger Bands(standard settings), MACD(5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "Non-commercial" group.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324397
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The Eurozone Economy Looks Worse Than The American One

InstaForex Analysis InstaForex Analysis 16.10.2022 09:43
Trading in the financial markets in the second half of the year is pure pleasure. The stock indices of the US and EURUSD step on the same rake with enviable frequency, counting on a dovish reversal where it does not even exist. Even the acceleration of US core inflation to 6.6% in September, the highest mark in 40 years, was seen as a command to euro fans. Where, where are you heading, fools? When the probability of a 75 bps hike in the federal funds rate in December jumps from 35% to 65%, and its ceiling rises from 4.5% to 5%, selling the US dollar is absolutely the wrong strategy. The US currency is enjoying well-deserved popularity in 2022 due to the aggressive tightening of the Federal Reserve's monetary policy and high demand for safe-haven assets due to recurrent stresses. Why get rid of it if the rate of monetary restriction is increasing, and there is no end in sight to the problems? The same crisis in the British debt market that has swept through global bonds in waves is far from over. Bond yield dynamics The government of British Prime Minister Liz Truss decided to turn it into a farce. They say that it is not the mini-budget that is to blame for the shocks, but the Bank of England, which raised rates more slowly than the Fed. In fact, as European Central Bank President Christine Lagarde says, during a period of monetary policy normalization, care must be taken to shift the focus of fiscal policy towards measures that keep debt sustainable. And what about Germany, which has announced a €200 billion stimulus package to support households hit by the energy crisis? A new fire could break out in the eurozone debt markets. So it turns out that problems arise in the eurozone, and investors flee from them to America. This leads to the strengthening of the US dollar no less than the monetary policy of the Fed. Which, by the way, does not think to slow down. What did the financial markets come up with amid the acceleration of US inflation, but their next campaign against the Fed will most likely end in another fiasco. Of course, EURUSD's paradoxical rise in response to strong core inflation figures can be blamed on the "buy the dollar on the rumor, sell on the facts" principle, but smart people don't do that. They prefer to wait until the bears throw away the ballast, unsure of the continuation of the downward trend of traders, and then move down again. In the end, nothing has changed. The eurozone economy looks worse than the American one, the Fed is already wrapping up the balance sheet, while the ECB is going to start doing this only in 2023, the armed conflict in Ukraine is not over, and there is no end in sight to the energy crisis. Technically, on the EURUSD daily chart, the bulls are trying to start a correction. Their failure to do so will result in the pair closing below the moving average near 0.978. If this happens, the euro will need to be sold on a break of the fair value of 0.97.   Relevance up to 15:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324375
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Trend Of The Euro To US Dollar Pair (EUR/USD) Is Again Downward

InstaForex Analysis InstaForex Analysis 17.10.2022 08:02
On Friday, the EUR/USD currency pair began a new round of downward movement, during which it again consolidated below the moving average line. Thus, the price did not spend even one day above the moving average, and the trend is again downward. Both linear regression channels are still directed downwards, so almost all indicators now support a new fall in the European currency. Also, recall that on the 24-hour TF, the price continues to be below the critical line. Therefore, according to all indicators, the European currency should continue to slide down. Of course, sooner or later, the downward trend will be completed. Still, we are asking one very simple question for the umpteenth time: what has changed over the last week (month/day) in the fundamental/geopolitical background so that now we can count not on an ordinary pullback up by 200-400 points, but a new upward trend? Answer: nothing. Consequently, the European currency is still at risk. Moreover, after several statements by Fed representatives last week, they assured us that the increase in the Fed's key rate would continue for some time, and then a high rate would remain for quite a long time. Recall that, at the beginning of this year, statements were repeatedly made that the rate would rise as much as possible to start slowing inflation (at that time, it was a 3.5% rate). And then (next year), a rate cut would begin so the economy could avoid a shock and recession. As you can see, there is no question of any rate reduction in 2023. Inflation is declining so slowly at a 3% rate that it is completely unclear at what level it will have to be raised. Is it worth saying again that any Fed rate hike is just fine for the dollar? The market could already consider future rate increases (planned at the beginning of the year), but did it consider the rate increase to 4.5%? Moreover, the European currency remains 200 points from its 20-year low. If the pound has made at least one serious upward leap, then the euro has not. Inflation in the European Union will be at least 10% in September. By and large, there will be only one more or less significant publication in the new week in the European Union—this is the inflation report for September. However, this report cannot be called "important" upon closer examination. First of all, what does European inflation change now? The ECB, just like the Fed, has set a course for an aggressive rate hike, so until inflation shows a serious slowdown, the regulator will not go off this course. Second, the reaction to European inflation has always been weaker than American inflation. A vivid example of this was last week when both major pairs "flew" in different directions after the publication of the CPI in the USA. Third, this is only the second final inflation value for September; the market is already aware that the indicator has risen to 10%. What else will be interesting in the European Union? Speeches by Luis de Guindos, Isabel Schnabel, and Christine Lagarde. Moreover, the speech of the head of the ECB is scheduled for Saturday, so it will not be able to have any impact on the euro currency during the week. Well, de Guindos and Schnabel are likely to remain true to their previous rhetoric, which implies a further tightening of monetary policy. Thus, nothing will be interesting regarding macroeconomics or foundations in the EU this week. But, unfortunately for the euro currency, there is also geopolitics. As several experts have warned, October will be very "hot." In November, the G-20 summit is due to take place, in which both Vladimir Putin and Vladimir Zelensky can participate. So far, no one understands how this can restore peace in Europe since Moscow and Kyiv have officially stated that they will not negotiate with each other. However, in any case, this event is a landmark, and maybe something will be decided on it. The average volatility of the euro/dollar currency pair over the last five trading days as of October 17 is 103 points and is characterized as "high." Thus, on Monday, we expect the pair to move between 0.9618 and 0.9825. A reversal of the Heiken Ashi indicator upwards will signal a new round of upward correction. Nearest support levels: S1 – 0.9644 S2 – 0.9521 Nearest resistance levels: R1 – 0.9766 R2 – 0.9888 R3 – 1.0010 Trading Recommendations: The EUR/USD pair made an upward leap, which ended very quickly. Thus, now it is necessary to stay in short positions with targets of 0.9644 and 0.9618 until the Heiken Ashi indicator turns up. Purchases will become relevant again no earlier than fixing the price above the moving average with goals of 0.9825 and 0.9888. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 02:00 2022-10-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324417
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Euro (EUR) Situation Is Under Pressure From Geopolitical And Macroeconomic Circumstances

InstaForex Analysis InstaForex Analysis 17.10.2022 08:15
The yield on 5-year US government bonds on Friday set another record of the last 15 years. This morning it is consolidating at these values (4.24%), showing the intention to continue growth. European debt securities are also growing in yields, but German debt is noticeably slower (2.10%), while Greek and Italian bonds are alarmingly fast: 4.21% and 3.82%, respectively, which is explained in the media as investor anxiety about the impending debt crisis in the southern countries of the eurozone. And if the euro quote goes under the support level of 0.9724, then the euro will again try to reach the bearish target of 0.9520. The daily Marlin Oscillator is in negative territory and inclines the euro to such a development of events. The limit of corrective growth is the target level of 0.9855, to which the MACD line is approaching and strengthening it. On the H4 chart, the price is kept from falling by the MACD indicator line. The Marlin Oscillator in the positive area. But since the recent exit above this line on the 13th was not developed, the probability of the price moving back under it increases, as well as the Marlin Oscillator. The Eurozone ZEW Economic Sentiment Index for October will be published on Tuesday - forecast -61.2 against -60.7 in September, while US industrial production for September will be released, the forecast for which is 0.1%. The euro's decline due to the totality of circumstances is considered as the main scenario.   Relevance up to 04:00 2022-10-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324425
GBP: Softer Ahead of CPI Risk Event

A Technical Look At The Movement Of The Euro To US Dollar (EUR/USD) Pair

InstaForex Analysis InstaForex Analysis 17.10.2022 08:25
  Relevance up to 06:00 2022-10-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/296990
Short-term analysis - Euro to US dollar by InstaForex - 31/10/22

ING Economics Think Inflation Is Already There In The Eurozone. Q3 GDP May Decline By 0.2%

ING Economics ING Economics 17.10.2022 12:34
Looking at all the evidence available so far, it looks like the eurozone fell into a shallow recession in the third quarter. For the European Central Bank, this is unlikely to be enough to prompt an immediate dovish pivot given its determination to hike interest rates in the face of double-digit inflation. We still expect another 75bp hike in October   A recession in the eurozone has now become the near-consensus view, with the IMF being the latest international institution to predict a contraction in the eurozone economy in 2023. The only question seems to be how severe this winter recession will be and when it will start. We take a look at whether the economy actually started to shrink in the third quarter. Soft data suggests that a recession is likely to have started During the pandemic, we developed a nowcast indicator that gave us insight into how the eurozone economy was performing during lockdowns. While it was designed to perform well in the specific circumstances of the pandemic, there is merit in looking at it once again. The big caveat is that electricity use is an important driver of the index, which has of course been subject to large productivity gains as the energy crisis has unfolded. Nevertheless, we see that the direction for most underlying variables is slightly negative at the moment, corresponding to a view that the economy fell into a mild contraction at the end of the third quarter. Nowcast tracker suggests that activity has been moderately declining recently For more on how this index is constructed, read here: https://think.ing.com/articles/introducing-the-ing-weekly-economic-activity-index-for-the-eurozone/ Source: ING Research   Mobility indicators are an important part of the nowcast index. When the economy reopened earlier in the year, we saw a strong increase. But except for workplace activity, most mobility indicators normalised during the spring and have remained at these levels over the course of the third quarter. Our average of the Google mobility indicators shows that the second quarter still saw large mobility gains, while the third quarter was flat. While seasonal factors may understate the performance in this regard, it does seem fair to assume that most, if not all, of the post-lockdown rebound is now behind us. Adding to meagre nowcast data, surveys suggest that a recession is likely to have started already. The composite PMI was below 50 – signalling contraction – for all three months of the third quarter. In fact, it gradually worsened as the quarter progressed, with September showing more serious signs of contraction as the summer months ended. Both services and manufacturing activity are now well below 50. This is a broader indicator of activity, which adds to signs that a shallow recession began in 3Q. Still, some evidence from data not collected from surveys would be useful so as not to miss out on positive surprises. Retail sales are weak and tourism is not expected to make up for it When looking at consumer spending, we see a clear downward trend in retail sales. November last year was the recent peak in sales activity after which a steady decline set in. This is because of the sharp decline in purchasing power that households have experienced since then, but will also be related to the reopening of certain services. With people returning to restaurants and bars and starting to take holidays again, spending patterns have shifted away from goods. The latter seems to be a smaller part of this though. As chart 2 shows, people are spending more than ever in retail, but volumes are down. So the impact of inflation is that people are forced to spend more and more at the store but take home less for it. Interestingly, car sales have been increasing in August, coming from a very low base. Consumers pay more in retail, but take home lower volumes than late last year Source: Eurostat, ING Research   The ECB put a lot of emphasis on the positive impact of tourism on third-quarter growth. This is a bit of a blind spot in terms of more frequent data and could indeed add to positive activity this quarter. Looking at overnight stays in the eurozone, we see that July and August were very close to pre-pandemic levels which suggests continued 3Q strength, but businesses are less optimistic. Surveys suggest that the peak in tourism activity was in June and that the summer may have slightly disappointed. Still, tourism is likely to have added positively to the third quarter GDP growth number. All in all though, it looks like the summer was not strong enough to have kept consumption growth positive overall. Industry limits losses so far due to improving supply chains, but trend is down When looking at industry, we see a divergence between the survey and hard data so far. While surveys suggest a sizable weakening in activity, August data was better than expected. It seems that the improvement in supply chain problems and the availability of inputs to production are allowing businesses to catch up on backlogs of orders. Still, new orders are falling and survey data suggests a weaker September. Particularly in energy-intensive sectors, production seems to have dropped again in September. The German statistical office has started to release a new times series for energy-intensive industry, showing that production in these sectors dropped by more than 8% between February and August. If September was indeed weaker than August, industrial production will have been negative on the quarter, adding to expectations that the economy was already in a shallow contraction in 3Q. Production recovered a bit in August, but energy-intensive sectors look problematic in September Right chart shows total manufacturing and the most energy-intensive sectors Source: Eurostat, Macrobond, European Commission DGECFIN, ING Research   Interestingly enough, trade is very difficult to judge at the moment. Data on volumes is hard to come by and strongly rising prices for energy have caused nominal imports to soar. It looks like real export growth weakened over the summer, but imports could have fallen even more as energy is such an important component and energy use is down due to high prices. This means that net exports could have actually contributed positively to GDP growth last quarter. If this makes growth positive, it would mean that a recessionary environment saw positive growth. Just as the US went through a technical recession in the first half of this year when the economy contracted but no real signs of recession were visible, so the eurozone could be in a technical expansion, where the economy expands in a recessionary setting. Contraction in 3Q, but no smoking gun for a dovish pivot from the ECB Taking this all together, we find enough weakness in recent data to believe that a recession has already started and stick to our forecast of a -0.2% quarter-on-quarter contraction in 3Q. But shallow negative growth – still held up by temporary recovery factors – is also unlikely to give the ECB the smoking gun for a dovish pivot. In fact, at the next ECB meeting on 27 October, there won’t be any new staff projections, nor will there be hard data for September, allowing the ECB to announce another hike by 75 basis points. It will take until the December meeting before the ECB has a better view on the severity of the recession, which should then be enough to embark on a dovish pivot. Read this article on THINK TagsGDP Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

Marc Chandler (MarcToMarket) Comments On (GBP) British Pound, US Dollar (USD), Markets Around The World And Much More! - 17/10/22

Marc Chandler Marc Chandler 17.10.2022 15:16
October 17, 2022  $GBP, $USD, Bank of Canada, BOJ, China, Currency Movement, Federal Reserve, Hungary, Intervention, SNB, UK Overview: The markets have returned from the weekend with a greater appetite for risk. Equities and bonds are rallying, and the dollar is better offered. China, Hong Kong, South Korea, and Indian bourses advanced. Mainland shares edged higher even though Zhengzhou, a city of one million people, near an iPhone manufacturing hub was locked down due to Covid. Europe’s Stoxx 600 is up nearly 0.5% to extend its recovery into a third session. US futures are trading a little more than 1% higher. European benchmark bond yields are 10-12 bp lower and the 10-year US Treasury yield is seven basis points lower to 3.95%. The reversal of the UK’s fiscal policy and a new Chancellor of the Exchequer has seen British Gilts rally strongly. The 30-year Gilt that traded briefly above 5.0% last week is off 34 bp today to 4.44%. A break of 4.25% would target 4.0%. Sterling is leading the major currencies higher today with around a 1% gain. The greenback is trading lower against all the major currencies, though it is virtually flat against the yen. Emerging market currencies are more mixed. Asian currencies are mostly softer, while the South African rand and Mexican peso join the central European currencies moving higher. Gold has stabilized after falling nearly 3% last week. It is approaching $1660, and the nearby cap is seen closer to $1670. December WTI is little changed. It fell 7.3% last week after rallying 16% the previous week on OPEC+ cuts. US natgas is off 3.4%. It gapped lower and is at its lowest level since mid-July. Natgas prices in Europe are tumbling as a cap is being discussed. Europe’s benchmark is at its lowest level since late June. It is down 4% today. It fell 9% last week, for its seventh consecutive weekly decline. Iron ore prices fell 2% today, giving back the pre-weekend gains in full. December copper is about 0.25% firmer, recouping half of what it lost ahead of the weekend. December wheat is starting the new week with a 1.4% advance after tumbling 3.6% at the end of last week. Asia Pacific Xi's speech at the 20th Party Congress in China seemed to offer little but a new confirmation of the current trajectory. In some ways, leaving out the political structure (I know, it is a bit like asking Mrs. Lincoln, "despite that, how was the play?), Xi sounded like many leaders of other countries while underscoring that economic development was the top priority. He talked about "common prosperity" limiting income and wealth inequality, recognizing markets' decisive role in allocating resources, and that housing is "for living not speculating." Reports indicate that in his two-hour speech, Xi had a section on "human capital." Xi's views on welfare are not so different than many liberals and neo-liberals in the US and Europe, and on more than one occasion, he has warned that welfare supports "lazy people."  Xi's emphasis on self-reliance (the word counters say he said it twice after not citing it at all in his 2017's speech) may be a recognition of the US tightening technology noose. Earlier this month, the Biden administration took the strongest steps to block China from developing start-of-the-art semiconductor capabilities, which have dual use--civilian and military. The full ramifications of the latest US controls are still rippling through the industry. Still, it appears that US citizens, including green card holders, cannot support the development or production of semiconductor chips at many (28) Chinese firms, which means employment and sales, shipping, servicing, and support. Taiwan's intelligence estimates that around 200 US passport holders are employed in Chinese semiconductor companies. It will work through third countries too. Even though the US is not the center of chip fabrication that it once did, US software is critical in chip design. Some pundits claim this "coup-de-grace" is a significant blow to this key industry. As the share prices have shown, it will also hurt several US chip companies. There is some speculation that the Bank of Japan may be intervening quietly and read into the BOJ's daily balances, the possibility that it sold a little less than $7 bln dollars to defend the yen. The first intervention last month was a record near $20 bln. To go from trying to muscle the market to quietly offering support to the yen seems unlikely. Moreover, the whipsaw in the exchange rate that is the intervention hypothesis is supposed to explain took place after the stronger than expected US CPI figures on October 13 in the North American session. That said, the Ministry of Finance Kanda did warn last month that "stealth" intervention was possible and that official confirmation would not always be provided. If the BOJ did intervene, which we doubt, did not have much impact. The dollar reached JPY148.85 ahead of the weekend more than a full yen higher than seen on October 13. It is in a little less than half-a-yen range today below JPY148.80. If we are right that intervention in Japan's time zone, then the dollar is likely to make its highs in Europe or North America. The Australian dollar rose to a marginal new high for the week ahead of the weekend before reversing and settling on its low slightly below $0.6200. It is trading with a firmer bias today, though it stalled near $0.6250 in the European morning, where options for A$465 mln expire today. A bit higher, $0.6270 are another set of options for nearly as much (~A$425 mln) will also roll off. The greenback remains firm against the Chinese yuan and is trading above CNY7.20. The high from late September was a little above CNY7.25. As expected, the benchmark Medium-Term Lending Facility rate was unchanged at 2.75%. The PBOC has steadied the daily dollar fix to around CNY7.10 and continued today with a CNY7.1095 reference rates. The median in Bloomberg's survey was for CNY7.1977. This appears to be the widest gap. Reports suggest that Chinese state banks swapped yuan for dollars in the forward market and sold dollars in in the onshore market to support the yuan. Europe The SNB has tapped the Fed's dollar-swap line for the past two weeks. On October 5, nine counterparties took $3.1 bln; last week, 15 institutions got $6.27 bln for a week. There are two general views. The first sees it as troublesome and an expression of the global stress being stoked by the reduction of dollar liquidity and growing systemic risks. A large Swiss bank has been the subject of rumors and speculation for weeks, but the number of counterparties suggests something more/bigger. The second view the use of US swap lines to secure the dollar as part of an arbitrage-like opportunity. Taking the dollars from the SNB's swap line, swapping them for Swiss francs, and depositing them with the SNB is a nearly risk-free pickup of an estimated 40-50 bp. Earlier, a similar type of arbitrage seemed to drive dollar-based investors' demand for Japanese government bonds. Then, the currency swap was greater than the bond's interest rate. Separately, while much of the coverage of central bank intervention has focused on Asia, some suspect the SNB may have quietly sold dollars near CHF1.00. The idea is that the SNB has become particularly hawkish and wants to resist currency weakness. The dollar is the second most important currency for Switzerland. Total sight deposits fell 3% last week, which one would expect amid dollar-selling intervention. Still, as we have previously suggested, it is also consistent with the SNB's efforts to mop up excess liquidity. Total sight deposits have fallen by nearly 20% over the past four weeks or CHF134.7 bln. When the UK government scrapped the cut to the highest marginal tax, many said it was a U-turn. We thought it was a relatively small dilution of its fiscal thrust. The shift before the weekend to embrace the Johnson/Sunak corporate tax increase is more significant and cost Chancellor Kwarteng his job. Hunt, whose fellow MPs rejected his bid to be Prime Minister, is the new Chancellor. Reports suggest he is committed to delivering the fiscal statement on October 31. Hunt may drop the one-percentage point cut in income tax that was to be implemented next year. The focus shifts from taxes to spending. One issue is whether welfare payments will be raised to blunt inflation, as Johnson had promised. Hunt is expected to make a statement late in the UK morning on measures to support fiscal sustainability and then will address the House of Commons a few hours later. Hungary surprised the market before the weekend. Last month, it signaled that it was done lifting rates and would focus on draining liquidity. The central bank introduced a new one-day deposit facility at 18%, compared with the base rate of 13%. It also indicated that it would use reserves to counter the rise in energy prices. That could cost around $1.5 bln a month. As a result, the forint recovered by about 4.2% against the euro ahead of the weekend. There has been no follow-through forint buying today and the euro recovered from about HUF416.35 to HUF419.25 before steadying in the European morning.  The euro held above the pre-weekend low slightly below $0.9710. Then it rallied nearly half a cent through the European morning. A consolidative tone is threatening. Last Thursday and Friday's high were recorded a little above $0.9800 and this remains the nearby cap. Options for almost 1.6 bln euro struck at $0.9800 expire on Thursday. Sterling is up around a cent in the European morning around $1.1275. It did initially slip through the pre-weekend low to dip below $1.1150 but recovered quickly. The high from the end of last week was $1.1365-80 this needs to be overcome to lift the tone and signal a re-test on the $1.1500 area. America The robust September employment data was followed by a stronger-than-expected CPI and respectable retail sales (0.4% core and August revised to 0.2% from 0). Despite the lagged nature of the data points, if the Fed were to say to its critics that after raising the Funds target by 225 bp and doubling the pace of the balance sheet unwind over the past 100 days, we venture that interest medium-and long-term US rates would rise rather than fall. Core CPI is at a new cyclical high. Headline inflation is higher. Frankly, the Federal Reserve seems to be moving in the opposite direction. Encouraged by Bullard, the market will take more seriously the chances of a 75 bp hike in December after a 75 bp hike in early November. The October Empire State manufacturing survey is on tap today (unlikely to be a big market mover), and while no Fed officials are scheduled to speak, the revelation that Bostic may have violated the Fed's trading rules is being discussed by market participants. Bostic and Kashkari speak tomorrow ahead of the Beige Book on Wednesday. The combination of stepped-up hawkish rhetoric by Bank of Canada Governor Macklem, despite words of caution from the IMF about risks of recession from the collective hikes, and the prospects of a more aggressive Fed has lifted expectations for a 75 bp hike next week. After the Reserve Bank of Australia raised rates by a quarter-of-a-point, some observers thought it was a tell for a more moderate pace by Canada. Still, Macklem put that to bed, The market accepted that a 50 bp was most likely, but in recent days, expectations for a 75 bp move have increased. The swaps market now sees about an 78% chance of another three-quarters point move. Firmer equities can help the Canadian dollar pare last week's 1% decline. The Canadian dollar fell to new two-and-a-half-year lows in the middle of last week. Trading remained choppy in the second half of the week and the greenback finished slightly below CAD1.39. It has not been above CAD1.3880 today and there are options for nearly $900 mln at CAD1.3900-05 that expire today. We suspect that they may have been neutralized ahead of the weekend. A break of CAD1.3800 could spur a move toward CAD1.3740-50 today. The greenback is offered against the Mexican peso, and it is approaching the lower end of its recent trading range. It has not traded below MXN19.9350 this month, but a break could signal a move to the bottom of the wider range, which extends to around MXN19.80. It is a quiet week for Mexican data and the highlight is the August retail sales report on Friday. A small rise is expected.    Disclaimer Source: Sterling and UK Debt Market Respond Favorably to the Return of Orthodoxy - Marc to Market
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

Forex Market: Euro To US Dollar - Technical Analysis | What Can We Expect From EUR/USD?

InstaForex Analysis InstaForex Analysis 17.10.2022 16:00
Red lines- bearish channel Blue lines- Fibonacci retracements EURUSD is trading just above 0.97. Short-term trend is mixed as price has stopped the decline from the parity level and at the same time there are some potential reversal signs. Price is trading around the 61.8% Fibonacci retracement of the entire rise and at this level we could see a bigger reversal to the upside. EURUSD remains inside the medium-term bearish channel but is also showing reversal signs. If bulls manage to start a new sequence of higher highs and higher lows, then we could see EURUSD reach the upper channel boundary close to 1.0150. Failure to hold above the recent low at the 78.6% retracement, will be a new bearish signal. Relevance up to 14:00 2022-10-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/297104
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

The Euro To US Dollar Pair (EUR/USD) Is In An Upward Mood

InstaForex Analysis InstaForex Analysis 18.10.2022 08:17
The main drivers of yesterday's growth in almost all market assets were the British pound and the US stock market. The new Minister of Finance, Jeremy Hunt, canceled the so-called "mini-budget" of his predecessor Kwarteng, on which the currency and debt markets of Great Britain went up. The pound rose by 1.05%, S&P 500 by 2.65%, also growing under the impression of good corporate reports, and the euro by 1.08% (117 points). In its growth, the price almost reached the magnetic point of intersection of two lines - the target level of 0.9855 and the MACD line of the daily scale. Now the price has two actions to choose from: consolidate above this level and continue to rise to 0.9950, and turn down to the starting point of yesterday - to the level of 0.9724. The Marlin Oscillator is in the positive area, it tends to continue growing. The difficulty in choosing a direction is also that there are now two opposing investment ideas on the market: to continue buying risk on a positive background of corporate reports and to be careful in this, slowly getting rid of the euro, as amid continuing negative statistics on the euro area, the European Central Bank may raise the rate not by 0.75% but by 0.50% at a meeting on October 27, which, of course, will send the euro unambiguously down. US industrial production data for September is released today. Forecast 0.1% vs. -0.2% in August. And if the data helps the euro to overcome the current resistance of 0.9855, then this will become an indicator of the mood of investors in the coming days (growth in risk appetite). The situation is generally on the rise on a four-hour timescale. But in order to stay in the growing trend, the price must consolidate above the resistance. Otherwise, a quick return to 0.9724 may follow. This can happen in the event of sharply negative news.     Relevance up to 02:00 2022-10-19 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324560
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The Upward Movement Of The EUR/USD Pair Is Not Strong Enough

InstaForex Analysis InstaForex Analysis 18.10.2022 08:21
EUR/USD 5M The euro/dollar pair rose significantly on Monday, as for the scale of the hourly timeframe. On higher time frames, the upward movement does not look overly strong, but on the hourly it is impressive. However, by the end of the day, the pair was only near the Senkou Span B line, and at the same time near the level of 0.9844. Thus, there was no clear breakthrough of these levels, which means that we can deal with another correction, after which the downward movement will resume. However, it should be noted that the euro had no special grounds for growth on Monday. Thus, "growth out of the blue" can be considered a positive moment for the euro. But we still believe that this is not the beginning of a new long-term upward trend. Unfortunately, the fundamental and geopolitical backgrounds still look very difficult for risky currencies, which means that the dollar can go on the offensive at any moment. Everything was complicated in regards to Monday's trading signals. The pair traded exclusively sideways during the European trading session, in the area of the Kijun-sen line and the level of 0.9747. There was exactly one pin above this area, which turned out to be false. At the same time, there should not have been a loss on the long position, since there was no sell signal, which means that it should not have been closed. The price nevertheless started an upward movement on the second attempt and subsequently went up by at least 100 points. The long position had to be closed manually at a profit of about 75 points. COT report: The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 3,200, while the number of shorts increased by 2,900. Accordingly, the net position decreased by about 6,100 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 38,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 18. The ECB will not be able to fight inflation effectively. Overview of the GBP/USD pair. October 18. The political pun in the UK persists. Forecast and trading signals for GBP/USD on October 18. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The downward trend still cannot be considered reversed on the hourly timeframe, despite a solid rise over the past few days. However, the euro is close to trying to start forming a new upward trend. If it manages to confidently overcome the Senkou Span B line, it will be possible to count on additional growth of the pair. On Tuesday, we highlight the following levels for trading - 0.9553, 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9834) and Kijun-sen lines (0.9740). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. No important events or reports are scheduled in the European Union on October 18, and a report on industrial production will be released in the US, which is interesting only from the point of view of statistics. However, the pair showed a very high volatility out of the blue on Monday, so there is reason to expect its active movements on Tuesday as well. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 00:00 2022-10-19 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324548
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

Across The Forex Board, The New Zealand Dollar (NZD) Emerges As The Strongest

TeleTrade Comments TeleTrade Comments 18.10.2022 09:20
Here is what you need to know on Tuesday, October 18: The US dollar resumes its bearish momentum on Tuesday, having lost the recovery momentum in the Asian session, as risk flows extend into the second straight day following the UK's dramatic U-turn over the tax-slashing mini-budget. The US S&P 500 futures, the risk barometer, is gaining roughly 1.70% so far while the Asian indices rally 1.20% to 1.80%, led by the rebound in the Chinese stocks. In early dealing, China’s stocks turned south after the country’s junk dollar bonds dropped to a record low, as a property market crisis sparked by a crackdown on excessive borrowing. Meanwhile, Chinese traders digested comments from US Secretary of State Antony Blinken. The US official said on Monday, China has made a decision to seize Taiwan on a “much faster timeline” than previously thought. Across the fx board, the Kiwi dollar emerges as the strongest heading into the European open, followed by its Antipodean partner, the aussie. Meanwhile, the yen pulled away from 32-year highs above 149.05 against the US dollar, dragged lower by weaker Treasury yields and Japanese verbal intervention. Top Japanese officials continued their jawboning, reiterating that they are ready to take necessary steps to avoid undesirable, as they watch the FX price action with a sense of urgency. USD/JPY was last seen trading around 148.85, consolidating the upside before the next push higher. NZD/USD surges over 1% to challenge 0.5700, as hotter New Zealand’s Q3 Consumer Price Index (CPI) ramped up bigger RBNZ rate hike expectations. NZ inflation rose by 2.2% QoQ in the third quarter, beating expectations of a 1.6% increase. Meanwhile, the annualized inflation eased from a 32-year high of 7.3% to 7.2%, although outpaced expectations of +6.6%. Hawkish comments from RBA Assistant Governor Michele Bullock and RBA minutes underpin the sentiment around the AUD/USD pair, as they suggest the need for more rate increases in the coming months. EUR/USD also capitalized on retreating Treasury yields and a renewed broad-based US dollar selling, having recaptured the 0.9850 barrier. Although bulls remain cautious ahead of the German and Eurozone ZEW sentiment surveys. Germany’s Economy Minister Robert Habeck said on Monday that “with fiscal policy in place, they can avoid deep recession in Europe without fuelling inflation.” GBP/USD is fading an uptick above 1.1400, as investors assess the Financial Times (FT) report that stated the Bank of England (BOE) is set to delay quantitative tightening (QT) worth £838bn until bond markets calm. The report comes after the new UK Chancellor Jeremy Hunt ditched almost all of the mini-budget announced by PM Liz Truss on September 23. The gains in cable appear short-lived, as PM Truss braces for political challenges, with Tory backbenchers preparing to oust her. Gold is holding its recovery momentum above the $1,650 barrier but is likely to remain in a defined range until buyers reclaim the critical $1,670 hurdle. The softer dollar keeps lending support to the metal. Bitcoin price is gradually pushing higher while above $19,500 but bulls stay cautious amid a wall fall of healthy resistance levels on a daily timeframe.
Mexico’s Central Bank Surprised Markets With A 50bps Rate Hike Once Again

Mexican Peso (MXN) Positions May Fall Further | The GBP/USD Pair Is Struggling To Gain Confidence In The Market

ING Economics ING Economics 18.10.2022 11:11
A reversal in UK fiscal policies, some stability in equity markets, and a dip in European energy prices point to a further corrective period in FX markets. The dollar could weaken a little further, but the core bull trend should remain intact In this article USD: Corrective forces may dominate short term EUR: Terms of trade go into reverse GBP: Don’t chase sterling higher MXN: Interesting carry USD: Corrective forces may dominate short term Measures of the trade-weighted dollar index are around 2.5% off their highs of the year. The correction has nothing to do with any softening of Federal Reserve tightening expectations. Here the market firmly expects the Fed to hike 75bp on 2 November and prices a terminal rate as high as 4.90% next spring. Instead, we would say three factors are behind this current dollar correction. The first is the reversal in UK fiscal policy. The much-maligned policy that garnered criticism at the IMF meetings has been largely reversed. This has brought some calm to global bond markets (Gilt instability had been dragging US Treasuries lower). Our rates strategy team does not see UK 10-year Gilt yields racing a lot further under 4.00%, though reports of the Bank of England delaying the start of its quantitative tightening Gilt sales programme should be helpful. Equally, it may be too early to expect US 10-year Treasury yields to drop back to the 3.75% or 3.50% area if the market is still searching for the top in Fed funds near 5%. The second factor is global equity markets. It is very early days, but the MSCI world equity index is now 5% above last week's lows, with the S&P 500 rallying another 2.6% yesterday. Global asset managers, positioned very underweight equities and overweight cash, could be putting money to work and are wary of the seasonal factors, where the S&P 500 index has rallied in nine of the last ten Novembers. How far the equity rally continues remains to be seen - but so far 3Q US earnings have been encouraging (only 29% of those reporting so far have missed on expected sales numbers, with only 24% missing on earnings). And the third factor is energy. European gas prices continue to sink on warmer weather and European gas storage facilities being largely full. Lower gas prices are allowing a drop in electricity prices, where German one-month forward power prices are just 50% above early June levels, compared to being three times higher in late August. The drop in energy prices is reversing the negative income shock that hit energy importers over the summer and reduces the dollar's advantage. A quiet week for US data could see the dollar correction extend a little. High beta currencies which trade on higher implied volatilities, eg AUD, NZD, NOK, SEK and possibly GBP may outperform during this period. And the case could be made for DXY heading back to 110 (another 2% drop). But a core view of not just the Fed, but other central banks hiking into a looming recession should mean that the core dollar bull trend remains intact. Chris Turner  EUR: Terms of trade go into reverse EUR/USD went under parity in late August largely driven by the negative terms of trade shock of higher energy prices. That energy shock is temporarily going into reverse as European gas prices drop sharply on the warmer weather and European governments having largely achieved their gas storage targets. It would thus be churlish of us to suggest that EUR/USD does not need to rally. A quiet week for US data (just soft US housing) and the conditions we outlined above, therefore, create a corrective window for EUR/USD, where an obvious target is the top of this year's bear channel at around the 0.9980/1.0000 area. We would assume that this continues to hold the correction.  Elsewhere today we have the German ZEW investor survey, which should continue to decline.  And we also have some ECB speakers in Gabriel Makhlouf (1540CET) and Isabel Schnabel (1900CET). The core ECB message at the moment seems to be the need to get the policy rate (deposit rate now 0.75%) as quickly as possible to 2% and then take stock from there. Chris Turner GBP: Don’t chase sterling higher As new UK Chancellor Jeremy Hunt carefully claws back all the fiscal giveaways offered in late September, the question is how far should sterling now rally? Taking the UK sovereign credit default swap as a benchmark for levels of UK fiscal anxiety, one could mark out dates around mid-September (GBP/USD at 1.15) and the third week in August (1.18) as possible targets – representing brief periods of stability before Trussonomics hits home. While there may be some more fiscal positives to come were the Conservatives to look at a windfall tax on the energy companies, we suspect cable will struggle to sustain gains over 1.15 this month. News that the UK government is shortening the period of the Energy Price Guarantee to six months from two years may not be greeted well by the consumer and also raises the prospect of UK inflation staying higher for longer. Equally, the Fed terminal rate has been priced close to 100bp higher over the last month. We think higher US real rates have contributed to the size of the sell-off in UK asset markets. There are no signs that the Fed wants to reverse this rise in real interest rates anytime soon. And one month GBP/USD implied volatility (now at 16% versus a peak near 22% in late September) may struggle to return to pre-crisis levels of 12% - confirming that trust is hard won and easily lost. Chris Turner MXN: Interesting carry Given the prospects of a brief corrective period in the dollar, interest may return to the carry trade. The highest available carry in the FX space can be found in Eastern Europe (Hungarian forint one month implied yields pay a staggering 16.5% per annum) and also the Latam currencies. However, we think Central and Eastern European FX still carries a lot of risks currently. The Mexican peso also has an attractive carry, with one-month implied yields are 10.2%. Banxico continues to move in lock-step with the Fed. Whilst investors could miss out on some larger nominal appreciation elsewhere, Mexican peso positions may have lower draw-downs if things went wrong. Spot USD/MXN could even make a run to 19.80 as well. Chris Turner Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EUR/USD Pair Has Potential For The Downside Movement Today

EUR: Luis de Guindos (European Central Bank Vice President) Thinks Positive About The Near Future Of Euro

Conotoxia Comments Conotoxia Comments 18.10.2022 22:24
Investors in the financial markets seem to be buying riskier assets, perhaps hoping that other central banks would follow the footsteps of the Bank of England or the European Central Bank. The talk is about a soft approach to QT and further interest rate hikes. Read next: JP Morgan Net Income Over $9B | Kanye West Is Buying Parler| FXMAG.COM Bank of England - Quantitve Tightening Delayed? As the Financial Times reported on Tuesday, the Bank of England is possibly postponing the start of quantitative tightening (QT) again. The central bank had originally intended to begin selling £838 billion worth of British government bonds on October 6, but postponed that plan until the end of the month. However, presently bank officials reportedly agree that reducing the balance sheet should be delayed again until the bond market stabilizes following the shock of the government's mini-budget tax proposals, most of which have since been withdrawn. BoE Governor Andrew Bailey recently said the central bank would primarily use higher interest rates, rather than quantitative tightening, as its main tool to fight inflation, BBN news reported. However, a spokesman for the Bank of England declined to comment on the report published by the Financial Times. Source: Conotoxia MT5, GBP/USD, Daily ECB with a slower pace of hikes? Will the EUR/USD exchange rate stabilize? European Central Bank Vice President Luis de Guindos said Monday that the ECB could not rule out the possibility of the eurozone suffering a technical recession, but added that any slowdown would not be severe. Speaking on the occasion of the 20th anniversary of the euro organized by the Consejo General de Economistas de Madrid, he noted that he sees the eurozone currency stabilizing in the coming months. De Guindos reiterated that he expects soaring inflation to begin to subside next year, according to a quote published by BBN. Also, the Financial Times reported today that French central bank chief François Villeroy de Galhau expects the European Central Bank to continue its rapid pace of interest rate hikes until its deposit rate reaches 2 percent by the end of the year. Any increases after that point would be at a "more flexible and slower pace," the European Central Bank policy maker told the FT in an interview. The ECB could stop exchanging some of the bonds maturing under its asset purchase program from the end of this year, and balance sheet reduction will be carried out cautiously, Bloomberg reported. EUR/USD - technical analysis Source: Conotoxia MT5, EUR/USD, Daily From the point of view of technical analysis, the EUR/USD exchange rate seems to have slowed down the downward momentum. Nevertheless, the quotation still remains inside the medium-term channel, the upper and lower limits of which could mark potential resistance and support for the EUR/USD. Thus, for the market to move at least to larger in price and time consolidation, it would first have to overcome the line outlined after the peaks. Then, possibly, the next potential resistances could be in the area of 0.9996 or 1.0191. Daniel Kostecki, director of the Polish branch of Conotoxia Ltd. (Cinkciarz.pl investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the study nor Conotoxia Ltd. are responsible for investment decisions made on the basis of the information contained in this publication. Copying or reproduction of this study without written permission from Conotoxia Ltd. is prohibited. Read article on Conotoxia
The Euro To US Dollar Instrument Did Not Change In Value

The EUR/USD Pair's Price May Go Above Resistance Level

InstaForex Analysis InstaForex Analysis 19.10.2022 08:13
The euro stalled on the strong price level resistance at 0.9864 (September 6 low) in line with the daily MACD indicator line. The Marlin Oscillator is growing in the positive area, which means that the price is preparing to exit above the resistance. If this attempt turns out to be successful, then the increase may last up to 0.9950/52, the low of July 14th. In order for the price to turn towards 0.9724, it needs to overcome the cluster of peaks on October 13-14 near the level of 0.9806. The situation is similar on the lower timeframe; consolidating above 0.9864 will allow the euro to rise to the target level of 0.9950, consolidating under 0.9806 will again direct the quote in a downward direction to the target level of 0.9724.   Relevance up to 02:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324682
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The Euro (EUR) Is Trying To Start Forming A New Upward Trend

InstaForex Analysis InstaForex Analysis 19.10.2022 08:24
EUR/USD 5M The euro/dollar pair stopped its upward movement and traded sideways all day on Tuesday. Volatility has declined sharply, but a downward correction has not begun, so the pair maintains some growth prospects after it has consolidated above the descending channel. In favor of the euro's growth (although it still looks rather doubtful) is the fact that the price settled above both lines of the Ichimoku indicator. However, it is still below all the lines of the Ichimoku indicator on the 24-hour time frame, so its long-term growth prospects are still vague. A flat may even begin on the 24-hour timeframe, which will look like up/down movements of 300-400 points on the hourly timeframe. You also need to be prepared for this. There was only one report on Tuesday - on industrial production in the US - which did not provoke any market reaction. It is also not necessary to expect important events this week, as the calendar is almost empty. The 5-minute timeframe shows even better that the pair has been trading sideways all day. Exactly in the middle of this intraday horizontal channel is the level of 0.9844 and the Senkou Span B line. It was around these levels that five signals were formed at once, which is a pronounced sign of a flat. Traders could try to work out the first two of them. However, neither in the first nor in the second case did the price manage to move even 15 points in the right direction. Thus, a small loss was received, which is quite normal for a flat day. COT report: The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 3,200, while the number of shorts increased by 2,900. Accordingly, the net position decreased by about 6,100 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 38,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 19. Luis de Guindos believes that the euro/dollar pair will stabilize in the coming months. Overview of the GBP/USD pair. October 19. Liz Truss will not voluntarily step down. Forecast and trading signals for GBP/USD on October 19. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The downtrend still cannot be considered completely reversed on the hourly time frame, despite a solid rise over the past few days. However, the euro is close to trying to start forming a new upward trend. If it manages to overcome the Kijun-sen line on the 24-hour timeframe, which it has now rested on, this will significantly increase its chances for continued growth. On Wednesday, we highlight the following levels for trading - 0.9553, 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9834) and Kijun-sen lines (0.9752). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union will publish its inflation report for September on October 19, and this is the only important report of the day. Not even that important, since this is the second final value for September, and there is no doubt that we will see a value of 10.0% y/y. Thus, there may not be a reaction to this report. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 00:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324670
The Collapse Of The Silicon Valley Bank Weakened The Dollar And USD/JPY But Supported EUR/USD, AUD/USD, And GBP/USD

America's Macroeconomic Indicators Continue To Worsen

InstaForex Analysis InstaForex Analysis 19.10.2022 08:32
The euro and the pound sterling are trying to resist the pressure exerted by the stronger US dollar. In the last several days, both currencies managed to score some gains, which means they may well start to form the ascending section of the trend. At the same time, traders should closely monitor headlines in the media and attempt to foresee how the market might react to certain events. Alas, the events taking place in the world could potentially have any outcome. When the pandemic broke and countries started to introduce lockdowns, the whole world stopped. Almost nothing worked, except, perhaps, large enterprises and industries. Planes stopped flying, trains stopped running, people stopped traveling, and restaurants and cinemas closed. It still remains to be seen how this pandemic ends because the virus hasn't gone anywhere. Moreover, the pandemic showed people that viruses can spread fast even today when the medicine is so advanced. In 2022, a conflict in Ukraine started. Actually, it began in 2014. All those years, there were still hopes for its peaceful resolution. However, the year 2022 showed the whole world that it stands on the verge of a new world war. Today, countries openly threaten each other with nuclear weapons. In light of all those events, a recession in the United States seems unavoidable. According to Bloomberg analysts, the chance of a recession in the United States within 12 months has reached 100%. Based on the latest outlooks from large analytical agencies and banks, the American economy is expected to rise by 2% in 2022 and 0.6% in 2023. Bloomberg believes US President Biden misleads Americans, reassuring them that a recession could be avoided, and the economy is stable. Macroeconomic indicators keep deteriorating, and the economy risks collapsing. In my view, the economy won't collapse. Meanwhile, a recession is unavoidable in many countries, given the events of the last 2-3 years. A recession is also inevitable in the European Union or in the United Kingdom where Governor Andrew Bailey speaks openly about it. On the chart, the formation of the descending section of the trend continues but may end at any time. It is possible that a new impulse wave is now building up. Therefore, consider selling the instrument at around 0.9397, in line with the 423.6% Fibonacci level, when the MACD reverses to the downside. It is important to trade cautiously right now, as it is unclear how long the instrument will stay in the downtrend and whether the current wave structure transforms into the ascending one.   Relevance up to 04:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324684
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

Bank Of England May Hike The Rate By 75bp As The Energy Price Cap Can Lead To Higher Inflation And Longer Recession

ING Economics ING Economics 19.10.2022 10:12
There is growing speculation that the UK government will need to cut budget spending further after the fiscal U-turn. We already estimate that the change in the energy price guarantee will cause higher inflation, a deeper recession and may cause the BoE to hike by 75bp rather than 100bp. GBP downside risks persist. Elsewhere, US housing data will be in focus USD: Housing data becoming more relevant The rally in global equities yesterday pushed some high-beta currencies higher: in G10, the New Zealand dollar and Swedish krona had a good day. However, currency-specific stories overshadowed the risk-on environment. GBP fell as markets slowly digest the fiscal U-turn, Norway's krone and Canada's dollar suffered from their elevated exposure to oil prices, where the post-OPEC cuts rally seems to have run out of steam and sub-$90 levels are being explored again. The trade-weighted dollar remains close to its highs, likely being shielded from the equity rally thanks to market expectations of a 75bp Federal Reserve rate hike in November, and a terminal rate priced at 4.90-4.95%. As long as the Fed retains its hawkish stance (we suspect well into 2023), dollar corrections should continue to prove short-lived. Today’s US calendar includes housing starts and building permits data, which will provide hints of how much strain is being put on the housing market from sharply rising mortgage rates. As discussed earlier this week, it appears that most developed central bankers are accepting a contraction in house prices as a necessary evil in the process of fighting inflation. Given the elevated weighting of shelter in the US inflation basket, a (controlled) downturn in house prices would likely mean a faster slowdown in inflation in 2023, and this is good news for the Fed. It’s probably too early anyway to see a material impact on Fed rate expectations from the housing data. The Fed will publish the Beige Book today, and there are a few speakers to keep an eye on: Neel Kashkari, Charles Evans and the arch-hawk James Bullard. We expect a consolidation in the dollar around current levels, and retain a bullish view on the greenback into year-end. Francesco Pesole EUR: Domestic picture remains grim EUR/USD has been stabilising in the 0.98-0.99 area after the rally from 0.9700, likely reflecting some positioning adjustments more than any change in the key drivers. Dollar strength remains the main hindrance to recovery in the pair, but the domestic picture is still far from looking appealing to investors. Despite a smaller-than-expected slump in the ZEW expectations index, the current situation survey plunged dramatically to -72.2 in October. These are levels last seen only in 2020 and 2009. The easing in gas prices is likely preventing a return to the 0.9540 lows, but we think the next round of dollar appreciation will heavily test that support. Today, the eurozone calendar includes the final CPI reading for September, as well as speeches by the ECB’s Francois Villeroy, Mario Centeno and Ignazio Visco. Francesco Pesole GBP: Austerity times? In a matter of days, the UK government has shifted from a large and unfunded expansionary fiscal policy to measures clearly in the direction of fiscal rigour. Chancellor Jeremy Hunt’s policy U-turn earlier this week has paved the way for a radically different policy agenda, and many are now speculating on widespread budget cuts after government offices suggested further savings worth 15% of the budget may need to be found by the government. A key Conservative policy, the hike in state pensions in line with inflation, may be scrapped in what could be the start of a new period of austerity. Just looking at what the government has already changed from the "mini" Budget, the implications for markets are very significant. Our UK economist argues that the U-turn in energy bills cap can add 3pp to inflation next year and should increase the size/length of the recession. We think the Bank of England will need to take this into account and will hike by 75bp rather than the 100bp expected by investors at the November meeting. To be sure, inflation hitting double-digits today (10.1%), with the core rate at 6.5%, makes any dovish surprise a harder sell. Today, Prime Minister Liz Truss will face questions by MPs. There is growing speculation that she will be forced to leave soon due to the loss of credibility and opinion polls currently suggesting the main opposition party (Labour) holding a 35-point lead. GBP/USD has found some tentative stability around 1.13-1.14 as 10-year Gilt yields edged back below 4.0% for the first time in nearly a month. Our rates team remains doubtful that sub-4% levels are sustainable and continues to see elevated risks of Gilt market fragility. A key question is whether the Bank of England will go ahead with planned Gilt sales from the start of November. Yesterday, a media report suggesting another delay in quantitative tightening was dismissed as “inaccurate” by the BoE. We still struggle to see a return to 1.15+ levels in cable, as a combination of political instability, risks of a deeper recession and smaller rate hikes by the BoE along the path of fiscal rigour – along with a strong dollar - may more than offset the benefits of quieter debt-related concerns. It’s too early to dismiss a return to sub-1.10 levels. Francesco Pesole CAD: Inflation to stir rate expectations The Canadian dollar suffered from a contraction in oil prices yesterday, as global demand fears appear to be overshadowing the tighter supply picture following the OPEC+ output cuts. Our commodities team still expects Brent to close the year in the $95-100/bbl range on the back of tighter supply, but downside risks are clearly mounting with global recession fears. We still want to highlight how the Canadian dollar is in a good position to benefit from any recovery in risk sentiment (although that may only materialise from 1Q23 onwards), thanks to Canada’s limited exposure to the two major poles of geopolitical and economic risk: Russia and China. But growing uncertainty about global demand dynamics may further postpone any strong rebound in the loonie. The Bank of Canada will announce policy next week, and we expect a moderation in the tightening pace to 50bp as the economy starts to show signs of slowing and inflation recently came in below expectations. Today, September CPI numbers will be published, and the consensus is centred around a slowdown in headline inflation from 7.0% to 6.7%. With markets currently pricing in 60bp ahead of next week’s meeting, any upside or downside surprise can definitely direct rate expectations towards 50bp or 75bp, and generate CAD volatility in both directions. In our view, the balance of risks appears slightly skewed to the upside for CAD today, but there is still room for USD/CAD appreciation (1.38-1.40) into year-end. Francesco Pesole Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

The Fed Is Not Ready To Pause In Raising Interest Rates

InstaForex Analysis InstaForex Analysis 19.10.2022 12:17
The dollar remains strong despite the recent rally in stock markets. The reason is the continued pressure from rising treasury yields, as well as the talks of an impending global recession. This morning, the yield of 10-year bonds exceeded 4%, and Fed members continuously hint at a further aggressive rate hike aimed at curb inflation. Yesterday, Minneapolis Fed President Neel Kashkari said the Fed is not ready to announce a pause in raising interest rates as inflation is still high and there are no clear signals that it is ready to decrease. Atlanta Fed President Raphael Bostic echoed this, adding that inflation needs to be brought under control. Existing factors that support dollar also remain effective, which means that pressure will most likely ease. Locally, there may be a price decrease amid rising risk appetite, but in the long term the scenario will be in favor of the US currency. A decline will also be perceived by market players as an invitation to purchases on the eve of the Fed meeting, and even more so after the central bank raises rates by another 0.75%. The upcoming consumer inflation report in the Euro area, which is expected to show growth to 10% y/y/ and 1.2% m/m, may tempt traders to buy euro, but the existing economic problems in the region, aggravated by the geopolitical crisis in Ukraine, will put downward pressure on the currency. Thus, after a slight rebound, EUR/USD should be sold again. Forecasts for today: EUR/USD The pair is trading above the level of 0.9820. Decline and consolidation below this mark may lead to a fall to 0.9720 GBP/USD The pair has not been able to consolidate above the level of 1.1370. This may lead to a decline to 1.1135.   Relevance up to 06:00 2022-10-21 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324698
The EUR/USD Pair Is Showing A Potential For Bearish Drop

Eurozone Inflation Hits 9.9%, It's The Highest Level In More Than 25 Years!

Conotoxia Comments Conotoxia Comments 19.10.2022 15:26
While consumer inflation seems to be slowing down in the United States, looking at the CPI measure, the opposite is true in the Eurozone or the United Kingdom. Price growth continues to accelerate, according to data released today. What is the inflation rate in Europe? The annual inflation rate in the eurozone rose to 9.9 percent in September 2022, up from 9.1 percent a month earlier. This is the highest inflation rate since measurements began in 1991. Inflation has thus moved further away from the European Central Bank's 2 percent target, which may cause policymakers to continue tightening monetary policy despite the risk of recession. The main upward pressure for eurozone prices came from the energy sector (40.7 percent versus 38.6 percent in August), followed by food (11.8 percent versus 10.6 percent), services (4.3 percent versus 3.8 percent) and non-energy industrial goods (5.5 percent versus 5.1 percent). Annual core inflation, which excludes volatile energy, food, alcohol and tobacco prices, rose to 4.8 percent in September. On a monthly basis, consumer prices rose 1.2 percent, Eurostat reported. Source: Conotoxia MT5, EUR/USD, H4 Prices in the UK are also rising The UK's annual inflation rate rose to 10.1 percent in September 2022 from 9.9 percent in August, returning to the 40-year high reached in July and beating market expectations of 10 percent, trading economics reported. The biggest contributor to the increase was food, which became more expensive by 14.8 percent. Costs also rose sharply for housing and utilities, as they rose by as much as 20.2 percent, mainly, due to soaring electricity or gas prices. In contrast, core inflation on an annualized basis, which excludes energy, food, alcohol and tobacco, rose to a record 6.5 percent, compared to expectations of 6.4 percent, according to data from the Office for National Statistics. Source: Conotoxia MT5, GBP/USD, H4 High inflation in Europe - central banks with no way out? High inflation may not give much room for further action by central banks in the context of executing the so-called pivot, i.e. a turnaround in the current monetary policy, which consists mainly of interest rate hikes. Further price increases could seal further interest rate hikes in the Eurozone or the UK, which in turn could affect household budgets, but also company valuations. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
The EUR/USD Pair: There Are Still No Sell Signals

It's Unbelievable That Eurozone Inflation Is That Close To The Level Of 10%

ING Economics ING Economics 19.10.2022 15:48
The final estimate of eurozone inflation has been adjusted down from 10% to 9.9%. When looking at the details there's little to be optimistic about. But the chances of peak inflation happening soon are increasing Monthly developments in inflation are concerning Inflation of 9.9% in the eurozone in September marks a huge jump from the 9.1% seen in August. We discussed our first thoughts on the reading here. Now that more detail has been released, let’s see whether there are any positive signs of inflation turning around. Let’s look at monthly developments, which we judge on a seasonally-adjusted basis to allow for month-on-month comparisons (seasonal adjustments are our own). The one bright spot was goods inflation, which fell on a seasonally-adjusted monthly basis from 0.8% to 0.3%. Other than that, jumps in services and food inflation stand out. Energy inflation continues to be too high as well, so the broad conclusion is that inflation remains far too high across all broad categories. Monthly inflation came in hot again as most categories saw prices grow faster than in August Seasonal adjustment from ING Research Source: Eurostat, Macrobond, ING Research   Looking somewhat deeper under the hood, we see that the jump in September was mainly driven by the end of the German €9 ticket for public transport as most other services saw stable price growth compared to last month. Package holidays’ inflation was elevated over the summer but dropped back in August and September, while other categories have been fairly stable (albeit at rates that are far too high). So, next month is likely to see slower services inflation on a monthly basis. Services inflation was driven by the reversal of the €9 public transport ticket in Germany Seasonally adjusted by ING Research Source: Eurostat, Macrobond, ING Research It's far too early to call peak inflation, but chances of a peak soon are increasing Energy inflation saw another uptick in both fuel and electricity and gas categories on a monthly basis due to the bounce back in oil prices and pass-through to the consumer of the August peak in gas prices. For the months ahead, the energy price declines of recent weeks are very welcome for the overall economy, but the question is how quickly that feeds through to consumer prices. Do expect some relief of course as year-on-year growth in spot prices for natural gas has turned negative this month, while it was still 192% in September and 425% in August. We also see declining futures prices, albeit at a slower pace. Annual growth in fuel prices is also steadily dropping, from 15% in September to 11% in October. Energy inflation remains high, but drop in market gas prices should provide some relief Base effects will be more favourable in October and November. The monthly increase in the index last year was strong at 0.7% and 0.8%, which will drop out of the calculations this month. That should add to some relief. But on the other hand, steady increases in food and core inflation are unlikely to be reversed quickly so not too much is expected from the upcoming inflation reading. While we see encouraging news from the energy side, there is too much uncertainty about key drivers of price, such as geopolitical developments and weather, to call peak inflation at this point. Also, core inflation drivers show only modest improvements at this point, so we’re cautious about an immediate peak there too. Still, the current improvements on the energy side should provide some relief for the moment and as strong base effects are fading and price caps are discussed, chances of an inflation peak soon are increasing. Read next: Apple’s New Products | Goldman Sachs’ Results | In Amazon Rejected A Unionization| FXMAG.COM Read this article on THINK
The EUR/USD Pair Chance For The Further Downside Movement

Another Decline In The Euro (EUR) Is On The Horizon

InstaForex Analysis InstaForex Analysis 20.10.2022 08:10
So, the euro failed to cope with the strong resistance of the 0.9864 price level and the MACD line of the daily scale, turning around from the point of their coincidence and falling by 85 points. At the same time, there was an exit from risky assets on the market: S&P 500 -0.87%, 5-year US government bonds increased in yield from 4.22% to 4.36%. It may seem that the growth of yields is a sign of investors looking for profitable investments, and this is true, only investments in the dollar now act as such a conditionally reliable investment - long positions on the dollar since the end of September have been the largest in recent years. Investors also notice that the economic situation in the US continues to be much better than in Europe. Yesterday's data showed a 0.63% fall in construction in the eurozone in August, slightly slowing down the pace of construction in the US in September, with an increase in building permits by 1.4% in September. The price is approaching the target level of 0.9724 on the daily chart. The signal line of the Marlin Oscillator has penetrated into the territory of negative values, which indicates a high probability that the price will successfully overcome the support. And when this happens, a new target of 0.9520 will open before the euro. On the H4 chart, the price has overcome the support of the MACD line, Marlin is falling in the negative territory. The trend is downward on both timeframes, we are waiting for the euro's succeeding decline.   Relevance up to 04:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324789
bybit-news1

US Indices - S&P 500 And Nasdaq Declined 0.67% And 0.85% Respectively. USD Supported

ING Economics ING Economics 20.10.2022 09:13
Mediocre Australian labour data starts the day while overnight, Fed officials are taking a less hawkish tone. Markets seem oblivious for now Source: shutterstock Macro outlook Global markets: Wednesday continued the selling pressure that started after the briefest of rallies on Tuesday, and leaves the S&P500 only slightly up from its Monday close at 3695, after a daily decline of 0.67%. The NASDAQ dropped 0.85% on the day. US equity futures are showing further small declines at the open today. This sentiment slide has helped the USD, and EURUSD has fallen back to 0.9764. Further disarray in the UK’s Government hasn’t helped Cable, which declined to 1.1205, though Gilt yields continued to decline yesterday. It’s worth considering whether a call for a General Election might actually be positive for sterling. The AUD is also looking softer at 0.6264, while the JPY seems to be plateauing out at just under 150, in what looks like a market version of “Grandmothers’ footsteps” (for those old enough to remember that). Maybe the BoJ won’t notice its ongoing weakness?  Most Asian currencies weakened against the USD yesterday. The Rupee led the pack and pushed over 83 to the USD, though the CNY was also weaker, rising to just under 7.23. US Treasury yields staged a further strong increase. 2Y yields rose by 12.8bp to 4.556%, while 10Y yields rose 12.7bp to 4.134% - a new cycle high. The move is interesting given that it coincided with a more moderate-sounding James Bullard (St Louis Fed), who many (including ourselves) regard as the most prescient and insightful Fed member. “…it doesn’t mean you go up forever...” – Bullard said to Bloomberg journalists. His comments were echoed by Neel Kashkari, who suggested that there could be a pause next year, and said that it was possible that overall inflation had peaked.  The market has been looking for hints of a Fed pivot for weeks, but now that they are here, they seem to be ignoring them. This sets up the day for a possible "lightbulb moment", followed by strong gains in equities, and falls in front-end bond yields and the USD. Possibly… G-7 Macro:  The Fed’s Beige Book was released early this morning Asia time, and the summary concluded that the economy had continued to grow modestly through early October, but was slowing in a couple of places. Although price growth remained elevated, there were signs of some easing in several districts (in line with what we are seeing in the NFIB surveys). The Macro calendar is relatively quiet today, with US existing home sales (following yesterday’s weak housing starts numbers) and weekly jobless claims figures. France produces a raft of business-related surveys today, while German PPI inflation (currently running at a staggering 45.8%YoY) will be worth a nervous glance.    Australia: September labour data showed a much smaller increase in total employment than the 25K expected by market analysts. Total employment rose only by nine hundred jobs, mainly due to a big fall (-12.4K) in part-time employment, which offset the 13.3K rise in full-time employment. The unemployment rate remained 3.5%. There was no change in the participation rate. The split between full-time and part-time workers means the headline overstates the weakness of this report, but this is still not a strong set of numbers. Japan: The September trade outcome was mostly in line with the market consensus. Exports were up 28.9% YoY (vs 22.0% in August and 26.6% market consensus) and showed continued improvement. By export item, the gain was broadly based. Auto exports gained the most and machinery exports also gained solidly. Meanwhile, imports rose 45.9% YoY (vs 49.9% in August, 44.9% market consensus) showing some slowdown as global commodity prices declined.   Indonesia: Bank Indonesia (BI) holds a policy meeting today.  Consensus points to a 50bp rate increase by Governor Warjiyo, with inflation expected to accelerate further in the coming months.  BI Governor Warjiyo also reiterated that policy moves would be "preemptive" suggesting a sizable increase to bring inflation back within target by 3Q next year.    What to look out for: BI policy meeting and Fed speakers Japan trade balance (20 October) Australia labour market data (20 October) China loan prime rate (20 October) Taiwan export orders (20 October) Bank Indonesia policy meeting (20 October) US initial jobless claims (20 October) Fed’s Evans, Bullard and Kashkari speak (20 October) New Zealand trade balance (21 October) Japan CPI inflation (21 October) South Korea advance trade data (21 October) Fed’s Jeferson, Cook and Bowman speak (21 October) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

Netflix Inc Was Leading Gainer While JP Morgan Chase & Co Was Down

InstaForex Analysis InstaForex Analysis 20.10.2022 08:16
At the close of the New York Stock Exchange, the Dow Jones fell 0.33%, the S&P 500 fell 0.67% and the NASDAQ Composite fell 0.85%. The components of the Dow Jones index The leading gainers among the components of the Dow Jones index today were The Travelers Companies Inc, which gained 7.40 points or 4.44% to close at 174.17. Chevron Corp rose 5.28 points or 3.24% to close at 168.00. Procter & Gamble Company rose 0.93% or 1.19 points to close at 129.56. The biggest losers were Home Depot Inc, which shed 9.57 points or 3.36% to end the session at 275.49. Dow Inc was up 2.70% or 1.25 points to close at 45.13, while JPMorgan Chase & Co was down 1.96% or 2.33 points to close at 116. .51. The S&P 500 index components Leading gainers among the S&P 500 index components in today's trading were Netflix Inc, which rose 13.09% to 272.38, Intuitive Surgical Inc, which gained 8.99% to close at 211.14, and shares of Valero Energy Corporation, which rose 5.32% to close the session at 123.96. The biggest losers were Generac Holdings Inc, which shed 25.34% to close at 110.30. Shares of M&T Bank Corp lost 13.89% and ended the session at 163.06. Quotes Northern Trust Corporation fell in price by 9.15% to 79.59. The components of the NASDAQ  Leading gainers among the components of the NASDAQ Composite in today's trading were Mullen Automotive Inc, which rose 57.12% to hit 0.34, Scopus Biopharma Inc, which gained 51.59% to close at 0.37, and also shares of SenesTech Inc, which rose 46.55% to close the session at 0.34. The biggest losers were Olaplex Holdings Inc, which shed 56.69% to close at 4.24. Shares of Agrify Corp lost 42.44% to end the session at 2.55. Quotes of Sientra Inc decreased in price by 37.36% to 0.38.  The number of securities that fell and rise On the New York Stock Exchange, the number of securities that fell in price (2363) exceeded the number of those that closed in positive territory (777), while quotes of 105 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,715 stocks fell, 1,085 rose, and 216 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.89% to 30.77. Commodities Gold futures for December delivery lost 1.31%, or 21.65, to hit $1.00 a troy ounce. In other commodities, WTI crude futures for December delivery rose 3.23%, or 2.65, to $84.72 a barrel. Futures for Brent crude for December delivery rose 2.53%, or 2.28, to $92.31 a barrel. FX Market Meanwhile, in the Forex market, EUR/USD fell 0.79% to hit 0.98, while USD/JPY edged up 0.43% to hit 149.90. Futures on the USD index rose 0.73% to 112.81.   Relevance up to 05:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/297535
Euro to US dollar - Ichimoku cloud analysis - 21/11/22

ECB Is Said To Hike The Rate By 75bp Next Week, But The Decision Isn't Everything

ING Economics ING Economics 20.10.2022 09:24
A 75bp hike looks like a done deal but the European Central Bank has a lot on its plate at its October meeting. Quantitative Tightening talks are premature but it will seek to mop up bank liquidity. Rates, sovereign and money market spread upside dominates with the 10Y Bund set to test 2.5%. None of this should be enough to support the EUR President of the European Central Bank (ECB) Christine Lagarde Source: Shutterstock Too optimistic growth forecast no obstacle to a 75bp hike When the ECB meets again next week, it looks as if the entire Governing Council could start humming the old Depeche Mode song “I just can’t get enough” as a choir. The hawks have clearly convinced the few doves left of the necessity to go big on rate hikes again. Contrary to the run-ups to the July and September meetings, there hasn’t been any publicly debated controversy on the size of the rate hike. In fact, ECB President Christine Lagarde seems to have succeeded in disciplining a sometimes very heterogeneously vocal club. The hawks have clearly convinced the few doves left of the necessity to go big on rate hikes again The economic backdrop of next week’s meeting has hardly changed from September. Confidence indicators have continued to drop, while hard data points at a very mild contraction of the eurozone economy in the third quarter. If anything, the ECB’s September growth projections that looked already very optimistic six weeks ago have become even less likely. Needless to say that the outlook for the eurozone economy is surrounded by an extremely high degree of uncertainty. The precise pass-through of higher energy and commodity prices on growth and inflation and the precise fiscal policy reaction are crucial but also very unclear determinants of eurozone growth and inflation in the coming months. A lot on the ECB's plate besides hikes At the current juncture, the ECB has turned a blind eye on recession risks but is highly determined to bring down inflation and inflation expectations. To this end, it is hard to see how the ECB cannot move again by 75bp at next week’s meeting. As the 75bp rate hike looks like a done deal, all eyes will also be on other, more open, issues: excess liquidity, quantitative tightening and the terminal interest rate. As regards excess liquidity, this seems to be the most pressing topic for the ECB and a solution could already be announced next week. Basically there are two possible options: reinstating a tiering multiplier or an ex post change of the terms of the targeted longer-term refinancing operations (TLTROs) in order to trigger early repayments. We think that reinstating a tiering multiplier would be the easiest option. Changing the TLTRO terms could hit the ECB’s credibility and would lead to reluctance of banks to ever make use of the TLTROs in the future again. As regards quantitative tightening, we think that markets have got ahead of themselves. Even if the discussion might have started at the ECB, with current financial stability risks, the recent UK experience and a very uncertain macro outlook, QT is still some way out. Christine Lagarde mentioned several times that interest rates would first have to be brought to their normal or neutral levels before any QT could start. Any QT would rather be an end to reinvestments than actively selling bonds. As we still see that end of the ECB’s rate hike cycle in the first quarter of next year, a gradual phasing out of the reinvestments under the Asset Purchase Programme (APP) could start in Spring 2023, at the earliest. As regards the level of the terminal rate, French central bank governor Francois Villeroy de Galhau said in an interview with the Financial Times that the ECB could “go quickly” to a deposit rate of 2% by year-end. ECB chief economist Philip Lane made similar comments, indicating that the ECB currently sees the neutral interest rate slightly above the common range of between 1% and 2%. We don’t expect a clear communication on where the terminal interest rate could be but see a growing consensus at the ECB that at least the neutral rate is currently a deposit rate of around 2%. This fits into our ECB call of another 50bp rate hike in December and 25bp in February before pausing as there is a high likelihood that already at the December meeting the ECB’s inflation forecasts for 2024 and 2025 will point to a return to price stability. Interestingly, since the start of the year, the ECB surprised to the hawkish side at every single meeting. Next week’s meeting could be the first one without such a surprise as the ECB has finally managed to guide market expectations. A 75bp rate hike looks like a done deal and the reinstatement of a tiering multiplier could be the first answer to tackle excess liquidity. The ECB can simply not get enough of hiking rates aggressively. 10Y Bund and swap rates won't turn before inflation starts declining Source: Refinitiv, ING Rates: upside risk dominates for now High rates volatility, and the underlying uncertainty about the growth and inflation outlooks, don’t allow investors to focus on the long-term picture. We think there is sympathy with the view that the ECB’s hiking cycle will be stopped in its tracks by the looming recession, we doubt many market participants are able to position for it. All this is to say, near-term upside risk dominates and will dominate as long as investors haven’t seen tangible evidence of a downtrend in inflation. This puts 10Y Bund and EUR swaps within touching distance of 2.5% and 3.4% respectively before year-end. 10Y Bund and EUR swaps are within touching distance of 2.5% and 3.4% respectively before year-end With talk of QT, withdrawing bank liquidity, and front-loaded hikes, the ECB is piling risks on financial markets. The debacle in the gilt market in recent weeks should serve as a cautionary tale and is another reason for investor caution. Sovereign spreads have remained relatively stable in a context of elevated rates volatility and QT chatter, all this as Pandemic Emergency Purchase Programme (PEPP) bi-monthly data showed minimal market intervention in August and September. An accelerated timetable for QT would provide the impetus needed for the 10Y Italy-Germany spread to break above the fateful 250bp line. Even with all that’s going on in long-dated interest rates, the action will probably be in money markets after the meeting. Whatever option the ECB retains to cause a repayment of TLTRO loans, the result will at least be a reduction in liquidity and greater sensitivity of money market rates to credit and sovereign spreads. Tiering, the most likely of these options, could have longer-lasting effects, ranging from easing collateral pressure in the best of cases, to differentiated pass-through of interest rates if not designed properly. Money market and sovereign spreads aren't pricing ECB balance sheet reduction yet Source: Refinitiv, ING A strong euro is a welcome – but unlikely – development While it’s true that the ECB has consistently surprised on the hawkish side in the past few meetings, the positive impact on the euro have been null. As shown in the table below, EUR/USD mostly weakened in the six hours following the last five ECB announcements.   Source: ING, Refinitiv We doubt there will be much support to the euro after the October announcement, even if the ECB attaches a hawkish message to a 75bp rate hike, as: 1) EUR/USD beta to short-term rate differentials has remained low; 2) markets have remained structurally pessimistic on the eurozone’s domestic outlook despite the recent drop in gas prices; and 3) the Fed’s hawkishness continues to fuel a strong dollar. Attempts by the ECB to lift the euro through more tightening should still be unsuccessful in the near term and we continue to target 0.92 as a year-end value in EUR/USD, with any upside correction proving only temporary. Read this article on THINK TagsInterest Rates Foreign exchange ECB meeting Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Price May Fall Under 1.0660

USD/JPY Is Near Jumping Over 150.00. According To ING Economics, EUR/USD May Be Trading At 0.92 By The End Of 2022

ING Economics ING Economics 20.10.2022 09:47
Many parts of the FX market are starting to see the emergence of trading ranges - although Asian FX now looks like the weak link here. Despite this consolidation, FX traded volatility levels remain near their highs as the market awaits another 75bp hike from the Fed in early November. Still higher real rates in the US will leave the dollar supported on dips USD: Dollar correction has been underwhelming Earlier this week, we had felt that conditions were building for a dollar correction - or at least for a recovery in the battered energy importers in Europe and Asia. That correction has certainly not been forthcoming in Asia, where large parts of the region have fallen to new lows against the dollar. USD/JPY is on the verge of breaking 150 - despite the threats of renewed BoJ FX intervention - and USD/CNH traded as high as 7.28 before reversing course in early Europe on reports that China might soften its quarantine restrictions for inbound travel. Keeping the dollar bid through all this has been the continued grind higher in US real rates, where the 10-year rate last night closed at a new cycle high of 1.72% - the highest level since 2009. Prospects of more restrictive US monetary conditions remain a key factor driving the dollar higher and judging from price action this week, it is going to take a lot to conclude that the Fed tightening cycle is over. On that subject, last night's release of the Fed's Beige Book  (prepared for the Fed's 2 November meeting) certainly showed no widespread decline in activity or softening in labour markets or pricing power that would merit a change in Fed tone. That leaves the dollar at its highs in Asia and about 1.5% off its highs on a trade-weighted basis. Importantly, one week traded volatility for G10 FX pairs remains elevated (e.g. 13.5% for EUR/USD and 16-18% for the commodity pairs) and warns that the dollar could easily grind back to its highs. We do not see any major market drivers today (though USD/JPY breaking 150 could elicit quite a few headlines and probably some more FX intervention). Certainly, some of the softer US housing data already seen this week has failed to dent expectations for the Fed tightening cycle. And today's US data set (existing home sales and jobless claims) looks unlikely to move the needle either. DXY to trade a 112-113 range. Chris Turner EUR: Lower gas prices have failed to provide much of a boost Earlier this week, we had felt that the sharp fall in European natural gas prices could give the euro a boost. After all, the spike in gas prices in August had weighed heavily on European FX. EUR/USD, so far anyway, has failed to enjoy much of a recovery - probably because US real rates have still pushed higher throughout. We can therefore conclude that EUR/USD price action has been poor. As such, 0.9850/0.9870 resistance may continue to hold any uptick and prevent a move closer to big channel resistance at 0.9970. Separately, we have just released our preview of next week's European Central Bank meeting.  A 75bp hike looks like a done deal and, as Francesco Pesole notes, we doubt the euro can get much joy even if the ECB threatens even more hawkish policy. 0.92 remains our year-end target for EUR/USD. Chris Turner GBP/USD: No margin for error We titled this month's FX Talking update, 'No margin for error', in order to highlight that very restrictive Fed policy created a very difficult environment for policymakers. Central bankers as far afield as Hungary and Chile had seen their currencies punished on views that they may have ended their tightening cycles too early. Of course, when it comes to policy errors, the current UK government leads the pack and despite the best efforts of new Chancellor Jeremy Hunt, the UK is struggling to regain lost fiscal credibility. The UK's five-year sovereign CDS is still trading above 40bp compared to levels nearer 25bp when PM Liz Truss took charge. Political infighting and the uncertainty of policy continue to demand a risk premium for sterling, where GBP/USD could easily slip back to the bottom end of its wide 1.10-1.15 range. The wild card is what happens to the top job and whether the re-emergence of former Chancellor Rishi Sunak would represent a steadying of the ship or merely split the Conservative party asunder. One can understand why foreign investors will want to steer clear of sterling until the political environment becomes a lot clearer. Chris Turner CEE: Lower gas prices driving FX to stronger levels We have a heavy economic calendar for today with data on the labour market, industry and PPI in Poland as well as bond auctions across the CEE region. Industrial data indicates that output started expanding again in 3Q, after declining in 2Q. This does not confirm the sharp deterioration in industrial conditions painted by the nose-diving manufacturing PMI. But still, annual growth moderated to single-digit levels in September in our view. On the FX side, CEE continues to rally driven by lower gas prices. For now, EU storage continues to increase with the latest numbers from Gas Infrastructure Europe showing storage is more than 92% full. However, with the heating season still ahead of us, it is important that the market doesn't get too complacent about the supply/demand picture in the near term. We should hear more from the European Commission in the next two days on price caps, which should be a key message for gas prices and CEE FX. However, in addition to lower gas prices, we see rising interest rate differentials across the region. In Hungary, we are at a new all-time high after Friday's NBH emergency rate hike and in Poland we are at the highest levels since early September. With EUR/USD above recent lows, we thus see favourable conditions for CEE to continue to rally, driven by further gas price declines if the European Commission approves the proposed measures. We thus see a good chance for the Hungarian forint to erase last week's losses and return below 410 EUR/HUF and the Polish zloty to move below 4.780 EUR/PLN. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
China: PMI positively surprises the market

People's Bank of China Loan Prime Rate Stays Unchanged | A Softer Labour Market In Australia |Eyes On The US - Philly Fed Manufacturing Index

Kamila Szypuła Kamila Szypuła 20.10.2022 10:56
This morning, reports from Asia and the Pacific appeared. Traders also are now looking at macro data from the US - Philly Fed Manufacturing Index, the usual weekly data on initial unemployment claims, and data on existing home sales. Japanese Trade Balance (Sep) Japan provided data on exports and imports, and thus on its balance sheet, at the start of the day. The current reading is positive and shows an improvement in the trading result. The current reading is higher than the pronosed -2.167.4B and is at the level of -2.094.0B. For more than a year, Japan has been importing more than exporting, and since May the situation has worsened significantly. The balance then decreased from the level of -842.8B to the level of -2,384.7B. In the following months, the result was above the level of 1,000.0B. This situation is unfavorable for the country, so the current positive reading has a significant impact on the Japanese currency (JPY). Source: investing.com This positive trade result was largely influenced by the positive export performance. The published report shows that exports increased from 22% to 28.9%. He was taller than expected. This is the lowest result during the year. Source: investing.com Australia labor maket reports Australia today presented the result on the appearance of the labor market. The number of employees and the unemployment rate are instances of the country's conditions in this sector. Despite a rebound from the negative area in the previous reading, the number of people employed in September fell to 0.9K. The index scores for the year are generally in a downward trend. The decline will begin in the first half of the year, and the lowest level was in April at 4.0K. It then doubled and the annual peak was at 88.4K. The unexpected drop below zero occurred in the month following the highest score. Therefore, the positive reading from the previous period was significant for the economy. The current reading may weaken not only the economy but also the Australian dolar (AUD). Source: investing.com People's Bank of China Loan Prime Rate The positive news for the Australian labor market is that the unemployment rate remains at 3.5%. Another reading showed that this indicator holds up once again. People's Bank of China Loan Prime Rate will remain at 3.65% for the third time. EU Leaders Summit The most important event of the day for europe is Leaders Summit . The Euro Summit brings together the heads of state or government of the euro area countries, the Euro Summit President and the President of the European Commission. This meetings provide strategic guidelines on euro area economic policy. The comments made at this meeting may give a signal about future decisions, which at the moment are very important not only for the economy but also for the market. US Initial Jobless Claims Every weekly report on the number of individuals who filed for unemployment insurance for the first time during the past week will appear at 14:30 CET. Another increase is expected. The projected number of applications is at the level of 230K. This means that the indicator will be in an uptrend for the second week in a row. Philadelphia Fed Manufacturing Index The Philadelphia Federal Reserve Manufacturing Index rates the relative level of general business conditions in Philadelphia. The last picture of conditions is negative. It has been at a very low level since May, falling below zero levels. The latest reading was at -9.9, expected to rise to -5.0. This is a small but important improvement in conditions. The general appearance is negative. US Existing Home Sales Another important report for the US market is the change in the annualized number of existing residential buildings that were sold during the previous month. The outlook for this indicator is pessimistic. The number is expected to drop from 4.80M to 4.70M. Despite the economic situation, the index remained above 5.0M for a significant part of this year. The first drop below this level took place in July (4.81M). In August, it fell slightly to the level of 4.80M. Another decline may signal a deepening of the downward trend. This means that home sales deteriorate significantly. Source: investing.com Summery 1:50 CET Japan Exports (YoY) (Sep) 1:50 CET Japan Trade Balance (Sep) 2:30 CET Australia Employment Change (Sep) 2:30 CET Australia Unemployment Rate (Sep) 3:15 CET PBoC Loan Prime Rate 12:00 CET EU Leaders Summit 14:30 CET US Initial Jobless Claims 14:30 CET Philadelphia Fed Manufacturing Index (Oct) 16:00 CET US Existing Home Sales (Sep) Source: https://www.investing.com/economic-calendar/
Bank Of England Will Probably Be Unable To Avoid A Significant Easing Of Policy

Liz Truss (UK Prime Minister) In Deep Trouble | Procter & Gamble And Tesla Did Better Than Expected | Nestle Reported Its Strongest Sales Growth

Swissquote Bank Swissquote Bank 20.10.2022 10:53
The market mood was rather bearish yesterday, as the major US indices gave back a part of the early week gains. The S&P500 slid 0.67%, Nasdaq gave back 0.85%, and the Dow Jones eased 0.33%. Mixed earnings didn’t really help improve sentiment. One of the biggest gainers was Netflix which jumped 13%, but other FANG stocks, or MAMAA stocks did poorly on hawkish Federal Reserve (Fed) expectations. Better than expected Procter & Gamble did better than the earnings and revenue expectations, Nestle reported its strongest 9-month sales growth in 14 years, IBM beat analyst expectations, and boosted its full year profit forecast, and Tesla announced a better-than-expected earnings per share, but slightly missed on revenue expectations. Tesla shares slipped more than 6% in the afterhours trading. Philip Morris and Dow are due to announce earnings today, American Express and Barclay on Friday. Crude Oil In energy, the barrel of American crude rebounded yesterday, after falling toward $82 earlier this week. Politics In politics, Liz Truss is really in a hot seat, as the chaos among the Tories got worse yesterday, after Home Secretary Braverman got fired for sharing confidential information. Forex Market In the FX, Cable continued falling, the EURUSD remains sold below the 50-DMA and the Japanese yen continues diving against the US dollar. The situation of turkey In central banks, Turkey is expected to cut its policy rate by another 100bp to 11%, which would push the Turkish inflation-adjusted rate down to -71.5%. But tell that to Mr. Erdogan! Watch the full episode to find out more! 0:00 Intro 0:33 Market update 2:08 Mixed earnings: Tesla, Nestle, P&G, IBM 3:48 Growing EV competition 5:05 US crude rebounds, Exxon revised to Buy at Jefferies 5:52 ASML reports strong results, jumps 6% 7:06 Liz Truss in deep trouble 8:59 FX update: USDJPY tests 150 resistance, Turkey to cut Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Netflix #Tesla #Nestle #P&G #IBM #ASLM #earnings #hawkish #Fed #expectations #USD #EUR #JPY #GBP #TRY #gilt #sovereign #crisis #Bailey #BoE #Liz #Truss #Jeremy #crude #oil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH      
CEEMEA FX Outlook 2023: The Situation Remains Fragile

It Is Expected That Rate Of The EUR/HUF Pair And The EUR/PLN Pair Will Drop

TeleTrade Comments TeleTrade Comments 20.10.2022 12:18
CEE continues to rally driven by lower gas prices. Economists at ING expect EUR/HUF to return to sub-410 levels while EUR/PLN is set to slip back below 4.78. Favourable conditions for CEE to continue to rally “In addition to lower gas prices, we see rising interest rate differentials across the region. In Hungary, we are at a new all-time high after Friday's NBH emergency rate hike and in Poland we are at the highest levels since early September.” “With EUR/USD above recent lows, we thus see favourable conditions for CEE to continue to rally, driven by further gas price declines if the European Commission approves the proposed measures.” “We see a good chance for the Hungarian forint to erase last week's losses and return below 410 EUR/HUF and the Polish zloty to move below 4.780 EUR/PLN.”  
German industry rebounds in January

Europe: Germany Preparing To Accommodate Refugees

Center Of Eastern Studies Center Of Eastern Studies 20.10.2022 15:17
On 11 October, German Interior Minister Nancy Faeser (SPD), in a meeting with representatives of the states and local authorities, announced support for municipalities to accommodate more refugees during the winter. The aid will consist of increasing the number of places made available to them by the federal offices – up to a total of 68,000 (up from the 64,000 so far guaranteed in 300 federal properties). In addition, the German government will extend the random checks (introduced in 2015) at the border with Austria and intensify those along the border with the Czech Republic. The meeting was called in response to appeals from local authorities, who have been warning for several weeks that the situation in numerous refugee centres is making it impossible to take in any more people. Local authorities are therefore renting additional spaces such as sports halls, hotels and market facilities, which is reminiscent of the actions of 2015 and 2016. In a letter to Chancellor Olaf Scholz (SPD) at the beginning of October, municipal unions demanded that the influx of asylum seekers be restricted, indicating that they would not be able to cope with another refugee crisis similar to the one in 2015. Some municipalities, especially in eastern Germany (including Dresden, Gera, Halle), have stopped accepting refugees, including from Ukraine. Read full article on osw.waw.pl
The EUR/USD Pair Chance For The Further Downside Movement

Kenny Fisher (Oanda) Talks Euro To US Dollar - 20/10/22

Kenny Fisher Kenny Fisher 20.10.2022 23:11
EUR/USD has posted considerable gains and is back above the 0.98 level. In the North American session, EUR/USD is trading at 0.9828, up 0.57%. US housing, manufacturing data decline As the Federal Reserve continues to deliver outsized interest rate hikes, the financial markets are closely monitoring US economic data, looking for signs of a slowdown. Today’s releases were softer than expected, bolstering the sentiment that the economy is losing steam. The Philly Fed Manufacturing Index came in at -8.7 in September, its fourth decline in the past five months. US Existing Home Sales fell to 4.71 million in September, down from 4.78 million in August and the eighth straight decline. The Federal Reserve meets on November 2nd and another large rate hike is expected. The Fed has pledged to keep its pedal on the gas until inflation is unmistakably on its way down, but inflation has been stubbornly persistent. The Fed’s beige book, released on Wednesday, indicated that inflationary pressures are easing, a possible sign that a peak may not be far off. In the eurozone, the final estimate for September inflation was 9.9%, a drop lower than the initial estimate of 10.0%. Still, this marks a sharp acceleration from the August reading of 9.1%. The main driver of soaring inflation remains energy prices, which are unlikely to drop substantially anytime soon, with winter just around the corner. The ECB meets on October 27th and is expected to deliver another oversized rate hike, most likely 0.75%, at the meeting. The ECB only began tightening in July and is lagging behind most other central banks, with a benchmark rate of just 1.25%. The US/Eurozone rate differential has weighed on EUR/USD, which has plunged about 8% since June 1st. With the Fed remaining aggressive and no end in sight for the war in Ukraine, the outlook for the euro is gloomy. EUR/USD Technical EUR/USD is testing resistance at 0.9814. Next, there is resistance at 0.9900 There is support at 0.9723 and 0.9637 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro gains ground on soft US data - MarketPulseMarketPulse
The Outlook Of EUR/USD Pair For Long And Short Position

The EUR/USD Pair: The Price Again Rushed To The Nearest Support

InstaForex Analysis InstaForex Analysis 21.10.2022 08:11
The euro bulls did not want to give up easily yesterday - the trading range was 92 points and the day closed with a white candle of 15 points. On the technical side, the price took advantage of the confusion of the Marlin Oscillator at the zero neutral line. But already in the Pacific session, yesterday's growth was blocked, the price again rushed to the nearest support of 0.9724, the Marlin Oscillator is pushing through the support of this zero line. A decline below 0.9724 opens the next target at 0.9520. On the four-hour chart, the price makes a second attack on the support of the MACD line. The price also moved under the balance indicator line, which shows us the shift in the players' mood to sell. The Marlin Oscillator is moving deeper into the downward trend.   Relevance up to 04:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324919
At The Close On The New York Stock Exchange Indices Closed Mixed

The NASDAQ Composite Was Down 0.61% And The Biggest Losers Were Talaris Therapeutics Inc

InstaForex Analysis InstaForex Analysis 21.10.2022 08:14
At the close of the New York Stock Exchange, the Dow Jones was down 0.30%, the S&P 500 was down 0.80% and the NASDAQ Composite was down 0.61%.  The Dow Jones index The leading gainer among the components of the Dow Jones index today was International Business Machines, which gained 5.79 points (4.73%) to close at 128.30. Salesforce Inc rose 3.83 points or 2.49% to close at 157.50. Verizon Communications Inc rose 0.43 points or 1.18% to close at 37.00. The biggest losers were Home Depot Inc, which shed 6.03 points or 2.19% to end the session at 269.46. Caterpillar Inc was up 2.10% or 3.87 points to close at 180.54 while Nike Inc was down 1.96% or 1.74 points to end at 86.83. .  The S&P 500 results Leading gainers among the S&P 500 components in today's trading were Lam Research Corp, which rose 7.81% to 355.87, AT&T Inc, which gained 7.72% to close at 16.74, and shares of Quest Diagnostics Incorporated, which rose 6.32% to close the session at 134.66. The biggest losers were Allstate Corp, which shed 12.90% to close at 117.71. Shares of Union Pacific Corporation shed 6.80% to end the session at 186.45. Quotes of Tesla Inc decreased in price by 6.65% to 207.28. The components of the NASDAQ Composite  Leading gainers among the components of the NASDAQ Composite in today's trading were Nextplay Technologies Inc, which rose 107.31% to hit 0.41, Cabaletta Bio Inc, which gained 50.77% to close at 1.96, and also shares of Save Foods Inc, which rose 31.33% to end the session at 1.97. The biggest losers were Talaris Therapeutics Inc, which shed 43.39% to close at 1.37. Shares of LMF Acquisition Opportunities Inc shed 34.55% to end the session at 6.82. Quotes of Gaucho Group Holdings Inc decreased in price by 30.40% to 0.21. How many fall and rise On the New York Stock Exchange, the number of securities that fell in price (2067) exceeded the number of those that closed in positive territory (1018), while quotes of 114 shares remained virtually unchanged. On the NASDAQ stock exchange, 2037 stocks fell, 1694 rose, and 240 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.54% to 29.98. Commodities Gold futures for December delivery lost 0.17%, or 2.85, to hit $1.00 a troy ounce. In other commodities, WTI crude for December delivery rose 0.50%, or 0.42, to $84.94 a barrel. Futures for Brent crude for December delivery rose 0.25%, or 0.23, to $92.64 a barrel. EUR/USD Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.12% to 0.98, while USD/JPY rallied 0.19% to hit 150.18. Futures on the USD index fell 0.07% to 112.81.   Relevance up to 05:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/297723
PLN Soars to Record Highs Ahead of NBP Decision

The Growth Of The Euro (EUR) And The Pound (GBP) Was Associated With The Resignation Of Liz Truss

InstaForex Analysis InstaForex Analysis 21.10.2022 08:20
EUR/USD 5M The euro/dollar pair managed to rise and fall on Thursday. The most important thing: the price was between the levels of 0.9747 and 0.9844 all day, between which the lines of the Ichimoku indicator also lie. That is, we got an almost perfect flat. Those "flights" during the day that we observed were not provoked by macroeconomic statistics. Not a single important report was published in the European Union yesterday, and there were two absolutely secondary ones in America, the values of which were not "bad" to cause the dollar's fall. We can assume that the growth of the euro and the pound was associated with the resignation of Liz Truss, but how can you say that the departure from the post of head of state of Great Britain is good for the pound? And what does the euro have to do with it? Well, the fall in the afternoon could definitely not have been provoked by anything. Thus, we believe that yesterday's movements are purely technical and somewhat random. In regards to trading signals, everything was not very good. In fact, two signals were generated. In both cases, the price bounced from the 0.9834-0.9844 area. In the first case, 45 points to the downside, in the second - about 30. Thus, Stop Loss should have been set to breakeven for both short positions, at which both positions were closed. Of course, it was possible to close positions manually (since the target level of 0.9752 was never reached), however, the decline was not so great to do it. COT report: The euro Commitment of Traders (COT) reports for 2022 could be used as good examples. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again and the euro is still dropping. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long non-commercial positions dropped by 3,200, whereas the number of short non-commercial positions jumped by 2,900. As a result, the net position declined by 6,100 contracts. However, this fact will hardly influence the market since the euro is still hovering near its multi-year lows. Now, professional traders still prefer the greenback. The number of long contracts exceeds the number of short contracts by 38,000. Thus, the net position of non-commercial traders may grow further without affecting the market. Although the total number of buy and sell positions is approximately the same, the euro continues falling. Thus, we need to wait for changes in the geopolitical and/or fundamental background to influence the foreign exchange market. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 21. Every day is the same! The market is consolidating around the 98th level. Overview of the GBP/USD pair. October 21.The "pendulum" is slowing down, the political absurdity in the UK is gaining momentum. Forecast and trading signals for GBP/USD on October 21. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The downward trend still cannot be considered completely reversed on the one-hour chart, despite the good growth over the past week. The euro cannot consolidate above the level of 0.9844 and above the Senkou Span B line, and now a flat may also begin. All recent movements were close to 20-year lows, from which the pair cannot be "peeled off" in any way. On Friday, trading could be performed at the following levels: - 0.9553, 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as the Senkou Span B (0.9834) and Kijun-sen lines (0.9791). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also additional support and resistance levels, but trading signals are not formed near them. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events and reports are scheduled again in the European Union and the United States. Thus, traders will have nothing to react to during the day, and the pair may remain between the levels of 0.9747 and 0.9844. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 02:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324907
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

Standard & Poor 500 Declined By Almost 1%, Nasdaq Went Down By Over 0.5%

ING Economics ING Economics 21.10.2022 10:00
JPY makes it to 150 with little sign of the Bank of Japan   Source: shutterstock Macro outlook Global Markets: Down we go again. Thursday’s price action was similar to that on Wednesday – early gains, followed by sustained losses, though the losses were again fairly moderate. The S&P500 dropped 0.8%, and the NASDAQ fell 0.61%. Equity futures suggest the selling will continue today. The upwards march in US Treasury yields also continued yesterday. 2Y yields rose 5.4bp to 4.61%, while 10Y yields rose 9.5bp taking them to 4.15%. Unlike Wednesday, when increases in bond yields came despite hints from the Fed's James Bullard and Neel Kashkari in the direction of a rate pause or pivot, there were no such calming voices yesterday. The main Fed comment was from  Patrick Harker, who said that he expected Fed funds rates to be “well above 4%” by the end of this year. The EUR is now down to 0.978, though, given the backdrop, that isn’t bad, and leaves it roughly unchanged from this time yesterday. The AUD is also little changed at 0.6270, though it was up in the mid 63s at one point yesterday despite mediocre labour market data. And it is a similar story for the GBP, which is at 1.1221, treading water while a new Prime Minister is chosen. It took a while, but the JPY is now above 150. There has been no sign of the BoJ apart from a rate check, and maybe the fact that the JPY crept across the line was enough to curb any reaction. If so, onwards and upwards still seems the most likely path for the JPY to follow. Asian FX had a mixed day, with the INR making small gains along with the CNY, but the IDR and KRW at the other end of the spectrum, making losses of about 0.4-0.5% on the day, and in spite of BI’s 0.5% “pre-emptive” rate hike and talk of IDR support.   G-7 Macro: It’s all tranquil on the macro front today, and there wasn’t a whole lot going on yesterday either. US September existing home sales were weak, but not as bad as had been forecast (-1.5%MoM vs -2.1% consensus) and initial jobless claims actually fell from the previous week. China: According to media reports, China is discussing whether to shorten hotel quarantine and replace it with a longer home quarantine, with the entire quarantine period possibly being reduced from 10 days to 7 days. Chinese officials have not confirmed the news. And if there is such a debate, it will be useful to know whether such changes would also apply to foreigners entering mainland China, or only to residents of Mainland China. Even if it applies to everyone, we believe that this relaxation will not be enough to attract many foreigners to enter the country as the quarantine period is still long. However, once the reduction in the number of quarantine days begins, the likelihood of further reductions will grow, which bodes well for China's growth next year. Japan: Consumer price inflation stayed at 3.0% YoY in September for the second month (vs 2.9% market consensus) while core inflation excluding fresh food hit 3.0% YoY in September (vs 2.8% in August, 3.0% market consensus). This is the first time the core inflation rate has reached 3% since 1991. We see some price increases related to the economic reopening, such as apparel (1.9%) and also entertainment (2.2%). While fresh food inflation (1.9%YoY) stabilized quite sharply from the previous month (8.1%).  Inflation pressures are broadening beyond energy, but the Bank of Japan will probably keep its easing stance until they see some signs of wage growth. We expect inflation to climb further until the year-end, but the government’s travel subsidy program may lower some travel-related prices in the coming months. South Korea: Early October trade data raises concerns about Korea’s sluggish exports, mainly in the semiconductor sector. 20-business day exports declined -5.5% YoY. Chip exports were down -12.8%, while automobiles moved up 32.1%. By destination, exports to the US rose 6.3% but exports to China fell -16.3%. The sluggish exports to China are probably due to weak chip exports. We maintain our view that 4QGDP will likely contract as exports are expected to weaken further during the quarter. The September PPI release shows that pipeline prices are slowing from their recent peak in June. The headline PPI inflation rate decelerated slightly to 8.0% YoY in September (vs 8.2% in August). Agricultural product prices accelerated due to floods and typhoons in the past month, but service prices such as transportation and financial services fell. However, the renewed weakness of the KRW and the recent rebound in global oil prices remain as upside risks in the short term. Indonesia: Central bank Governor Warjiyo indicated that Bank Indonesia (BI) would want to continue to "control the exchange rate" and that recent IDR weakness was not reflective of Indonesia's economic fundamentals.  We expect BI to step up intervention to limit imported inflation and to shore up the currency which has slipped 2.2% month-to-date.      What to look out for: Fed speakers slated for tonight New Zealand trade balance (21 October) Japan CPI inflation (21 October) South Korea advance trade data (21 October) Fed’s Williams and Evans speak (21 October) Read this article on THINK TagsAsia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Forex: US dollar against Japanese yen amid volatility and macroeconomics

US Dollar Index - ING Economics keeps their forecast. According to them DXY may near 114/115

ING Economics ING Economics 21.10.2022 10:13
The European Union decides what's next in the gas story. The European Central Bank is entering a blackout period ahead of its 27 October meeting. FX interventions are back on the table in Japan. Political uncertainty in the UK has found a new shape. The Czech Republic's credit rating is in jeopardy  USD: Strong dollar drivers intact The resignation of UK prime minister Liz Truss reverberated across FX in a largely risk-positive way yesterday, with high-beta currencies (like AUD and NZD) ultimately rising more than the directly impacted GBP or the neighbouring EUR. It’s still quite likely that the upcoming period of fresh political uncertainty in the UK will continue to drive a portion of global risk sentiment. Yesterday’s small correction in the dollar proved very short-lived. This is not surprising, as most drivers of dollar strength have indeed remained intact. Markets have pushed their peak Fed rate expectations to the 5.0% mark, and UST 2-year yields are inching closer to 4.60%. This rate environment continues to shed doubts about the sustainability of any rally in equities, and chances that the dollar will receive more safe-haven flows are elevated. The rate environment is also what's driven USD/JPY above 150.00. Japanese authorities are indeed in an uneasy position. We can easily see their interest in not drawing a line in the sand at 150.00 given the very elevated market volatility, but allowing the yen to break higher risks generating those sharp sell-offs in the currency that Tokyo wanted to curb in the first place. Unless the Bank of Japan shifts to a less dovish stance (no hints of this happening so far), FX interventions remain the most viable option. The US calendar is very light data-wise today and two Fed members – John Williams and Charles Evans – are due to speak. For the moment, we see no reasons to change our call for a return of DXY to the late-September 114/115 highs over the coming weeks. Francesco Pesole EUR: Still no benefits from falling gas prices The ECB has entered its quiet period ahead of the 27 October policy meeting which – as discussed in our ECB preview – should bring another 75bp hike but likely very little support to the euro. On the data side, markets will monitor consumer confidence data for September today, with consensus centred around another drop (to -30.0) from what are already all-time lows in the series. Falling consumer confidence is hardly surprising, but the fact that the euro is drawing very little benefits from the recent drop in gas prices is likely a testament to how markets are clearly looking well beyond short-term dynamics and may actually be growing increasingly concerned about Europe’s energy supply for next year, not just this winter. It looks like 0.9800 is working as an anchor from EUR/USD at the moment, and this could continue to be the case today unless we receive some truly exciting news from the ongoing EU summit, which has so far only displayed lingering divergence in EU members’ views on energy price caps. We retain, however, a bearish bias on EUR/USD and expect a drop below 0.9500 by year-end. Francesco Pesole GBP: Never a dull moment The simmering uncertainty over which candidate will now replace the British Prime Minister, Liz Truss has probably prevented sterling from moving too far out of this week’s trading range. As Antoine Bouvet highlighted in our joint note yesterday, the Bank of England may choose the lesser of two evils by deciding to hike less than the market expects – certainly sterling seemed to soften on remarks to that effect from the BoE’s Broadbent yesterday. As we concluded in that article, our view that: a) UK politicians will struggle to quickly reclaim all of the lost fiscal credibility and b) US real interest rates look set to push even higher this year meaning that GBP/USD will likely struggle to break above the 1.15 area over coming weeks. Equally 0.8600 may well prove the lower end of the EUR/GBP trading range over coming weeks and maybe months too. Chris Turner CEE: Czech Republic rating is at risk Today in the calendar we get the second round of monthly data on retail sales and construction in Poland. In our view, in September sales expanded by 4.8% year-on-year, which is a similar pace as in August. The structure of sales is projected to remain similar, with poor sales of durable goods and solid sales of necessities (food, clothing). In the Czech Republic, the Fitch rating review will be published later today, which we believe will be the most crucial one this year. Fitch has proven to be the most aggressive rating agency in the current energy crisis and we see a high risk of a one-notch downgrade for the Czech Republic. The outlook was downgraded from stable to negative back in May and since then most macro, fiscal and energy assumptions have deteriorated. The FX market continues this week's story – low gas prices, rising interest rate differentials across the region and friendly EUR/USD levels. We should hear more today from the European Commission on what the next steps or measures will be on the energy crisis front, which should be positively received, and CEE FX should continue the current trend. The Polish zloty and Hungarian forint hit our targets yesterday and we see room to go lower today, closer to 4.750 EUR/PLN and 405 EUR/HUF. If Fitch downgrades its Czech Republic rating, the impact on the koruna can be expected on Monday. Until then, we may see a move below 24.50 EUR/CZK. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Euro to US dollar - Ichimoku cloud analysis - 21/11/22

The week ahead looks promising. ECB Decides on interest rate, ING Economics expects a 75bp rate hike

ING Economics ING Economics 21.10.2022 15:06
All eyes will be on the European Central Bank meeting next week. We think a 75bp hike looks like a done deal. The PMI survey on Monday will also be closely watched, providing clues on whether the eurozone economy has contracted even further. For the Bank of Canada, we expect a similar 75bp rate hike, given the upside surprise in inflation In this article US: The Fed cannot slow the pace of hikes yet Canada: a 75bp hike is the most likely outcome UK: Markets looking for clarity on fiscal plans and government stability Eurozone: ECB to hike by 75bp again amid ongoing inflation concern Source: Shutterstock   US: The Fed cannot slow the pace of hikes yet There are lots of important numbers out for the US next week, but none are likely to change the market's forecast for a 75bp interest rate hike on 2 November. 3Q GDP is likely to show positive growth after the “technical” recession experienced in the first half of the year. Those two consecutive quarters of negative growth were primarily caused by volatility in trade and inventories, which should both contribute positively to the 3Q data. Consumer spending is under pressure though while residential investment will be a major drag on growth. We are forecasting a sub-consensus 1.7% annualised rate of GDP growth. We will also get the Fed’s favoured measure of inflation, the core personal consumer expenditure deflator. This is expected to broadly match what happened to core CPI so we look for the annual rate to rise to 5.2% from 4.9%. With the economy growing and inflation heading in the wrong direction, the Fed cannot slow the pace of hikes just yet. Also, look out for durable goods orders – Boeing had a decent month so there should be a rise in the headline rate although ex-transportation, orders will likely be softer. We should also pay close attention to consumer confidence and house prices. The surge in mortgage rates and collapse in mortgage applications for home purchases has resulted in falling home sales. With housing supply also on the rise, we expect to see prices fall for a second month in a row. Over the longer term, this should help to get broader inflation measures lower given the relationship with the rental components that go into the CPI. Canada: a 75bp hike is the most likely outcome In Canada, the central bank is under pressure to hike rates a further 75bp given the upside surprise in inflation. Job creation has also returned and consumer activity is holding up so we agree that 75bp is the most likely outcome having previously forecast a 50bp hike. UK: Markets looking for clarity on fiscal plans and government stability The ruling Conservative Party has said it will fast-track plans to get a new leader in place by next Friday - and potentially even by Monday if only one candidate makes it through the MP selection round. Candidates have until Monday at 2pm to clear the hurdle of 100 MP nominations to make it onto the ballot paper, before Conservative MPs vote on the outcome. With only a week to go until the Medium Term Fiscal Plan on 31 October, there's inevitably a question of whether this is enough time for a new prime minister to rubber stamp Chancellor Jeremy Hunt's plans for debt sustainability. Investors are - probably rightly - assuming that Hunt will remain in position under a new leader. But the bigger question is whether the Conservative Party can unite behind a new leader and whether a more stable political backdrop can emerge - because if it can't, then not only is there uncertainty surrounding future budget plans, but also whether we're moving closer to an early election. Eurozone: ECB to hike by 75bp again amid ongoing inflation concern The hawks have clearly convinced the few doves left of the necessity to go big on rate hikes again. Contrary to the run-up to the July and September meetings, there hasn’t been any publicly debated controversy on the size of the rate hike. In fact, European Central Bank President Christine Lagarde seems to have succeeded in disciplining a sometimes very heterogeneously vocal club. To this end, it is hard to see how the ECB cannot move again by 75bp at next week’s meeting. As the 75bp rate hike looks like a done deal, all eyes will also be on other, more open, issues: excess liquidity, quantitative tightening and the terminal interest rate. Read more here. Besides the ECB, which will be the key focal point for eurozone investors, we’re looking at the survey gauges of the economy next week. The PMIs on Monday will be critical to determine whether the eurozone economy has slid further into contraction or whether an uptick has occurred. There is not much evidence on the latter in our view, but Monday will provide more clarity on how the eurozone economy is performing in October. Key events in developed markets next week Source: Refinitiv, ING This article is part of Our view on next week’s key events   View 3 articles TagsUS UK election Eurozone Canada Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

Europe Has Moved From The World's Largest Trade Surplus Bloc To A Deficit Bloc

Saxo Bank Saxo Bank 22.10.2022 08:13
Summary:  Barring a sudden resumption of Russian natural gas flows to Europe in the coming quarter, an economic winter is coming for Europe and the euro, as well as satellite currencies sterling and the Swedish krona. Despite the ECB and other central banks - with the extremely notable exception of the Bank of Japan - playing some catchup with the Fed in delivering policy tightening in Q3, the Fed remains the central bank that "rules them all". We will need to see the Fed easing again before we can be sure that the US dollar is finally set to roll over. USD: after the Fed tried to get cute on a policy deceleration, it found religion again.  The US dollar found a temporary peak in the wake of the June 16 FOMC press conference as the market figured that the first 0.75 percent hike since 1994 would prove a peak in Fed hawkishness for the cycle. For its part, the equity market bear market low of the cycle at the time of writing was posted on the day after that FOMC meeting. Risk sentiment found further fuel and the USD dipped slightly heading into the late July FOMC meeting as Powell offered insufficient pushback against the market, which was beginning to price that the Fed policy rate would peak by as early as December 2022 and begin rolling over in the first half of 2023. However, beginning in early August Fed members quickly moved to push back explicitly against the notion of forecasting any Fed easing with consistently hawkish rhetoric almost across the board. The USD rallied anew, even as a number of other central banks moved even more aggressively with their own rate tightening moves and guidance. The ECB even hiked 75 basis points at its September 8 meeting, the largest hike in the central bank’s history, with another 75 basis points priced for the October meeting. After the remarkable thaw in financial conditions since the June FOMC meeting, despite that meeting delivering the first “super-size” rate hike of 75 basis points, the Fed clearly decided that it had more to gain by maintaining a hawkish tone than in trying to guide for the possibility of any imminent policy pivot due to some abstract notion like the neutral rate. The Fed probably can see now that that it is easier to back down from accidents created by excessively tight policy than to risk aggravating inflation risks with easing financial conditions in the middle of a tightening cycle by trying to play cute with guidance. One factor that has added to the potential for a bounce-back in the US economy fairly deep into Q4 is the steep decline in petrol prices after their remarkable peak at record prices north of $5/gallon in early June. The decline to well below $4.00 already in August could have a significant real and psychological impact on the legendary US consumer and keep the economy and wage pressures humming a bit longer than expected for this cycle, requiring that the Fed maintain course and continue its attempt to achieve the full pace of quantitative tightening, promised to reach $95 billion in balance sheet reductions per month in September. Hence our Steen Jakobsen’s anticipation of “peak tightness” in the coming quarter. Tail risk alert for USD in Q4: the mid-term elections. The mid-terms are an important tail-risk event in Q4 for the longer-term outlook for likely US policy responses in the next recession or soft patch. The pundits and oddsmakers assure us that, while the Democrats are very likely to solidify their majority in the Senate, they are nearly certain to lose control of the House. That may well be, but the last two election cycles have taught us to treat election polls with more than a grain of salt, and two developments have dramatically raised the potential for surprises in our view: the Trump-packed US Supreme Court overturning of the Roe v. Wade case from the 1970s that guaranteed access to abortion services at a federal level, and a couple of special elections in Trump country in recent months falling to Democrats—particularly the election for Alaska’s US House representative in which the pro-Trump Sarah Palin lost to a Democrat. This was a state that voted for Trump in 2020 by a margin of 10 points and for the Republican House member by nine points over an independent challenger in the same election. With a deeply divided partisan political environment, the US is only able to make policy at the margin on the fiscal side when one party does not control both houses of Congress and the Presidency. There are important exceptions, including bipartisan issues like reducing supply chain vulnerabilities with China and limiting Chinese access to military and advanced technology. In any case, if the Democrats surprise and maintain control of the House, together with a stronger control of the Senate, it could completely flip the script on fiscal policy potential ahead of the 2024 US presidential election, generally increasing the risks of far higher inflationary outcomes. Had Biden enjoyed a mere seat or two more in the Senate over the last two years, his party might have passed a package some $2 trillion larger than what actually made it through in the so-called Inflation Reduction Act. Graphic: The jaws are widening perilously! The story since mid-2021 has been of a widening performance divergence between the soaring US dollar and weakening euro and even weaker JPY. Note that the indices are CPI-adjusted, and Japan’s retail CPI measures have likely been suppressed, meaning that the picture would look even worse than it does here. Something could give in Q4 on the Bank of Japan’s commitment to containing yields. Note that the euro weakness looks pedestrian in comparison, even after trading below parity at times in Q3. EUR, GBP and a winter of discontent. The euro fell to below parity against the US dollar on the intense and excessive pressure on inflation in the EU from soaring energy and power prices, which also presented risks to output volumes and had a seismic impact on external balances. Europe went from being the world’s largest surplus bloc on trade to a deficit bloc in a world heading into a slowdown and likely recession in Q4 and early next year.  Much has been made of the EU’s heroic efforts to build natural gas storage ahead of the heating season beginning in the autumn, but this will not cover the additional supply needed unless Russian gas flows resume over the winter—unless EU demand drops further. If Russian leader Putin, or anyone of his ilk, remains in power in Russia, the longer-term energy supply picture for Europe will remain difficult as the EU will have to continue bidding up for shipments of LNG in a tight global market. New sources of gas could be in the wings, possibly in the long run from Algeria and already in coming months from the newly-arrived-on-the-scene LNG from Mozambique. But the EU energy outlook will likely never again prove as bad as it does for the coming winter of discontent, so some major low in the euro may emerge in the coming quarter or early next year. The EU plans to cap prices may help nominal EU inflation readings to begin rolling over in coming months, but this won’t kill demand. Physical limits to natural gas supply, possibly aggravated by risks that French nuclear power is not fully back on line until late in the winter, might force power rationing and real GDP output drops. Europe will be hoping that a mild winter lies ahead, and daily and weekly weather forecasts will receive more attention than perhaps at any time in the continent’s history. Ditto for the UK with the cherry on top that the UK lacks strategic gas storage facilities even if it is scrambling on that front. Again: winter is coming and will continue to come every year, but the EU will move with existential haste to address its vulnerabilities.  The UK bears extra close watching as a country capable of a more nimble and forceful policy response than any other major country, given the combination of tremendous pressures on the UK economy from its external deficits and cost of living crisis on the one hand, and a new Prime Minister Liz Truss and her nothing-to-lose mentality on the other. Her instinct will be to move fast and move big to keep the lights on and to keep her country warm this winter for starters, but also to ensure that policy moves the UK away from its current predicament and vulnerabilities. The UK simply must find a new path toward balancing its external deficits and decreasing energy vulnerabilities if she is to enjoy more than a brief stint as PM. Her approach of populist price controls on the one hand together with tax cuts on the other are a risky gambit for sterling on the implications for the national deficit. Sterling may see an aggravated further drop this winter as long as energy prices remain divergently high for Europe (natural gas is the critical factor in particular). Further out, policy will have to show traction in attracting investment, bringing rising UK domestic energy output (UK shale gas potential unleashed?) and improving productivity to see sterling rising from the ashes. And for perspective, sterling isn’t even fully in the ashes yet anyway, as we note that in CPI-adjusted real-effective-exchange-rate terms, it is actually only mid-range since the 2016 Brexit referendum collapse. Continued tension among the Asian giants CNH and JPY: Q4 to deliver a big bang? We have highlighted the still very stretched CNYJPY exchange rate in both of the last two outlooks. The CNH has loosely tracked the USD higher, while the JPY has remained the weakling of G10 currencies on the Bank of Japan’s stick-in-the-mud refusal to shift to a tightening stance and away from its yield-curve-control policy. In Q3, the CNYJPY exchange rate reached new multi-decade highs well north of 20.00. Could Q4 finally be when something “breaks” here? On the CNY side of the equation (and closely linked, the tradeable offshore CNH), China might decide that it is simply no longer in its interest to maintain a strong currency, especially if commodity prices begin to fret at the economic outlook souring. But more likely, the capitulation could come from the Bank of Japan via a stronger JPY as discussed in our Q3 outlook. Significant further downside pressure on the yen may simply force the Bank of Japan to surrender after it held out so long in the hope of seeing wage gains rising sufficiently to suggest a sustainably positive inflation outlook. But there may also be a chicken-and-egg problem in the Bank of Japan’s measures of inflation and inflationary risks from here: the policy by Japan’s supermarket chains to keep food prices capped even as wholesale and import prices have soared, the latter aggravated by the tanking JPY. October 1st is meant to see a reset of retail prices for retail shoppers overnight, which could lead to soaring official inflation readings and a growing sense of popular outrage as the cost-of-living rises. Fiscal attempts to shield lower income households will do nothing for the JPY or alleviate the concern for medium-wage and higher income earners. Will Q4 finally be the quarter that sees the Kuroda BoJ surrender and shift its guidance, and at least shift the goal posts on yield-curve control? There is tremendous two-way volatility potential for JPY crosses, particularly if the USDJPY rips to new aggressive multi-decade highs before the BoJ finally then capitulates. The rest of G-10 FX. In this case, the “rest of G-10” would be the Swiss franc (CHF) and the “G-10 smalls” that include the AUD, CAD, NZD, SEK and NOK. Regarding CHF, with cost-of-living pressures at a maximum over the coming winter, the Swiss National Bank will be happy to continue its tightening policy and encouraging a stronger franc, which has helped materially in dampening inflation pressures for Switzerland. For the G-10 smalls, the “peak tightness” we anticipate in Q4 will likely not be kind to these less liquid currencies. For the Antipodeans AUD and NZD, we’re curious whether AUDNZD can break above the multi-year range capped by 1.1300 that stretches back over seven years, as we consider Australia’s formidable commodities portfolio and its newfound status as a current account surplus country while New Zealand is reliant on energy imports. New Zealand was also quick to tighten rates and is therefore likely at the leading edge of countries set to roll over into a slow-down and an eventual pause of its rate-tightening regime. In Europe, Norway will have to play ball to some degree with Europe’s move to cap energy prices after the country has reaped enormous windfall profits from soaring natural gas prices in particular. The Swedish krona looks cheap, but may need to see a major market bottom before its prospects can brighten sustainably, given its history as one of the more sensitive currencies to the economic outlook and risk sentiment.     Source: https://www.home.saxo/content/articles/quarterly-outlook/a-fed-thaw-needed-to-deliver-a-sustained-usd-turn-lower-04102022
Top 10 Stocks to Watch: August 2023 - BY: RYAN SULLIVAN

The First Month Of The Fourth Quarter (Q4) Can Be Ugly

Saxo Bank Saxo Bank 22.10.2022 08:19
Summary:  Equities and fixed income could face a tough Q4. Can US dollar positions provide some upside in the cold winter? US 10-year Treasury yields Things have not evolved as quickly as anticipated in my Q3 Outlook on US 10-year Treasury yields. However, the picture remains the same and is still very important to discuss.  A short recap: US 10-year Treasury yields broke a multi-decade-long downtrend with a confirmed uptrend when yields broke above 1.71 percent in January 2022, marking a new higher high. This was followed by a break of the multi-decade-long falling trend line in March.  In June yields broke above the 2018 peak at 3.26 percent and spiked at 3.50 percent, only to be hit by a correction.  That correction seems to be over, and US 10-year Treasury yields are likely set for higher levels. With just the psychological resistance at 4 percent, yields could very well reach the 1.382 Fibonacci projection at around 4.38 percent in Q4. However, there is no strong resistance until around 5.25 percent, which is around the pre-subprime peak between the 1.618 and the 1.764 Fibonacci projection levels from the 2018–2020 downtrend. S&P 500 was rejected at the medium-term falling trend line a few weeks ago just below the 0.618 Fibonacci retracement at 4,367 and just below the 55 Simple Moving Average, which is declining, indicating an underlying bearish sentiment.   Key resistance level is at 4,325. If S&P 500 closes above the falling trend line and above 4,325 the bearish picture has reversed, and the leading US index will push for levels around 4,600 and possibly all-time highs.  The trend is down on the medium term but bulls don’t give up without a fight. If they can’t hold S&P 500 above 3,886, US equities are likely in for a rough Q4. Depending on how the market reacts to the October earnings season, the first month of Q4 can be become ugly. If S&P 500 closes below 3,886 June lows around 3,636 are likely to be taken out and a 3,500-3,200 consolidation area could be reached in Q4.  3,503 is the 0.50 Fibonacci retracement of the 2020–2022 bull market and 3,200 is close to the 0.618 retracement level (3,195 to be exact). It is also the 0.382 retracement of the 2009 (end of subprime crisis bear market) through to the 2002 peak bull market.  There is still massive divergence on RSI that needs to be traded out. That can be done by either a higher high on both RSI and the Index, or by an RSI close below the 40 threshold. For RSI to drop below 40 and reset/trade out the divergence, lower levels on the S&P 500 are needed.  EURUSD The past 18 months of downtrend in EURUSD paused at parity and in the middle of the wide falling channel it has been trading in the past ten years.   Just as most market participants thought that it was the last time in a very long time we were to see the euro being stronger than the dollar, the euro has bounced back strongly.  However, it was time for a correction after almost 18 months in one direction. A correction could take EURUSD to around 1.0350 resistance.  The downtrend is likely to resume in Q4 and the parity and consolidation areas are likely to be tested once again—this time they’re likely to be taken out. The consolidation area was “founded” back in 2002 just before an almost decade-long bull move in EURUSD.  If parity is broken again, EURUSD is likely to drop swiftly to the lower level of the consolidation area, around 0.96.  However, 0.96 is not a strong support level and if EURUSD moves below the middle of the wide channel trendline, selling pressure could accelerate and push EURUSD to 0.90.  0.90 is the 1.618 Fibonacci projection level of the 2020–2022 up-and-down trend. Parity is at the 1.382 projection and 0.90 is close to the 2.00 projection.      Source: https://www.home.saxo/content/articles/quarterly-outlook/autumn-can-become-ugly-for-equities-and-bond-holders-04102022
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

Tightening Of Fed Monetary Policy Next Year Will Remain If Necessary

InstaForex Analysis InstaForex Analysis 23.10.2022 09:42
The US dollar was gradually regaining its positions after Thursday's unsuccessful attempt by buyers of risky assets to continue growing. Yes, investors took advantage of the resignation of Prime Minister Liz Truss, but this did not last long. Good statistics on the US labor market and the speech of the President of the Federal Reserve Bank of Philadelphia Patrick Harker - all this strengthened the confidence that the Fed will continue to act quite aggressively, actively fighting inflation. Harker statement  Harker said on Thursday that the committee is likely to raise interest rates well above the planned 4% this year and will keep them at this level for quite some time to combat inflation. At the same time, the official did not rule out taking additional measures, if necessary. "We're going to keep raising rates for a while. Given our outright disappointment at the lack of progress in reducing inflation, I expect that by the end of the year we will exceed the 4% ceiling," Harker said during a speech at the Greater Vineland Chamber of Commerce in Vineland, New Jersey.   Expectations Policymakers are expected to commit to a fourth consecutive 75 basis point rate hike when they meet in early November this year. Many economists also expect that the Fed will go for a similar increase in December of this year, after which rates will reach their peak of about 5% in early 2023. Harker, who does not vote on monetary policy decisions this year, said the Fed will base its decisions on economic data and will remain flexible on policy, tightening next year if necessary. "If we need to, we can continue tightening policy based on new data," Harker said. "But these are extreme measures, because we have to let the system work itself, which will take time." Harker said he expected the unemployment rate to rise to 4.5% next year and then fall to 4% in 2024. According to the Ministry of Labor, it was 3.5% in September. As for inflation, Harker believes that the price index of personal consumption expenditures, the Fed's preferred indicator, will be about 6% this year, 4% next year and will drop to 2.5% only in 2024. "We really need to see a steady decline in a number of inflation indicators before we stop tightening monetary policy," he said. Lisa Cook The head of the Fed, Lisa Cook, in a separate speech, also said that high inflation would probably require a constant increase in rates, and then maintaining a restrictive policy for some time. EUR/USD As for the technical picture of EURUSD, the bears actively piled on the euro and managed to return everything to the framework of the horizontal channel observed recently. To resume growth, it is necessary to return the pair above 0.9800, which will take the trading instrument to the area of 0.9840 and 0.9870. However, the upward prospects will depend entirely on the new US data and the decisions taken by the Fed. A breakthrough of 0.9760 will return pressure on the trading instrument and push the euro to a low of 0.9720, which will only worsen the situation of buyers of risky assets in the market. Having missed 0.9720, it will be possible to wait for the lows to update around 0.9680 and 0.9640. GBP/USD As for the technical picture of GBPUSD, the growth and reaction to Truss' retirement quickly ended, which by the end of Thursday led the pound to the area of the opening level. Now bulls will focus on protecting the support of 1.1170 and the breakdown of the resistance of 1.1240, limiting the pair's growth potential. Only a breakthrough of 1.1240 will return the prospects for recovery to the 1.1290 area, after which it will be possible to talk about a sharper jerk of the pound up to the 1.1330 area – Thursday's high. We can talk about the trading instrument being under pressure again after the bears take control of 1.1170. This will deal a blow to the bulls' positions and completely negate the prospects of the bull market observed since September 28. A breakthrough of 1.1170 will push GBPUSD back to 1.1120 and 1.1070.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324949
US Dollar Index May Confirm A Potential Bullish Trend Reversal

Without US Support, Currency Interventions Are Doomed To Failure

InstaForex Analysis InstaForex Analysis 23.10.2022 09:44
What doesn't kill makes us stronger. No matter what the Federal Reserve's rival central banks try to rein in the US dollar, it still blooms. It would seem that high inflation-induced rate hikes in other countries outside the US should have cooled the ardor of the bulls on the USD index. It wasn't there! One piece of information about the acceleration of consumer prices in New Zealand, Britain and Canada was enough for the greenback to launch a new attack. The same can be said about foreign exchange interventions. In conditions of low external demand and the highest inflation in decades, the interest in reverse currency wars, thereby strengthening rather than weakening the national currency, is understandable. As well as the dissatisfaction of governments with the fall of its exchange rate. Alas, intervention in the life of Forex does not help. Large-scale long positions on the yen managed to stop the USDJPY pair at 146 for just a few days, after which it rose to 151. At the same time, the experience of foreign exchange interventions with USDJPY in 1998 and 2011, with EURUSD in 2000, with GBPUSD in 1992 was also negative. A coordinated intervention is required, like the Plaza Accord in 1985. Dollar pairs react to coordinated intervention The problem is that the conditions then and now are significantly different. In those years, the Fed defeated high inflation and could afford the weakening of the US dollar. Today, the central bank still has a lot to do before consumer prices begin to move confidently towards the target. In addition, Finance Minister Janet Yellen notes that market-determined exchange rates are the best regime for the US dollar. Its strengthening is the result of differences in economic policies and the shocks that countries face. Without US support, currency interventions are doomed to failure. You don't need to go far for an example. Japan threw money to the wind, trying to support the yen diving into the abyss. Its interference in the life of Forex only made the situation worse. Gold and foreign exchange reserves were used to sell USDJPY. It was necessary to get rid of US Treasury bonds, which led to an increase in their yields and further strengthened the dollar. Dynamics of US Treasury Bond yields Rates on 10-year securities have reached the highest level since 2007. The situation resembles the events of those years, and investors are beginning to argue that only an increase in profitability to 5-5.25% will allow the indicator to reach a plateau. Until this happens, the US dollar will continue to sweep away everything in its path. No matter how hard its opponents try, raising rates or using currency interventions. Only the European Central Bank is able to suspend the fall of EURUSD. Its meeting is rightly regarded as a key event of the economic calendar in the last full week of October. Technically, the EURUSD peak continues on the daily chart. We hold the short positions formed from the 0.9845 and 0.9815 levels and increase them on the breakout of support at 0.97. The initial target is the 0.95 mark.     Relevance up to 15:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324997
The Outlook Of EUR/USD Pair For Long And Short Position

The Eurozone Economy Is Facing A Deep Recession

InstaForex Analysis InstaForex Analysis 23.10.2022 09:49
The USD/JPY pair was storming the 151.00 mark (we wrote about this in our previous review), gold is falling in price, and the dollar continues to advance. When this article was written the DXY dollar index was near 113.34, remaining in the upper part of the range formed between the local support and resistance levels of 114.74 and 109.96. At the same time, the general upward dynamics of the dollar remains, pushing the DXY index towards more than 20-year highs near 120.00, 121.00. The breakdown of the local round resistance levels of 114.00, 115.00 will be a signal that the DXY index will return to growth. On Thursday, the dollar received support from statistics on the labor market: in its weekly report, the US Department of Labor reported a decrease in the number of initial applications for unemployment benefits (for the week of October 14) to 214,000 thousand (from 226,000 a week earlier ), which is better than economists' expectations of an increase to 230,000. The state of the labor market (together with data on GDP and inflation) is a key indicator for the Federal Reserve in determining the parameters of its monetary policy. The drop in the indicator (the number of initial and secondary claims for unemployment benefits) and its low value is a sign of a recovery in the labor market and has a short-term positive impact on the USD. There were no important macro statistics for the US on Friday. It will appear next week (for more details, see Key economic events of the week 10/24/2022 – 10/30/2022). Also next week, meetings of the three largest world central banks will be held at once: Japan, Canada, the eurozone. As for the latter, its leaders are, in general, set up for another interest rate hike. As expected, at a meeting on Thursday, European Central Bank leaders will again raise the level of key interest rates, by 0.50% or even 0.75%. According to the final estimate, annual inflation in the eurozone in September amounted to 9.9% (below the first estimate of 10.0%). Core annual CPI rose by +4.8%, which is in line with the forecast and the previous 4.8%. According to Eurostat, annual inflation fell in six of the bloc's member states, remained stable in one and rose in twenty. A recent media poll of economists showed that they expect the ECB to raise its deposit and refinancing rates by 75 bps (deposits to 1.50% and the refinancing rate to 2.00%) at the October 27 meeting to contain inflation exceeding the target level by five times. By the end of the year, deposit and refinancing rates are forecast to be 2.00% and 2.50%, respectively. At the same time, the ECB is in a difficult situation as the eurozone economy is facing a recession, with the probability of its onset within a year, and the nature of the recession can be deep and long, given the military conflict in Ukraine and confusion in the European energy market. Despite information from the previous EU leaders' summit, which "managed to reach a common agreement on energy security" with the prospect of creating a cartel of European gas buyers that would deal with the purchase and subsequent distribution, the shortage of gas and oil in Europe will continue to drive inflation. Whether the ECB, which is moving so far with cautious steps, will be able to cope with it is a question that remains open. As for the EUR/USD pair, at the time when this article was written on Friday morning, it was trading near the 0.9740 mark, in the area of a stable bear market. From a fundamental point of view, we should expect at least a strong bearish momentum in the EUR/USD pair, and at a high, a further fall of the pair towards 20-year lows, when it was trading near 0.8700, 0.8600. In general, the downward dynamics of EUR/USD remains.   Relevance up to 13:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324985
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

Geopolitics And The Euro (EUR) Situation Are Expected To Deteriorate

InstaForex Analysis InstaForex Analysis 23.10.2022 09:57
Long-term perspective. The EUR/USD currency pair gained 140 points during the current week. We can say that this is one of the best weeks for the euro in recent times, although this growth is very difficult to consider on a 24-hour TF. But on this TF, a global downward trend immediately catches the eye, within which strong corrections are still rare. However, it would be correct to say there are none. As we have already said, over the past 1.5–2 years, the euro currency has shown corrections of a maximum of 400–450 points. And the whole downward trend already exceeds 2500 points. And, of course, it is worth noting that it has been three weeks since the price last updated its 20-year lows, and the pair is still close to these lows. The beginning of an upward trend does not even "smell." Thus, the technical picture does not change. Therefore, it can be assumed that the fundamental and geopolitical backgrounds do not change either. And this is not just an assumption. It is an objective reality since the "foundation" now remains the same as it was a month ago, two months ago, and three months ago. The Fed is also raising interest rates aggressively and is prepared to do so "to the bitter end." The ECB is also simply raising the rate and is already thinking about reducing it because many EU countries may be unable to cope with tight monetary policy. The Fed rate has long been higher than the ECB rate, and the gap between their values may only increase in the coming months. When the Fed ends the rate hike cycle, a "high rate period" will begin, during which monetary policy will not change. Thus, the Fed's monetary policy may remain much tougher than the ECB for another year or two or three. Naturally, this state of affairs will support the dollar. It may not grow all this time, but it will be extremely difficult for the European currency to show tangible growth. COT analysis. COT reports on the euro currency in 2022 can be entered into the textbook as a vivid example. For half the year, they showed a frank "bullish" mood of professional players, but at the same time, the European currency was steadily falling. Then they showed a "bearish" mood for several months, and the euro currency also steadily fell. The net position of non-profit traders is bullish again, and the euro continues to fall. This is happening, as we have already said, because the demand for the US dollar remains very high against the backdrop of a difficult geopolitical situation. Therefore, even if the demand for the euro currency is growing, the high demand for the dollar does not allow the euro currency itself to grow. During the reporting week, the number of buy-contracts from the non-commercial group increased by 6.5 thousand, and the number of shorts decreased by 4 thousand. Accordingly, the net position increased by about 10.5 thousand contracts. This fact does not matter much since the euro remains "at the bottom" anyway. Professional traders still prefer the dollar to the euro currency at this time. The number of buy contracts is higher than sell contracts for non-commercial traders by 48 thousand, but the European currency cannot extract any dividends from this. Thus, the net position of the "non-commercial" group can continue to grow, but it does not change anything. If we look at the general indicators of open longs and shorts for all categories of traders, then sales are 22 thousand more (586k vs. 564k). Thus, according to this indicator, everything is logical. Analysis of fundamental events. There is nothing to note in the European Union this week except for the banal inflation report, which was released in the second assessment for September. Traders expected an increase of 10.0%, but in reality, prices rose only by 9.9% y/y. However, the epithet "only" hardly applies to an ever-growing index. We cannot say that traders were upset about this or, on the contrary, happy. This indicator does not change anything because it cannot affect the ECB's plans in a cardinal way. The European regulator cannot look at the current inflation and decide to raise the rate at each next meeting by 1% to deal with high price growth and not just pretend. There was practically no geopolitical news this week either. Perhaps that is why the euro currency has avoided a new fall. But again, there is no difference since it continues to be near its 20-year lows. Trading plan for the week of October 24–28: 1) In the 24-hour timeframe, the pair resumed their movement to the south. Almost all factors still support the long-term growth of the US dollar. The price is below the Ichimoku cloud and the critical line, so purchases are irrelevant now. It would be best if you waited at least for consolidation above the Senkou Span B line and only considered long positions. 2) The euro/dollar pair sales are still more relevant now. The price formally went above the critical line, but it did not go higher, but the line itself declined, so we expect the fall to continue with a target below the 0.9582 level (161.8% Fibonacci). In the future, if the fundamental background for the euro currency does not improve and geopolitics continues to deteriorate, the euro currency may fall even lower. Explanations of the illustrations: Price levels of support and resistance (resistance/support), Fibonacci levels – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger Bands (standard settings), MACD (5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "Non-commercial" group.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325028
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

Recent Reports Have Not Helped The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 23.10.2022 10:04
  The US dollar index showed contradictory dynamics this week. Initially, at the start of the five-day trading period, it dropped sharply, returning to the area of the 111th figure. The market unexpectedly increased interest in risk, amid quarterly reports of the largest US banks (in particular, Bank of America and Bank of New York Mellon), which exceeded the expectations of most analysts. After that, the main Wall Street indexes went up, while the safe greenback came under pressure. In addition, on Monday it became known that British Prime Minister Liz Truss canceled the key points of her odious anti-crisis plan, which included large-scale tax cuts. And although this step subsequently did not help her stay in the chair of the head of government, directly "in the moment" it increased interest in risky assets. Against this background, the EUR/USD pair reached 0.9875 (one and a half week price high). However, bulls on the pair were unable to develop an upward trend. On Tuesday, the US dollar index turned around and headed upward again. Throughout the week, including on Friday, the pair had been trading within a wide price range, actually circling in the area of 97-98 figures. Traders reacted reflexively and are reacting to contradictory macroeconomic statistics, mainly from the United States. For example, the greenback reacted positively to the published report in the real estate sector: the volume of construction permits issued in America increased by 1.4% in September after a serious decline in August (-8.5%). At the same time, the volume of housing sales in the secondary market (the release was published the next day) unexpectedly decreased, and immediately by 1.5% (with a forecast decline of 0.8%). The Federal Reserve-Philadelphia Manufacturing Index also turned out to be disappointing, which came out at -8.7 in October. While the growth rate of initial applications for unemployment benefits was at the level of 214,000 (a three-week low). The above-mentioned macroeconomic reports (generally of a secondary nature) could not help – neither the EUR/USD bears nor the bulls. Of course, traders reacted to these reports accordingly, but only formally – literally after a few hours, the downward/upward momentum faded away. Obviously, traders need a more powerful informational occasion that will allow them to either approach the parity level or break through the defense at the base of the 96th figure. For the development of the upward corrective movement, EUR/USD bulls need to settle above the 1.0000 mark, and for the continuation of the downward trend, bears need to go below the 0.9600 target. Current macroeconomic statistics are not able to cope with such tasks. In my opinion, EUR/USD traders can only pin their hopes on larger-scale information campaigns. The vector of price movement will be determined primarily by the level of anti-risk sentiment. By the way, Friday's dynamics of the dollar index eloquently illustrated the current situation. So, during the day, the greenback steadily strengthened its positions throughout the market, but at the start of the US session it weakened sharply: it became known that Russian Defense Minister Sergei Shoigu held telephone talks with US Defense Minister Lloyd Austin. According to Russian media, the parties discussed "topical issues of international security, including the Ukrainian issue." These are the second talks between the heads of defense departments this year (the first were in May). Amid general geopolitical tensions, this news was received by the market "with a bang". However, the growth of the EUR/USD pair was limited. Almost immediately, the press secretary of the president of Russia Dmitry Peskov said that following the conversation of the ministers, "there are no plans for a telephone conversation between Vladimir Putin and Joe Biden." However, this moment highlighted the main idea: traders react sharply to news of a geopolitical nature. A decline in anti-risk sentiment can put significant pressure on a safe greenback - and vice versa, an increase in panic will allow dollar bulls to open a second wind. Also, the tone of trading can be set by representatives of the Fed. But, to the disappointment of the EUR/USD bears, the members of the Fed have not yet decided to voice "ultra-hawkish" comments. In particular, many representatives of the central bank spoke this week – Philip Jefferson, Lisa Cook, Michelle Bowman, Patrick Harker, James Bullard, Charles Evans. In one form or another, they made it clear that the Fed is ready to continue taking steps to curb inflation in the United States. In one form or another, they hinted that they are ready to support a 75-point rate hike in November. But the thing is that even before their speeches, the probability of a 75-point rate hike at the November meeting was estimated at 95%! That is, the market has already largely played this fundamental factor. While the members of the Fed are not yet ready to "increase the degree of heat", allowing, for example, a 100-point increase. They are also not ready to talk about more distant prospects (regarding the November meeting) – according to them, further decisions will be made taking into account incoming data, primarily in the field of inflation and the labor market. Thus, traders of the EUR/USD pair in the medium term will continue to trade in the 100-point price range of 0.9750-0.9850. In my opinion, the downward dynamics will resume over time, but at the moment it is impossible to talk about prioritizing short or long positions. Given the current uncertainty, it is advisable to take a wait-and-see attitude for the EUR/USD pair.     search   g_translate       Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325008
The EUR/USD Pair Chance For The Further Downside Movement

ECB interest rate decision, German GDP and other important economic events of the following week commented by InstaForex (part II)

InstaForex Analysis InstaForex Analysis 23.10.2022 20:16
Read the first part here: The release of Chinese GDP, Bank of Canada interest rate decision and more - InstaForex talks the following week (part I)| FXMAG.COM Thursday 27 October Eurozone. The European Central Bank's decision on the rates (main and deposit). ECB Monetary Policy Statement The consequences of Brexit and the coronavirus pandemic, due to which European countries were forced to impose strict quarantine restrictions that negatively affected economic activity, trade conflicts, factors of political instability in Europe are the main threats to the European economy. A new factor of instability in Europe is the military conflict in Ukraine, where Russia is conducting a special military operation. According to ECB economists, this military conflict can reduce the eurozone's GDP by 0.3%-0.4%, and in the worst-case scenario, GDP will decrease by almost 1%. However, some of the economists believe that these are modest forecasts. The situation could be much more serious. Amid the Russian-Ukrainian military conflict, which provoked a sharp increase in energy and food prices, inflation in Europe has accelerated sharply, and economists expect it to grow further in the coming months, as energy prices continue to rise, while the European Union imposes new restrictions on the Russian economy. The consumer price index (CPI) for the eurozone rose by +8.1% in May (in annual terms), which was higher than the forecast for growth of +7.7% and the previous value of +7.4%. In June, consumer price growth accelerated to +8.6% (in annual terms), and in September to +9.9%. Thus, inflation in the eurozone is accelerating, updating record highs and forcing ECB leaders to accelerate decision-making to curb it. The focus of the EU's foreign economic policy on the refusal of Russian energy carriers, combined with high inflation and problems in supply chains, will provoke a recession in the eurozone, economists say. And now the ECB is in a difficult situation: to curb accelerating inflation without harming the recovery of the European economy. And yet, according to ECB President Christine Lagarde, the central bank may raise its key interest rate again in order to reduce the risks of record high inflation rates and ease growing concerns about the weakness of the euro. It is expected that following the results of this meeting, the key interest rate and the ECB deposit rate for commercial banks will be raised by 0.5%. But there are other forecasts both in one direction and in the other, or, for example, that interest rates will be increased by 0.25% or 0.75%. It is also necessary to be prepared for an interest rate increase at the next ECB meetings. Perhaps this will also be mentioned in the accompanying statements of the ECB leaders. The level of influence on the markets is high. USA. Orders for Durable Goods. Orders for Capital Goods (excluding defense and aviation). Annual GDP for the 3rd quarter (preliminary estimate). The Main Index of Personal Consumption Expenditures (PCE price index). Applications for Unemployment Benefits Durable goods are defined as solid products with an expected service life of more than three years, such as cars, computers, household appliances, airplanes and imply large investments in their production. This leading indicator determines the change in the total value of new orders for the supply of durable goods placed with manufacturers. Growing orders for the supply of this category of goods signal that manufacturers will increase their activity as orders are fulfilled. Capital goods are durable goods used for the production of durable goods and services. Goods produced in the defense and aviation sectors of the American economy are not included in this indicator. A high result strengthens the USD, a decrease in the indicator has a negative effect on the USD. Data worse than the previous value and/or forecast will also have a negative impact on dollar quotes, while data better than the forecast will have a positive impact on the dollar. Previous values of the "durable goods orders" indicator: -0.2% in August, -0.1% in July, +2.2% in June, +0.8% in May, +0.4% in April, +0.6% in March, -1.7% in February, +1.6% in January. Previous values of the indicator "orders for capital goods excluding defense and aviation": +1.3% in August, +0.3% in July, +0.9% in June, +0.6% in May, +0.3% in April, +1.1% in March, -0.3% in February, +1.3% in January. The level of influence on the markets is high. This indicator (GDP) is the main indicator of the state of the American economy, and along with data on the labor market and inflation, GDP data are key for the country's central bank in determining the parameters of its monetary policy. A strong result strengthens the US dollar; a weak GDP report negatively affects the US dollar. There are three versions of GDP released at monthly intervals - Preliminary, Updated and Final. The pre-release is the earliest and has the greatest impact on the market. The final release has less impact, especially if it coincides with the forecast. Previous values of the indicator (in annual terms): -0.6%, -1.6%, +6.9%, +2.3%, +6.7%, +6.3% ( in the 1st quarter of 2021). Forecast for the 3rd quarter of 2022 (preliminary): +2.0%. The level of influence on the markets is high. The Core Personal Consumption Expenditure Index (or Core PCE Price Index, Core PCE) is a core measure of inflation that Federal Reserve FOMC officials use as the primary indicator of inflation. The rate of inflation (apart from the state of the labor market and GDP) is important to the Fed in setting the parameters of its monetary policy. Rising prices put pressure on the central bank to tighten its policies and raise interest rates. Higher-than-expected price index (PCE) readings could push the US dollar higher as it hints at a possible hawkish shift in the Fed's forecasts, and vice versa. Previous values: +4.7% (Q2 2022), +5.2% (Q1 2022), 5.0% (Q4 2021), +4.6% (Q3), +6.1% (Q2), +2.7% (Q1 2021). The level of influence on the markets is medium to high. At the same time, the US Department of Labor will publish a weekly report on the state of the US labor market with data on the number of primary and secondary claims for unemployment benefits. The state of the labor market (together with data on GDP and inflation) is a key indicator for the Fed in determining the parameters of its monetary policy. The result is higher than expected and the growth of the indicator indicates the weakness of the labor market, which negatively affects the US dollar. The drop in the indicator and its low value is a sign of the recovery of the labor market and may have a short-term positive impact on the USD. Initial and re-claims are expected to remain at pre-coronavirus lows, which is also positive for the dollar, indicating the stability of the US labor market. Previous (weekly) figures for initial jobless claims: 214,000, 219,000, 190,000, 209,000, 208,000, 218,000, 228,000, 237,000, 245,000 , 252,000, 248,000, 254,000, 261,000, 244,000, 235,000, 231,000, 232,000, 202,000, 211,000 Previous (weekly) values for repeated claims for unemployment benefits: 1,385,000, 1,361,000, 1,346,000, 1,376,000, 1,401,000, 1,401,000, 1,437,000, 1,412,000, 1,434,000, 1,430,000, 1,420,000, 1,368,000, 1,384,000, 1,333,000, 1,372,000, 1,324,000, 1,331,000, 1,309,000, 1,309,000 The level of influence on the markets is average. Eurozone. ECB press conference During the press conference, ECB President Christine Lagarde will explain the central bank's decision on rates and likely outline the prospects for the central bank's monetary policy in the coming months. Recently, the leadership of the ECB has been increasingly signaling the need for further tightening of monetary policy, which remains one of the softest (together with the BOJ and the Swiss National Bank) among the world's largest central banks. If Lagarde again gives hawkish signals, then the euro may strengthen sharply. The soft tone of her statements will have a negative impact on the euro. The level of influence on the markets is high. Friday 28 October Japan. BOJ Interest Rate Decision. BOJ Press Conference and Commentary on Monetary Policy The level of interest rates is the most important factor in assessing the value of a currency. Most other economic indicators are only looked at by investors to predict how rates will move in the future. The BOJ is pursuing an extra-soft monetary policy, keeping the main interest rate in negative territory. Most likely, the rate will remain at the same level of -0.1%. At the time of the announcement of the interest rate decision, volatility in the quotes of the yen and in the Asian financial market could rise sharply if the BOJ makes an unexpected decision. During the press conference, BOJ Governor Haruhiko Kuroda will comment on the central bank's monetary policy. As Kuroda has repeatedly stated earlier, "it is appropriate for Japan to patiently continue the current loose monetary policy." The level of influence on the markets is high. Japan. BOJ Press Conference During the press conference, the head of the BOJ Kuroda will give comments on the bank's monetary policy. Markets usually react noticeably to Kuroda's speeches, especially if he touches on the topic of monetary policy. If he does not touch on this issue, then the reaction to his speech will be weak. The level of influence on the markets is high. Germany. GDP for the 3rd quarter (preliminary release) The German Statistical Office will publish a report with preliminary data on the country's GDP for the 3rd quarter. There are two versions of the quarterly GDP, published at intervals of about 10 days, - Preliminary and Final (final release). The pre-release is the earliest and therefore tends to have the greatest impact on the markets. This report reflects the overall economic performance of Germany, whose economy is the locomotive of the entire European economy, and has a significant impact on the ECB's monetary policy decision. GDP growth means an improvement in economic conditions, which makes it possible (with a corresponding increase in inflation) to tighten monetary policy, which, in turn, usually has a positive effect on the quotes of the national currency. The release of this report usually causes an increase in volatility in EUR quotes. It is likely that the report with preliminary data on German GDP for the 3rd quarter will come out with positive indicators. Data worse than the forecast/previous values will negatively affect EUR quotes. Previous values: +0.1%, +0.6%, +0.3%, +2.2%, +2.2%, -0.1% ( in the 1st quarter of 2021). Forecast for the 3rd quarter of 2022: +0.4%. The level of influence on the markets is from medium to high. Germany. Harmonized Consumer Price Index HICP (preliminary release) Consumer prices account for most of the overall inflation. In normal economic conditions, rising prices force the country's central bank to raise interest rates to avoid excessive inflation (above the target level of the central bank). One of the dangerous periods of the economy is stagflation. This is rising inflation with a slowing economy. In this situation, the central bank should act very carefully so as not to harm the recovery of economic growth. The index (CPI) is published by the EU Statistics Office, is an indicator for assessing inflation and is used by the ECB Governing Council to assess the level of price stability. Usually, a positive result strengthens the EUR, a negative one weakens it. The growth of the indicator is a positive factor for the national currency (under normal conditions). Data worse than the previous value and/or forecast will have a negative impact on the euro. Previous indicator values: +10.9% in September, +8.8% in August, +8.5% in July, +8.2% in June, +8.7% in May, +7.8% in April, +7.6% in March, +5.5% in February, +5.1% in January 2022 (in annual terms). Forecast for October: +11.5% (preliminary estimate). The level of influence on the markets is from medium to high. USA. Personal consumption expenditures (Basic PCE Price Index) The annual core PCE price Index (excluding volatile food and energy prices) is the main inflation indicator that Fed FOMC officials use as the main inflation indicator. The level of inflation (in addition to the state of the labor market and GDP) is important for the Fed in determining the parameters of its monetary policy. Rising prices put pressure on the central bank to tighten its policy and raise interest rates. The values of the base price index (PCE) exceeding the forecast may push the US dollar up, as this will hint at a possible hawkish shift in the Fed's forecasts, and vice versa. Previous values: +4.9% (in annual terms), +4.7%, +4.8%, +4.7%, +4.9%, +5.2%, +5.3%, +5.2% ( in January 2022). The level of influence on the markets is from medium to high. Canada. GDP Statistics Canada is to publish its monthly GDP report, which is the broadest measure of economic activity and a major indicator of the health of the economy. High GDP figures will have a positive impact on the CAD quotes, and, conversely, a weak GDP report will have a negative impact on the CAD. Despite a possible relative decline, the data suggests that the Canadian economy continues to recover after its strong fall in early 2020 due to the coronavirus pandemic (in the 1st quarter of 2020, Canada's GDP fell by -8.6%, and in the 2nd - by -44.2%). Better-than-expected data will also have a positive impact on CAD. Previous values: +0.1%, +0.1%, 0%, +0.3%, +0.7%, +0.9%, +0.2% (in January 2022). The level of influence on the markets is from low to medium. USA. University of Michigan Consumer Confidence Index (final release) This index is a leading indicator of consumer spending, which accounts for the majority of overall economic activity. It also reflects the confidence of American consumers in the economic development of the country. A high level indicates growth in the economy, while a low level indicates stagnation. Data worse than previous values and/or forecast may have a negative impact on the dollar in the short term. The growth of the indicator will strengthen the USD. Previous indicator values: 58.6, 58.2, 51.5, 50.0, 58.4, 65.2, 59.4, 62.8, 67.2 in January 2022. The preliminary score was: 59.8. The level of influence on the markets (final release) is medium. Relevance up to 12:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324977
Unlocking the Future: Key UK Wage Data and September BoE Rate Hike Prospects

The Positive Close On The New York Stock Exchange, The Dow Jones Hit A Monthly High

InstaForex Analysis InstaForex Analysis 24.10.2022 08:00
At the close on the New York Stock Exchange, the Dow Jones rose 2.47% to hit a monthly high, the S&P 500 rose 2.37% and the NASDAQ Composite rose 2.31%. Dow Jones index  Caterpillar Inc was the top performer among the components of the Dow Jones index today, up 10.88 points or 6.07% to close at 190.22. JPMorgan Chase & Co rose 6.10 points or 5.25% to close at 122.23. Goldman Sachs Group Inc rose 14.29 points or 4.60% to close at 325.10. The losers were shares of Verizon Communications Inc, which shed 1.65 points or 4.46% to end the session at 35.35. American Express Company rose 1.67% or 2.38 points to close at 140.04, while Procter & Gamble Company rose 1.25% or 1.59 points to close at 128.58. S&P 500 Leading gainers among the components of the S&P 500 in today's trading were Schlumberger NV, which rose 10.33% to 50.41, Freeport-McMoran Copper & Gold Inc, which gained 9.99% to close at 32. 03, as well as Huntington Bancshares Incorporated, which rose 9.47% to end the session at 14.45. The drop leaders were SVB Financial Group shares, which lost 23.95% to close at 230.03. Shares of Robert Half International Inc lost 8.55% and ended the session at 73.01. Quotes of HCA Holdings Inc decreased in price by 5.69% to 196.74. NASDAQ  Leading gainers among the components of the NASDAQ Composite in today's trading were Huadi International Group Co Ltd, which rose 89.27% to hit 58.92, Altamira Therapeutics Ltd, which gained 58.64% to close at 0.52 , as well as shares of Missfresh Ltd ADR, which rose by 57.50%, ending the session at around 2.52. The drop leaders were shares of Immunic Inc, which fell 77.39% to close at 2.08. Shares of Nextplay Technologies Inc lost 33.23% and ended the session at 0.28. Quotes of Kalera PLC decreased in price by 35.61% to 0.28. The number  On the New York Stock Exchange, the number of securities that rose in price (2282) exceeded the number of those that closed in the red (835), while quotes of 104 shares remained virtually unchanged. On the NASDAQ stock exchange, 2503 companies rose in price, 1265 fell, and 238 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.97% to 29.69. Gold Gold futures for December delivery added 1.40%, or 22.95, to $1.00 a troy ounce. In other commodities, WTI crude for December delivery rose 0.73%, or 0.62, to $85.13 a barrel. Futures for Brent crude for December delivery rose 1.24%, or 1.15, to $93.53 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.80% to hit 0.99, while USD/JPY shed 1.75% to hit 147.51. Futures on the USD index fell 0.90% to 111.80.     Relevance up to 04:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/297940
The EUR/USD Price May Fall Under 1.0660

Today There May Be Confirmation Of The Bearish Sentiment Of The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 24.10.2022 08:10
On Friday, the head of the San Francisco Federal Reserve, Mary Daly, said that the high pace of rate hikes is slowing down the economy, this pace needs to be slowed down. As a result, yields on government bonds fell, stock indices rose, and the euro closed the day up 75 points. The quote of the single currency again reached the resistance of 0.9864 and the MACD indicator line. The European Central Bank raises rates on the 27th, but we still doubt the market's willingness to switch so quickly from the Fed's leading role in pricing the euro to the ECB's leading position. Eurozone business activity indicators for October will be released today, and a recession is predicted for them. On the technical side, in order to consolidate the euro in the green, the price needs to go above the descending price channel, marked in green on the daily chart, that is, above the level of 0.9950. Price development above 0.9864 (September 6 low) before breaking 0.9950 in this situation is considered as a false exit above the MACD indicator line. Consolidation below this line may bring the price back to support 0.9724. The Marlin Oscillator is already turning down and does not share the optimism of the price. The price is already forming a divergence with Marlin on the H4 chart. As long as it's weak. A decline below the MACD line (0.9797) will set the bearish mood for the euro.       Relevance up to 04:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325066
The Outlook Of EUR/USD Pair Is Downward In The Near Term

The Movements Of The Euro To US Dollar (EUR/USD) Pair Were Bad

InstaForex Analysis InstaForex Analysis 24.10.2022 08:18
EUR/USD 5M The euro/dollar pair managed to fall and rise on Friday. The same was observed a day earlier and, as on Thursday, no specific fundamental or macroeconomic reasons for this. There was not a single significant event in the US nor in the European Union and, nevertheless, the pair managed to show volatility of more than 100 points and they were enviable movements. Indeed, these movements were not as wonderful as it might seem, since the price overcame the Ichimoku indicator lines without any apparent difficulties, which should actually represent quite strong resistance. But for several days in a row, the price does not even notice them, which, unfortunately, can speak of a flat or "swing". We have already warned about the "swing" before. At this time, traders do not quite understand what to do with the euro, since it is already dangerous to sell at the current, lowest levels, and there is no reason to buy. As a result, the pair very often corrects and rolls back up and down. Analyzing Friday's trading signals, it is very clear that the movements were not so good. The first trading signal was perhaps the most unambiguous of all. The price rebounded from the critical line, after which it dropped to the level of 0.9747 and overcame it, then went down for about 25 more points. But it did not reach the next level, so the position should have been closed at the nearest buy signal, which was formed when it settled above 0.9747. Profit amounted to about 20 points. It was possible to open long positions on the same signal, but then "songs and dances" began near the Kijun-sen line. The price overcame it both upwards and downwards several times. Therefore, a long position should have been closed as soon as possible and it is unlikely that it was possible to make good money on it. The first rebound from the critical line should not have been worked out, since the price immediately appeared near the level of 0.9747, from which it could also rebound. Another signal near Kijun-sen could have been worked out, but it most likely caused a loss, which offset most of the profit on the first two positions. COT report: The euro Commitment of Traders (COT) reports for 2022 could be used as good examples. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again and the euro is still dropping. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long non-commercial positions increased by 6,500, while the number of shorts decreased by 4,000. Accordingly, the net position increased by about 10,500. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 48,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. If you look at the total open longs and shorts for all categories of traders, then shorts are 22,000 more (586,000 vs 564,000). Thus, according to this indicator, everything is logical. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 24. ECB meeting: how much will the central bank raise the rate? Overview of the GBP/USD pair. October 24. This week - the election of the prime minister in the UK! Forecast and trading signals for GBP/USD on October 24. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The downward trend still cannot be considered completely reversed on the hourly time frame, despite the good growth on Friday. Now the "swing" can begin and the pair can change the direction of movement every day. The lines of the Ichimoku indicator are already being ignored, which is a sign of a flat. On Monday, trading could be performed at the following levels: 0.9553, 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9779) and Kijun-sen lines(0.9791). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also additional support and resistance levels, but trading signals are not formed near them. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal.The European Union and the United States will publish indexes of business activity in the services and manufacturing sectors. If there is no strong deviation from the predicted values, then there may not be a reaction to these data either. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 02:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325054
Foreign exchange - Euro against US dollar - preview

The EUR/USD Pair: We Should Expect An Equally Strong Growth

InstaForex Analysis InstaForex Analysis 24.10.2022 08:28
After a strong decline in EUR/USD over 14 years, the US dollars show signs of weakness. So, we are looking for a break above resistance at 0.9997 to confirm that the US dollar has topped and completed the corrective decline in EUR/USD from 1.6038 to 0.9507. We want to check whether the next impulsive rally to well above the peak of wave [A] 1.6038 has begun. As the last part of the decline in EUR/USD from 1.2266 to 0.9507 has been fast, we should expect an equally strong rally once resistance at 0.9997 breaks and the US dollar comes under pressure. The first major target to look for is June 2021 peak at 1.2266, but in the longer term, we should see a much weaker USD.   Relevance up to 07:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/297958
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

FX Today: Major Currencies Stay Relatively Quiet (EUR/USD, USD/JPY, GBP/USD)

TeleTrade Comments TeleTrade Comments 24.10.2022 11:00
Here is what you need to know on Monday, October 24: As investors prepare for the highly-anticipated central bank decisions later this week, major currencies stay relatively quiet at the start of the new week except for the Japanese yen. The US Dollar Index moves sideways at around 112.00 and US stock index futures trade flat on the day. S&P Global will release the preliminary October Manufacturing and Services PMI data for Germany, the euro area, the UK and the US. Federal Reserve Bank of Chicago's National Activity Index will also be looked upon for fresh impetus later in the day. During the Asian trading hours, the data from China revealed that the Gross Domestic Product grew at an annualized rate of 3.9% in the third quarter. This reading came in better than the market expectation for an expansion of 3.4%. Retail Sales in China, however, rose by 2.5% on a yearly basis, falling short of analysts' estimate of 3.3%. The Shanghai Composite fell sharply following mixed data and was last seen losing more than 2% on a daily basis. USD/JPY The USD/JPY pair climbed toward 150.00 in the first hours of trading early Monday but lost over 400 pips in a matter of 10 minutes. Japan’s top currency diplomat Masato Kanda refrained from clarifying whether they intervened in the market but reiterated that they will continue to take appropriate action against excessive, disorderly market moves. Following the sharp decline witnessed in the Asian session, the pair recovered to the 149.00 area, where it's up around 1% on the day. EUR/USD EUR/USD trades in a relatively tight range near mid-0.9800s following Friday's rebound. Business activity in the euro area's and Germany's manufacturing sectors are expected to continue to contract in early October.  GBP/USD GBP/USD trades in positive territory and continues to edge higher toward 1.1400 in the early European morning on Monday. Former British Prime Minister Boris Johnson announced that he ended his big to replace Liz Truss. Meanwhile, former chancellor Rishi Sunak has reportedly 165 supporters ahead of Monday's nomination deadline and remains the clear favourite to become the next PM. Gold Following Friday's impressive upsurge, gold climbed to a fresh 10-day high near $1,670 early Monday but struggled to preserve its bullish momentum. At the time of press, XAU/USD was little changed on the day at $1,657. Meanwhile, the 10-year US Treasury bond yield is down nearly 2% on the day, helping gold hold its ground for the time being. BTC Bitcoin climbed toward $20,000 on Sunday but lost its traction before reaching that level. As of writing, BTC/USD was down 1% on the day at $19,350. Ethereum ended up gaining more than 4% last week and seems to have gone into a consolidation phase above $1,300 early Monday.
The Outlook Of EUR/USD Pair For Long And Short Position

Eurozone PMI hits 47.1, one point less than the consensus | ING Economics expects two hikes of 50 and 75bp this year

ING Economics ING Economics 24.10.2022 11:08
A weaker-than-expected PMI confirms that the eurozone is now in recession. While pipeline price pressures are gradually abating, it seems too soon to give the all-clear on consumer price inflation. The European Central Bank (ECB) will therefore remain in tightening mode until the first quarter of 2023 Downturn confirmed The eurozone composite PMI flash estimate fell to a lower-than-expected 47.1 in October, from 48.1 in September. This is not only a 23-month low but is also the fourth consecutive month that the PMI has been below the 50 boom-or-bust level, clearly suggesting negative GDP growth. The manufacturing PMI came out at 46.6, while the services sector PMI is now at 48.2. The steepest downturns were seen in the most energy-dependent industries, such as chemical and plastics and basic resource sectors. Industrial powerhouse Germany saw the fastest decline in activity, while in France growth merely stalled. Forward-looking components of the survey don’t herald any improvement in the coming months – on the contrary. New orders for goods and services fell for the fourth month in a row. Excluding the Covid-19 pandemic, manufacturing orders saw the biggest drop since April 2009, while the decline in new business inflows into service sector companies was the strongest since June 2013. No wonder that backlogs of orders fell for a fourth consecutive month, especially in manufacturing. While there was still modest employment growth in October, there seems to be job cutting at some firms and hesitancy to hire in the wake of the uncertain economic outlook. This means that the job market is likely to be less of a support for consumption in the coming quarters. Too soon to give the all-clear on inflation In this rapidly weakening economic environment, supply chain delays have eased to the lowest in just over two years. Manufacturers also bought fewer inputs, reflecting lower production plans and inventory reduction policies in the wake of weakening sales. Easing raw material supply constraints were partially offset by rising energy costs and upward wage pressures, keeping the overall rate of input cost inflation elevated. This still translated into a high rate of increase in prices charged for goods and services, with rates of selling price inflation cooling only marginally in both manufacturing and services. While it seems obvious that upstream price increases are now softening, it still seems a bit too soon to give the all-clear on consumer price inflation. This is one of the last important economic data the ECB disposes of in the run-up to the meeting of the Government Council on Thursday. While in our view today’s figure clearly confirms that the eurozone economy is already in recession, the ECB has made it clear that a downturn would not deter it from tightening monetary policy, as long as inflation is not brought under control. With inflation hovering around 10%, the bank surely wants to restore its credibility. We therefore pencil in another 75bp hike this week and 50bp in December. As inflation is likely to start to come down in the first quarter of 2023 and signs of recession will become more prominent, we think the ECB will stop tightening after the February meeting when we expect the deposit rate to have reached 2.25%. Read this article on THINK TagsInflation GDP Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

US Dollar affected by Bank's of Japan intervention and rumours about possible rate hiking slowdown. ING Economics don't see incoming ECB decision as a big one for EUR/USD

ING Economics ING Economics 24.10.2022 10:29
The dollar is a little weaker after seemingly large-scale FX intervention from the Bank of Japan (BoJ) and a WSJ article hinting that the Fed is ready to slow the pace of tightening. But decent US 3Q GDP growth and higher inflation readings this week should keep the dollar bid on dips. This week also sees central bank meetings in the eurozone, Japan and Canada Sterling is trading on a mildly firmer footing as it increasingly looks as though Rishi Sunak will become the UK's next prime minister USD: Japan sells a lot of dollars The dollar opens a new week slightly softer and we would say two main factors are at work here. The first is the large-scale FX intervention campaign underway from Japanese authorities, with reports that Tokyo might have sold as much as US$30bn late on Friday in a carefully-crafted move to upend speculators chasing what appeared to be a decisive break in USD/JPY above 150. This has resulted in some phenomenal trading ranges, e.g. nearly a 146-152 range on Friday and not far from 145-150 today with another round of intervention in early Asia. Tokyo has yet to confirm that it has intervened, but we might receive FX intervention statistics next week. Though FX markets are deep, $30bn+ in dollar sales will be having some effect on the dollar across the board. Friday also saw US rates markets react to a Wall Street Journal article implying that the Fed was wrestling with how to communicate a slow-down in tightening after a likely 75bp hike in November. The article was well-timed in that expectations of the terminal rate for the Fed cycle had just hit 5.00% – and have since dropped back to 4.82%.  However, neither of the above factors may keep the dollar in check for long. On the former, the BoJ meets to set monetary policy this Friday and unless we see a shift in its ultra-dovish outlook (a negative policy rate and ongoing quantitative easing) it seems hard to expect a top in USD/JPY anytime soon. Equally on the Fed side, this week's US data calendar should maintain a hawkish Fed. Third-quarter GDP should come in around 2% quarter-on-quarter annualised and the September readings (both headline and core) for the PCE price deflator should both rise and move further away from the Fed's year-end expectations.  For today, the focus will be on the PMIs released in the US and Europe. These readings should continue to portray greater challenges for Europe. Expect continued high FX volatility and DXY probably bouncing around in a 111.50-112.50 range. Chris Turner EUR: Bear market consolidation EUR/USD has struggled to make the most of the softer dollar environment. We highlighted last week that the sharp drop in European natural gas prices gave cause for the euro to bounce and aggressive BoJ dollar sales could also have created room for EUR/USD to push ahead. Instead, the EUR/USD recovery has been pretty lacklustre and can be best described as a bear market consolidation. For reference, 0.9950 is now probably significant intra-day resistance, marking the top of this year's bear channel. Look out today for another soft set of PMI releases across Europe and the eurozone. And we doubt that Thursday's 75bp hike from the ECB will be a game-changer for EUR/USD.  Chris Turner GBP: Some welcome stability Sterling is trading on a mildly firmer footing as it increasingly looks as though Rishi Sunak will become the UK's next prime minister. It seems that former PM Boris Johnson has pulled out of the race and unless he endorses the third candidate, Penny Mordaunt, we may well hear news later today that the race is over. Were Mordaunt to receive the support of 100 MPs, however, the race could extend into Friday. Sterling price action seems to assume the advent of a Sunak/Hunt ticket as PM/Chancellor and a focus on trying to restore some of the UK's lost fiscal credibility. After the failed experiment with Trussonomics, the challenge facing the new team will be harder than the one that existed earlier this summer and probably a reason why international investors will not want to chase GBP/USD above the 1.15 level. FX volatility does remain exceptionally elevated, however, and large swings cannot be ruled out. Chris Turner CEE: The region remains supported on all fronts The Central and Eastern Europe (CEE) region offers a rather lighter calendar this week. Today, we start with consumer confidence in the Czech Republic, which dropped to its lowest-ever reading in September, and labour market data in Hungary, boosted by a one-off pay rise by employers amid a cost-of-living crisis. Tuesday will see the highlight of this week, the Hungarian central bank meeting. The National Bank of Hungary raised rates at an emergency meeting in mid-October, and we expect the central bank to maintain that approach and leave rates unchanged at this meeting. Otherwise, the region will be driven more by global events this week, which offer more this time.   On the FX side, the CEE region continues to benefit from falling gas prices, rising interest rate differentials and friendly EUR/USD levels. The Hungarian forint should remain supported and enjoy this moment of peace created by recent central bank actions and global conditions. The rest of the region should also remain supported. We see room for the Hungarian forint to move closer to 405 EUR/HUF, the Polish zloty to 4.760 EUR/PLN, and the Czech koruna to 24.450 EUR/CZK. However, the ECB meeting will come into play in the second half of the week, resulting in a lower EUR/USD and potentially weaker CEE FX.  Frantisek Taborsky  Read this article on THINK TagsFX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

German manufacturing PMI hits 45.7, ECB will most probably go for 75bp, but 100bp is not excluded. Naturally, Lagarde's rhetoric will be crucial for euro

Kenny Fisher Kenny Fisher 24.10.2022 14:59
EUR/USD has edged lower at the start of the week. In the European session, EUR/USD is trading at 0.9824, down 0.37%.   Manufacturing, services PMI point to contraction Germany is the locomotive of the Eurozone, and a faltering economy means trouble for the entire bloc. German Service and Manufacturing PMIs remained in contraction territory in September, below the neutral level of 50.0. The Manufacturing PMI fell to 45.7, down from 47.8 (47.0 est). The PMI has declined for a fourth straight month, as high energy costs and weak demand for goods have dampened factory production. German business activity is also struggling, as the Services PMI ticked lower to 44.9, down from 45.0, (44.7 est). The eurozone PMIs are also mired in contraction territory, and with winter coming and no end in sight to the Ukraine war, the PMIs will likely continue to decline in the short term.   ECB expected to hike by 0.75% The ECB meets on Thursday, with policy makers having to contend not only with a gloomy economic outlook, but also with spiralling inflation, with no sign of a peak. Eurozone CPI jumped to 9.9% in September, up sharply from the 9.1% rise in August. The markets have priced in a supersize 0.75% hike, which would bring the cash rate to 2.0% and will be looking for the Bank to declare its commitment to bring inflation back to the 2% target. A jumbo full-point increase is unlikely, but a possibility, given that inflation is close to double-digits. Investors will be monitoring the follow-up press conference, and the euro’s movement could well depend on ECB President Lagarde message to the markets – a signal that further rate hikes are coming would be bullish for the euro.   EUR/USD Technical EUR/USD is testing support at 0.9814. Next, there is support at 0.9753 There is resistance at 0.9924 and 0.9985     This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro slips lower on soft German PMIs - MarketPulseMarketPulse
The EUR/USD Pair Maintains The Bullish Sentiment

Ebury expects European Central Bank to significantly hike the interest rate

Matthew Ryan Matthew Ryan 24.10.2022 23:54
We expect another jumbo interest rate hike from the ECB this week, as it continues to play catch up to almost every other major central bank in the G10. The European Central Bank finally kicked its tightening cycle into gear at its September meeting, raising all three of its main policy rates by 75 basis points, following a half a percentage point hike in July. While the decision among policymakers was unanimous, the bank’s communications were more mixed. The bank’s inflation projection for 2022 was revised sharply higher, no surprises there, with President Lagarde saying that price pressures remained ‘far too high’. She also said that the bank planned to raise interest rates further ‘over the next several meetings’, and that upcoming policy decisions would remain data-dependent.   Financial markets were disappointed by Lagarde’s remarks on the 75bp hike, which she suggested could be a one-off, although ECB ‘sources’ were quick to correct her. We think that developments in the interim have cemented the case for another 75bp hike at this week’s meeting. Since the September meeting, economic conditions have remained broadly consistent. Euro Area inflation has hit fresh highs, consumer confidence has dropped to another low, and the PMIs of business activity are in line with a mild contraction. The uncertainty surrounding the European energy crisis presents a downside risk to growth, but we think that policymakers will overlook this and prioritise bringing down inflation. Figure 1: Euro Area Inflation Rate (2013 – 2022) Source: Refinitiv Datastream Date: 24/10/2022 In our view, another 75bp hike is all but guaranteed this Thursday – anything less would be a significant disappointment for markets as this is currently fully priced in. With that in mind, we believe that the bank’s rhetoric on the pace of hikes beyond the October meeting, notably the level of the terminal rate, will determine the reaction in the euro. We have been saying for some time that the Governing Council may need to raise rates deeper into 2023 than markets expect. As things stand, there appears to be a general view among policymakers that the terminal deposit rate may land somewhere around 2%, which we think is far too low. Any indication that rates may need to be raised deeper and more aggressively into 2023 than markets expect would drive a sharp rally in the common currency. Any news on the start date for quantitative tightening (QT), the process of unwinding the bank’s massive holdings of government and corporate bonds, could also shift the euro on Thursday. Lagarde has said in recent communications that the debate on QT has already begun among policymakers, and it’s likely that discussions will be had once again during the October meeting. That said, we think that it is still too soon for any concrete details on a start date. The ECB has already said that this won’t take place until rates are at a neutral level, which appears a long way off given the inflation outlook, while the UK’s premature QT announcement and general uncertainty in global financial markets may elicit caution. Other than that, we could get word on tweaks to the bank’s targeted longer-term refinancing operations (TLTROs), though this should have minimal implications for the FX market. There will be no fresh macroeconomic projections from the ECB this week, which could lead to a more muted response in markets relative to previous meetings. The bank’s comments on the state of the bloc’s economy, particularly in light of the ongoing uncertainty surrounding the European energy crisis could, however, guide market expectations. Should the GC indicate that growth may undershot its September projections, which we think is likely, and suggest that the pending recession could impact the tightening cycle, then the euro would sell-off. Conversely, a firm commitment to bringing down inflation at all costs would be perceived as unequivocally hawkish. Of the two scenarios, we favour the latter. Unlike many of its major peers, most notably the Bank of England, the ECB has delivered hawkish surprises in most of its recent monetary policy meetings. We think that the bar for another hawkish surprise this week may be slightly higher, as committee members appear to have done a better job in guiding market pricing. As mentioned, we do, however, still contest that markets are underestimating the pace that rates will need to go up in the Euro Area next year. In our opinion, this presents room for a higher common currency in the medium-term, even if the ECB fails to acknowledge this at Thursday’s meeting. The ECB’s policy decision will be announced at 13:15 BST (14:15CET) this Thursday, with the press conference to follow 30 minutes later. Read the article on Ebury.com: ECB October Meeting Preview: No let up in tightening just yet | Ebury UK
The EUR/USD Pair: There Are Still No Sell Signals

The Development Of The Price Of The EUR/USD Pair Growth

InstaForex Analysis InstaForex Analysis 25.10.2022 08:06
As a result of Monday, the euro did not fall, closing the day above Friday, above the balance and MACD indicator lines, and above the resistance of 0.9864. At the moment, the market is trying to win back the difference in sentiment between the Federal Reserve, which is slowing down the pace of rate hikes, and the European Central Bank, which is raising rates by 0.75% the day after tomorrow. We do not know how the market will de facto react to the ECB rate hike, although formally the mood of the players is clearly optimistic. This optimism in technical terms is expressed in the fact that if the price goes above the upper limit of the price channel and above the resistance of 0.9950, the euro opens a target of 1.0050. But if there is no upward breakthrough, for example, the ECB will raise the rate by only 0.50%, which is already being talked about in the press, or, with a 0.75% rate hike, will copy the Fed's mood and declare that it is not possible to continue to maintain such a pace for the shrinking economy, the price can easily turn into a medium-term decline with the first target at 0.9724. The price settled above the level of 0.9864 on the four-hour chart, above both indicator lines, the Marlin Oscillator is in the positive area. We follow the development of the current price growth. Long positions in the current situation is associated with increased risk.     Relevance up to 05:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325187
At The Close On The New York Stock Exchange Indices Closed Mixed

On The NASDAQ Stock Exchange, 1925 Companies Rose

InstaForex Analysis InstaForex Analysis 25.10.2022 08:08
At the close of the New York Stock Exchange, the Dow Jones rose 1.34% to a one-month high, the S&P 500 was up 1.19% and the NASDAQ Composite was up 0.86%. The Dow Jones index Amgen Inc was the top performer among the components of the Dow Jones index today, up 9.38 points or 3.72% to close at 261.32. Quotes Coca-Cola Co rose by 1.61 points (2.88%), ending trading at 57.57. Home Depot Inc rose 7.73 points or 2.81% to close at 283.26. The least gainers were Nike Inc, which lost 0.49 points or 0.55% to end the session at 88.01. The Walt Disney Company (NYSE:DIS) was up 0.32 points or 0.31% to close at 101.72, while Chevron Corp was down 0.06 points or 0.03% to end the trading at 173.13. The S&P 500 index  Leading gainers among the S&P 500 index components in today's trading were HCA Holdings Inc, which rose 7.02% to hit 210.47, Tractor Supply Company, which gained 5.30% to close at 207.83, and also shares of Regions Financial Corporation, which rose 5.28% to close the session at 20.55. The least gainers were Las Vegas Sands Corp, which shed 10.29% to close at 35.05. Shares of Starbucks Corporation shed 5.47% to end the session at 83.76. Quotes of Wynn Resorts Limited decreased in price by 3.86% to 56.53. The NASDAQ  Leading gainers among the components of the NASDAQ Composite in today's trading were Applied Genetic, which rose 62.43% to hit 0.39, Vaxcyte Inc (NASDAQ:PCVX), which gained 60.35% to close at 33. 00, as well as shares of Mullen Automotive Inc, which rose 32.94% to close the session at 0.50. The least gainers were Tricida Inc, which shed 94.48% to close at 0.60. Shares of Alfi Inc lost 54.32% and ended the session at 0.11. Quotes of Huadi International Group Co Ltd decreased in price by 43.99% to 33.00. The numbers On the New York Stock Exchange, the number of securities that rose in price (1,751) exceeded the number of those that closed in the red (1,344), while quotes of 124 shares remained virtually unchanged. On the NASDAQ stock exchange, 1925 companies rose in price, 1828 fell, and 253 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.54% to 29.85. Gold Gold futures for December delivery lost 0.15%, or 2.55, to hit $1.00 a troy ounce. In other commodities, WTI crude futures for December delivery fell 0.26%, or 0.22, to $84.83 a barrel. Futures for Brent crude for January delivery rose 0.13%, or 0.12, to $91.46 a barrel. FX Market Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.14% to 0.99, while USD/JPY edged up 0.98% to hit 149.09. Futures on the USD index fell 0.04% to 111.93.     Relevance up to 05:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/298126
The Price Of EUR/USD Pair Will Develop Sideways Movement

The Euro To US Dollar (EUR/USD) Pair Has Potential For Growth

InstaForex Analysis InstaForex Analysis 25.10.2022 08:16
Technical outlook: EURUSD pushed higher through 0.9900 intraday on Monday before easing off a bit. The single currency pair is seen to be trading close to the 0.9880 level at this point in writing as the bears might be preparing to drag towards 0.9780, near-term support. On the flip side, if the bulls are successful in pushing the price above 0.9900, they would try and test 0.9999 soon. EURUSD might be into its final leg higher since the beginning to rally from the 0.9535 lows earlier. Potential upside targets are 1.0200 and 1.0300 as projected on the daily chart here. The probability remains high for a pullback towards 0.9780 from here before turning higher again. Immediate support is seen at 0.9700-10, followed by 0.9635 and 0.9535 levels respectively. EURUSD is facing resistance at 1.0200 and a push higher would expose the next one, which is seen around 1.0350 respectively. Once the above counter-trend rally terminates, prices are expected to turn lower towards the larger-degree downtrend. Only a break below 0.9635 from here will bring back the bears into control again. Trading idea: Potential rally through 1.0200 against 0.9535 Good luck!     Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298134
The Euro May Attempt To Resume An Upward Movement

It Is Very Hard To Expect Strong Growth Of The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 25.10.2022 08:20
EUR/USD 5M The euro/dollar pair managed to trade in different directions on Monday. There was a formal reason for such movements, since weak business activity indices in the services and manufacturing sectors were published in the European Union in the morning, and similar US ones in the afternoon. However, we recall that in the past few days, both major pairs have been trading very inadequately and it is difficult to predict. Very often we see intraday reversals, corrections, pullbacks. Naturally, when a pair changes direction ten times a day, it becomes very difficult to trade. The euro continues to rise. We can see that the market still does not understand why it should buy the euro? There will be a European Central Bank meeting this week at which the rate will be raised by 0.75% with a probability of almost 100%. But the Federal Reserve will also raise its rates in early November. And the Fed rate is still much higher than the ECB rate. Therefore, we do not expect the euro to sharply rise, but the "swing" seems to have already begun. In principle, the nature of the pair's movement on Monday is perfectly visible on the 5-minute timeframe. All trading signals formed around one level 0.9844, and there were as many as eight of them. This, at least, indicates that the price spent a lot of time around the level of 0.9844, isn't this a sign of a flat? Quotes still went up a bit during the US session (immediately after the release of data on business activity), but then the same flat began. Thus, traders could only try to work out the first two signals. In both cases, the price failed to move even 15 points in the right direction, so both positions closed with a small loss. Once again, we urge everyone to be very careful in the near future. COT report: The euro Commitment of Traders (COT) reports for 2022 could be used as good examples. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again and the euro is still dropping. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long non-commercial positions increased by 6,500, while the number of shorts decreased by 4,000. Accordingly, the net position increased by about 10,500. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 48,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. If you look at the total open longs and shorts for all categories of traders, then shorts are 22,000 more (586,000 vs 564,000). Thus, according to this indicator, everything is logical. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 25. Boring Monday without bright splashes at the US session. Overview of the GBP/USD pair. October 25. Elections, elections... Forecast and trading signals for GBP/USD on October 25. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H You can see on the hourly timeframe that the pair has begun to form a new upward trend, but the movement is more like a "swing". Recall that such problems usually do not exist during periods of a decline, since it moves down with much more willingness than up. Therefore, we still believe that it is very difficult to expect the pair to show strong growth. It may continue for some time, but the dollar still looks preferable. On Tuesday, trading could be performed at the following levels: 0.9553, 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9754) and Kijun-sen lines (0.9800). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also additional support and resistance levels, but trading signals are not formed near them. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events or reports are scheduled in the European Union and America. Thus, we will likely see a flat or "swing" today. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 06:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325195
JPY: Assessing the FX Intervention Zone and Market Conditions

UK gilts decreased, Standard&Poor 500 went up. Singapore CPI inflation is released today

ING Economics ING Economics 25.10.2022 09:22
Sentiment lifts stocks for a second day, but conviction on the next move seems lacking Source: shutterstock Macro outlook Global Markets: A second consecutive day of gains for US stocks has taken the S&P500 to the 23.6% retracement level of its drop from December. Gains from here could signal a more significant recovery, though equally, this could mark the top in the latest move and set up stocks for a renewed push lower. Equity futures are not sending a strong directional signal. And the US Treasury market is also providing very few pointers. 10Y US Treasury yields are fairly steady at just below 4.25%, while yields on 2Y US Treasuries have dropped back from nearly 4.65% on Friday to just over 4.50% now following weaker US data. Markets have responded positively to news of the new UK Prime Minister, Rishi Sunak. 10Y and 30Y Gilt yields are down about 30bp, while the 2Y Gilt yield is about 24bp lower. Cable has also rallied back to just above 1.13, while EURUSD has climbed back to 0.9888 and the AUD is roughly where it was at this time last Friday at 0.6328,  having taken a brief peek above 64 cents yesterday. The JPY is sharply lower at 148.85 with occasional spikes lower consistent with Bank of Japan intervention starting soon after the yen looked like it would breach 152. Asian FX was mostly soft against the USD on Monday. The Offshore Renminbi led yesterday’s declines in Asia.   G-7 Macro: Widespread weakness was evident in the PMI indices published yesterday across the developed markets, though perhaps the sharp decline in the US service sector PMI is a silver lining in this bad news if it means slower Fed hikes and perhaps a lower peak Fed funds rate? This could be one reason that equity markets are finding some support. Today, US house price inflation data for August should show the decline in house prices accelerating and the year-on-year house price inflation data dropping. October’s US Conference Board consumer confidence data may also point to some cracks in the household sector. China: After President Xi's power consolidation, it seems that the market is worried that Xi may continue with restrictive policies. We have commented that there should be no big change in policy direction with the new top government team. We also expect the yuan to be weaker. Taiwan: The TWD is also likely to be weaker following weak Industrial production data at -4.83%YoY in September. Semiconductor manufacturing growth is set to contract in the coming months with an expected drop in orders for laptops and weaker orders for smart devices. South Korea: The composite consumer sentiment index slid to 88.8 in October (vs 91.4 in September) with all sub-components falling except for spending plans. Among the expectation components, household income and the domestic economic situation declined the most. Inflation expectations over the next 12 months increased to 4.3% in October (vs 4.2% in September). It seems like inflation expectations peaked in July (4.7%), but are still anchored above 4%. We think this will justify the Bank of Korea hiking 25bp next month. The possibility of another 50bp hike has lowered on the back of stabilizing inflation expectations and signs of tightening financial market conditions. Singapore:  September inflation data is set for release today.  The market consensus points to headline inflation steady at 7.5%YoY while core inflation could accelerate further to 5.3%.  Elevated core inflation should keep the Monetary Authority of Singapore (MAS) on a hawkish bias.  After a string of moves, the MAS will continue to monitor price developments to determine whether additional tightening would be necessary.    What to look out for: ECB meeting and US GDP Singapore CPI inflation (25 October) Hong Kong trade (25 October) US conference board confidence (25 October) Australia CPI inflation (26 October) South Korea GDP (27 October) China industrial profits (27 October) ECB meeting (27 October) US durable goods, initial jobless claims and 3Q GDP (27 October) Tokyo CPI inflation (28 October) Australia PPI inflation (28 October) Taiwan GDP (28 October) US personal spending, core PCE and Univ of Michigan sentiment (28 October) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Drop In German Inflation Is Welcome News, But It Is Mean That Can We Say That Inflation Has Peaked?

Germany’s Economy Minister Robert Habeck Statement About Natural Gas

TeleTrade Comments TeleTrade Comments 25.10.2022 09:49
Germany’s Economy Minister Robert Habeck said on Tuesday that they “expect the gas price mechanism decision at the next EU Council.” “Joint EU purchases are the best way to keep the gas price low,” Habeck added. Market reaction EUR/USD was last seen trading at 0.9864, daily lows, down 0.09% on the day.
The South America Are Looking For Alternatives To The US Currency

EUR/USD (euro to US dollar) - technical analysis - 25/10/22

InstaForex Analysis InstaForex Analysis 25.10.2022 22:47
  Overview : Euro parity still in play ahead of decisive US inflation data, for that common currency came within whisker of 0.9965 ($1.0000) this week. Right now, the EUR/USD pair is still moving around the price of 0.9965 - 1.0000. The currency pair EUR/USD is trading below the resistance levels of 1.0000, 1.0050 and 1.0100. The euro to US dollar (EUR/USD) rate has fallen about 1.25% year-to-date to trade around 0.9965. The decline is comparable to losses last seen for seven years, when the European Central Bank unleashed its massive stimulus programme. The EUR/USD pair continues to move upwards from the level of 0.9860, which represents the double bottom in the hourly chart. Yesterday, the pair rose from the level of 0.9860 to the bottom around 0.9965. Today, the first resistance level is seen at 1.0000 followed by 1.0050, while daily support is seen at the levels of 0.9919 and 0.9860. According to the previous events, the EUR/USD pair is still trading between the levels of 0.9919 and 1 USD. Hence, we expect a range of 81pips in coming hours (1.0000 - 0.9919). The first resistance stands at the price of 1 USD, therefore if the EUR/USD pair fails to break through the resistance level of 1.0000, the market will rise further to 1.0050. This would suggest a bearish market because the RSI indicator is still in a negative area and does not show any trend-reversal signs. The pair is expected to climb higher towards at least 1.0050 in order to test the second resistance (1.0050). The US Dollar and the Euro are two of the most prominent and well-known currencies in the world. The Euro versus US Dollar (EUR/USD) currency pair has the largest global trading volume, meaning it is the world's most-traded currency pair. Whether you find the instrument easy or difficult to trade on, it's not a pair that many traders neglect, due to its daily volatility and price movement. Thus, the market is indicating a bullish opportunity above the above-mentioned support levels, for that the bullish outlook remains the same as long as the 100 EMA is headed to the upside. Today, resistance is seen at the levels of 1.0000, 1.0050 and 1.0100. So, we expect the price to set above the strong support at the levels of1.0000, 1.0050 and 1.0100; because the price is in a bullish channel now. The RSI starts signaling an upward trend. Consequently, the market is likely to show signs of a bullish trend. Thus, it will be good to buy above the level of 0.9919 with the first target at 1 USD and further to 1.0050 in order to test the daily resistance. If the GBP/USD pair is able to break out the daily resistance at 1.0050 , the market will rise further to 1.0100 to approach resistance 3 in coming hours or days. However, the price spot of 1 USD and 1.0050 remains a significant resistance zone. Therefore, the trend is still bullish as long as the level of 0.9860 is not breached. Relevance up to 21:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298297
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

The Major Indices On The New York Stock Exchange Rose

InstaForex Analysis InstaForex Analysis 26.10.2022 08:02
At the close of the New York Stock Exchange, the Dow Jones rose 1.07% to hit a monthly high, the S&P 500 rose 1.63% and the NASDAQ Composite rose 2.25%. The Dow Jones index  The top performer among the components of the Dow Jones index today was Nike Inc, which gained 3.71 points (4.22%) to close at 91.72. Quotes of American Express Company rose by 5.39 points (3.81%), closing the session at 147.02. Boeing Co rose 4.60 points or 3.24% to close at 146.65. The biggest losers were The Travelers Companies Inc, which shed 3.70 points or 2.06% to end the session at 176.09. Amgen Inc was up 1.33 points (0.51%) to close at 259.99, while UnitedHealth Group Incorporated was down 1.38 points (0.25%) to close at 540. 22. The Dow Jones index  Leading gainers among the S&P 500 index components in today's trading were Centene Corp, which rose 10.47% to 83.75, IQVIA Holdings Inc, which gained 10.17% to close at 197.83, and shares of Charles River Laboratories, which rose 9.10% to end the session at 219.12. The losers were Brown & Brown Inc, which shed 12.65% to close at 55.10. Shares of Cadence Design Systems Inc shed 5.55% to end the session at 151.32. Quotes W. R. Berkley Corp fell in price by 4.64% to 69.20.  The NASDAQ Composite Leading gainers among the components of the NASDAQ Composite in today's trading were Taysha Gene Therapies Inc, which rose 97.35% to hit 2.98, Fangdd Network Group Ltd, which gained 89.64% to close at 1.26. , as well as shares of Revelation Biosciences Inc, which rose 64.60% to close the session at 0.41. The biggest losers were Hoth Therapeutics Inc, which shed 26.37% to close at 0.24. Shares of Mana Capital Acquisition Corp lost 23.24% to end the session at 5.99. Quotes TuanChe ADR fell in price by 18.45% to 6.32. The numbers On the New York Stock Exchange, the number of securities that rose in price (2619) exceeded the number of those that closed in the red (487), while quotations of 112 shares remained practically unchanged. On the NASDAQ stock exchange, 2989 companies rose in price, 753 fell, and 241 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 4.66% to 28.46, hitting a new monthly low. Gold Gold futures for December delivery added 0.21%, or 3.55, to $1.00 a troy ounce. In other commodities, WTI crude futures for December delivery rose 0.39%, or 0.33, to $84.91 a barrel. Brent futures for January delivery fell 0.05%, or 0.05, to $91.16 a barrel. Forex Market Meanwhile, in the Forex market, EUR/USD rose 0.94% to hit 1.00, while USD/JPY fell 0.71% to hit 147.90. Futures on the USD index fell 1.03% to 110.75.   Relevance up to 04:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/298317
The EUR/USD Price Failed To Exhibit A Strong Trending Movement

There Is The Probability Of A Sideways Price Of The EUR/USD Pair Movement

InstaForex Analysis InstaForex Analysis 26.10.2022 08:12
The euro continued to grow on Tuesday and set new tasks for solving: will the price settle above the overcome resistances, this is the level of 0.9950 and the upper line of the price channel and continue to grow to 1.0050, or will it return with a consolidation to the level of 0.9950 and then continue to descend to 0.9864 and 0.9724? The Marlin Oscillator on a daily scale is prone to a reversal of corrective growth from current levels, and the price's exit above resistance will become a false signal. In this case, the downward channel will be abolished. The main events will take place tomorrow when the European Central Bank announces its decision on monetary policy. A price divergence is forming with the Marlin Oscillator on the four-hour chart. If this is not a reversal, then the probability of a sideways price movement. The safe waiting range is 0.9864-0.9950. The lower level (0.9864) is supported by the MACD indicator line.     Relevance up to 04:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325323
Credit squeezing into central banks – what next?

Growth Of The EUR/USD Pair Could Be Associated With The Future ECB Meeting

InstaForex Analysis InstaForex Analysis 26.10.2022 08:20
EUR/USD 5M The euro/dollar pair alternated between an absolute flat and a strong trend on Tuesday. Recall that at this time the pair's movements are confusing so any development of events should be expected. However, yesterday everything went more or less logically, as the pair was again virtually in the same place during the European trading session, and again traded in a very volatile manner during the US session. There were no reports or events in the European Union and the United States that could provoke a fall in the dollar by 100 points in just an hour. Thus, we are inclined to believe that the nature of this movement was technical. The euro in the long term continues to move away from its 20-year lows, but it is still somehow hesitant. Yesterday's growth could be associated with the future European Central Bank meeting, the results of which will be known on Thursday, but at the same time, the British pound was also growing, which, in theory, should not be reacting to such a factor. But it's good that the euro is at least trying to show growth. There was a difficult situation in regards to Tuesday's trading signals, since the very first one formed in the middle of the US session, when most of the upward movement had already been completed. Thus, after the pair grew by 100 points, it was hardly worth trying to work out a buy signal. The same applies to the second signal to buy near the level of 0.9945, it also formed too late in time. Unfortunately, a pretty good move was missed, but out of 8-10 hours of the daytime, the pair was only following a trend movement for an hour, and it was impossible to predict this breakthrough. COT report: The euro Commitment of Traders (COT) reports for 2022 could be used as good examples. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again and the euro is still dropping. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long non-commercial positions increased by 6,500, while the number of shorts decreased by 4,000. Accordingly, the net position increased by about 10,500. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 48,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. If you look at the total open longs and shorts for all categories of traders, then shorts are 22,000 more (586,000 vs 564,000). Thus, according to this indicator, everything is logical. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 26. Four more explosions occurred in the area of the Nord Stream pipelines. Overview of the GBP/USD pair. October 26. The British prime ministerial election ended dull and prosaic. Forecast and trading signals for GBP/USD on October 26. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H You can see on the hourly timeframe that the pair continues to form a new upward trend and, if not for yesterday's strong growth that lasted for about an hour, we would say that the pair is preparing for a new fall. But no, it came close to price parity, breaking 400 points off its 20-year lows for the second time in recent weeks. There are still no obvious reasons to buy the euro. They can be highly technical and expressed by the bears' lack of desire to continue selling the euro. On Wednesday, trading could be performed at the following levels: 0.9553, 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, as well as Senkou Span B (0.9754) and Kijun-sen lines (0.9838). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also additional support and resistance levels, but trading signals are not formed near them. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. Today there will be no important events or reports scheduled again in the European Union and America. Thus, once again there is a possibility that we might witness a flat or "swing". What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 02:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325311
Foreign exchange - Euro against US dollar - preview

The Euro To US Dollar Pair (EUR/USD) Is Well Supported

InstaForex Analysis InstaForex Analysis 26.10.2022 08:30
Technical outlook: EURUSD grew through the 0.9975 high intraday on Tuesday before pulling back lower again. Prices are trading in a very tight range around 0.9950-60 for the last few hours. The instrument is looking to push through 1.0200 before giving in to the bears. A break above 1.0000 will accelerate the climb towards 1.0200 and 1.0350 lined-up resistances in the near term. EURUSD is developing its final leg higher towards 1.0200 at least with a potential up to 1.0600 as projected on the daily chart. It would then terminate the larger-degree counter-trend rally, which had begun from 0.9535 earlier. Also, note that 1.0600 is the Fibonacci 0.618 retracement of the entire drop between 1.2350 and 0.9935 as seen here. Hence, there is a high probability of a turn lower from there. EURUSD is well supported at 0.9812, followed by 0.9710 and 0.9630, while resistance comes in around 1.0200, followed by 1.0350. A break above 1.0200 will open the door to testing 1.0350 and higher levels going forward. Only a reversal from current levels and a break below 0.9710 will negate the above bullish structure. Trading idea: Potential rally through 1.0200 and 1.0350 against 0.9535 Good luck!     Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298341
The EUR/USD Pair Chance For The Further Downside Movement

It seems that European Central Bank will hike the interest rate by 75bp

Jing Ren Jing Ren 26.10.2022 09:05
Tomorrow the ECB meets for its latest policy assessment. The consensus among economists is that there will be a hike of 75bps, and the market appears to be pricing it in. Therefore, the reaction in the currency pairs might be minimal, since over two-thirds of the surveyed economists agreed. Those who didn't were split between 50bps and 100bps, with the midpoint at 75. That means markets are likely to be looking beyond the current meeting, with expectations around what happens in December likely the key to how the pairs perform. The Euro has fallen respect to the dollar for two major reasons: The ECB has been much slower to raise rates, and inflation has gone higher in the shared economy. That means the real interest rate spread has continued to grow. With the Fed expected to raise rates another 75bps as well, the ECB has to keep pace in order to keep the Euro from falling. It would have to do something more than that to lift the shared currency. What can make a stronger Euro? The thing is, a stronger Euro would help the ECB reach its targets in the current circumstances. Almost half of the inflation experienced in Europe is because of the high price of fuel - which is priced in dollars. A stronger Euro would help reduce the impact of inflation from that source. It would also help reduce the cost of other imports. Of course, on the other hand, it would make exports more difficult, but the Euro is near lows it hasn't seen for more than a couple of decades. However, that's unlikely to be a consideration for policy; merely a potential beneficial side effect. The ECB is dealing with another problem, and that is so called "excess liquidity". Investors have been staying on the sidelines given the uncertainty in Europe. And considering how little bonds pay, they aren't rushing to buy up debt. With inflation expected to remain high for an extended period of time, but interest rates not forecast to rise to compensate, it's just not a sound investment to buy Eurobonds (compared to other currencies). What to look out for The ECB is expected to address this issue during the meeting, and look for another mechanism to mop up this "extra cash" that's contributing to higher inflation. One of them is quantitative tightening, which is to sell bonds that the ECB has bought up. This would be expected to force up market interest rates, and encourage investors to take on more debt. However, Lagarde has insisted this won't happen until the ECB has reached its neutral rate, meaning it's unlikely to be implemented just yet. However, a change in rhetoric around the possibility of QT - for example, that it's not necessary to reach the neutral rate - might change the calculus of the market. It's not likely to be enough to push the Euro substantially higher, but it could set the groundwork for that to happen later in the year. The other option is to take a more definitive stance on what's called the "terminal rate" or the rate at which the ECB will taper off hikes. So far, officials have talked about reaching 2.0% by the end of the year. With 75bps expected tomorrow, that means just 50bps in December. But if members were to talk about a higher terminal rate, it could get bond yields to rise as well. But, again, that would be more setting the groundwork for future actions, in a very uncertain environment.
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

Worrying signs from German economy | ECB decides on interest rate shortly. Euro may rise if Lagarde tease next hikes.

Kenny Fisher Kenny Fisher 26.10.2022 22:21
EUR/USD continues to power forward and has breached the parity line for the first time since September 20th. The euro is red hot, having gained 2.1% this week, as the US dollar has hit a bump in the road and is lower against all the major currencies. In the North American session, EUR/USD is trading at 1.0069, up 1.02%. The German economy, the largest in the eurozone, continues to show signs of weakness. September PMIs pointed to contraction in manufacturing and business activity, and these are unlikely to rebound as the Ukraine war continues and an energy crisis looms, with winter close by. The Ifo Business Confidence index fell for a fourth straight month in October and GfK Consumer Sentiment, which will be released tomorrow, is expected to remain deep in negative territory. ECB expected to hike by 0.75% The ECB meets on Thursday, with policy makers having to contend not only with a gloomy economic outlook in the eurozone, but also with spiralling inflation, with no sign of a peak. Eurozone CPI jumped to 9.9% in September, up sharply from the 9.1% rise in August. The markets have priced in a supersize 0.75% hike, which would bring the cash rate to 2.0% and investors will be looking for the Bank to declare its commitment to bring inflation back to the 2% target. A jumbo full-point increase remains a slight possibility, given that inflation is close to double-digits. Investors will be monitoring the follow-up press conference, and the euro’s direction tomorrow could depend on ECB President Lagarde’s message to the markets. If Lagarde signals that further rate hikes are coming, the euro will likely gain ground. Conversely, a dovish stance from Lagarde could cut short the euro’s rally. EUR/USD Technical EUR/USD has broken above 0.9846 and is testing resistance at 0.9985. The next resistance line is 1.0095 There is support at 0.9753 and 0.9643 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. EUR/USD punches above parity, ECB next - MarketPulseMarketPulse
GBP: BoE Stands Firm on Bank Rate and Mortgage Interest Relief, EUR/GBP Drifts Lower

ECB is expected to hike by 75bp. USD is not that powerful at the moment, and it seems that a less hawkish move may be on the cards

ING Economics ING Economics 27.10.2022 11:25
The dollar is having one of its deepest corrections of the year. Yesterday's smaller-than-expected hike by the Bank of Canada has given rise to speculation that the Fed may also want to slow the pace of tightening. Softer-than-expected 3Q US GDP numbers later could see the dollar correct a little further. But the highlight today should be a 75bp ECB hike USD: Focus on US GDP numbers Volatility remains the name of the game and the dollar is now seeing one of its deepest corrections of the year. If we were to say what drove dollar weakness yesterday, we would highlight: i) quite a sharp turn lower in USD/CNY where there had been reports of Chinese state banks selling (quasi intervention?) and ii) the smaller than expected Bank of Canada (BoC) rate hike by 50bp. On the latter, it does seem that the BoC is a little hesitant to power ahead with 75bp rate hikes, noting the slowing economy. This has raised speculation that the Fed may not be as immune to economic weakness as it claims. Somewhat surprisingly, the pricing of the Fed terminal rate is only 15bp off its recent highs at 5.00%. This suggests the FX market has reacted more than the rates market. That brings us to today where we will receive third-quarter US GDP data. My colleague, James Knightley, believes there are downside risks to the consensus figure of 2.4% QoQ annualised given softer residential investment and consumption. Such an outcome could feed the corrective forces currently at work for the dollar. That could possibly see the DXY correction extend all the way to the 100-day moving average at 108.42. However, some high US inflation data tomorrow and what should be a hawkish Fed next week should contain the depth and length of this dollar correction. And for those corporates with dollar needs over the next 3-6 months, this correction should be a good opportunity to secure dollars. As an aside, we noted reports of record US crude and refined product exports last week. That will help keep the US current account deficit in check. Chris Turner EUR: A hawkish ECB has not helped the euro so far this year The European Central Bank is expected to hike rates by 75bp today, which will bring the deposit rate to 1.50%. Money markets price the deposit rate being taken to 2.75% in a year's time. Our team thinks the top in the cycle will be more like 2.25%, but with Eurozone CPI running at 10% it is too early to expect the ECB to push back against such pricing. As my colleagues discuss in their ECB preview, beyond any discussion on the terminal rate, the focus will be on i) excess liquidity and ii) Quantitative tightening (QT). On the former, source stories suggest the ECB may adjust the terms of the existing TLTROs (making borrowing rates less advantageous) as opposed to some kind of reverse tiering which could depress available deposit rates. This makes sense in that the ECB will not want to depress money market rates as it fights inflation. On the QT side, our team feels it is too early to provide too many details on QT, where a wind-down of the ECB balance sheet could hit peripheral debt markets. What does this all mean for the euro? As my colleague Carsten Brzeski noted in that ECB preview, the ECB has surprised hawkishly all year - but EUR/USD has generally ended ECB policy days weaker. It feels like investors use the liquidity provided around ECB event risk to offload euros. As noted above, we have a slightly softer environment today and EUR/USSD has firmly broken out of this year's bear channel. That could point to EUR/USD risk on the day to 1.0200. If EUR/USD does find something bearish in the release, ideally it would now need to break back below the 0.9920/0.9950 area to return us to the bear trend. Chris Turner GBP: Recovery moves into the hard yards Sterling continues to enjoy a renaissance, but we would argue that further gains will be harder to come by. The fiscal credibility premium has reduced substantially, and increasingly the markets will be left to focus on the UK fiscal/monetary policy mix. Here the delay in the release of the government's fiscal plan to November 17th serves as a reminder that there is a lot to play for. Does the delay signify greater cost-cutting at work or will the use of lower gilt yields and lower gas prices in the Office for Budget Responsibility (OBR) estimates mean that the Sunak government has to do less cost-cutting overall?  Where the ground looks slightly firmer is on the Bank of England (BoE) side. Here a recent speech by the BoE's Ben Broadbent makes the case that the BoE does not need to respond as aggressively as the markets have priced to government spending plans. In effect, this is a push-back against the aggressive pricing of the BoE cycle. And if there is a risk to the consensus of the BoE hiking 75bp next week, it's that it merely rises by 50bp.  The softer dollar environment means that the GBP/USD correction could extend to the 1.1750 area - but we doubt these gains last. EUR/GBP may well find support in the 0.8600/8650 area, with risks tilted towards 0.8800 into next week. Chris Turner CEE: ECB may spoil the party in the region The Central and Eastern Europe (CEE) region continues to seek new local currency gains thanks to a combination of new highs in EUR/USD, gas prices staying below EUR 100/MWh, elevated rates and risk-on sentiment in the markets. This saw the Polish zloty reach its strongest levels since late September and the Hungarian forint test the recent highs. The Romanian leu also looked stronger, breaking significantly away from central bank intervention levels for the first time since the summer. We see similar buying interest in the ROMGB market, but we think it is too early to consider this the same scenario as we saw in the summer. The Czech koruna is the only currency in the region to remain flat after fresh comments from the CNB, which once again cooled market hopes for an additional rate hike at the November meeting. However, the koruna is well away from the CNB's intervention levels, and our estimates suggest that the central bank has not had to intervene since the September meeting. Today, the regional calendar is empty again and all eyes will be on the ECB, which could threaten the favourable EUR/USD levels for the CEE region and end the positive story of the last two weeks. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Is Showing A Potential For Bearish Drop

We could say European Central Bank has three variants to choose from today

Kenny Fisher Kenny Fisher 27.10.2022 12:06
EUR/USD is in a holding pattern ahead of today’s ECB rate meeting. In the European session, the euro is trading at 1.0068, down 0.16%. ECB projected to hike by 0.75% The ECB holds its policy meeting later today, amidst difficult economic conditions in the eurozone. Inflation jumped to 9.9% in September, up sharply from 9.1%. The manufacturing and services sectors are in decline and confidence levels are low. The markets have priced in a 0.75% hike and there has even been talk of a jumbo full-point increase. Could the ECB surprise with a lower-than-expected hike of 0.50%? Earlier this week, the Bank of Canada and Reserve Bank of Australia both delivered smaller hikes than expected, at 0.50% and 0.25%, respectively.  The message from both central banks is that they are close to ending their rate-tightening cycles and expect inflation to peak in the next several months. Read next: ECB is expected to hike by 75bp. USD is not that powerful at the moment, and it seems that a less hawkish move may be on the cards| FXMAG.COM Will the ECB follow suit? It’s possible but unlikely. The ECB only entered the tightening game in July, and the current benchmark of 1.25% remains out-of-sync with inflation, which is close to double-digits and the ECB needs to be aggressive if it hopes to beat inflation. The benchmark rates are much higher in Canada (3.75%) and Australia (2.60%) and have slowed economic growth, while the ECB’s low benchmark rate has not had the same effect. Still, the weak eurozone economy could tip into recession as a result of sharp rate hikes, which means that a 0.50% hike cannot be completely discounted. We can expect some movement from EUR/USD in response to the ECB decision – an increase of 0.75% or 1.00% will be bullish for the currency, while a 0.50% hike would disappoint investors and likely send the euro lower. EUR/USD Technical There is resistance at 1.0095 and 1.0154 0.9924 and 0.9814 are the next support levels   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. EUR/USD eyes ECB rate decision - MarketPulseMarketPulse
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

Euro to US dollar - technical analysis by Sebastian Seliga (InstaForex) - 27/10/22

InstaForex Analysis InstaForex Analysis 27.10.2022 12:29
Technical Market Outlook: The EUR/USD pair has broken above the wave A high located at the level of 1.0000 and made a new local high at the level of 1.0091. The bulls wait for the ECB interest rate decision that is scheduled for release at 14:15 today in order to continue the rally higher despite the extremely overbought market conditions. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the down trend reversal is confirmed. The mid and long-term outlook for the EUR remains bearish until the swing high seen at 1.0389 is clearly broken.     Weekly Pivot Points: WR3 - 0.99810 WR2 - 0.99177 WR1 - 0.98838 Weekly Pivot - 0.98544 WS1 - 0.98205 WS2 - 0.97911 WS3 - 0.97278 Trading Outlook: The EUR had made a new multi-decade low at the level of 0.9538, so as long as the USD is being bought all across the board, the down trend will continue towards the new lows. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Please notice, there is plenty of room to the downside for the EUR to go, all of the potential technical support level are very old and might not be much reliable anymore. Relevance up to 09:00 2022-10-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298587
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

ECB to hike by 75bp | Softer US Dollar (USD) Helps Gold And Crude Oil

Swissquote Bank Swissquote Bank 27.10.2022 13:51
Yesterday wasn’t not a good day for the US Big Tech. Google dived almost 10% after reporting disappointing results, while Microsoft sank almost 8%. Nasdaq bounced 2% lower after having tested the major 38.2% Fibonacci retracement, a touch below the 11700. Meta And don’t expect the things to look better today. Meta dived another 20% in the afterhours trading, after announcing disappointed results. Softer-than-expected  On the macro front, however, the Bank of Canada (BoC) surprised with a softer-than-expected rate hike, and US home sales fell almost 11% in September.   EUR/USD The US dollar index dived below its 50-DMA yesterday. The EURUSD rallied above parity, as Cable advanced past 1.16. Focun On Focus shifts to US GDP dat, the European Central Bank (ECB) decision, Apple & Amazon earnings today. Watch the full episode to find out more! 0:00 Intro 0:33 US Big Tech selloff intensifies. Meta down 20% post-market 1:55 What to expect from Apple & Amazon?7 4:05 Policy pivot? 5:20 US GDP to rebound despite sluggish economy 6:52 US dollar softer, EURUSD rallies above parity, Cable past 1.16 7:52 ECB to hike by 75bp, discuss QT 9:19 Gold, oil up on soft dollar Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Apple #Amazon #Meta #Google #Microsoft #earnings #USD #GDP #ECB #rate #decision #EUR #XAU #crudeoil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH      
The EUR/USD Pair Chance For The Further Downside Movement

"Today's decision should reflect a desire to further normalise policy and unwind stimulus in light of unbudging inflation"

ING Economics ING Economics 27.10.2022 13:55
The ECB is likely to hike by 75bp and attempt a first reduction of its balance sheet via the TLTROs. Given the markets current predisposition with a rebalancing of risks among global central banks, they may be more sensitive to the dovish bits in today's meeting – like continued vagueness on QT. But the desire to tighten remains, and we see more rates upside   Beyond today's ECB hike: From the balance of risks to first balance sheet tweaks The European Central Bank policy statement and press conference will be the driver of today’s markets. As our economists note in their preview, communication by the ECB has appeared unusually streamlined ahead of the meeting so that a clear consensus for a larger 75bp hike has distilled in market pricing. More important for the market reaction should thus be the ECB’s communication on its economic outlook as well as any decisions regarding the ECB’s balance sheet and excess liquidity. But all decisions today should still point to a desire to further normalise policy and unwind stimulus in light of unbudging inflation.   Today's decision should reflect a desire to further normalise policy and unwind stimulus in light of unbudging inflation The ECB’s action will be interpreted against the more broader backdrop of global central bank meetings where the Bank of Canada has just yesterday surprised markets with a smaller-than-expected hike as rising recession risks are being accounted for. While more tightening will still be needed, the Bank of Canada was trying to balance the risks of under- and over-tightening as Governor Macklem noted. In that regard all eyes are already turned to next week’s Federal Open Market Committee meeting for any hint of policy pivot, but also President Lagarde’s statements today will be scrutinized for any sign of the ECB shifting the balance of inflation versus growth risks within its new reaction function.   Fed pivot chatter has also knocked ECB hike expectations off their peak Source: Refinitiv, ING What we will be watching in today's ECB press release and press conference A 75bp rate hike: The ECB is likely to increase all policy rates by 75bp today, which would take the refinancing rate to 2% and the deposit facility rate – the market  relevant rate – to 1.5%. Markets already attach a c.90% probability to this outcome. We do not see the ECB providing a clearer idea of the terminal rate, sticking to the meeting-by-meeting approach. Macro outlook: There are no updated staff forecasts for the public, but the ECB’s assessment of current risks and economic conditions versus its base and downside scenarios will be relevant for market reaction. The ECB’s growth projections already looked optimistic in September, and since then survey indicators have continued to decline. Hard data does not point to the economy dropping off a cliff and fiscal support measures are also taking shape. Inflation remains high, but we have seen a drop in energy prices, albeit they are prone to volatility. All in all there might be more discussion within the Council, but the outlook remains highly uncertain and the ECB may find it warranted to maintain a hawkish line here.   Steering excess liquidity lower: Measures to incentivise the early repayment of targeted longer-term refinancing operations are widely anticipated. Background stories suggest the ECB was leaning towards unilaterally changing the terms of the TLTRO. However, this option has received more pushback yesterday by market- and banking associations in a last ditch lobbying effort. Among the other options reportedly on the table are reverse tiering or lowering the minimum reserve remuneration while increasing the requirement at the same time. In the end all of the aforementioned options are means to steer excess liquidity lower – which should have knock-on effects in widening money market spreads and to a degree also sovereign spreads.     Discussing quantitative tightening: After the Cyprus meeting the ECB confirmed it has started to discuss quantitative tightening. Given the experiences of the UK and the fragile state of markets also in the eurozone we suspect the ECB will leave it at that for now – it was discussed – and not provide further concrete guidance. The hawkish outcome would be to tweak the APP reinvestment guidance contained in the press statement already today. This would set the ECB on a clearer path to decide on QT in December or February for a start in the second quarter of next year, in line with the ideas that the ECB’s hawks have outlined in public over the past month.   ECB officials have flagged a gradual start of Quantitative Tightening in 2023 Source: Refinitiv, ING Today's events and market views Markets are clearly trading with an eye for any signs of policy pivot, especially after the smaller hike than anticipated from the Bank of Canada yesterday. As such they may pick up more on the dovish bits in today’s ECB meeting and post-meeting reporting, such as any hints of more discussion surrounding the appropriate size of the hike. The ECB not committing to anything on QT just yet, may also be a relief when compared to the already very concrete ideas that had been voiced by some of the ECB hawks over the past month. Beyond any short-term reaction today, we think the market should come around to the notion that near-term the ECB will need to deliver more tightening. This will come in the form of more hikes and quantitative tightening is clearly waiting in the wings. Tweaks on the TLTROs are just the first step of scaling back the balance sheet. Before we can look for a more lasting turn towards lower yield we would want to see a confirmation – or compelling evidence as the Fed puts it – that the inflation problem has been tackled. Away from the ECB the focus is on the US data today. The first print for third quarter GDP should point to a return to growth, but durable goods orders ex transport could come in softer. Also on the menu are initial jobless claims data and – in terms of supply – a US$35bn 7Y US Treasury note auction. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair: There Are Still No Sell Signals

The Euro (EUR) Requires Concerns About Growth To Ease In Order To Strengthen

TeleTrade Comments TeleTrade Comments 27.10.2022 14:06
Markets expect a 75 bps hike from the European Central Bank (ECB) today but the focus will be on communication. Nevertheless, the euro requires concerns about growth to ease in order to strengthen, Kit Juckes, Chief Global FX Strategist at Société Générale, reports. 75 bps is priced in, forward guidance is everything “A 75 bps hike is priced in, followed by at least 50 bps more in December. Warmer weather is helping, the market doesn’t expect QT to start until rates are significantly higher, but does expect to see the TLTRO being run down.”  “As important as anything else will be the tone of Christine Lagarde’s comments, and there, a clear focus on fighting inflation probably keeps the hawkish message intact. That suggests we won’t get anything negative for the euro from the meeting, a least. A stronger currency though probably requires pessimism about growth to wane.” “The Bloomberg consensus for Eurozone 2023 GDP growth has fallen from 2.5% to -0.1% since the start of March, during which time the consensus for US GDP has fallen from 2.5% to 0.4%.”  See – ECB Preview: Forecasts from 15 major banks, no obstacles to a 75 bps hike
The EUR/USD Price May Fall Under 1.0660

FX interventions kicking USD to correction

Alex Kuptsikevich Alex Kuptsikevich 27.10.2022 16:50
As we previously warned, major central banks worldwide that hold massive amounts of dollar securities, are stepping up interventions to support their national currencies. On Wednesday, China, Japan, and Switzerland resorted to such measures. The UK and India used earlier the same tool. Countries are using this short-term tool to stop the one-sided selling of their national currencies. A longer-term measure is to raise rates, but its side effect is that the time lag and the impact on the real economy, many of which are already heading for a recession, is too long. On the speculative side, other consequences of this intensification of FX interventions are essential. More dollars are becoming available in the financial system, which counteracts the kind of liquidity drying that the Fed is engaged in by sharply raising rates and shrinking the balance sheet. Central banks' very regular dollar sales are setting the stage for at least a corrective pullback. Yesterday, for the first time since January of this year, the DXY Dollar Index was 1% below its 50-day average, which acts as a medium-term trend signal line. Looking at the chart outside the context of FX interventions, the sharp dip below the line calls into question the continuation of the dollar's rising trend. More locally, without the dollar returning to gains before the end of this week, the priority scenario for the FX market could be a correction in the DXY. Given the total amplitude of the rally from the "double bottom" of January-May 2021 to the highs of September 2022, a pullback to the 104-105 area is possible. The target range's lower end was the Dollar surge's highs in March 2020. The 200-day moving average, which serves as a long-term trend indicator, pulls into the same area. The upper boundary is the retracement area to the 61.8% level of the dollar's rise since the beginning of 2021.
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

European Central Bank delivered a 75bp rate hike

ING Economics ING Economics 27.10.2022 19:47
The ECB just announced another jumbo rate hike by 75b basis points, bringing interest rates in the eurozone very close to neutral levels   The ECB just hiked interest rates by 75bp, bringing the deposit facility interest rate to 1.5% and the main refinancing rate to 2%. Contrary to the rate hike decisions in July and September, the size of today’s rate hike seems to have been uncontested and broadly supported by all ECB members. Next to the expected rate hike, the ECB also announced changes to the current Targeted-Long-Term-Refinancing Operations (TLTRO), in terms of the applied interest rate and earlier repayment dates. Also, the ECB decided to set the remuneration of minimum reserves at the ECB’s deposit facility rate. More details will be released after the press conference. The sharpest and most aggressive hiking cycle ever In slightly more than three months, the ECB has now hiked interest rates by a total of 200bp. It's the sharpest and most aggressive hiking cycle ever. In the previous two hiking cycles since the start of the monetary union, it took the ECB at least 18 months to hike rates by a total of 200bp. Today’s rate hike provides further evidence of the extreme paradigm change at the ECB. A year ago, ECB president Christine Lagarde still said at a press conference that “the lady is not tapering”. Now, the ECB has conducted the most aggressive rate hikes in its history, despite a war in Europe, little signs of an overheating economy but rather indications of a looming recession and record high inflation, which is mainly driven by high energy and commodity prices. A couple of years ago, the same ECB but different main characters might have decided differently. The current ECB, however, has woken up very late to the fact that even if inflation is driven by supply-side factors, too high inflation for too long can damage a central bank’s credibility and plant the seeds for unwarranted second-round effects. At the current juncture of a looming recession and high uncertainty, normalising monetary policy is one thing but moving into restrictive territory is another thing. With today’s rate hike, the ECB has come very close to the point at which normal could become restrictive. At the press conference starting at 2.45pm CET, ECB president Christine Lagarde might provide the first insights into how far the ECB is still willing to go. Read this article on THINK TagsMonetary policy Inflation Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Euro to US dollar - Ichimoku cloud analysis - 21/11/22

ING Economics expect that European Central Bank may end hiking in February 2023

ING Economics ING Economics 27.10.2022 20:35
The press conference after the rate hike announcement showed that the European Central Bank (ECB) is determined to continue hiking interest rates. However, while today's jumbo hike was a no-brainer, we expect much more controversial discussions in December and an end to the hiking cycle in February next year ECB President Christine Lagarde at today's press conference   The ECB has hiked interest rates by 75bp, bringing the deposit facility interest rate to 1.5% and the main refinancing rate to 2%. Contrary to the rate hike decisions in July and September, the size of today’s rate hike seems to have been uncontested and broadly supported by all ECB members. Alongside the expected rate hike, the ECB also announced changes to the current Targeted-Long-Term-Refinancing Operations (TLTRO), in terms of the applied interest rate and earlier repayment dates. The central bank also decided to set the remuneration of minimum reserves at the ECB’s deposit facility rate. Regarding the changed TLTRO terms, from 23 November 2022 onwards, the interest rate on all remaining TLTRO III operations will be indexed to the average applicable key ECB interest rates. There will also be three additional moments for earlier repayments. According to the ECB, “it is necessary to adapt certain parameters of TLTRO III to reinforce the transmission of our policy rates to bank lending conditions so that TLTRO III contributes to the transmission of the monetary policy stance”, which is a bit strange as the latest Bank Lending Survey had already signalled a tightening of lending conditions. As regards the decision to set the remuneration of minimum reserves at the ECB’s deposit rate and no longer at the refi rate, this should hardly have an impact as minimum reserves are currently only a fraction of overall excess liquidity. The ECB did not announce any reverse tiering. The sharpest and biggest rate hike cycle ever The ECB has now hiked interest rates by a total of 200bp over a period of slightly more than three months. It's the sharpest and most aggressive hiking cycle ever. In the previous two hiking cycles since the start of the monetary union, it took the ECB at least 18 months to hike rates by a total of 200bp. Today’s rate hike provides further evidence of the extreme paradigm change at the ECB. A year ago, ECB president Christine Lagarde said at a press conference that “the lady is not tapering”. Now, the ECB has conducted the most aggressive rate hikes in its history, despite a war in Europe, little signs of an overheating economy but rather indications of a looming recession, and record high inflation, which is mainly driven by high energy and commodity prices. A couple of years ago, the same ECB but different main characters might have decided differently. The current ECB, however, has woken up very late to the fact that even if inflation is driven by supply-side factors, too high inflation for too long can damage a central bank’s credibility and plant the seeds for unwarranted second-round effects. At the current juncture of a looming recession and high uncertainty, normalising monetary policy is one thing but moving into restrictive territory is another. With today’s rate hike, the ECB has come very close to the point at which normal could become restrictive. However, during the press conference, Lagarde said that the ECB might still have to hike rates at several more meetings as the job to bring inflation back to target is not done yet. First opening for a dovish pivot in December Looking ahead, the ECB seems determined to continue hiking interest rates, though no longer at the current jumbo size of 75bp. Lagarde tried to give the impression that there will be more than one more rate hike. However, her comments about the fact that the ECB no longer believes in any estimates of a neutral interest rate, after previous comments that the central bank no longer believed in its inflation projections, make it hard to identify the ECB’s precise reaction function. This reaction function can probably be summarised as 'whatever, whenever'. Lagarde also mentioned the word “recession” and stressed that incoming data and the next staff projections at the December meeting would be important. A first opening for a dovish pivot at the December meeting We think that the debate at the December meeting will already be much more controversial than today, delivering another 50bp rate hike. However, as the ECB’s inflation outlook for 2024 was already at 2.3% in September and will very likely be at 2% for 2025 at the December meeting, it is hard to see how the ECB can deliver more than an additional 75bp rate hikes. For us, the terminal rate remains at 2.25% for the deposit rate. The ECB has been too late and too slow with normalising monetary policy. It shouldn’t try to make up for it by being too high for too long. Read this article on THINK TagsMonetary policy Inflation Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Collapse Of The Silicon Valley Bank Weakened The Dollar And USD/JPY But Supported EUR/USD, AUD/USD, And GBP/USD

Meta stock plunges, Caterpillar presents a decent report

Ed Moya Ed Moya 27.10.2022 21:20
US stocks are struggling for direction after a mixed bag of earnings was accompanied by economic data that supports the idea that the economy is weakening. It looks like the economy is still headed for a recession, but that might reinforce Fed pivot calls which still seems to be driving some inflows back into equities. ​ ​ ​ Super Thursday will resume after the close when Apple and Amazon report after the bell. ​ ​ This is peak earnings season and at the end of the day, we will know if investors are going to shun tech stocks for a little while longer. ​ Facebook takes a hit Mark Zuckerberg is looking reckless here. Meta shares plunged after revenue collapsed and they decided to nearly double their CAPEX. ​ It looks like Sheryl Sandberg’s departure was well-timed as this ship is clearly sinking. ​ Artificial Intelligence (AI) investment was boosted and now everyone is expecting Meta to have a free cash flow problem. Caterpillar Caterpillar did not disappoint this earnings season. ​ The heavy-equipment maker did everything right last quarter. ​ Caterpillar posted a strong earnings beat, trimmed their CAPEX budget a little, signaled demand is strong and that highlighted that margins momentum will continue next quarter. ​ Caterpillar also noted ‘some pockets’ of supply chain improvement. What was also very positive is that Asia/Pacific sales were little changed despite the slowdowns that have hit that part of the world. ECB The ECB delivered a third major consecutive rate increase across all three key rates. ​ The 75-basis point hike was well-telegraphed and the comment that “inflation remains far too high” indicates more massive rate increases could be warranted. They signaled they expect to raise rates further and markets are still convinced that they could raise rates by 75bp again in December. It seems the market is convinced that the ECB’s hiking cycle won’t have to be as aggressive next year and traders are now expecting rates to peak at around the 2.75% level. TLTRO changes signals they are going to remove some of the excess liquidity and incentivize the banks to pay back cheap loans before rates go up. US GDP and more The US economy appears to have bounced back from those two negative GDP readings with a solid 2.6% improvement in economic activity. The strong headline number is welcome news, but when you dig into the numbers it is clear that an economic slowdown is here. The international trade component helped this quarter and that obviously won’t continue going forward. ​ Consumer spending is softening and prices are coming down quickly. ​ Business investment is clearly weakening. ​ ​ The labor market remains tight as jobless claims edged slightly higher. Hiring freezes will become a growing trend across corporate America, but layoffs still seem distant as job openings still remain healthy. FX Fed expectations still widely expect a 75 basis point rate increase next week and for a downshift to a half-point in December. ​ The Fed won’t want to lock itself into softening its stance against fighting inflation before the data confirms pricing relief. ​ The economy is slowing and that is sending Treasury yields lower as recession bets grow. ​ Safe-haven flows are powering both the yen and dollar today as global recession risks grow. Oil Crude prices are rallying after the US economy bounced back last quarter. ​ Oil’s gains are capped as the key takeaway from this morning’s swathe of economic readings is that an economic slowdown is here. ​ The dollar remains volatile but safe-haven flows should keep it supported over the short-term and possibly leading up to next week’s FOMC decision. Gold Gold prices aren’t doing much today after the ECB rate decision and a swathe of US data confirmed a global economic slowdown is here. ​ Global bond yields are heading lower and that is good news for bullion, but a major move seems like it might have to wait until next week’s FOMC decision. Cryptos Bitcoin’s rally has run out of steam. ​ Momentum from the rally above the $20,000 level has stalled out as risk appetite struggles to find solid footing post earnings and US economic data. The global crypto market cap is flirting with the $1 trillion level and that might remain a hard barrier to break away from. Bitcoin seems likely to consolidate leading up to the FOMC decision, but it could see further strength if the dollar continues to soften. ​ If Wall Street grows more concerned with the economic outlook, rates could slide even further, which is great news for crypto. ​ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. OANDA - Super Thursday! Massive earnings day, US GDP, ECB raises rates, FX, crypto momentum stalls - MarketPulseMarketPulse
EUR/USD Pair Has Potential For The Downside Movement Today

Euro to US dollar - technical analysis - 27/10/22

InstaForex Analysis InstaForex Analysis 27.10.2022 22:57
Overview : The EUR/USD pair's outlook and further decline is expected with 1.0093 minor resistance intact. Current down trend should move from the last resistance levels of 1.0093, 1.0169 and 1.0228. Firm break there could prompt downside acceleration to last bearish wave of 1.0093. On the hourly chart, the EUR/USD pair suggests the corrective advance could continue, particularly if the pair surpasses the immediate resistance level at 1.0093. Technical indicators are recovering from extreme oversold readings, holding far below their midlines, a sign that there's a long way ahead before a substantial recovery takes place. Moving averages, in the meantime, maintain their bearish slope way above the current level. Furthermore, although the news is bearish for the Euro, professional may not want to sell weakness, but rather following a rebound rally. Additionally, some aggressive counter-trend buyers may be defending parity. On the upside, break of 1.0093 minor resistance will turn bias back to the upside for stronger rebound. The EUR/USD pair will have been trading in a tight sideway range since yesterday for that the price has also set below the daily resistance 1 at the level of 1.0093. The EUR/USD pair rate has fallen over 2.5% from its October, 2022 high of 1.0093 to just over 1.0100 at the time of writing on 27 Oct. - 2022, despite the European Central Bank (ECB) finally moving to hike interest rates - it is a high risk and jeopardy. The EUR/USD pair fluctuates in the 1.0093 area, with risk-shifting increasingly to the downside. If the pair fails to pass through the level of 1.0093, the market will indicate a bearish opportunity below the level of 1.0093. Moreover, a breakout of that target will move the pair further downwards to 0.9900 in order to form the double bottom. So, the market will decline further to 0.9900 and 0.9854 to return to the daily support 2. However, if the price of the EUR/USD pair breaks 1.0093 and closes above it, the market will indicate a bullish opportunity above 1.0169 for temporary time. Trading recommendations: According to previous events, the EUR/USD pair is still moving between the level of 1.0093 and the 0.9854 level (these levels coincided with the fibonnacci retracement levels 100% and last bearish wave). It should be noted that the 1.0093 price will act as a minor resistance on Oct. 27, 2022. Therefore, it will be too gainful to sell short below 1.0093 and look for further downside with 0.9900 and 0.9854 targets. It should also be reminded that stop loss must never exceed the maximum exposure amounts. Thus, stop loss should be placed at the 1.0228 level today. Relevance up to 20:00 2022-10-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298683
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The Expectation Of Development Of The Euro's (EUR) Decline

InstaForex Analysis InstaForex Analysis 28.10.2022 08:11
With the European Central Bank rate hike by 0.75% and the release of good data on US GDP for the 3rd quarter, the euro collapsed by more than a figure, blocking the previous day's growth. US GDP growth amounted to 2.6% y/y against the expectation of 2.4%, and this factor confirms the Federal Reserve's message that the pace of rate hikes can be reduced. ECB President Christine Lagarde's rhetoric was not "soft" (which was expected), but rather just neutral. Trading volumes were high, positions were clearly being closed. But we still do not see an increase in euro sales volumes and, from the technical side, the price has not reached the target support of 0.9950, which together suggests that the price is preparing to go above 1.0050 and above the upper limit of the price channel, to the range of 1.0100/20, overcoming which opens the 1.0205 target. Consolidating under 0.9950 may push the price to 0.9864 and a little lower to the MACD line of the daily scale. Getting the price to settle under the MACD line will be the final sign of taking the course for further decline (0.9520). Which scenario will the price choose? Despite the positive signals for the stock markets, the US stock index S&P 500 fell by 0.61% yesterday, and the index has been falling for two consecutive days, that is, investors are still leaving risky assets, which puts pressure on counter-dollar currencies. This morning the entire Asia-Pacific region is in the red zone. In general, we are inclined to a scenario with a decline - we are waiting for the price to move under 0.9950 and further move towards 0.9864 with a test of the MACD line. On the H4 chart, the signal line of the Marlin Oscillator made the first plunge under the zero line. Here there is synchronization with the price, which could not reach the support of 0.9950 on the first attempt. So, we are waiting for the development of events with the expectation of the euro's decline.   Relevance up to 05:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325586
FX Daily: Testing the easing pushback

The EUR/USD Pair Continues To Form A New Upward Trend

InstaForex Analysis InstaForex Analysis 28.10.2022 08:23
EUR/USD 5M The euro/dollar pair started a downward movement on Thursday. This is exactly what we warned about yesterday. The pair showed absolutely unreasonable growth for almost the entire week, behind which there were no macroeconomic indicators or fundamental events. Thus, we could assume that the market began to work out the European Central Bank rate hike in advance. And yesterday, when the central bank raised the rate by 0.75% (which was fully in line with forecasts), the market began to get rid of the euro, as there were no more reasons to buy it. However, a pullback from the local high of 120 points cannot break the upward trend that has formed in recent weeks. It is clearly indicated by an ascending trend line. Also, the pair is above the lines of the Ichimoku indicator on the hourly timeframe. Therefore, despite the dollar's growth on Thursday, the upward movement may continue. But in the long term, the euro's growth is still in doubt. We even admit that this week's upward movement was a run-up before a new powerful fall. After all, next Wednesday the Federal Reserve will raise its rate by 0.75%, which may become a reason for new long positions on the dollar. There were plenty of trading signals on Thursday, but all the signals from the US trading session should have been ignored, because they were formed at the time when the ECB results were announced, and important statistics were published in the USA. Thus, it was impossible to predict the pair's movement, as well as the values of the reports themselves. During the European trading session, the pair formed a buy signal near the 1.0072 level, which turned out to be false, and then two sell signals near the same level, which duplicated each other. Therefore, on the first transaction, a loss of about 20 points was received, and on the second - a profit of about 30 points. COT report: The euro Commitment of Traders (COT) reports for 2022 could be used as good examples. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again and the euro is still dropping. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long non-commercial positions increased by 6,500, while the number of shorts decreased by 4,000. Accordingly, the net position increased by about 10,500. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 48,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. If you look at the total open longs and shorts for all categories of traders, then shorts are 22,000 more (586,000 vs 564,000). Thus, according to this indicator, everything is logical. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 28. The ECB is going to continue to raise the key rate. Overview of the GBP/USD pair. October 28. The pound does not want to lose the gained momentum. Meetings of the BoE and the Fed ahead! Forecast and trading signals for GBP/USD on October 28. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H You can see on the hourly timeframe that the pair continues to form a new upward trend. The euro's decline, which we expected, has happened, but the upward trend remains relevant. Therefore, growth may resume, although in the long term, the "happy euro" may not last long. On Friday, trading could be performed at the following levels: 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as the Senkou Span B (0.9765) and Kijun-sen (0.9900). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also additional support and resistance levels, but trading signals are not formed near them. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There will be nothing remarkable in the European Union. On the other hand, we have reports on income and expenses of the American population in the US, as well as the consumer sentiment index from the University of Michigan. We do not expect a strong market reaction to such data. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 02:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325576
EU Gloomy Picture Pointing To A Gradual Approach To Recession

ECB's Policymaker Gediminas Simkus And His Statement About European Central Bank Decision

TeleTrade Comments TeleTrade Comments 28.10.2022 09:37
European Central Bank (ECB) policymaker Gediminas Simkus hints at a potential 75 bps rate hike at the next policy meeting. Additional quotes “We're moving closer towards the neutral-rate territory.” “It is not the case that 75 basis points is the new norm.” “Expect inflation forecasts to be revised up.” “I expect ECB inflation projections to be raised in December.” “QT discussion in December should be about the start date and amounts.” Market reaction EUR/USD remains unfazed by the above comments, trading around 0.9970, up 0.06% on the day.
The EUR/USD Pair Chance For The Further Downside Movement

Euro's reaction to the latest ECB decision, Fed outlook and more

Conotoxia Comments Conotoxia Comments 28.10.2022 14:34
The end of October and the beginning of November seems to be hectic time in the foreign exchange market, as the European Central Bank has already communicated its interest rate decisions, and the US Fed will do so on November 2. As a result, the forex market may see above-average volatility. Yesterday the European Central Bank raised its three key interest rates by an expected 75 basis points, the third consecutive hike. It could confirm the ECB's determination that further policy tightening would continue until inflation approaches its 2% target. The main refinancing operations rate and the central bank lending and deposit rates were raised to 2%, 2.25% and 1.50%, respectively, with the decision taking effect on November 2. BBN reported that the ECB said that the current inflation rate, which stood at 9.9% last month, remains "far too high" and would remain at elevated levels in the coming months.  How did the euro exchange rate react to the ECB's decision? Source: Conotoxia MT5, EURUSD, H1 The euro exchange rate fell immediately after the ECB decision, perhaps because the market expected a more hawkish stance. The Bank has changed its statement that interest rates will rise at future meetings to a statement that decisions will be made from meeting to meeting. As a result, the market has pushed back its expectations by a full 25 bps, and is perhaps hoping for a softer tone from the ECB due to a potential recession in 2023. Statements after the ECB decision - will they affect the euro? According to the BBN website, Bank of Lithuania head Gediminas Simkus argued on Friday that the next interest rate hike must be significant. A Simkus hinted at the possibility of the ECB raising key rates by another 75 basis points after yesterday's hike, noting that this should not be the new norm. He also shared expectations that the ECB will raise inflation projections in December. In contrast, Bank of France Governor Francois Villeroy de Galhau said Friday that the European Central Bank needs to be cautious in the way it will approach quantitative tightening. However, he expects rapid moves toward normalizing interest rates, BBN reports.ECB President Christine Lagarde said yesterday that the bank's governing council will formally discuss a reduction in the asset purchase program (APP) in December. What can the Fed do? Recent data from the US show a decline in inflation and a drop in activity in the industrial sector and the real estate market. As a result, the market seems to expect that the Fed may begin to slow down the pace of interest rate hikes, and after the November hike, the chance of an end to the cycle in Q1 2023 seems to be increasing. Moreover, the market may expect that the Fed will still cut interest rates by 50 bps next year. Such expectations could have a negative impact on the US dollar and could strengthen the euro, but confirmation of this could be possible on November 2. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Read more reviews and open a demo account at invest.conotoxia.com Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Read the aricle on Conotoxia.com
Eurozone: Spanish Gross Domestic Product jumped much less than in August

Eurozone: Spanish Gross Domestic Product jumped much less than in August

ING Economics ING Economics 28.10.2022 14:58
The Spanish economy grew by 0.2% Q-on-Q in the third quarter, a significant slowdown from the 1.5% we saw the previous month. A strong tourism season helped stop the growth figures from turning negative Spain has had a good tourism season Spain's economy slowed sharply in the third quarter Spain's economy still grew by 1.5% on a quarterly basis In the second quarter, thanks to strong growth in domestic demand and the revival of tourism. However, growth slowed sharply to 0.2% QoQ. In the manufacturing sector, economic activity stagnated. While manufacturing recorded growth of 1.7% QoQ in the previous quarter, it fell to just 0.1% in the third. The services sector also slowed significantly from 1.6% to 0.7%. The leisure sector still recorded strong growth rates (7.6% QoQ), mainly thanks to a strong tourist season. The tourism sector, contributing 14% of total GDP in 2019, has held up much better than the rest of the economy so far and positively contributed to the growth figures. Economy is likely to fall in a recession over the winter months The latest figures suggest the economy is likely to contract in the fourth quarter. Both manufacturing and service sector PMIs fell below 50 in September, signalling contraction. New orders were again noticeably down in September as the high inflation and bleak economic outlook weighed on demand. There is little improvement in sight as Spanish consumer confidence fell again in September. The index stands below the Covid-19 pandemic low illustrating that Spaniards are increasingly worried about high inflation. Also, tourism, which contributed positively to growth figures in the second quarter, is starting to show signs of weakening. While the number of international visitors in July was still at 92% of its pre-pandemic levels, this dropped to 87% in August. The slowdown in domestic tourism was even greater than that of foreign tourism. The number of hotel stays booked by residents fell to 101% of pre-pandemic levels in August, from 107% in July. On the other hand, the aid packages, amounting to 30 billion euros or 2.3% of Spanish GDP announced by the government last month will bring some relief. We forecast a mild recession for the Spanish economy in the next 2 quarters. Thanks to the strong first half of the year, GDP growth will still come in at 4.3% in 2022, but for 2023 we are now looking at 0.3% growth. Read this article on THINK TagsTourism Spain PMI GDP Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
German industry rebounds in January

Although German economy sends a positive signal by posting a 0.3% GDP growth, it's not the end of recession fears...

ING Economics ING Economics 28.10.2022 16:59
The German economy recorded surprise GDP growth in the third quarter. However, this does not mean that the country will avoid a recession Despite all talks of a looming recession, the just-released flash estimate of third-quarter German GDP growth came in at 0.3% quarter-on-quarter, from 0.1% QoQ in the second quarter. On the year, the economy grew by 1.2%. Growth components will only be released at the end of November but judging from available monthly data and the statistical agency’s press releases, growth was mainly driven by private consumption. Looking ahead, the surprise growth in the third quarter does not mean that the recession narrative has changed. All leading indicators point to a further weakening of the economy in the fourth quarter and there doesn’t seem to be any improvement in sight. Even if the weather has brought some relief to the German economy, as the rainfall increased water levels and the warm October weather has postponed the start of the heating season, the gradual slide into recession continues. Companies and households are increasingly suffering under higher energy bills and ongoing high inflation, adjusting consumption and investments. The government’s latest support package, if not implemented retroactively, will be too little too late to prevent a winter recession. It will only be able to soften such a recession. Leaving short-term and cyclical developments aside, we again reiterate that the German economy is in the middle of a complete overhaul. The war in Ukraine has probably marked the end of Germany’s very successful economic business model: importing cheap (Russian) energy and input goods, while exporting high-quality products to the world, benefitting from globalisation. The country is now being forced to accelerate the green transition, restructure supply chains, and prepare for a less globalised world. And these things come on top of well-known long-standing issues, such as a lack of digitalisation, tired infrastructure, and an ageing society, to mention a few. Offsetting factors are the still strong labour market and the government’s willingness and available fiscal firepower to financially support companies and households facing high energy bills. Today’s positive growth data is a welcome surprise. However, it does not mean that the German economy will be able to prevent a recession. The recession is only delayed, not cancelled. Read this article on THINK TagsGermany GDP Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

The Euro (EUR) Failed To Pick Up The Falling Banner-28.10.22

InstaForex Analysis InstaForex Analysis 29.10.2022 09:06
The euro-dollar pair is trading flat on Friday after the previous day's sharp decline to 0.9960. EUR/USD bulls could not keep the price above the parity level, despite the European Central Bank's 75-point rate hike and ECB President Christine Lagarde's rather hawkish comments. The ECB has become a temporary ally of the euro, but traders have ignored this fact. Impulsively rising to the 1.0090 mark, the pair turned around and headed downward, following the US currency. By the way, the current situation serves as another confirmation that the euro is not capable of its own game. EUR/USD growth is possible only if the greenback weakens. Strengthening the single currency is optional, not a prerequisite. At the beginning of this week, a "perfect storm" formed: the dollar was losing its positions, while the euro was gaining momentum throughout the market. Thanks to a combination of these factors, the pair broke the 1.0000 mark for the first time since September 20. But as soon as the dollar bulls reminded themselves, the price impulsively declined to the area of the 99th figure. The euro failed to pick up the "falling banner", once again confirming its role as a slave, not a leader. The US dollar index updated a 5-week low on Thursday, reaching 109.36. However, on the same day, the index turned upward, reacting to the release of data on the growth of the American economy. According to the published report, the US economy recovered in the third quarter after a two-quarter decline (in the first quarter of 2022, it shrank by 1.6%, in the second - by 0.6%). In the period July-September, GDP increased by 2.6% with a growth forecast of 2.3%. The indicator was in positive territory for the first time this year, amid fears that the country is at risk of recession. The growth of consumer and government spending, as well as investments in fixed assets in the non-residential sector contributed to the improvement of the economic situation. The report was an important trump card for dollar bulls, which have recently loosened their grip. Over the past two weeks, rumors have been actively circulating in the market that the Federal Reserve will reduce the pace of monetary policy tightening after the November meeting. The latest releases, which were in the red zone, also added fuel to the fire. In particular, the US index of business activity in the manufacturing sector collapsed to 49.9 points. This is the weakest result since July 2020. The index of business activity in the services sector fell to 46 points with a forecast of a decline to 49 points. The consumer confidence index also disappointed, which fell to 102 points. The index of manufacturing activity from the Fed Bank of Richmond was also in the red zone. Amid such a series of negativity in the market, there was some confidence that in November the Fed will raise the interest rate by 75 basis points for the last time (within the current cycle). Further, the 5% indicative goal will be achieved in shorter steps – 50-point or even 25-point. For example, the probability of a 50-point rate hike following the December meeting is now 48%. The report on US GDP growth made traders doubt that the members of the Fed will reduce the pace of interest rate hikes. In my opinion, these doubts are justified, given the position of Fed Chairman Jerome Powell and most of his colleagues. Powell actually said that Americans will have to put up with the slowdown in economic growth, since "this is a sad price for reducing inflation." At the same time, he has repeatedly stated that the pace of monetary policy tightening this year "will depend on incoming data," primarily in the field of inflation. Take note that the core PCE price index, which is the preferred indicator of inflation for Fed members, rose in September to 5.1% in annual terms (in August, an increase to 4.9% was recorded). Thus, the dollar was caught between a rock and an anvil. On the one hand, there is a record increase in core inflation (the core CPI has reached a 40–year high), an increase in gasoline prices in the United States (amid the latest OPEC+ decision), foreshadowing an acceleration in the overall CPI and an increase in the PCE index. On the other hand, there are pessimistic forecasts regarding the slowdown of the American economy. According to most experts surveyed by The Wall Street Journal, US GDP growth will slow down in the coming months, as consumers and businesses continue to cut spending in the face of rising interest rates and uncertainty. Members of the Fed at the November meeting (the results of which we will learn next Thursday) will swing the pendulum in one direction or another. Either they will express concern about the economic downturn, hinting at a possible slowdown in the pace of monetary policy tightening, or they will again focus their attention on the dynamics of inflationary growth. The Fed meeting is less than a week away. Consequently, the members of the Fed now observe a 10-day silence regime and do not speak publicly. In such an information vacuum, the EUR/USD pair is likely to circle around the parity level, moving away from the 1.0000 mark by 60-100 points. Given the influence of the so-called "Friday factor", it is impractical and even risky to open trading positions now. The downward momentum of Thursday has exhausted itself, while EUR/USD bulls, apparently, are not able to organize a large-scale counteroffensive. Therefore, at the moment it is most expedient to take a wait-and-see attitude.     Relevance up to 16:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325678
The EUR/USD Pair: There Are Still No Sell Signals

European Bond Yields Went Down And There Is A Bad News For The EUR/USD Pair-28.10.22

InstaForex Analysis InstaForex Analysis 29.10.2022 09:08
The unexpected expansion of the German economy by 0.3% q/q in the third quarter did not save the euro from falling. Bloomberg analysts expected to see a 0.2% reduction in German GDP due to the armed conflict in Ukraine and the related energy crisis, but the echoes of the exit from lockdowns and large-scale population support programs due to the pandemic allowed Berlin to surprise experts. Perhaps the fall in gas prices in October will make the picture even more joyful, but it's too early to talk about breaking the downward trend in EURUSD. Dynamics of European GDP and inflation European Central Bank President Christine Lagarde's hints of a dovish reversal following the October ECB meeting and expectations that the Federal Reserve will remain resolute in the fight against inflation are to blame. From the text of the ECB's accompanying statement, the affirmation that rates would rise at several subsequent meetings had disappeared, and the Frenchwoman talked a lot about the troubles of the eurozone economy and that the tightening of monetary policy was already having its effect. The futures market lowered expectations of the deposit rate ceiling, European bond yields went down, and the euro weakened. In my opinion, after December +50 bps and February +25 bps, the ECB may stop. This implies an increase in the cost of borrowing to 2.25%, not 2.5%, as Bloomberg analysts and the futures market currently predict. Bad news for EURUSD. However, the fate of the main currency pair will certainly be decided not in Europe, but in North America, where the Fed will meet next week. According to economists surveyed by Bloomberg, the central bank will bring the federal funds rate to 5%, which will provoke a recession in the US economy. The trajectory of the movement of borrowing costs is as follows: +75 bps in November, 50 bps in December and 25 bps at each of the next two meetings. Thus, it is longer than that of the ECB, which allows us to talk about maintaining the stability of the downward trend in EURUSD, at least until the end of the first quarter of 2023. Dynamics of the federal funds rate Along with the FOMC meeting, the key event of the first week of November will be the release of data on the US labor market for October. It is expected that unemployment will rise from 3.5% to 3.6%, and employment – by 220,000. A very decent figure, given the fact that it takes +50-100,000 per month to cool the labor market and stable unemployment growth. If the US economy remains resilient amid strong employment, inflation will remain at elevated levels for longer than expected. Including due to an increase in wages by 5% or more. The Fed will need additional efforts in the process of tightening monetary policy, and this is good news for the US dollar. Technically, a Dragon reversal pattern is forming on the EURUSD daily chart. The return of quotes to the Dragon's head near 1.009 or the rebound from support at 0.9885 are reasons for buying. In the meantime, we remain in short-term sales from parity.     Relevance up to 14:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325668
ECB press conference brings more fog than clarity

Eurozone Interest Rate Decisions Will Continue To Be Data Driven -28.10.22

InstaForex Analysis InstaForex Analysis 29.10.2022 09:10
The downside risks of the European economy are growing, but with inflation rising to almost 10% in September, the European Central Bank continued to raise interest rates. After raising interest rates by 75 basis points across the board, ECB President Christine Lagarde said the committee had tightened financial conditions and more work needed to be done. "There is still a field to cover," she said. "In the current state of uncertainty, with the possibility of a recession rising, everyone has to do their job," Lagarde said. "Our job is price stability. This is our main task." Interest rates are expected to rise by early 2023. But Lagarde didn't say how high the stakes would be. Reiterating that future policy rate decisions will continue to be data-driven and meeting-by-meeting. The increase in interest rates is due to the fact that the ECB continues to see further risks to economic activity until the end of the year. "Eurozone economic activity is likely to slow significantly in the third quarter of the year, and we expect further weakening for the remainder of this year and early next year. High inflation continues to hold back spending and production. Serious disruptions to gas supplies have further worsened the situation, and both consumer and business confidence has fallen rapidly, which is also putting pressure on the economy," Lagarde said in her opening remarks. However, price stability and bringing inflation down to the ECB's medium-term target of 2% is the central bank's priority. While soaring energy and food prices are the two biggest drivers of inflation, the ECB is forecasting a general rise in consumer prices. "Inflation remains too high and will remain above our target for an extended period," Lagarde said. "Incoming data confirms that the risks to the economic growth outlook are clearly abating, especially in the near term," she added. However, price stability and bringing inflation down to the ECB's medium-term target of 2% is the central bank's priority. Although the sharp rise in energy and food prices is the most significant driver of inflation, the ECB predicts a widespread increase in consumer prices. "Inflation remains too high and will remain above our target for an extended period," Lagarde said. - The risks for the inflation forecast are primarily positive. The main risk for the nearest period of time is a further increase in retail prices and energy prices. In the medium term, if energy and food prices rise, inflation may be higher than expected."     Relevance up to 12:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325638
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The Euro To US Dollar (EUR/USD) Pair Is Showing Signs Of Strength

InstaForex Analysis InstaForex Analysis 30.10.2022 09:48
Overview : Pivot : 0.9946. The EUR/USD pair's rise from 0.9798 is still in progress and intraday bias stays on the upside for 0.9900 resistance first on the one-hour chart. All elements being clearly bullish market, it would be possible for traders to trade only long positions on the EUR/USD pair as long as the price remains well above the price of 0.9798. The EUR/USD pair will continue rising from the level of 0.9798 in the long term. It should be noted that the support is established at the level of 0.9798 which represents the daily pivot point. The price is likely to form a double bottom in the same time frame. Accordingly, the EUR/USD pair is showing signs of strength following a breakout of the highest level of 0.9873. This suggests that the pair will probably go up in coming hours. If the trend is able to break the level of 0.9873, then the market will call for a strong bullish market towards the objectives between 0.9873 and 1 USD this week. Currently, the price is in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. As the price is still above the moving average (100), immediate support is seen at 0.9798, which coincides with a key ratio (61.8% of Fibonacci). The EUR/USD pair swing around the breached resistance of the bullish channel and keeps its stability above it until now, noticing that the EMA50 continues to resistance the price from above, while RSI begins to overlap positively. Thus, the market is indicating a bullish opportunity above the above-mentioned support levels, for that the bullish outlook remains the same as long as the 100 EMA is headed to the upside. So, buy above the level of 0.9850 with the first target at 0.9900 in order to test the daily resistance 1. The buyers' bullish objective is set at the level of 0.9950. A bullish break in this resistance would boost the bullish momentum. The buyers could then target the resistance located at 0.9950. If there is any crossing, the next objective would be the resistance located at 0.9950. The level of 1 USD is a good place to take profits. Moreover, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). However, beware of bullish excesses that could lead to a possible short-term correction; but this possible correction would not be tradeable. The EUR/USD pair's rise from 0.9798 is still in progress and intraday bias stays on the upside for 0.9900 resistance first on the one-hour chart. All elements being clearly bullish market, it would be possible for traders to trade only long positions on the EUR/USD pair as long as the price remains well above the price of 0.9798. The EUR/USD pair will continue rising from the level of 0.9798 in the long term. It should be noted that the support is established at the level of 0.9798 which represents the daily pivot point. The price is likely to form a double bottom in the same time frame. Accordingly, the EUR/USD pair is showing signs of strength following a breakout of the highest level of 0.9873. This suggests that the pair will probably go up in coming hours. If the trend is able to break the level of 0.9873, then the market will call for a strong bullish market towards the objectives between 0.9873 and 1 USD this week. Currently, the price is in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. As the price is still above the moving average (100), immediate support is seen at 0.9798, which coincides with a key ratio (61.8% of Fibonacci). The EUR/USD pair swing around the breached resistance of the bullish channel and keeps its stability above it until now, noticing that the EMA50 continues to resistance the price from above, while RSI begins to overlap positively. Thus, the market is indicating a bullish opportunity above the above-mentioned support levels, for that the bullish outlook remains the same as long as the 100 EMA is headed to the upside. So, buy above the level of 0.9850 with the first target at 0.9900 in order to test the daily resistance 1. The buyers' bullish objective is set at the level of 0.9950. A bullish break in this resistance would boost the bullish momentum. The buyers could then target the resistance located at 0.9950. If there is any crossing, the next objective would be the resistance located at 0.9950. The level of 1 USD is a good place to take profits. Moreover, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). However, beware of bullish excesses that could lead to a possible short-term correction; but this possible correction would not be tradeable. Next week : Between 31 Oct. 2022 and 4 Nov. 2022. Weekly range 1.0100 and 0.9850. Point : 250 pips. Trend : uptrend above the weekly support 0.9850.     Relevance up to 10:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298893
The Euro May Gradually Climb To The Target Level

The EUR/USD Pair: The Construction Of An Upward Trend Section Has Begun

InstaForex Analysis InstaForex Analysis 30.10.2022 12:07
The wave marking of the 4-hour chart for the euro/dollar instrument has finally undergone certain changes. The demand for European currency has been growing in recent days. Quotes have been rising, and this has led to the fact that they have gone beyond the peak of the last rising wave. Thus, now we have at least a three-wave ascending structure, which can become a new upward section of the trend for five or more waves, or it can remain a three-wave corrective. In the first case, the European currency has a good chance of growth over the next few months. In the second case, the decline in quotes may resume at any moment. The most important thing is that now the wave markings of the pound and the euro coincide. If you remember, I have repeatedly warned about the low probability of a scenario in which the euro and the pound will trade in different directions. Theoretically, this is certainly possible, but in practice, it happens extremely rarely. Now both instruments assume the construction of at least one more upward wave, and the low of September 28 can be considered a new starting point. The downward section of the trend has become so complicated that even its internal waves are very difficult to identify correctly. But now we have a clear starting point. The demand for the euro currency is declining. The euro/dollar instrument did not decrease or increase by 1 point on Friday. Nevertheless, earlier a successful attempt was made to break through the 323.6% Fibonacci level, which indicates the readiness of the market to sell the instrument. On Thursday and Friday, the demand for the European currency was declining, and it was clear that the market had won back the ECB interest rate increase, and now it intends to prepare for the Fed meeting to be held next week. In my opinion, the wave pattern may undergo serious changes after the market learns the results of this meeting. What can we expect from the Fed? In the last few weeks, rumors have been actively circulating that the rate will continue to rise but at a slower pace than before. I think it's just a rumor. The head of the San Francisco Fed, Mary Daly, said that "it's time to start discussing the slowdown in the rate hike." Thus, at the November meeting, the FOMC members will only begin to pronounce this scenario. Therefore, I do not expect the rate to rise by less than 75 basis points. If this assumption is correct, then the demand for the US currency may grow significantly, just as the demand for the euro grew this week before the ECB meeting. What does this mean for wave marking? If wave 3 of the upward section is being built now, then the instrument should resume raising quotes as soon as possible so that the wave takes a five-wave form. In this case, it will be possible to expect the construction of the fifth wave of the ascending section. If this wave is c, then the decline may continue next week, but then the entire downward section of the trend may take an even longer form or start building a new downward section. General conclusions. Based on the analysis, I conclude that the construction of an upward trend section has begun, but it may not last very long. At this time, the instrument can build a new impulse wave, so I advise buying with targets located near the estimated mark of 1.0361, which equates to 261.8% by Fibonacci, by MACD reversals "up." However, by the end of this section of the trend, you also need to be ready now. At the higher wave scale, the wave marking of the descending trend segment becomes noticeably more complicated and lengthens. It can take on almost any kind of length, so I think it's best now to isolate the three and five-wave standard structures from the overall picture and work on them. One of these five waves can be just completed, and a new one has begun its construction.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325696
The EUR/USD Pair Is Showing A Potential For Bearish Drop

Next week's Fed decision is naturally crucial for EUR/USD. What do we learn from predictions? How big may be the December move?

InstaForex Analysis InstaForex Analysis 30.10.2022 18:59
The euro-dollar pair ended the last trading week at 0.9965 – so to speak, in "neutral territory". Bulls on EUR/USD were unable to settle above the parity level, while bears were unable to develop a downward momentum to return to the 98-97 figure area. As a result, the parties stopped around the 1.0000 mark and dispersed to the corners of the ring. At the same time, there is no doubt that traders will come together again next week. The Federal Reserve will act as the arbiter of this confrontation. The US central bank will determine the winner: either the dollar will collapse throughout the market (and the EUR/USD pair will not be an exception here), or dollar bulls will organize another rally.     The Fed will announce the results of its next meeting on November 2. On the one hand, the results of this meeting are predictable. The probability of a 75-point rate hike is now estimated by the market at 82%, according to the CME FedWatch Tool. The main intrigue of the November meeting lies in the further pace of tightening of the Fed's monetary policy. Again, if we focus on the CME data, the probability of a 75-point rate hike in December is only 43.4%. Whereas the probability of implementing a 50-point scenario is estimated at 48.2%. A 25-point hike is also not excluded, although this scenario is unlikely (8.4%). Rumors that the Fed will slow down the pace of monetary policy tightening (after the November meeting) especially intensified last week, when the so-called "silence mode" was already in effect (for 10 days before the meeting, Fed members cannot voice comments in the public plane). An interesting situation has developed: amid the "forced silence" of the representatives of the Fed, weak macroeconomic reports were published in America, indicating a slowdown in economic growth. At the same time, it became known that the volume of US GDP in the third quarter increased by 2.6%, after a two-quarter decline in the first half of 2022. Now the Fed members will have to resolve this. Actually, there are only two scenarios: either the Fed expresses its concern about the "side effects" of aggressive tightening of monetary policy (hinting at a decrease in the rate of rate hikes in December and beyond), or the central bank again focuses on inflation, thereby confirming its intention to raise the interest rate at an aggressive pace. Many factors speak in favor of the second, hawkish scenario. Among them is the corresponding position of Fed Chairman Jerome Powell and the growth of inflation indicators (core CPI, base PCE). On the side of the conditionally dovish scenario, there are gloomy prospects for the American economy. According to many experts, US GDP growth will slow down in the coming months, as consumers and businesses continue to cut spending in the face of rising interest rates and uncertainty. On Wednesday we will find out which way the scales will tilt. In my opinion, the Fed will maintain its hawkish attitude, after which the dollar will strengthen its position throughout the market. Powell has repeatedly stated that the fight against high inflation is the number one task for the Fed. Similar statements were made by many of his colleagues, including those who have the right to vote in the Committee. In general, the economic calendar of the upcoming week is full of events. For example, key data on inflation growth in the eurozone will be published on Monday. According to most analysts, the overall consumer price index in October will jump to 10.2%, the core CPI – to 5.1%. However, given the results of the October ECB meeting (which were announced last Thursday), this release will have a limited impact on the EUR/USD pair. On Tuesday, traders will focus on the ISM manufacturing index, which should fall to the 50.0 mark. If it falls below the 50-point value, the dollar will be under significant pressure. On Wednesday, as mentioned above, the Fed will announce the results of its November meeting. Also on this day, the ADP agency will publish a report on the state of the labor market in the United States. This release serves as a kind of "petrel" ahead of the release of Nonfarm, which will be published a day later, on November 4. On Thursday, we should pay attention to the dynamics of the index of business activity in the US services sector from the ISM Institute. Negative dynamics is also expected here (a decrease from 56 points to 54). And finally, on Friday, Nonfarm will be the central release of the day. According to preliminary forecasts, the unemployment rate will increase slightly in October (from 3.5% to 3.6%), and the number of people employed in the non-agricultural sector will grow by 200,000. The average hourly wage should slow down to 4.7% (in annual terms). However, all of the above releases, despite their significance, will play a secondary role for the EUR/USD pair (perhaps, except for Non-Farms). The tone of trading will be set by the Fed. If the US central bank refutes (explicitly or covertly) rumors about a slowdown in the pace of monetary policy tightening, EUR/USD bears will be able to mark at least 0.9830. At this price point, the average line of the Bollinger Bands indicator coincides with the Kijun-sen line and the lower boundary of the Kumo cloud on the daily chart. With a high degree of probability, bears will push through this level of support and will be designated in the area of the 97th figure. But if the dovish rumors are really confirmed, bulls will again try to gain a foothold above the parity level. The key resistance level here will be the 1.0060 mark – this is the upper line of the Bollinger Bands on the same timeframe. Relevance up to 12:00 2022-10-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325712
Euro to US dollar - Ichimoku cloud analysis - 21/11/22

Another day of Forex trading is ahead of us! Euro to US dollar - 30/10/22

InstaForex Analysis InstaForex Analysis 30.10.2022 19:07
Analysis of Friday's deals: 30M chart of the EUR/USD pair     The EUR/USD currency pair did not show anything interesting on Friday. After the market "digested" the results of the European Central Bank meeting on Thursday, there was no more strength left for Friday and the pair was in a fairly calm movement all day, as close as possible to a flat. Important macroeconomic statistics were not planned for this day either in the US or in the EU, but even those reports, which were, turned out to be as neutral as possible. That is, their actual values almost coincided with the forecasts. For example, personal income and spending of the American population grew by 0.4% and 0.6%, while forecasts were 0.3% and 0.4%. However, the pair still settled below the ascending trend line on Thursday, so at this time, a downward movement is more likely. We believe that the market fully worked out the ECB rate hike last week, but now the Federal Reserve meeting is ahead, which will also raise its key rate, therefore, following the market logic, the US dollar should rise next week. However, the market often interprets the results of central bank meetings in its own way, so you cannot be 100% certain of a downward movement. 5M chart of the EUR/USD pair     You can see even better on the 5-minute timeframe that the pair nearly spent the entire Friday in horizontal movement. The level of 0.9977 is new, and 0.9952 was recognized as irrelevant by the end of the day. However, all trading signals of the day were formed exactly around 0.9952. Thus, the day turned out to be very unfortunate in terms of trading. Novice traders could try to work out only the first two signals, since at that time it was not yet clear that the flat had begun. However, it was not even possible to place a Stop Loss on both positions, so a small loss was received on both. Unfortunately, from time to time there are days when it is not possible to make a profit. How to trade on Monday: The pair has consolidated below the trend line on the 30-minute timeframe, so next week we expect a fall. Moreover, the Fed rate hike should also provoke the strengthening of the US currency, that is, the fall of the euro/dollar pair. On the 5-minute TF tomorrow it is recommended to trade at the levels of 0.9756, 0.9807, 0.9877, 0.9977, 1.0020-1.0034, 1.0072, 1.0123, 1.0156, 1.0221. When passing 15 points in the right direction, you should set Stop Loss to breakeven. The European Union will publish a report on GDP for the third quarter, which can be very interesting amid all the talk about an impending recession. An inflation report will also be published, which is even more interesting, as the ECB raises the rate, and forecasts say that the consumer price index will rise again, this time to 10.2-10.4%. Thus, very volatile movements await us tomorrow. Basic rules of the trading system: 1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal. 2) If two or more positions were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored. 3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading. 4) Trade positions are opened in the time period between the beginning of the European session and until the middle of the US one, when all positions must be closed manually. 5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance. On the chart: Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines). Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time. Relevance up to 06:00 2022-10-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325702
GBP: BoE Stands Firm on Bank Rate and Mortgage Interest Relief, EUR/GBP Drifts Lower

Awaited Fed's interest rate decision is made on Wednesday - InstaForex talks important events of the next week

InstaForex Analysis InstaForex Analysis 30.10.2022 19:44
Wednesday 02 November Germany. Index (PMI) of business activity in the manufacturing sector (final release) This S&P Global report is an analysis of a survey of 800 purchasing managers that asks respondents to rate the relative level of business conditions, including employment, production, new orders, prices, supplier shipments and inventory. Since purchasing managers have perhaps the most up-to-date information on the situation in the company, this indicator is an important indicator of the state of the German economy as a whole. This sector of the economy forms a significant part of Germany's GDP. A result above 50 is considered positive and strengthens the EUR, below 50 is considered negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro. Previous values: 47.8, 49.1, 49.3, 52.0, 54.8, 54.6, 56.9, 58.4, 59.8, 57.4, 57.4, 57.8 , 58.4, 62.6. The preliminary value was 45.7. The level of influence on the markets (final release) is average. Eurozone. Index (PMI) of business activity in the manufacturing sector (final release) The Eurozone Manufacturing PMI (from S&P Global) is an important indicator of the state of the entire European economy. A result above 50 is considered positive and strengthens the EUR, below 50 is considered negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro. Previous values: 48.4, 48.9, 49.8, 52.1, 54.6, 56.5, 58.2. The preliminary value was 46.6. The level of influence on the markets (final release) is average. USA. ADP Private Sector Employment Report ADP will present the monthly report on employment in the private sector of the US economy in October. This report usually has a strong impact on the market and dollar quotes, although, as a rule, there is no direct correlation with Non-Farm Payrolls. Strong data has a positive effect on the dollar; a decrease in the indicator can negatively affect it. In any case, during the release of this report, there may be an increase in volatility in the market and, above all, in dollar quotes. Previous values: 208,000 in September, 185,000 in August, 270,000 in July, 358,000 in May, 457,000 in April, 425,000 in March, 375,000 in February, 372,000 in January 2022. The level of influence on the markets is medium to high. USA. The Fed's interest rate decision. Fed Commentary on Monetary Policy The level of interest rates is the most important factor in assessing the value of a currency. Most other economic indicators are only looked at by investors to predict how rates will move in the future. The Fed is widely expected to raise interest rates again by 75 bps (up to 4.00%) and, possibly, will announce plans for its further increase, and Fed Chairman Jerome Powell will explain the decision. Market participants expect the US central bank to accelerate the tightening cycle of monetary policy. However, what will happen after the November meeting is not entirely clear. During the announcement of the Fed's decision, volatility in the market usually increases sharply, primarily in the US stock market and in dollar quotes. Powell's comments could affect both short-term and long-term USD trading. A more hawkish stance on the Fed's monetary policy is seen as positive and strengthens the US dollar, while a more cautious stance is seen as negative for the USD. Investors want to hear Powell's opinion on the Fed's plans for this year. The level of influence on the markets is high. USA. FOMC (Open Market Committee) press conference The press conference of the Federal Open Market Committee is used by the Fed to communicate with investors regarding monetary policy. It examines the factors that influenced recent interest rate decisions and comments on the economic environment in which the decision was made. The FOMC press conference lasts about an hour and consists of two parts. The first part reads the ruling, followed by a series of questions from invited members of the press and answers from the leadership of the Fed. Almost always, the course of the Fed's press conference (after the meeting on monetary policy) is accompanied by an increase in volatility in the markets, primarily in dollar quotes and US stock market instruments. The level of influence on the markets is high. Relevance up to 10:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325632
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Eurozone Currency (EUR) Is More Likely To Decline

InstaForex Analysis InstaForex Analysis 31.10.2022 08:09
The euro faces the 0.9959 support level on Monday. The target level of 0.9864 is at the bottom, and at the top is the resistance of 1.0051 (high on September 20) and the upper limit of the price channel. In general, the dollar feels strong on the market, but there is also an increased interest in risk in the market, which can pull the euro up (on Friday, the S&P 500 added 2.46%). On the other hand, Friday could also be the last day of such appetites, as the Federal Reserve is expected to raise the rate by 0.75% to 4.00% on Wednesday. Also, weak data on the eurozone may come out today. Retail sales in Germany for September are expected to be -0.3% m/m (decreasing at an annual pace from -4.3% to -4.9%), while euro area GDP for the 3rd quarter may be as low as 0.1%, which will reduce annual growth from 4.1% to 2.1%. The euro is more likely to decline from these positions. After consolidating under 0.9950, we are waiting for the price at 0.9864. On the four-hour chart, the price is consolidating at the support level and on the MACD indicator line. Overcoming supports will be a signal to decline. More precisely, the signal level is Friday's low at 0.9927. The Marlin Oscillator is falling in negative territory.       Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325726
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The Market Will Not Buy Euro (EUR) Due To High Inflation

InstaForex Analysis InstaForex Analysis 31.10.2022 08:13
The EUR/USD currency pair ended the previous week very boring, with a correction to the moving average line. Thus, the new week will begin with a dilemma: will there be a rebound from the moving or overcoming? Recall that formally, a new upward trend is now being maintained, and the pair has already managed to move away from its 20-year lows by 550 points, which has not happened to it for a very long time. However, the upward movement still does not look convincing as the beginning of a new long-term upward trend. Well, the fundamental and geopolitical backgrounds remain on the side of the US dollar. However, recently, there has been an increase in risk sentiment, and the dollar has sunk against many of its competitors. However, the dollar has not fallen in price so much as to give up on it. Thus, we fully assume that the downward trend may still resume. The last round of the upward movement of interest by 60% was due to the ECB meeting, at which the rate was raised by 0.75%. This was known in advance, so traders began to buy the euro currency in advance. However, the Fed will hold a meeting this week, at which the rate will also be increased by 0.75%. Logically, we should now see the growth of the US currency. Theoretically, the market may have already worked out "in advance" all future rate increases in the United States, of which few are left. However, we cannot know for sure whether their market has worked out or not. We have to consider both options, so we assume that the demand for the US currency will continue to grow. Moreover, we should not forget that the geopolitical conflict in Ukraine and the aggravation of relations between Russia and the West have not gone away. From time to time, the parties, it seems, take a short pause, and there is an information calm for several weeks. However, a new escalation, explosions, sabotage, terrorist attacks, or other important events force traders to turn to the US dollar again and again as the safest currency. Inflation in the European Union will continue to grow. Usually, important publications rarely happen on Mondays. However, today is not the case. Data on GDP and inflation will be published in the European Union today. And both of these reports may be as weak as possible. For example, GDP may grow by only 0.2-0.3% in the third quarter. Then it turns out that the growth of the European economy over the past four quarters will be as follows: +0,5%, +0,7%, +0,8%, +0,2-0,3%. We see a minimal increase, so the European economy is walking on the edge of the abyss called recession. The situation is sure to get worse this winter. Inflation report - you can't expect anything optimistic from it either. According to experts, the consumer price index will accelerate to 10.2-10.4%. Of course, it's too early to expect a serious slowdown from this indicator since this report is from October, and at the end of October, the ECB only raised the key rate twice, which is frankly not enough. Therefore, we do not see anything surprising in the fact that inflation will accelerate again. This report may even support the euro, as it will mean that the ECB will have to continue to aggressively raise the rate if it wants to achieve price stability at 2%. However, we do not believe that the market will buy euros due to high inflation. On Wednesday, the index of business activity in the manufacturing sector for October will be published, which is likely to fall even more and amount to 46.6. On Thursday, the unemployment rate will likely remain unchanged at 6.6%. Well, on Friday – the speech of ECB President Christine Lagarde and the index of business activity in the service sector. We do not expect any new information from Lagarde or a change in her rhetoric. Just last week, she gave a speech, but she didn't say anything super important. Therefore, the key events of the week for the euro currency are scheduled for Monday and Wednesday, when the results of the Fed meeting will be announced. The average volatility of the euro/dollar currency pair over the last five trading days as of October 31 is 115 points and is characterized as "high." Thus, on Monday, we expect the pair to move between 0.9850 and 1.0080 levels. The upward reversal of the Heiken Ashi indicator signals the resumption of the upward movement. Nearest support levels: S1 – 0.9888 S2 – 0.9766 S3 – 0.9644 Nearest resistance levels: R1 – 1.0010 R2 – 1.0132 R3 – 1.0254 Trading Recommendations: The EUR/USD pair continues to be located above the moving average. Thus, it is necessary to consider long positions with targets of 1.0010 and 1.0080 in case of a reversal of the Heiken Ashi indicator up or a rebound of the price from the moving. Sales will become relevant no earlier than fixing the price below the moving average with goals of 0.9850 and 0.9766. Explanations of the illustrations: Linear regression channels – help to determine the current trend. The trend is strong if both are directed in the same direction. Moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which you should trade now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325718
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Outlook For The Movement Of The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 31.10.2022 08:34
EUR/USD reached a high of 1.00937 which makes the second rally from 0.9632 to 1.00937 equal in length to the first rally from 0.9536 to 0.99997. Equality between two minor rallies like this could imply that we have only seen a corrective rally. So, one final decline to test the former low at 0.9536 or even slightly below will follow. That means we are in limbo at this point. We need to see a clear break above the minor resistance at 1.00954 to remove the possibility of a final retest of the 0.9536 low. However, a break above minor resistance at 1.00954 will confirm that we have seen a long-term low and call for more upside pressure towards 1.0198 and much higher in the longer term.   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298957
The Markets Still Hope That The Fed May Consider Softer Decision

The Markets Still Hope That The Fed May Consider Softer Decision

InstaForex Analysis InstaForex Analysis 31.10.2022 09:52
The coming week will be unusually rich in economic statistics and various events that will have a significant impact on the markets. A number of important economic data will be released this week, where the values of production indicators both in Europe, China and the USA will play a significant role. The numbers of indexes of business activity in the manufacturing sectors will have to indicate what impact the processes of raising interest rates have on national economies, of course, here we mean the countries of the so-called West. The decline in indicators will demonstrate a steady trend towards recession in the Western countries with the expected result - continued increase in interest rates by central banks and, as a result, continued pressure on demand in the stock markets and the dollar. Also, new data on consumer inflation in the euro area will be published today, which, as predicted, will again show its increase in annual terms from 9.9% to 10.2%. If the reports do not disappoint, then the growth of inflation in the euro area will again bring to life the topic of further continuation of the aggressive increase in European Central Bank interest rates, however, which we strongly doubt, since there are noticeable discrepancies between the words of the central bank's representatives and real actions. This allows us to believe that the euro is unlikely to receive significant support in the near future. Monetary policy meetings of the Reserve Bank of Australia and the Bank of England will be held this week. Interest rates are expected to rise by 0.25% in Australia and by 0.75% in Britain, which, in our opinion, is unlikely to noticeably change the positioning of the Australian dollar and sterling against the US currency if the Federal Reserve, following the meeting on Tuesday, makes it clear that the growth rate rates at 0.75% can be maintained until the start of the new year. Only a softening of the US central bank's position regarding the prospective aggressive continuation of raising rates can significantly change the situation on the markets and lead to a global reversal in the stock markets and a weakening of the dollar. And the icing on the cake will be the release on Wednesday and Friday of new data from the US labor market. If they show the preservation of a high rate of creation of new jobs, this may allow the Fed to continue actively raising rates, which will become a new basis for the dollar's growth. What can we expect in the markets today? We believe that trading in Europe, according to the dynamics of futures for stock indices, will start in the red, but a lot will depend on the positioning of American investors. If trading in the United States starts positive, this may put pressure on the dollar and support its local weakening, as the markets still hope that the Fed at the November meeting may consider reducing the rate growth rate in the near future. Forecast of the day: EURUSD The pair is trading in a very tight range of 0.9925-0.9970. If the eurozone inflation report turns out to be lower than expected or in line with the forecast, the pair may break out of this range and fall to 0.9820, at the same time, if inflation shows more growth, this will cause an expectation of a continuation of the ECB's aggressive rate hike and may cause the pair to rise to 1.0080. EURJPY The pair is moving in the range of 14550-147.65. A strong increase in inflation in the euro area may trigger the likelihood of continued aggressive rate hikes by the ECB, which will support the euro against the yen. In this case, a rise above 147.65 could lead to a rise of the pair to 148.65.       Relevance up to 08:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325759
Hang Seng Index Plummets -2% Amid Weak China Data, Short-Term Trend Intact

Major Currency Pairs (EUR/USD And GBP/USD) Are Now Subject To A Future Fed Decision

InstaForex Analysis InstaForex Analysis 31.10.2022 11:02
According to a preliminary estimate released by the Bureau of Economic Analysis, U.S. real GDP increased at an annualized rate of 2.6 percent in the third quarter of 2022, well above expectations. The main contribution to GDP growth was from data on foreign trade, other indicators turned out to be noticeably less positive. Take note that the US stock indexes were impressed by the strong reporting of companies, the S&P 500 index rose 2.5%, exceeding the cumulative fall of 1.35% over the previous two days, ending the week up 3.95%, which was the second consecutive weekly gain. In general, the US economy looks quite confident, which gives reason to expect that the Federal Reserve will not give clear signals about the slowdown in tightening, and the dollar may well win back the positive data, continuing to strengthen. In any case, the probability of a rate hike by the same 0.7% in December remains high. European stock indices showed mixed dynamics, high inflation and the threat of an energy crisis are still the main negative factors for the euro, which will prevent it from resuming growth. EURUSD As expected, the European Central bank raised interest rates by 0.75%, but did not give any signal that the pace of rate hikes will continue to be high. Most likely, the ECB is inclined to slow down the pace of rate hikes, as it noted "substantial progress" in the revision of monetary policy, plans for quantitative tightening will be determined at the December meeting, which came as a surprise to markets that were waiting for specifics. The insufficiently hawkish stance of the ECB provoked a decline in global bond yields, European ones suffered the most, and amid accelerating inflation. Germany's overall consumer price index reached an annualized rate of 11.6% in October, well above the 10.9% expected by economists, while Italy (11.9% vs. 9.5% experience) and France (7.1 % vs 6.5% experience) also exceeded expectations. The net long position on the euro increased during the reporting week by 3.4 billion to 9.3 billion, this is a very strong growth, indicating an increase in the positive relative to the euro. However, despite such a strong change, the settlement price turned down, the reason being that even the apparently hawkish decision of the ECB did not lead to an increase in European bond yields, and the yield differential between European and US bonds did not decrease, but even slightly increased. This discrepancy between the long-term positioning in the futures and options market, which is reflected in the CFTC report, and current yields does not yet allow us to break the trend towards the weakening of the euro. EURUSD, as we suggested a week earlier, made a successful attempt to corrective growth, it passed the resistance of 0.9920/40, however, short positions resumed in the area above parity. We assume that the euro will be under slight pressure ahead of the Federal Reserve meeting, growth above the local high of 1.0092 is unlikely, trading will go in a sideways range with a downward trend. The main target is the support zone of 0.9820/40. This scenario can be canceled if the Fed shows more pronounced weakness on Wednesday than the markets have been laying down so far. GBPUSD The Bank of England will hold a regular meeting on Thursday, and the rate is expected to rise by 0.75%. The government change has calmed the markets, yields have pulled back, and now the focus will be on inflation forecasts, as they directly affect the position of the BoE. The net short position on the pound slightly decreased during the reporting week by 0.2 billion to -3.4 billion, positioning, unlike the euro, remains confidently bearish. The yield differential widened sharply in favor of the dollar, resulting in a rapid decline in the settlement price. The pound on the wave of rumors about the easing of the Fed's position still went higher than we expected, and reached the upper limit of the long-term bearish channel. We assume that a high will be formed here, an attempt to test the strength of the local high of 1.1735 is not ruled out, but a downward reversal from current levels is much more likely. Technical support at 1.1336 and 1.1147 can also act as immediate targets. High volatility is unlikely before the announcement of the results of the Fed meeting.   Relevance up to 09:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325776
The South America Are Looking For Alternatives To The US Currency

Wheat prices went up. "Risky assets" are ahead of Fed decision and NFP release

ING Economics ING Economics 31.10.2022 11:36
Markets uncertain ahead of Fed decision and NFP this week The US Dollar has mostly dominated other currencies in recent times, pushing EUR/USD and GBP/USD to multi year lows while also maintaining its strength against safe haven currencies as the Bank of Japan attempts to limit the devaluation of the Yen through several interventions. However, a noticeable pullback occurred last week with the USD index as it dropped over 2,5% and reached the lowest level in around a month. Meanwhile, Wheat prices soared at the start of the week following a series of strikes across Ukraine and news that Russia withdrew from a UN-brokered deal on Ukrainian grain exports which once again raised concerns for the supply which has been in doubt since the beginning of the conflict. While the price pulled back from daily highs, it has held the majority of its gains and could continue to be volatile as general uncertainty surrounds the developments of the geopolitical situation.  On the other hand, gold continues to struggle and started the week trading lower as it is attempting to break through the previous support area of $1640 after failing to extend the upward move which saw it reach a high of $1675 towards the end of last week. Despite this, the situation remains unclear and it remains to be seen if the price will manage to decisively move past this support area or if it will manage to rebound once again.   Bitcoin holds above $20,000 key level while USD attempts to rebound Bitcoin finally managed to escape its short term trading range below the $20,000 level which acted as a resistance for the main crypto currency as interest in risky assets continued to be uncertain while central bank policies and troubling macroeconomic data impacted sentiment. The initial upward move which occurred around a week ago coincided with a significant drop in the value of the USD and was followed by a retest of the key psychological area which was defended and sparked another upward impulse which has led bitcoin to trade around $20,600 today. This week could be crucial for bitcoin and other risky assets performance as investors will be looking closely at the upcoming central bank decision in addition to Friday's NFP report which will precede the US midterm election week. Either way, in addition to benefiting from an improvement in risk-on sentiment it will be essential for Bitcoin to remain above the aforementioned level as any major moves in either direction may lead to a cascading effect across alt coins and smaller cryptos.
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

The Currency Markets This Week Will Be Dominated By Fed Decisions

ING Economics ING Economics 31.10.2022 11:58
It is a busy week for FX markets, with key policy rate meetings on both sides of the Atlantic and some tier-one data releases. The question to be answered this week: is the Federal Reserve ready to pivot? We would argue that the Fed has less cause than many to pivot. And weak growth overseas should mean that it is too early to unwind long dollar positions In this article USD: Wednesday's FOMC will dominate EUR: Markets still price a 75bp ECB hike in December GBP: Thursday's BoE could do some damage CEE: Tough times are back USD: Wednesday's FOMC will dominate FX markets this week will be dominated by Wednesday's FOMC meeting and whether the Fed provides any oxygen to the idea of a pivot - or a shift to a slower pace of tightening. As we discuss in our FOMC preview, the Fed faces several challenges here, but we suspect the bar is quite high for a pivot and we feel it is too early to call time on the dollar's rally. After all, the market in effect already prices the pivot (pricing a 75bp hike this week and a 50bp hike in December) and we suspect the chances of another 75bp hike in December are under-priced. In addition, this week sees a whole raft of US data culminating in Friday's nonfarm employment data. We forecast 220k in job gains and an unemployment rate of 3.6% - still below the 3.8% the Fed forecast for year-end. Recall that even with the unemployment rate rising to 3.8%, the Fed's dot plots had assumed that a policy rate in the 4.25-4.50% area would be appropriate for the end of this year. As always there are two sides to the dollar story - what's going on at home and what's going on abroad. High beta currencies like the Norwegian krone, New Zealand dollar and British pound have been some of the best performers against the dollar over the last month. That has largely been due to the turnaround in sterling. But as my colleague James Smith discusses in his Bank of England (BoE) preview, the BoE may well disappoint with just a 50bp hike.  A weaker tone in sterling could undermine the recent renaissance in European currencies and push more wind back into the dollar's sails. At the same time, Chinese data continues to disappoint, with the October composite PMI dropping back into contraction territory for the first time since May. In short, it looks as though the dollar's month-long, 4.5% correction could have ended last Thursday and events this week could prove a catalyst to send the dollar back towards the highs. Our base case does see the dollar retesting the highs later this year. A break of 111.00/10 in DXY today could open up a move to the 111.80 area. Chris Turner EUR: Markets still price a 75bp ECB hike in December The eurozone continues to battle with inflation and today should see the release of a new cycle high in CPI at 10.3% year-on-year - and potentially even higher given the German CPI release. Today we will also get a first look at 3Q22 eurozone GDP, expected at 0.1% quarter-on-quarter. The news may temporarily push eurozone rates higher, even though a 75bp hike is virtually priced for the 15 December ECB meeting. Ultimately, however, our macro team believes the ECB will only hike 50bp in December and that the terminal rate for this cycle proves to be in the 2.25% area rather than the 2.80% currently priced by the markets. And bluntly, the ECB has far more cause than the Fed to pivot. With global growth under pressure from tighter rates and a misfiring Chinese economy, we think the eurozone and the euro will continue to struggle. That is why last Thursday's high of 1.0089 in EUR/USD could have been significant. A close back under the 0.9900/9910 area this week would support our preferred view of EUR/USD retesting the lows near 0.95. Chris Turner GBP: Thursday's BoE could do some damage GBP/USD is consolidating above the important 1.1500 level, holding onto recent gains. The highlight this week will be Thursday's Bank of England meeting. The market firmly prices 75bp, but we think the risk of a softer 50bp is under-priced as the BoE prepares for the coming recession. As we have argued previously - now that a lot of the fiscal risk premium has come out of sterling - the forthcoming tighter fiscal and more dovish than expected monetary policy could prove a bearish combination for sterling. We are dollar bulls and would thus favour GBP/USD breaking back under 1.1500 based on this week's confluence of events. This would also point to current EUR/GBP losses under 0.8600 proving short-lived. Chris Turner CEE: Tough times are back This week we have a busy calendar not only at the global level but also in Central and Eastern Europe. Today we start with Polish inflation, which will be crucial for next week's National Bank of Poland meeting. We expect a jump from 17.2% to 18.1% year-on-year, slightly above market expectations, mainly due to higher fuel, energy and food prices. Tomorrow in the Czech Republic, 3Q GDP data, October PMI and the state budget result will be released. The first GDP result in the region should show a contraction in the economy and confirm the start of a shallow recession. On Wednesday, we will see October PMIs in Poland and Hungary, which will confirm the downward trend in industrial sentiment. On Thursday, the highlight of this week is the Czech National Bank meeting. In line with the market, we expect interest rates to remain unchanged. A new forecast will be presented which will show lower inflation but higher wage growth, which together with the cost of FX intervention is the main risk for us in terms of a possible additional interest rate hike at the coming meetings. However, we consider the CNB hiking cycle to be finished. The FX market in the region will be dominated by global events in the coming days. Already last week, the positive trend in CEE was halted by the ECB meeting. This week will see a series of central bank meetings led by the Fed. Therefore, we see both support from high-interest rate differentials in the region and EUR/USD as being at risk. In addition, gas prices have been rising again in the last two days and many of the reasons for the strengthening trend in the CEE region over the past two weeks are now dissipating. Of course, at the local level, we will be watching the inflation numbers in Poland and the CNB meeting in particular but this week speaks strongly against CEE FX.  We see the Czech koruna as the most vulnerable at the moment, which will again be the focus of short positioning ahead of the central bank meeting. We will likely see a move towards the 24.60-24.70 EUR/CZK levels. The Hungarian forint is likely to look above 415 EUR/HUF again. On the other hand, the Polish zloty should be best positioned this week, supported by a high inflation number and an increase in NBP rate hike bets. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Is Showing A Potential For Bearish Drop

Eurozone's GDP growth hits 0.2%, inflation exceeds 10.5%!

ING Economics ING Economics 31.10.2022 12:02
The eurozone contraction hasn’t started yet as GDP growth for the third quarter came in at 0.2%. Inflation continues to increase though, which sets the eurozone economy up for a tough winter as a recession is looming Inflation continues to be a problem across the eurozone. Pictured: shoppers in Madrid GDP growth of 0.2% is better than expected A positive surprise for eurozone GDP. In fairness, this has happened often during the pandemic recovery as the rebound effect has been stronger and lasted longer than expected. While cracks in the eurozone economy are clearly showing, the economy continued to expand in the third quarter. In Germany, it looks like this was mainly due to the last legs of the consumer rebound, while in France consumption growth had already stalled. Investment was the positive surprise in France. Spain experienced fast slowing growth but the tourism recovery prevented the economy from going into the red in the third quarter.  Overall, the picture remains bleak though. Consumer confidence is near historical lows as real wage growth is at a multiple-decade low at the moment. This weighs substantially on the consumption outlook, as retail sales have already been trending down over recent quarters. The reopening of economies boosted services, but that effect is now fading. With interest rates up and the economic outlook uncertain, investment expectations are weakening too. We therefore still expect the economy to contract over the coming quarters. Inflation into double digits The inflation rate jumped once again in October, to a whopping 10.7%. This was partly on higher consumer energy prices. The low prices on the wholesale market in recent weeks are clearly not yet translating into declining prices for households. In fact, it’s likely that this will only happen in a few months’ time and even that is a big 'if' because it depends on uncertain factors such as energy supply and the weather of course. Other components saw little bright spots in this October release. Food inflation continues to trend up fast despite commodity prices moderating, and goods inflation is also still showing large monthly gains which that's pushed core inflation up to 5%. Services inflation trended just mildly higher to 4.4% in October. Overall there is still clear evidence that the second round effects of the supply-side shocks to the economy keep pushing up inflation despite moderating demand. Tough time for a pivot? The slightly more dovish tone at the ECB press conference on Thursday indicates we shouldn't come to expect such extensive rate hikes, such as the 75bp rise they gave us last week, to be a feature of forthcoming meetings, especially since a recession is drawing closer. Today’s data will provide more ammunition for the hawks to show that there is no need to make a sudden pivot yet. Overall though, we keep reiterating that current inflation cannot be fought effectively by monetary policy that has the most effect with a big lag. And hawks cannot expect GDP to keep surprising on the upside forever. With economic conditions weakening and a recession in the making for the winter, we think the ECB is going make its next hike somewhat smaller at 50 basis points. Given the historic total size of the hikes the ECB is delivering, that will have quite the slowing impact on the economy next year. Read this article on THINK TagsInflation GDP Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Positive Start Expected as Nvidia's Strong Performance Boosts Market Confidence

Dow Jones Saw The Biggest Profits And The German DAX Index Rebound From Declines

Conotoxia Comments Conotoxia Comments 31.10.2022 12:13
October 2022 seems to have brought respite to many asset classes. During this time, the stock, bond or cryptocurrency markets tried to pick up, while the US dollar seemed to lose value at the same time, along with the falling VIX "fear index" contract. Performance of key indices and companies In October,one of the popular futures contracts, the contract for the U.S. Dow Jones Industrial Average index saw the biggest gains. It rose by almost 13 percent during this period. Although the month is not yet over, for the moment, only Verizon ranks in the entire index since the beginning of October with a negative result. On a monthly basis, the decline is 0.92 percent. In contrast, the biggest increase in the index was achieved by Caterpillar (up more than 30 percent). The company reported that sales and revenues in the third quarter of 2022 recorded an annual increase of 21 percent, reaching $15 billion. The company's profit was $2.04 billion, an increase of 43.13 percent compared to the same quarter of the previous year, BBN reported. Operating profit rose 45.73 percent year-on-year to $2.42 billion. Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel engines, industrial gas turbines and diesel-electric locomotives. Source: Conotoxia MT5, Caterpillar, Monthly DAX also with growth in October The second popular instrument, which seemed to rebound from earlier declines, was the contract for the German DAX index. Although emerging macroeconomic forecasts for the German economy appear to be worsening, and the European Central Bank raised interest rates, the DAX rose nearly 10 percent. The company that may have gained the most was Deutsche Bank, as the month's performance was up more than 30 percent by now. The German bank reported its best results since 2016 in October. Net income for the third quarter of 2022 was €6.9 billion, up 15 percent year-on-year and the highest third-quarter income since 2016. The dollar exchange rate fell nearly 1 percent. Market hopes that the U.S. Fed will slow down interest rate hikes at the end of the year and in the first quarter of 2023 may have led the U.S. dollar to fall in October. At the moment, the USD index is trading 0.9 percent lower than at the beginning of the month at 111 points. The EUR/USD exchange rate is near parity at 1.0000, all likely in anticipation of the Fed's November 2 interest rate decision. The market seems to be expecting a 75bp hike to 3.75-4.00 percent, while the end of the hike cycle could be priced in at 4.75-5.00 percent in early 2023. October's biggest declines? It seems that among the popular contracts, the biggest drop in October may be the VIX, which fell 15 percent to 26.86 points this morning. Looking at the chart of the contract showing expected volatility on the S&P500 index, someone could  see that this month's trading may have turned around at a potential resistance level. Source: Conotoxia MT5, VIX, Weekly Will volatility continue at lower levels in November? Here, a lot may depend on the US central bank and events in Eastern Europe. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Read more reviews and open a demo account at invest.conotoxia.com Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Forex: Most NOK Gains May Be Channelled Against The Dollar

Together With The Risk In The Financial Markets The Norwegian Krone (NOK) Has Strengthened

TeleTrade Comments TeleTrade Comments 31.10.2022 12:19
The Norwegian krone strengthened last week in tandem with the pullback of the USD and risk-on in financial markets. Still, economists at Nordea see EUR/NOK trading as high as 10.75 until year-end. More pain to come “Historically speaking, the period towards year-end, remains a difficult period for the NOK seasonality-wise. We don’t think this year will be an expectation given the macroeconomic backdrop and see EUR/NOK trading as high as 10.75.”  “USD/NOK could rise to 11.50 if/when EUR/USD takes a turn to 0.95 again.”
Euro to US dollar - Ichimoku cloud analysis - 21/11/22

Eurozone inflation jumped by 0.8%. | Core inflation and other indicators went up. FxPro's analyst says ECB shouldn't slowdown

Alex Kuptsikevich Alex Kuptsikevich 31.10.2022 15:42
Eurostat's preliminary estimate indicated an acceleration of annual inflation in the euro region from 9.9% immediately to 10.7%. Economists, on average, expected no change, and this difference of 0.8 percentage points is one of the most prominent indicators economists predict quite accurately on average. But it's not only this surprise that we want to point out, but also how fast price growth has spread beyond energy and food categories. Core inflation accelerated to 5% YoY in September, adding 0.6% MoM. Non-energy industrial goods rose at 1.2% MoM and 6.0% YoY. These dynamics should signal that the ECB should not reduce the pace of monetary tightening. No doubt the ECB had this or very comparable data available for last Thursday's meeting but chose to act within market expectations with a rate hike of 75 points. A softer policy than required by the macroeconomic context is likely to be one of the reasons for the pressure on the euro on Monday. The EURUSD is testing the 0.9900 level and the 50-day moving average from above. A sharp dip below would make the previous breakout be considered false. A breakup of the rising trend from the end of September would set the pair to create a global low, disappointing the recent buyers. At the same time, the market is unlikely to make an essential move beyond local trends before the results of Wednesday evening's Fed meeting. The FOMC is expected to raise rates by 75 points for the fourth consecutive time but will indicate a smaller rate hike in the future, which could reduce traction in dollar-denominated assets.
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

What Kind Of Scenario Is Most Likely For The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 01.11.2022 08:05
The euro undertook a downward breakout on Monday. Having made a path of 80 points, the euro has almost reached the target support of 0.9864. Apparently, the price lingered before the support to build up strength before it was overcome, as the support is strengthened by the MACD line (0.9840). Overcoming the formed range (0.9840/64) opens a further path to the target support at 0.9715 – to the April 2000 high. The Marlin Oscillator is approaching the zero line on the daily. It is likely that the price will overcome the support range and the zero line oscillator at the same time. Such synchronization will lead to a powerful downward movement. In terms of timing, such a breakthrough may take place tomorrow - on the day of the Federal Reserve meeting. On the four-hour chart, the price consolidated under the balance (red) and MACD indicator lines. The Marlin Oscillator is developing in the downward trend zone. Today, consolidation is likely before the breakout of the planned supports, or even the first attempt at such a breakout.   Relevance up to 03:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325858
FX Daily: Testing the easing pushback

EUR/USD: The Situation Of The Euro To US Dollar Pair Was Almost Perfect

InstaForex Analysis InstaForex Analysis 01.11.2022 08:16
Analysis of EUR/USD, 5-minute chart The euro/dollar pair continued to move down on Monday, as we predicted at the end of last week and over the weekend. We believe that the market has begun to work out the results of the Federal Reserve meeting in advance, which, in fact, are already known - the rate will be raised by 0.75% for the fourth consecutive time. Thus, the strengthening of the dollar is indeed logical. Take note that both major pairs fell simultaneously on Monday, so the euro is unlikely to decline due to macroeconomic statistics from the EU. We found out that GDP in the third quarter grew by only 0.2%, while inflation accelerated to 10.7%. As we said earlier, rising inflation is a bullish factor for the currency, as it means that the central bank can tighten its monetary policy even more. However, in the case of the European Central Bank, such a logical chain is not entirely correct, since now there are big doubts that the ECB will be able to raise the rate "to the bitter end." Moreover, the results of the Federal Reserve meeting will be summed up tomorrow, which is clearly more important than European GDP or inflation. In regards to Monday's trading signals, the situation was almost perfect. Only two sell signals were formed during the European trading session and afterwards the price fell. The first signal can be considered false, since the price managed to go down only 18 points, which, however, was enough to set Stop Loss to breakeven. The second short position brought at least 50 points of profit, and it had to be closed manually in the late afternoon. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of short orders initiated by non-commercial traders increased by 24,000, whereas the number of long orders declined by 2,700. As a result, the net position increased by 26,700 contracts. However, this could hardly affect the situation since the euro is still at the bottom. At the moment, professional traders still prefer the greenback to the euro. The number of buy orders exceeds the number of sell orders by 75,000. However, the euro cannot benefit from the situation. Thus, the net position of non-commercial traders may go on rising without changing the market situation. Among all categories of traders, the number of long positions exceeds the number of short positions by 19,000 (609,000 against 590,000). We recommend to familiarize yourself with: Overview of the EUR/USD pair. November 1. The EU economy is in a tailspin. Overview of the GBP/USD pair. November 1. Elections in the UK will soon take on the character of an annual national tradition. Forecast and trading signals for GBP/USD on November 1. Detailed analysis of the movement of the pair and trading transactions. Analysis of EUR/USD, 1-hour chart The pair is moving upwards on the one-hour chart, however, a lot may change this week. So far, the price is above the Senkou Span B line and above the ascending trend line, and on the 24-hour timeframe, it has not managed to overcome the Ichimoku cloud. Therefore, the euro can fall by another 100 points and at the same time maintain an upward trend, but at the same time, a drop below the trend line will break the upward trend. On Tuesday, the pair may trade at the following levels: 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as the Senkou Span B (0.9900) and Kijun-sen (0.9982). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events are planned in the European Union, on the other hand, a rather important index of business activity in the manufacturing sector ISM and a less important S&P index for the same sector will be released in America. A reaction to ISM may follow, especially if its value is very different from the forecast. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 06:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325866
The Upside Of The EUR/USD Pair Remains Limited

Analysis Of The EUR/USD Pair By Miroslaw Bawulski

InstaForex Analysis InstaForex Analysis 01.11.2022 09:29
Yesterday was a pretty good trading day. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 0.9930 level in my morning forecast and advised making decisions on entering the market there. Everything happened by analogy with last Friday, so nothing good could be obtained from the received signal in the first half of the day. A decline and breakdown of 0.9930 with a reverse test from the bottom up have led to an entry point for selling the euro, however, the pair went further down, which led to fixing losses. The US session turned out to be much better: a breakthrough and reverse test from below 0.9913 gave a sell signal, which resulted in a downward move by more than 35 points. The bulls protecting support at 0.9875 and a false breakout on it - all this led to long positions and the pair moved up by 20 points. When to go long on EUR/USD: Yesterday's eurozone GDP report gave confidence that the economy will actually contract by the end of the year and this is unlikely to be avoided. Inflation growth continued in October and exceeded 10.7%, which will force the European Central Bank to continue acting aggressively: raising rates, while counting on a quick return of consumer prices to an acceptable level. Today there are no statistics that could somehow turn the market, so it is possible that the euro will be able to return to the opening levels of the week before the Federal Reserve meeting, the results of which will be known tomorrow. If the pair goes down, forming a false breakout in the area of the nearest support at 0.9913 will be an excellent reason to build up long positions with the prospect of the euro's further recovery along the trend towards 0.9954 and 1.0000. We can talk about new attempts by the bulls to strengthen market control after the breakout of parity and the test from the down up. A breakthrough of 1.0000 would hit bearish stops and form a buy signal with the possibility of a push higher to the 1.0042 area, strengthening the bullish trend. An exit above 1.0042 will serve as a reason for growth to the area of the weekly high of 1.0090, where I recommend taking profits. In case the pair drops and bulls fail to protect 0.9913, the pressure on the euro will reverse, thus causing another slump. In this case, it will be wise to go long on a false breakout near 0.9875. It is also possible to buy the asset just after a bounce off 0.9849, or even lower - 0.9816, expecting a rise of 30-35 pips. When to go short on EUR/USD: The bears have managed to prove themselves, but have lost all the advantage in today's Asian session. It's more like running stops before key US data, so don't be surprised if the market moves against common sense in the coming days, of which there is very little in it. Today, bears should primarily protect the resistance at 0.9954, just below which are moving averages, playing on their side. It would be better to open short positions after a false breakout of this level after obscure statistics on the German import price index, which will provide an excellent entry point, allowing a return to 0.9913. If the pair settles below this level and upwardly tests it, traders may go short to push the price to the 0.9875 area, where bears may face serious obstacles. The farthest target is located at 0.9849, where I recommend taking profits. If EUR/USD moves up during the European session and bears fail to protect 0.9954, demand for the pair will jump, thus prolonging the upward trend. In this case, bears should remain cautious. They may open positions after a false breakout of 1.0000. It is also possible to go short after a rebound from the monthly high of 1.0042 or higher – from 1.0090, expecting a decline of 30-35 pips. Signals of indicators: Moving averages Trading is performed below the 30- and 50-day moving averages, which shows that the pair is still under pressure. Note: The period and prices of moving averages are considered by the author on the one-hour chart, which differs from the general definition of the classic daily moving averages on the daily chart. Bollinger Bands If the euro/dollar pair rises, the upper limit of the indicator located at 0.9935 will act as resistance. If the pair drops, the lower limit of the indicator will act as support. Description of indicators Moving average (moving average, determines the current trend by smoothing volatility and noise). The period is 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing volatility and noise). The period is 30. It is marked in green on the graph. MACD indicator (Moving Average Convergence/Divergence - convergence/divergence of moving averages). A fast EMA period is 12. A slow EMA period is 26. The SMA period is 9. Bollinger Bands. The period is 20. Non-profit speculative traders are individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions are the total number of long positions opened by non-commercial traders. Short non-commercial positions are the total number of short positions opened by non-commercial traders. The total non-commercial net position is a difference in the number of short and long positions opened by non-commercial traders.   Relevance up to 07:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325882
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

The Euro Bloc Economy Lost Its Growth Momentum

InstaForex Analysis InstaForex Analysis 01.11.2022 11:20
The US currency has once again bypassed the European one, which is seriously puzzled by a new batch of news about inflation. At the same time, the dollar draws confidence in the Federal Reserve's actions, which allows the completion of the current cycle of rate hikes. The greenback significantly strengthened at the beginning of this week, restoring some of the positions lost over the past month. This was largely facilitated by the expectation of another interest rate hike from the Fed, whose two-day meeting is scheduled for November 1-2. According to preliminary calculations, on Wednesday, November 2, the central bank will raise the key rate by 75 bps, to 3.75-4.00%. This will be the fourth step on the Fed's part in raising rates. However, many analysts and market participants doubt the continuation of the Fed's harsh rhetoric. According to experts, after the fourth rate hike by 75 bps, the central bank will take a less aggressive position on this issue. Michael Wilson, currency strategist at Morgan Stanley, is sure of this. He believes that the Fed's rate hike cycle is nearing completion. In support of his words, Wilson cites the inversion of the yield curve of ten-year and three-month US Treasury bonds. Recall that this is one of the key indicators indicating the need for a reversal of the central bank's tight monetary policy to a softer one. However, some experts do not share the optimism of the Morgan Stanley representative. Currency strategists at UBS Global Wealth Management are confident that a reversal in the Fed's policy is unlikely, since the inflation rate in the US remains high. Against this background, the central bank will have to raise the rate until inflation recedes, the bank emphasizes. The current situation puts pressure on the dollar, which, despite the current tension, is gradually strengthening. Against this background, the EUR/USD pair has been declining for the third consecutive day, continuing to struggle with the pull of the downward trend. On the morning of Tuesday, November 1, the EUR/USD pair was cruising near 0.9911. This is a difficult situation for the euro since it has to resist negative macro data. Recall that reports on inflation in the eurozone were published on the evening of Monday, October 31, which again demonstrated its sharp rise. As a result, the inflation rate in the region soared to a new historical high, and the euro bloc economy lost its growth momentum. According to analysts, consumer prices in the EU rose by 10.7% in October 2022 compared to October 2021, exceeding forecasts. In the third quarter of this year, the volume of production in the eurozone decreased to 0.2% compared to the same period last year. According to experts, the current situation is aggravated by a sharp increase in the European Central Bank's interest rates. At the same time, many analysts believe that the central bank should continue to actively fight inflation, which includes raising rates. It is possible that after the recent rate hike, the ECB will raise it again by 75 bps at the next meeting, which is scheduled for December 15. However, such a scenario is still in question, as well as a possible pause in the process of raising rates by the Fed. Some analysts do not expect dovish decisions from the US central bank, although the current situation requires revision. According to experts, the aggressive tightening of the monetary policy contributes to the early onset of a recession in the United States, as well as a large-scale drop in treasury state bonds and stocks over the past few years. Take note that as rates rose and the economic downturn that followed the tightening of the monetary policy, the markets were gripped by a crisis. It was followed by an increase in the number of defaults, which seriously hit investors. In the current situation, the leading central banks will have to solve the issues that provoked such problems. The current situation significantly affected the dynamics of the EUR/USD pair, provoking a correction at the end of September. However, the pair is gradually returning to a relatively stable course. According to experts, a new round of risk appetite in the markets will save the EUR/USD pair from further decline. At the same time, experts expect a New Year rally on the US stock market and the growth of risky assets in the near future.   Relevance up to 07:00 2022-11-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/325874
The Euro May Attempt To Resume An Upward Movement

The Euro To US Dollar (EUR/USD) Pair Will Have A Bullish Trend

InstaForex Analysis InstaForex Analysis 02.11.2022 08:01
Trend analysis EUR/USD will increase this November, starting from 0.9882 (closing of the October monthly candle) to 1.0198, which is the 23.6% retracement level (red dotted line). Then, it will go to the historical resistance level of 1.0373 (blue dotted line), before turning down again. Fig. 1 (monthly chart) Comprehensive analysis: Indicator analysis - uptrend Fibonacci levels - uptrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - uptrend All this points to an upward movement in EUR/USD. Conclusion: The pair will have a bullish trend, with no first lower shadow on the monthly white candle (the first week of the month is white) and no second upper shadow (the last week is white). Throughout the month, quotes will climb from 0.9882 (closing of the October monthly candle) to the 23.6% retracement level at 1.019 (red dotted line), go to the historical resistance level of 1.0373 (blue dotted line), then turn down again. Alternatively, the pair could rise from 0.9882 (closing of the October monthly candle) to the 23.6% retracement level at 1.0198 (red dotted line), then bounce down to the historical support level at 0.9994 (dashed blue line). Upward movement may resume from this level.   Relevance up to 14:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325948
Apple Q3 2023 Results – Surpassing Expectations and Aiming for New Heights

Technical Analysis Of Both EUR/USD and GBP/USD Currency Pairs

InstaForex Analysis InstaForex Analysis 02.11.2022 08:04
Both EUR/USD and GBP/USD have been bearish lately, so it was not surprising that an upward correction is brewing. After that, another price decrease could occur. GBP/USD pulled back deeper, which creates more headroom for a decline. Since price movements form a three-wave pattern (ABC), where wave A represents the bearish pressure, traders could enter the market by selling up to the 50% retracement leel. Set stop loss at 1.16, then exit the market on the breakdown of 1.14271. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 11:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325923
What's ahead of Euro against greenback today? Let's look at Stefan Doll's review

The Fed Will Be Raise The Rate And The Euro (EUR) Will Be Fall Further

InstaForex Analysis InstaForex Analysis 02.11.2022 08:13
Yesterday's PMI in the US was mixed, and investors, in anticipation of today's announcement of the Federal Reserve on the results of a two-day meeting, partly closed positions. The stock index S&P 500 fell by 0.41%, the correction against the dollar was short-lived. As a result, the dollar index fell by only 0.03%. The euro reached the range of target levels 0.9864 and 0.9950 by the shadows of the daily candle. With overcoming the MACD line (0.9840), the price will continue to decline to 0.9714. The Marlin Oscillator is in a neutral situation, preparing to go under the zero line at the same time as the price overcomes the support of the MACD line. On the four-hour chart, the price retested from below the MACD line. This is a technical sign of further decline. The retest took place without the price going above the balance line (red indicator), so this growth can be taken as a correction from the entire previous three-day decline. Marlin in negative territory. We are waiting for the Fed to raise the rate and the euro to fall further.   Relevance up to 03:00 2022-11-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325990
Asia Morning Bites: Focus on Regional PMI Figures, China's Caixin Manufacturing Report, and Upcoming FOMC Minutes and US Non-Farm Payrolls"

The Close On The New York Stock Exchange Was Red

InstaForex Analysis InstaForex Analysis 02.11.2022 08:17
At closing time on the New York Stock Exchange, the Dow Jones was down 0.24%, the S&P 500 was down 0.41% and the NASDAQ Composite was down 0.89%. Dow Jones The leaders among Dow Jones index components in today's trading were shares of JPMorgan Chase & Co. which gained 2.28p (1.81%) to close at 128.16. Nike Inc rose 1.09 pct (1.18%) to close at 93.77. Goldman Sachs Group Inc rose 3.94p (1.14%) to close at 348.45. The least gainers were shares of Apple Inc, which fell 2.69p (1.75%) to close the session at 150.65. Salesforce Inc shares rose 2.79p (1.72%) to close at 159.80, while Microsoft Corporation dropped 3.96p (1.71%) to close at 228.17 S&P 500 The top gainers among S&P 500 index components in today's trading were ABIOMED Inc which gained 49.88% to 377.82, IDEXX Laboratories Inc which gained 9.80% to close at 394.93, and Hologic Inc which gained 9.34% to end the session at 74.13. Catalent Inc shares were the fallers, down 24.62% to close at 49.55. Shares of Zebra Technologies Corporation lost 15.86% and ended the session at 238.30. Ecolab Inc dropped 8.98% to 142.96. NASDAQ  The gainers among the components of the NASDAQ Composite index in today's trading were shares of ABIOMED Inc. which gained 49.88% to 377.82, Sonnet Biotherapeutics Holdings Inc. which gained 46.63% to close at 2.83 and shares of NLS Pharmaceutics AG which gained 44.00% to close the session at 0.74. Varonis Systems shares were the fallers, dropping 35.49% to close at 17.27. Shares of China Liberal Education Holdings lost 27.39% to end the session at 1.14. Acorda Therapeutics Inc. was down 25.22% to 0.80. On the NYSE, 1,960 securities gained more than 1,172 which closed negative and 95 were flat. On NASDAQ, 2,101 stocks gained in value, 1,680 declined, and 194 remained flat. The CBOE Volatility Index, which is based on the S&P 500 options trade, fell 0.27% to 25.81. Gold Gold futures for December delivery added 0.55%, or 8.95, to $1.00 per troy ounce. In other commodities, December WTI crude oil futures rose 2.02%, or 1.75, to $88.28 a barrel. January Brent crude futures traded up 1.83%, or 1.70, to $94.51 per barrel. FX Market Meanwhile, on the Forex market, EUR/USD remained unchanged 0.08% to 0.99, while USD/JPY dropped 0.33% to 148.23. The USD index futures rose 0.02% to 111.44.     Relevance up to 04:00 2022-11-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/299302
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

EUR/USD Pair: There Is Such A Strong Fundamental Background

InstaForex Analysis InstaForex Analysis 02.11.2022 08:28
Analysis of EUR/USD, 5-minute chart The euro/dollar pair continued its corrective movement on Tuesday as part of an uptrend, which after three days of falling still persists. However, yesterday the price overcame the Senkou Span B line and now there is only one support from below in the form of a trend line. If the price settles below it, then the long-term downward trend may resume, and the euro will again rush to its 20-year lows. And today, the price may overcome this line, as the results of the Federal Reserve meeting will be announced in the evening. The market has no doubts that the rate will rise for the fourth time by 0.75%, and this is a weighty argument for further strengthening of the US currency. Over the past 2-3 days, traders could already work out the rate hike "in advance", so today we can see the pair rise. However, a further fall cannot be completely ruled out either. Recall that the market can react to such important events in an unpredictable way. In regards to Tuesday's trading signals, the situation was quite interesting. At the very beginning of the European trading session, quotes bounced from the Senkou Span B line, afterwards they rose to the level of 0.9945. It was necessary to open a long position on this signal, and the profit was about 20 points. There were two bounces from the 0.9945 level, two sell signals. The first one was closed by Stop Loss at breakeven, and after the second one, the price overcame the Senkou Span B and almost reached the level of 0.9844, making it possible to earn another 60 points. This position should have been closed manually in the late afternoon. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of short orders initiated by non-commercial traders increased by 24,000, whereas the number of long orders declined by 2,700. As a result, the net position increased by 26,700 contracts. However, this could hardly affect the situation since the euro is still at the bottom. At the moment, professional traders still prefer the greenback to the euro. The number of buy orders exceeds the number of sell orders by 75,000. However, the euro cannot benefit from the situation. Thus, the net position of non-commercial traders may go on rising without changing the market situation. Among all categories of traders, the number of long positions exceeds the number of short positions by 19,000 (609,000 against 590,000). Analysis of EUR/USD, 1-hour chart The pair is moving upwards on the one-hour chart, however, it may change its direction today. The price is around 70 points from the trend line, so it will not be difficult to overcome it. Especially when there is such a strong fundamental background, like what we have for tonight. On Wednesday, the pair may trade at the following levels: 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as the Senkou Span B (0.9900) and Kijun-sen (0.9977). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. The European Union is set to publish an index of business activity in the manufacturing sector. Not the most important report or indicator. In the US we have the ADP report and in the evening - the results of the Fed meeting. The macroeconomic background will be quite weak during the day, but the market may trade actively ahead of the meeting. You need to be ready for any development of events. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate         Relevance up to 01:00 2022-11-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325978
The Challenge to the Dollar: De-dollarisation and Geopolitical Shifts

The Fed Meeting Ahead Is A Key In The Reversal Of Markets

InstaForex Analysis InstaForex Analysis 02.11.2022 11:01
Large movements may be seen in markets today after the release of Fed's decision on monetary policy. Earlier, many expressed their belief that the US central bank will make its last rate increase this month, signal an easing, then take a short pause to assess the impact of the previous rate hikes on the country's economy. If this really happens, the US stock market will bounce up, with the trend shifting from bearish to bullish. But if the opposite occurs and the Fed makes it clear that it is too early to change their view on the pace of rate hikes, another wave of sell-offs will take place, especially in the stock markets, while US Treasury yields will rise. In short, the Fed meeting ahead is a key in the reversal of markets, though a lot will depend if the US economy is entering a recession or not. Another factor is the quarterly reports of companies. As for dollar, the change in the Fed's policy will put pressure on it, possibly causing noticeable changes. The behavior of Treasury yields will also affect USD, in which a decline will lead to a price decrease. If there are no changes, dollar will climb further, while gold prices may update recent lows. So far, a change in the Fed's policy is highly likely since members have recently stated their support on the slowdown of rate hikes. The stabilization of consumer inflation may also convince the central bank to resort to this option. Forecasts for today: EUR/USD A change in the Fed's policy could push the pair above 0.9900, to 1.0050 and then to 1.0150. USD/CAD The weakening of dollar and increase in oil prices could bring the pair down to 1.3500 after falling below 1.3570.     Relevance up to 08:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326010
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

Conditions In Central And Eastern Europe Are Deteriorating And FX Market Is Heading Into The Fed Meeting

ING Economics ING Economics 02.11.2022 11:16
The Fed should hike by 75bp today, but markets appear divided on the degree of openness to slower tightening by Chair Powell. We suspect that lingering data-dependency may put off pivot speculation to the next inflation report, leaving risk assets vulnerable and the dollar bid. In this scenario, we expect the high-beta pound to suffer more than the euro In this article USD: Is the Fed really a make-or-break event for the dollar? EUR: Eyeing 0.9800 GBP: More at risk than the euro CEE: Fed as party crasher Source: Shutterstock USD: Is the Fed really a make-or-break event for the dollar? It’s FOMC day, and the extreme sensitivity of global assets and the dollar to the theme of a dovish pivot has boosted the notion this will be a make-or-break event for market sentiment. With so much at stake, our approach has been to look at different scenarios for markets and the dollar in our FOMC preview. There, we also highlight our baseline scenario, which sees a 75bp hike (consensus view) being accompanied by some tentative openness to a slower pace of tightening. It does appear that there is a considerable heterogeneity of expectations on the Fed today, which indeed makes it harder than usual to draw a precise market reaction function. Still, it appears that investors have been swinging increasingly in favour of a dovish pivot, which in our view increases the chances of a hawkish surprise. In particular, any reference to a potential slowing of the pace of hikes may come with some strings attached, retaining a de-facto data dependency and making the next inflation report the real pivotal event for markets. Given the tendency of inflation to surprise on the upside, investors may be reluctant to fully price out a 75bp hike in December (currently, 60bp is embedded in the OIS curve). So, what does this mean for the dollar? We are inclined to think that Chair Jay Powell will need to drop a substantial chunk of his data-dependent approach, and emphasise the risks of recession over the risks of inflation, in order to drive a substantial dollar downtrend. However, it does seem too early for this, and a risky move given the lack of evidence that inflation is coming under control. With markets still left in limbo, we suspect the balance of risks for the dollar is skewed to the upside today. After all, recent price action has pointed to interest in rebuilding long-dollar positions after the late-October correction, a dynamic that remains supported by a heavily inverted yield curve, instability in the equity market and lack of alternatives to the dollar in FX given macroeconomic uncertainty (especially in Europe and China). While surely a close call, we see DXY closing the week above the 112.00 handle, and moving back to the 113.00+ highs in the coming weeks. There are also US ADP jobs figures to keep an eye on today, but the proximity to the FOMC announcement and the limited predictive power on actual payrolls (which are released on Friday) should limit market sensitivity to the release. Francesco Pesole EUR: Eyeing 0.9800 It’s all about the FOMC announcement today for EUR/USD, and we see downside risks for the pair into the weekend. The 0.9800 level may prove quite pivotal, as this was an important anchor before last week’s upside correction. A break below 0.9800 before the end of the week would likely imply markets defaulting to the pre-correction levels, and signal a return to a more structural bearish tone on the pair, which could unlock further downside room. The main development to follow in the eurozone at the moment is the rhetoric of European Central Bank speakers after the upside surprise in eurozone inflation numbers. Yesterday, Germany’s Joachim Nagel and Spain’s Pablo Hernández De Cos firmly reiterated that there is still a long way to go in tightening, and we’ll hear from Ireland’s Gabriel Makhlouf and France’s François Villeroy today. As discussed on multiple occasions, the euro remains unable to draw substantial benefits from the ECB’s hawkish tone. Francesco Pesole GBP: More at risk than the euro The pound bounced back yesterday, as it continued to display the kind of high beta to risk sentiment that would normally be associated with commodity currencies in the G10. This feature inevitably puts the pound at risk of a larger drop than other peers – like the euro – if the Fed fails to offer support to risk assets today. We continue to highlight the risk of a dovish surprise (50bp hike) by the Bank of England tomorrow: more details in our scenario analysis. The combination of a USD-positive FOMC and a GBP-negative Bank of England means cable could test 1.1300 by the of the week. EUR/GBP may climb back into the 0.8650-0.8700 area in the coming days. Francesco Pesole CEE: Fed as party crasher For today, we have PMIs in Poland and Hungary on the calendar. As already foreshadowed by the result in the Czech Republic, a negative surprise can be expected here as well. Special attention will be given to Poland, which is currently leading the decline in leading indicators in the region. Poland and Hungary are returning to the market after the holidays today. Meanwhile, conditions in Central and Eastern Europe are deteriorating and FX is heading into the Fed meeting without much support. The US dollar continues its rally, local rates are lower against core rates across the region and yesterday's jump in gas prices back above EUR100/MWh is not helping the situation either. Thus, we expect to see selling pressure in CEE markets return. Moreover, in the Czech Republic, we will see the Czech National Bank meeting on Thursday, which traditionally attracts short positioning with the prospect of an end or change to the central bank's FX intervention regime, which should take the koruna back to CNB intervention levels in the 24.60-24.70 EUR/CZK range. Despite strengthening over the past two days, we continue to think that the Polish zloty and Hungarian forint should trade higher as well. Just based on the current interest rate differential and FX relationship, we see the zloty closer to 4.75 EUR/PLN and the forint closer to 415 EUR/HUF. Moreover, with the Fed meeting today, we expect pressure on the CEE to increase during the day, which may lead to a painful end to the current rally in the region. Frantisek Taborsky   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Euro to US dollar - Ichimoku cloud analysis - 21/11/22

S&P and Nasdaq went down a little bit. Euro to US dollar touched 0.9953 yesterday

ING Economics ING Economics 02.11.2022 11:42
Roller coaster ride for markets on rumours of relaxed Covid measures in China and FOMC anxiety Source: shutterstock Macro outlook Global Markets: US stocks look a bit jittery ahead of the FOMC meeting, which is due to pronounce at 02:00 SGT/HKT tomorrow morning Asia time. Both S&P and NASDAQ dropped, though by less than 1 per cent, but this came after they opened strongly, so the drop looks more meaningful measured peak to trough. Equity futures aren’t indicating much of a pickup at the open later today. Chinese stocks had a much better run. The CSI 300  rose 3.58% on rumours that a more flexible approach to zero Covid was being considered by the government. Further gains are indicated by futures markets today.  Still, these are just rumours at this stage. So caution is warranted. EURUSD looks barely changed from this time yesterday, but like equities, it was far from a dull day. EURUSD rose to 0.9953 at one point yesterday and then fell to 0.9853 before settling at the current 0.9875. There was much the same story for the other G-10 currencies, AUD, GBP and even JPY, which has actually gained a bit of ground, at 148.059, though remains well off its lows of around 147 yesterday.  Most of the Asia FX group made gains yesterday, including the CNY, which has pulled back to 7.2775. The THB and KRW also made decent gains on the day. Shorter-dated US Treasury yields have continued their ascent. 2Y yields are up another 6.2bp. But the long end has stuck, and the 10Y yield remains at just over 4.0%, awaiting clues from Fed Chair Powell in the next 24 hours. Markets want signs of a pivot. And that augurs for some euphoria if it is received, but misery if not. Powell has a tough job later on. G-7 Macro: Yesterday’s Manufacturing ISM index from the US was slightly down from the September reading at 50.2 (was 50.9, consensus 50.0), though the decline in the prices paid index to 46.6 is perhaps more interesting. New orders continued to register a contraction, though at a slower pace, while the employment index indicated no change ahead of Friday’s payroll figures. Besides the FOMC, there isn’t much else worth bothering with from the G-7 today.   South Korea: Inflation picked up again in October to 5.7% YoY as expected (vs 5.6% in September), but is still clearly off its peak of 6.3% reached in July. The main driver for the latest rise was the hike in city gas and electricity rates. On a monthly basis, food prices and transport (including gasoline) prices fell -1.3% and -0.5%, respectively, from the previous month. Despite high upside risks such as the weak KRW and rebounding food prices, we expect inflation to decelerate from now on. As a result, we believe that the Bank of Korea will likely raise rates by only 25bp at its November meeting. What to look out for: Fed meeting and US NFP South Korea inflation (2 November) Australia building approvals (2 November) Australia trade balance (2 November) US ADP employment (2 November) US FOMC decision (3 November) Australia trade (3 November) China Caixin PMI services (3 November) Malaysia BNM policy meeting (3 November) BoE policy meeting (3 November)  US trade balance, durable goods orders and initial jobless claims (3 November) Japan Jibun PMI (4 November) Philippine trade and inflation (4 November) Thailand CPI inflation (4 November) Singapore retail sales (4 November) US non-farm payrolls (4 November) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The Indecision Of Both Bears And Bulls On The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 02.11.2022 14:26
It is difficult to overestimate the significance of the Fed's November meeting. Traders of dollar pairs are waiting for the verdict, not daring to make unipolar decisions – either in favor of the greenback or against it. A vivid illustration of this is the EUR/USD pair, which cannot determine the vector of its movement. On Monday, the price dropped sharply to the area of the 98th figure, but yesterday the downward momentum faded, which buyers took advantage of. However, their successes also leave much to be desired: the pair is circling around the 0.9900 mark, reflecting the indecision of both bears and bulls on EUR/USD. In general, a paradoxical situation has developed around the November meeting of the Fed. On the one hand, market participants have no doubt that the regulator will increase the interest rate by 75 basis points today. On the other hand, the general plot contains intrigue, primarily regarding the further pace of monetary policy tightening. So, the probability of a 75-point rate hike in November is currently 90.2%. The probability of implementing a 75-point scenario at the December meeting is 50.3%. These figures, published by the CME FedWatch Tool service, indicate the precariousness of the current situation. The scales can tilt both in the direction of the dollar and against it. If the members of the regulator in the accompanying statement (or/and Jerome Powell at a press conference) hint, or at least do not rule out, a slowdown in the tightening of monetary policy at the end of this year / early next year, the greenback will be under the strongest pressure. In this case, the EUR/USD pair will not only overcome the parity level but also gain a foothold above the 1.0050 resistance level (the upper line of the Bollinger Bands indicator on the daily chart). Moreover, the dollar may react negatively even to veiled hints from the Federal Reserve – for example, if the text of the final communique (or Powell's rhetoric) emphasizes accordingly. For example, if the regulator expresses concern about the slowdown in a number of macroeconomic indicators in the United States, takes care of the decline in the global economy, and pays attention to difficult international conditions. In other words, even if the Fed voices hypothetical reasons for slowing down the pace of rate hikes without directly indicating such intentions, the dollar will be under the strongest pressure. The fact is that over the past two weeks, the situation has been escalating in a certain way, the information background has been "dovish" in nature, so market participants will "look out" for such hints in the Fed's rhetoric. In my opinion, only "direct verbal interventions" of a hawkish nature will help the dollar bulls. In the text of the accompanying statement, as a rule, very streamlined, diplomatic language is used, so all hope is on Federal Reserve Chairman Jerome Powell. He should convey to traders a simple but important message: the Fed is not going to slow down until inflation in the United States shows signs of slowing down; without fulfilling this condition, it is pointless to reduce the pace of the rate hike. The head of the Fed should voice this message categorically and unequivocally. In this case, dollar bulls will be able to organize another rally, returning the EUR/USD pair to the area of 96–97 figures. Whereas all doubts, ambiguous hints, and cautious wording will be interpreted against the US currency. How likely is the implementation of a conditionally "hawkish" scenario? In my opinion, this scenario is basic, given all the previous rhetoric, not only of Powell but also of most of his colleagues. Powell has consistently (since the August economic symposium in Jackson Hole) defended his position that the regulator should curb inflation, while agreeing with the presence of side effects. And now, with the side effects of the Fed's aggressiveness starting to show, and inflation still at unacceptably high levels, can Powell back off? Note that the core consumer price index jumped in September to 6.6% in annual terms. This is the strongest growth rate since 1982. The upward dynamics of the core index is fixed for the second month in a row. The core personal consumption expenditures price index (the Fed's main inflation indicator) strengthened its growth rate to 5.1% year on year after rising 4.9% a month earlier. All these signals indicate that the Fed has not yet completed its number one task. As for the notorious "side effects," there are also some nuances here. Against the backdrop of a slowdown in many macro indicators, data on US GDP growth in the third quarter came out in the "green zone." The US economy expanded by 2.6% (against a growth forecast of 2.3%), after a two-quarter decline in the first half of 2022. Thus, despite the circulating rumors of a "dovish" nature, the likelihood of a "hawkish" scenario being realized today is quite high. Powell is likely to reaffirm his commitment to aggressive monetary tightening, and in one form or another, will repeat his phrase that Americans will have to put up with an economic slowdown, as "this is a sad price for reducing inflation." Nevertheless, given the continued likelihood of an alternative ("dovish") scenario, it is most expedient to take a wait-and-see position for the EUR/USD pair now, at least until the end of the final press conference of the head of the Fed.     Relevance up to 17:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326042
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The New Zealand Dollar (NZD) Rally Against The Aussie (AUD)

Saxo Bank Saxo Bank 02.11.2022 14:33
Summary:  The Powell Fed was probably hoping that it could fly under the radar at today’s FOMC meeting, giving itself the luxury of two more data cycles as inputs before providing fresh guidance and forecasts at the mid-December FOMC meeting. But no such luck, given the recent significant easing of financial conditions and yesterday’s very hot September jobs opening survey. FX Trading focus: Powell in the hot seat at tonight’s FOMC, needing to surprise hawkish The US September JOLTS jobs openings release yesterday was a shocker, as August data was revised up 250k and the September release was nearly a million more than expected at 10.72M. This jolted US yields and the US dollar back higher, keeping the greenback largely in the tactical neutral zone ahead of tonight’s FOMC meeting. It is the latest data point to suggest that the Fed will have a hard time pre-committing to any slowdown in the pace of its policy tightening after the 75-basis-point hike that is fully priced in for tonight. The December 14 FOMC meeting odds have not shifted much over the last couple of weeks, as investors still favor the idea of a downshift to a 50-basis-point hike at that meeting, followed by another 50 basis points of tightening early next year over the space of a couple of meetings. (An interesting psychological block for this market appears to be the 5.00% level for the Fed Funds rate – markets have been unwilling to project the Fed to hike above this level – which is about where we are now for the March-May FOMC meetings) As I outlined in yesterday’s update, if the Fed merely keeps quiet and endorses current expectations and punts on further guidance until December, we might see an extension of the melt-up in risk sentiment and see another wave of USD weakness. But yesterday’s JOLTS data point raises the odds that the Fed will want to push back against that outcome or at least against complacency on its potential policy path in general. To surprise hawkish today, Powell and company will have to make it very clear that the Fed is willing to continue tightening beyond current expectations. At the same time, that task will be difficult if they are reluctant to pre-commit to another large hike in December. One possible tactic to keep maximum forward potential for hawkishness would be for the Fed to indicate very high reactivity to further incoming data and openness to continuing with large hikes as long as necessary if the data supports doing so. It's hard to tell how the market would treat such a stance at tonight’s meeting if that is what the FOMC delivers, but in coming days and until the December 14 FOMC meeting, it would certainly mean extreme volatility on the next bits of Incoming data, starting with the ISM Services tomorrow and then especially the October jobs report this Friday. Then we’ll have the October JOLTS survey, the November jobs report, and the October and November CPI releases before that meeting. Chart: EURUSDEURUSD is perched between the important parity level to the upside and perhaps 0.9875-0.9850 support to the downside, an important level on the way up, awaiting today’s FOMC meeting. Downside risk for a test of the cycle lows below 0.9600 if the Fed manages to surprise hawkish and lift rate expectations, while we’ll have to close north of parity and see a continued improvement in risk sentiment and perhaps some weak US data through Friday to sustain a new upside leg. Bank of Japan minutes surprise. It’s been a while since we got a surprise from the BoJ, and normally we don’t look for them in the minutes, which are not released until after the following meeting. But last night’s minutes from the September BoJ meeting generated a few waves and JPY strength as they showed considerable signs of member discomfort with rising price pressures and even brought up the subject of an eventual policy shift, even if not suggesting one is imminent: one member said that “when the appropriate time comes, it’s important to communicate to markets an exit strategy”. This won’t sustain a JPY rally if US treasuries run back higher after the FOMC today and/or in the wake of the key US data through Friday. NZD strength getting stretched after the strong jobs report overnight extended the NZD rally against the Aussie and even keeping the currency near the top of the recent range versus the US dollar. Not sure how much more the little kiwi can get out of this run of strength here – a turn in broad sentiment could suddenly see vulnerability. The RBNZ is concerned about the impact on the policy tightening on the country’s financial system in its financial stability report released yesterday. I don’t see any meaningful ability for policy to diverge from here from Australia’s for example. Bloomberg put out an interesting article on the globally weather-stressed dairy industry. New Zealand is the world’s largest dairy exporter and combined, milk, beef, butter and cheese make up some 30% of New Zealand’s exports in physical goods. The article mentions climate-linked legislation possibly limiting future output – worth watching. Table: FX Board of G10 and CNH trend evolution and strength.CNH weakness still prominent, sterling’s relative strength fading, kiwi strength looking overdone and USD at maximum indecision here. Table: FX Board Trend Scoreboard for individual pairs.EURCHF making a bid at a reversal of the uptrend that was established more than four weeks ago if it drops through the 0.9850-0.9800 zone in coming days. Look at AUDUSD ready to possibly tilt lower again if the USD can get a leg-up post-FOMC. EURUSD is also close to flipping lower again after its uptrend attempt didn’t extend very far from its launching point, which was near the current rate. Upcoming Economic Calendar Highlights 1215 – US Oct. ADP Employment Change 1800 – US FOMC Meeting 1830 – US Fed Chair Powell Press Conference 2000 – New Zealand RBNZ Governor Orr before Parliamentary Committee 0145 – China Oct. Caixin Services PMI   Source: https://www.home.saxo/content/articles/forex/fx-update-pressure-mounts-on-fed-to-surprise-hawkish-02112022
The EUR/USD Pair Is Showing A Potential For Bearish Drop

We could say European Central Bank doesn't have a wide range of options

Kenny Fisher Kenny Fisher 02.11.2022 15:30
EUR/USD is in positive territory today. In the European session, the euro is trading at 0.9905, up 0.32%. German, eurozone manufacturing PMIs fall The manufacturing sector in the eurozone continues to struggle, as PMIs in Spain, Italy and France slowed in October and remained in contraction territory, with readings below 50.0. German and eurozone Manufacturing PMIs also pointed to a downturn in manufacturing. Final Manufacturing PMI in Germany was revised to 45.1, down from 45.7, with the eurozone Manufacturing PMI coming in at 47.2, revised from 47.4. With winter approaching and an energy crisis looming in Western Europe, there’s little reason to expect any significant improvement in manufacturing data. The economic outlook remains uncertain, leaving in question what the ECB has in store at the December meeting. The ECB joined the rate-hiking dance late and finds itself well behind the inflation curve, as headline inflation in the eurozone jumped to a staggering 10.7% in October, up from 9.9% in September. The ECB has little choice but to deliver an oversize rate hike in order to tackle double-digit inflation, and ECB President Lagarde said as much on Tuesday, warning that the central bank would use “all the tools we have available to bring inflation back to the ECB’s 2% target. The focus is on the Federal Reserve, which winds up its 2-day policy meeting later today. This would bring the benchmark rate to 4.0%. The question on the minds of investors is what happens next? The final meeting of the year is on December 14th and hopes that the Fed will downshift their tightening pace at that meeting have faded, as inflation has been stickier than the Fed expected. The markets will be listening closely to Fed Chair Powell’s comments today, hopeful for some insights into what the Fed has planned for December and early 2023. EUR/USD Technical EUR/USD faces resistance at 0.9956. Next, there is resistance at 1.0105 0.9870 and 0.9818 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro shrugs after soft manufacturing data - MarketPulseMarketPulse
The Euro May Gradually Climb To The Target Level

The EUR/USD Pair Can Start Move In Downwarnd Trend

InstaForex Analysis InstaForex Analysis 03.11.2022 08:06
The Federal Reserve's rate hike to the expected 0.75% was not without surprise, or rather, it did not go without intrigue: the accompanying statement spoke about the effect of the delay of monetary policy on inflation (that is, the possible rate cut sooner rather than later), and Fed Chairman Jerome Powell at the conference announced a possible higher final level of the rate than previously expected by committee members. Markets immediately raised the highest expected rate to 5.1% for May 2023 from the previous peak expectation of 4.85%. As a result, the euro fell by 60 points, having overcome the support of the MACD line on the daily chart. But the Marlin Oscillator has not yet crossed the border into the downtrend area. Maybe it will happen this afternoon. But actually the 0.9714 target is available. Settling below the level will open the 0.9520 target. The S&P 500 stock index fell by 2.50%, it will push the euro down. On the H4 chart, the price went under the range of 0.9840/64 with consolidation, the Marlin Oscillator is in negative territory, we are waiting for the development of a downward trend.     Relevance up to 04:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326108
The Euro To US Dollar Instrument Did Not Change In Value

The Upward Trend Is Still Preserved For The Euro (EUR)

InstaForex Analysis InstaForex Analysis 03.11.2022 08:14
Analysis of EUR/USD, 5-minute chart The euro/dollar pair continued its corrective movement within the uptrend, which after four days of falling is still preserved. Recall that we do not consider the movements that took place last night and tonight, since the reaction to the results of the FOMC meeting can be observed within 24 hours quite freely. Therefore, we consider it right to analyze afterwards. At the moment, we can say that the upward trend is still preserved for the euro, as evidenced by the rising trend line. Settling below it will break the current trend, but it should be understood that a breakthrough, which will happen on a strong fundamental background, may be false. One way or another, conclusions will need to be drawn no earlier than tonight. Yesterday, in fact, the only more or less important report of the day - from ADP - was ignored. Weak volatility and almost complete absence of trend movement were observed throughout the day. The dollar only started to rise in price sluggishly during the US session. In regards to Wednesday's trading signals, the situation was difficult due to the flat. Traders could try to work out the first two signals near the Senkou Span B line, but both turned out to be false, after which all subsequent signals should have been ignored. In total, five signals were formed near the Senkou Span B line - this is a clear sign of a flat. The fall began only after the fifth signal. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of short orders initiated by non-commercial traders increased by 24,000, whereas the number of long orders declined by 2,700. As a result, the net position increased by 26,700 contracts. However, this could hardly affect the situation since the euro is still at the bottom. At the moment, professional traders still prefer the greenback to the euro. The number of buy orders exceeds the number of sell orders by 75,000. However, the euro cannot benefit from the situation. Thus, the net position of non-commercial traders may go on rising without changing the market situation. Among all categories of traders, the number of long positions exceeds the number of short positions by 19,000 (609,000 against 590,000). Analysis of EUR/USD, 1-hour chart The pair is moving upwards on the one-hour chart, but today it could stop. The price is around 70 points from the trend line, so it will not be difficult to overcome it. Especially when there is such a strong fundamental background, like what we have for tonight. No matter how the pair moved last night, high volatility and strong movements can continue to be observed today and tomorrow. Recall that the most important statistics will be released on Friday. And today the market may continue to work out the results of the Federal Reserve meeting. On Thursday, the pair may trade at the following levels: 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as the Senkou Span B (0.9900) and Kijun-sen (0.9955). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. The EU will release a report on unemployment - not the most important indicator, we do not expect the market to react to it. Two business activity indices in the service sector will be released in America - ISM and S&P. Naturally, the ISM index is much more important for traders, and they could react to it. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate           Relevance up to 01:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326096
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

S&P ended yesterday's session 2.5% down, Nasdaq lost over 3%!

ING Economics ING Economics 03.11.2022 09:39
Fed rates - higher, slower. Pivot optimism quickly sours.  Source: shutterstock Macro outlook Global Markets: US equity investors didn’t much like the message from Fed Chair Powell last night. Equities did spike higher on the announcement of a 75bp increase in rates (relief it wasn’t 100bp?), but it was downhill soon after and then for the rest of the session which closed with the S&P down by 2.5% and the NASDAQ down 3.36%. Equity futures are also looking soggy right now, so further losses will likely follow today. The initial boost was provided by a hint that the pace of tightening could soon moderate. But the key disappointment seems to have been the remark that rates would have to go higher than expected. Expected by whom? The market? If that is the case, then this sounds like Powell is telling us that 5% will not be the peak, and Fed funds futures implied rates have pushed up to about 5.1% from the May 23 contract onwards. If it is simply higher than the Fed previously expected, then a 5% peak remains the plausible outcome. For more on this, please read the linked note from our US Economist, and rates and FX strategists. US Treasury yields responded to the FOMC decision and press conference with a mirror image of the equities move. The initial response was a sharp fall in yields in the 2Y Treasury, which then swung back strongly to end up by 7.5bp at 4.626%. Yields on 10y Treasuries followed the same pattern, rising by 5.9bp to sit at 4.10% now. It was much the same in currency space. The EURUSD exchange rate spiked up initially to 0.998, before retreating to 0.9813.  The AUD, GBP and JPY all lost ground to the USD. Other Asian currencies have yet to take on board the latest moves fully, and yesterday was relatively quiet, except for some PHP weakness (see also below) and a little bit of THB strength. Anyway, some Asian FX weakness looks probable today.    G-7 Macro: Lost amidst the FOMC noise yesterday, the ADP employment survey for the US showed a 239,000 increase in employment in October.  That is more than the 192,000 revised reading for September, and for “pivot” proponents, is going in the wrong direction (if that is also the direction of tomorrow’s non-farm payrolls).  The consensus median for payrolls is only 200,000, which even then is still a fairly decent pace of employment growth and not conducive to a lower peak Fed funds rate. Today the US is fairly quiet, with the main interest being the service sector ISM index. But we do have a Bank of England meeting, and they are widely expected to raise rates a further 75bp taking Bank Rate to 3.0%. China: It is uncertain whether Caixin Services PMI will come in below 50, like the official non-manufacturing PMI. The Caixin service sector PMI's survey participants are mainly small service providers, which are very different from those responding to the official non-manufacturing PMI, which includes more property-related participants. But even if it is above 50, it may not have much impact on CNY and CNH, as today's driving force for fx should mainly come from the dollar after yesterday’s FOMC meeting. Australia: Australia’s trade surplus for September widened substantially on a big surge in exports, which gained 7%MoM, while imports made no headway over the month. The bigger-than-expected export figure coupled with weaker imports took the surplus out to AUD12.4bn. This is still lower than the June reading of AUD17.6bn, but may well put a floor under the AUD after the impact of last night’s FOMC decision. Philippines: Bangko Sentral ng Pilipinas (BSP) Governor Medalla pre-announced his policy move today.  Medalla said he would raise the policy rate by 75bp at the scheduled meeting on 17 November.  BSP previously telegraphed that it would match any move by the Fed.  BSP's commitment to hike rates at their next meeting should steady the PHP at the open today.    What to look out for: US non-farm payrolls Australia trade (3 November) China Caixin PMI services (3 November) Malaysia BNM policy meeting (3 November) BoE policy meeting (3 November)  US trade balance, durable goods orders and initial jobless claims (3 November) Japan Jibun PMI (4 November) Philippine trade and inflation (4 November) Thailand CPI inflation (4 November) Singapore retail sales (4 November) US non-farm payrolls (4 November) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Forex: US dollar against Japanese yen amid volatility and macroeconomics

Fed hiked the interest rate by 75bp. The final rate target could be higher than estimated. ING expects US dollar index may stay calm, pointing to tomorrow's labour market data

ING Economics ING Economics 03.11.2022 09:53
The dollar is higher after the Fed raised rates 75bp again yesterday. Chair Jerome Powell is trying to switch attention away from the pace of rate hikes to the terminal rate, which he said will likely be higher than what the Fed had estimated in September. Expect the dollar to hold gains - especially versus GBP were the BoE to surprise with just a 50bp hike USD: Higher rates for longer As we discussed in yesterday's Fed reaction piece, the dollar initially sold off on the FOMC statement, but then rallied on what was overall a hawkish press conference. When the dust had settled, the US money market curve had bear-steepened - e.g. 1m USD OIS rates priced six months forward were 6bps higher, but priced 12 months forward were 12bps higher. There were many ways to read the press conference, but one interpretation is that Chair Powell was trying to shift the narrative away from how fast the Fed would be hiking towards how high the terminal rate would have to go and how long it would have to stay there. The press conference also concluded with a sense of frustration from Chair Powell that inflation had not fallen more quickly - and he certainly did not provide any encouragement to those in the market looking for an early fall in rents (a key component of core inflation). With the focus now switching to the terminal rate, Chair Powell has guided expectations that it will be higher than the 4.50-4.75% area the Fed had estimated back in September. That could prepare us for another bullish dollar event risk with the release of the next set of projections on 14 December - assuming neither employment nor core inflation sags quickly.  Expect Fed policy to prove a bullish undercurrent to the dollar and an even more inverted US yield curve to weigh in particular on the high beta activity and commodity currencies, such as the Australian and New Zealand dollars, Norway's krone and Sweden's krona. Where there could be some joy for those a little more bearish on the dollar is amongst high-yielding Latam FX - especially the Mexican peso. Some have made the good point that the slower pace of Fed hikes could reduce volatility in the interest rate markets. Indeed, the MOVE index - a basket of US Treasury implied volatility across maturity buckets - edged lower yesterday. FX volatility typically takes its cue from the interest rate markets. Lower FX volatility will increase risk-adjusted returns, where we think the 11.1% MXN implied yields available through the three-month forward look attractive and could drive USD/MXN to 19.45/50 during brief periods of calm. For today's US session, the focus will be as usual on the weekly jobless claims data. We also have ISM services and the September trade balance. The US monthly trade deficit has narrowed in from $107bn to $67bn this year, no doubt helped by rising US energy exports. Another dollar positive. We favour a flat to higher DXY today (perhaps to 112.50) as the market consolidates ahead of tomorrow's monthly US jobs release. Chris Turner EUR: Dollar hedging costs are 3% again The jump in US short-dated rates has widened the two-year differential between EUR and USD swap rates back to 210bp again - not far from the widest levels of the year. Equally, the shorter-dated yields now indicate that it will cost euro-based companies around 3% per annum to hedge the dollar using rolling three-month forwards - that is expensive. EUR/USD is gradually sinking back towards 0.98 and we feel momentum could easily build for a push to 0.9650 tomorrow if US jobs and wage data do not slow as much as expected. In Europe today, there are a lot of European Central Bank speakers, where the doves are trying to get the message across that the forthcoming recession will do some of the work in taking inflation off its highs. EUR/USD could trade in a 0.9760-0.9850 range today. Chris Turner The Bank of England (BoE) will not be the only European central bank announcing policy today, as Norway’s Norges Bank (NB) is also due to deliver another hike. We note that consensus is split between a 25bp and a 50bp move today: we expect a half point hike, as the September CPI upside surprise (6.9% year-on-year) may have overshadowed concerns about slowing economic activity. We think this can offer some extra help to the krone, which is already benefiting from oil’s good performance and the support from Norges Bank’s reduced daily FX purchases (from NOK 4.3bn to 3.7bn) for November. EUR/NOK may break below 10.20 in the near term, but we suspect that a worsening of risk sentiment conditions into year-end may limit further NOK appreciation. Francesco Pesole GBP: Scope for a 50bp BoE surprise today My colleague James Smith is making the 'courageous' call that the Bank of England will only hike 50bp today. His argument is that the consensus 75bp hike would end up seeing UK CPI undershooting the BoE's 2% target in 2025. In other words, the BoE does not need to increase the pace of tightening right now. As we discuss in that BoE preview, the FX options market attaches a 150 pip GBP/USD range to today's event risk. That could see GBP/USD trading back to the 1.1250 area if we are right with our BoE call. EUR/GBP could trade back to 0.87 too. Sterling also looks challenged from both: i) the international investment environment where US equities sold off 2.5% yesterday on the prospect of higher for longer Fed rates and ii) what is shaping up to be quite a tight fiscal event in the UK on 17 November as the new government struggles to plug its borrowing gap.  Chris Turner  CEE: No change in Czech National Bank approach The highlight of this week's calendar is today's Czech National Bank (CNB) meeting. We expect interest rates to remain unchanged, in line with market expectations. Thus, the key will be the new central bank forecast, which we believe will show lower inflation but also higher wage growth. Also key for the market will be the interest rate forecast, or any indication of the timing of the first rate cut next year and the long-term level. However, the main focus will be on FX intervention, with which the CNB has been defending the koruna since mid-May. However, in our view, the current central bank approach will only be confirmed, and we do not expect any changes.   On the FX market, we see the koruna underperforming the Polish zloty in recent days, which can be attributed to the building of short positions ahead of the CNB meeting. We can expect this trend to continue until the central bank's decision up to 24.60-70 EUR/CZK as a bet on the end of the intervention regime. But after the press conference, we can expect the liquidation of those positions and the return of the koruna to stronger levels. However, we believe that this effect will be smaller compared to the September meeting given the greater clarity that the CNB will not change its intervention regime.  Elsewhere in the region, given the empty calendar, it will be purely about the fallout from yesterday's Fed meeting and as expected, the picture is clearly negative for Central and Eastern European FX. EUR/USD is heading lower while rising core rates are pushing interest rate differentials lower across the region. Thus, we expect the Polish zloty and Hungarian forint to open with losses today.  Frantisek Taborsky  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Long-Term Yields Soar Amidst Hawkish Fed: Will They Reach 5%?

Statements Of ECB's Member About Inflation And Monetary Policy

TeleTrade Comments TeleTrade Comments 03.11.2022 10:20
European Central Bank (ECB) executive board member Fabio Panetta said on Thursday, “we need to bring inflation back to our 2% target as soon as possible, but not sooner”. Additional quotes   Medium-term inflation outlook presents clear upside risks. Further policy adjustment is warranted. We must calibrate our monetary policy carefully to ensure inflation durably returns to target, while also guiding market expectations and limiting excess volatility. He of our stance should not rely on a one-sided view of risks. We must avoid excessive focus on short-run developments and fully taking into account the risks. The neutral interest rate provides limited guidance here. We also need to stand ready to address collateral issues. I  prefer the concept of the target-consistent rate to that of the neutral rate. Maintaining ample liquidity in the system will help ensure smooth money market functioning. Ready to intervene in a timely manner to counter unwarranted market dysfunctions, should they arise. We should ensure that TLTRO repayments have been absorbed before we stop fully reinvesting the principal payments. A controlled reduction – whereby only redemptions above a cap are not rolled over – is preferable to active sales. A bigger-than-expected rate increase may heighten volatility and have a stronger impact in the current highly leveraged environment. We need to pay close attention to ensuring that we do not amplify the risk of a protracted recession. Our policy rate remains a suitable marginal instrument of normalization. If these bigger-than-expected increases are interpreted as signalling a higher terminal rate, we could have a stronger impact on financing conditions. We have a comparatively limited understanding of the effects of reducing the size of our balance sheet.   Market reaction The EUR/USD pair was last seen trading at 0.9786, down 0.31% on the day.
Construction Activity in Poland Contracts in May: Focus on Building Decline and Infrastructure Investment

After the rate hike EUR/USD touched the parity level. Federal funds rate futures let us think about the end of the hiking cycle

Conotoxia Comments Conotoxia Comments 03.11.2022 11:38
Yesterday we saw the long-awaited decision by the US Federal Reserve on interest rates. The range for the federal funds rate was raised by 75 bps to 3.75-4.00 percent, in line with market expectations. US interest rates are presently at their highest level since 2008. How did the dollar exchange rate react to the decision? The dollar and the interest rate hike The U.S. currency, as well as related markets, including gold or silver, but also U.S. stock indexes, seemed to react to the Fed's decision with increased volatility. At first, the U.S. dollar lost value, only to make up the losses during Jerome Powell's press conference. This could have had to do with the fact that Powell dashed the market's hopes for a quick end to the interest rate hike cycle, which he made clear during the conference. U.S. Federal Reserve Chairman Jerome Powell stressed on Wednesday that it is very premature to think about halting interest rate hikes. Powell also added that "no one knows whether there will be a recession, and if so, how dangerous it will be." The road to a soft landing has narrowed, but it is still possible. Powell stressed that spending growth has slowed and the labor market situation is still good. Inflation is well above the Fed's target, and recent inflation data have been above expectations, but long-term inflation expectations remain "well-anchored" - The Fed chairman noted in statements quoted by the BBN service. Reaction of the dollar exchange rate after the Fed decision Source: Conotoxia MT5, EUR/USD, H1 The EUR/USD pair's exchange rate approached parity shortly after the decision, only to fall towards 0.9800 at the end. This could be related to the still high expectations for further interest rate hikes by the Fed. On the morning of November 3, federal funds rate futures indicated that a 50bp hike could occur in December. In February 2023, the market expects another 50 bp hike and only in March 2023, after the last hike from 25 bp, is the end of the cycle expected. The market today is pricing the end of the cycle at 5.00-5.25 percent, and only next December could see a 25bp rate cut in the U.S. to 4.75-5.00 percent, according to futures and CME exchange data. Stock markets with a bump after the Fed The Nasdaq fell 3.4 percent yesterday, the S&P 500 fell 2.1 percent, and the Dow Jones fell more than 1.5 percent. Higher interest rates, typically also mean higher interest rates on bonds and the U.S. dollar, instruments with potentially little investment risk. The higher the interest rates and the lower the risk, capital could turn away from riskier assets until they are attractively priced relative to the risk-free rate. Hence, Wall Street may continue to be under pressure until companies' earnings prospects improve or their prices become more attractive relative to interest rates.  Nevertheless, interesting companies may emerge in such an environment. One of them may be Boeing, which stands out in the Dow Jones index. The company's share price has risen 6 percent in the past week, and is up 16 percent in a month. The company reported yesterday that it could generate free cash flow of $3 billion to $5 billion in 2023, and $10 billion by the middle of the decade, as it believes it would be able to outsource the delivery of the last of its 737 and 787 aircraft to airlines, its CEO David Calhoun said on Wednesday, as quoted by BBN news service. Source: Conotoxia MT5, Boeing, Weekly Did you know that CFDs allow you to trade on both falling and rising prices? Derivatives allow you to open buy and sell positions, and thus invest on rising as well as falling quotes. At Conotoxia, you can choose from CFDs on more than 100 currency pairs. Wanting to find a CFD on USD/PLN, for example, you just need to follow 4 simple steps: To access Trading Universe - a state-of-the-art center of financial, information, investment and social products and services with a single Smart account, register here. Click "Platforms" in the "Invest&Forex" section. Choose one of the accounts: demo or live On the MT5 or cTrader platform, search for the CFD currency pair you are looking for and drag it to the chart window. Use the one-click trading option or open a new order with the right mouse button. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Read more reviews and open a demo account at invest.conotoxia.com Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

Jason Sen comments on AUD/USD, NZD/USD, Euro to US dollar and other Forex pairs - 02/11/2022

Jason Sen Jason Sen 02.11.2022 09:41
AUDUSD longs at support at 6395/6385 worked on the strong bounce to 6463, just below the 6370 target. The pair is still trying to build a counter trend move. The problem with counter trend moves is that they are never smooth. The bears still think they have control & keep trying to push lower so we keep seeing deep 150 pip moves lower before a strong recovery. NZDUSD longs at first support at 5790/70 finally work as we bounce off the inverse head & shoulders neck line at 5790/70 & shot higher to my target of 5890/5910 for an quick 100 pips profit. However in this tough counter trend move, the gains were not sustained & the pair collapsed swiftly to 5823. EURUSD longs at 9880/70 & EURCAD shorts at 1.3500/1.3480 were 2 of the scalps that worked yesterday for a quick 50 pips profit in each pair. EURUSD struggling to push higher in the counter trend recovery. 2 steps forward & 1 huge step back - this has been the trend for 5 weeks. USDCAD scalping resistance at 1.3680/1.3700 & support at strong support at 1.3520/00 has been a great strategy for a week. Keep scalping while we wait for a breakout. EURCAD shorts at first resistance at 1.3490/1.3510 worked perfectly with a high for the day exactly here. A 50 pips profit offered so far. **Dollar pairs will obviously be influenced by today's Fed rate decision.** Today's Analysis. AUDUSD collapsed to retest support at 6395/6385 & made a low at 6375 so obviously this remains the important levels for today. A bounce again targets 6435/45 , perhaps as far as 6465/6470. Further gains test last week's high at 6510/20. Longs at 6395/6385 stop below 6360. A break lower targets 6330 & 6280/70. NZDUSD first support again at the head & shoulders neck line at 5790/70 of course. Longs need stops below 5750. Our longs target 5845/55 & 5890/5910. A break higher can reach 5980. EURUSD support at 9880/70 is key to direction again today. Longs worked perfectly yesterday targeting 9915/25 & reaching 9950. Above 9955 today signals further gains towards resistance at 9985/95. Longs at 9880/70 need stops below 9850 (a low for the day yesterday at 9851 so we are just holding the position). Further losses can target support at 9810/9790. USDCAD holding below 1.3600 risks a slide to 1.3570/60 & perhaps as far as strong support at 1.3520/00. Longs need stops below 1.3480. A break lower is a sell signal. Holding above 1.3630 can retest resistance at 1.3680/1.3700. Shorts need stops above 1.3720. A break higher is a buy signal. EURCAD shorts at 1.3500/1.3480 work on the slide to 1.3450 & we could target support at 1.3390/70. Longs need stops below 1.3350. Longs at support at 1.3390/70 can target 1.3450, perhaps as far as first resistance at 1.3490/1.3510. Shorts need stops above 1.3530.
The Price Of EUR/USD Pair Will Develop Sideways Movement

The Further Decline In The Euro (EUR) Is Expected

InstaForex Analysis InstaForex Analysis 04.11.2022 08:08
Yesterday, the euro fell by 66 points after a preliminary test from below the MACD indicator line (reversal from resistance). The price did not reach the support of 0.9710, and the Marlin Oscillator is already in the negative zone on the daily chart, which indicates the market's desire to develop a decline. Breaking the support will complete the technical formation of conditions for the price to move towards 0.9520. On the 4-hour chart, the price is settling with the rising Marlin Oscillator after yesterday's decline and in anticipation of today's US employment report. The employment forecast is optimistic. In the non-agricultural sector, 200,000 new jobs are expected against 288,000 in September, the unemployment rate, according to economists' calculations, may increase from 3.5% to 3.6%. But since the benchmarks of labor trends have already come out quite good in recent days, today's data may also exceed expectations. Such benchmarks are relatively low rates of weekly jobless claims, private sector employment (239,000), PMI sub-index from ISM employment in the manufacturing sector (50.0 vs. 48.7 in September). We expect the euro to fall further.       Relevance up to 04:00 2022-11-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326230
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The Euro (EUR) Missed A Good Chance To Form An Upward Trend

InstaForex Analysis InstaForex Analysis 04.11.2022 08:13
Analysis of EUR/USD, 5-minute chart The euro/dollar pair moved down on Thursday. If in previous articles we called it "corrective", now it is already descending, as the price has overcome the ascending trend line. The price is now around 200 points away from its 20-year lows and, apparently, is going to fall back to them and maybe even surpass it. That's how quickly and rapidly the situation in the foreign exchange market is changing. A week ago, the euro had pretty good chances for growth, and now it is ready to continue a long-term downtrend, which has been going on for two years. We said earlier that the fundamental and macroeconomic backgrounds remain, in fact, unchanged for the euro/dollar pair. Those factors due to which the pair fell, at least in 2022, remain. The US central bank added fuel to the fire on Wednesday evening, which assured of its readiness to continue and further tighten monetary policy. In regards to Thursday's trading signals, everything was unfortunate, since the first one was formed only when the price had already gone down 80 points. Therefore, the signal near the level of 0.9747 should not have been processed. We could have tried to work out the buy signal near the same level, formed during the US trading session, but it did not bring profit, as the price quickly returned to the level of 0.9747. The long position was closed by Stop Loss at breakeven. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of short orders initiated by non-commercial traders increased by 24,000, whereas the number of long orders declined by 2,700. As a result, the net position increased by 26,700 contracts. However, this could hardly affect the situation since the euro is still at the bottom. At the moment, professional traders still prefer the greenback to the euro. The number of buy orders exceeds the number of sell orders by 75,000. However, the euro cannot benefit from the situation. Thus, the net position of non-commercial traders may go on rising without changing the market situation. Among all categories of traders, the number of long positions exceeds the number of short positions by 19,000 (609,000 against 590,000). Analysis of EUR/USD, 1-hour chart You can see that the pair has changed its trend to a downward one on the one-hour chart. After a six-day fall, an upward correction may follow. However, now the euro still needs to overcome the Senkou Span B and Kijun-sen lines, which are above them. The euro missed a good chance to form an upward trend, once again. On Friday, the pair may trade at the following levels: 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, as well as the Senkou Span B (0.9900) and Kijun-sen lines (0.9859). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. The index of business activity in the services sector will be published in the European Union, as well as a speech by European Central Bank President Christine Lagarde. Reports on unemployment and nonfarm in the US. As you can see, there will be a lot of important statistics today, so the market could react to these reports. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-11-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326216
The EUR/USD Pair Chance For The Further Downside Movement

Technical Analysis Of The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 04.11.2022 08:16
Technical outlook: EUR/USD dropped through the 0.9730 mark on Thursday before finding bids again. The euro bounced back sharply thereafter and is seen to be trading close to 0.9790 levels at this point in writing. A high probability remains for a bullish turn from current levels and a push through 1.0200 highs in the next few trading sessions. EUR/USD is still holding above its critical support at 0.9700, followed by 0.9635 and 0.9535 levels respectively. The near-term structure continues to remain bullish till 0.9635 support is intact. Bulls are looking poised to come back in control from current levels as they unfold a potential Engulfing Bullish candlestick pattern on the daily chart. EUR/USD is also seen to be bouncing off the 0.786 Fibonacci retracement of the recent upswing between 0.9635 and 1.0093 levels respectively. A bullish turn from here has the potential to push the price through 1.0200, which is immediate resistance, at least. Only a sustained break below the 0.9635 mark will nullify the above structure and bring back bears into play. Trading plan: Potential rally towards 1.0200 against 0.9600 Good luck!     Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299665
ECB decision: 50bp rate hike is on the cards, but this week's data can be game-changing

It's Just A Matter Of Time Before The EUR/USD Pair Starts To Grow

InstaForex Analysis InstaForex Analysis 04.11.2022 08:32
  The US dollar is fighting the best it can to stay strong and try to reach a new high against the euro. Looking at the most recent price action, that remains a possibility if minor support at 0.9704 is broken. The 11-year decline in EUR/USD is about to end and it's just a matter of time before EUR/USD starts to rally strongly. Only a direct break above resistance at 1.0095 will confirm that a long-term already is in place. The labor market in the US remains relatively strong. The Fed hikes rates more aggressively to fight inflation than the market has expected. However, the underlying weakness in the US economy will soon show its ugly face as the real estate market is on the edge of a collapse and that will be a major drag on the economy.   Relevance up to 07:00 2022-11-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299677
The Downside Of The US Dollar Index Remains Limited

Bank of Englad went for a 75bp hike, in Norway and Australia hikes were less hawkish. US dollar may be supported by NFP released today

ING Economics ING Economics 04.11.2022 10:25
There is a growing (USD-positive) divergence between the Fed – which delivered only a 'timid' dovish pivot – and other major central banks. Yesterday, the Bank of England pushed back against market pricing as it hiked by 75bp, following dovish turns in Norway, Canada and Australia. Today's US payrolls may come in above 200k, adding fuel to the USD rally Today's US payroll figures may add fuel to the dollar rally USD: Payrolls can keep Fed away from pivot The dollar has retained very good momentum in the aftermath of the FOMC announcement on Wednesday, with markets continuing to push their Fed peak rate expectations higher. Fed Funds futures for the March 2023 meeting are currently trading in the 5.10/5.20% region, a clear testament to how markets have not bought into any dovish pivot narrative.  This is particularly relevant for FX given the growing divergence between the Fed and other major central banks. Yesterday, the Bank of England and Norges Bank both surprised on the dovish side, and so did the Bank of Canada and the RBA a few days ago. There's a growing perceived chance that the Fed will be the last major central bank to throw in the towel and arrest its tightening cycle, and we think this notion can provide quite sustainable support to the dollar into the new year.  Today, the focus will shift back to data as US October payrolls are released. Our US economist sees room for a slightly above-consensus headline read (220k vs a conservative 195k), which should overshadow the widely expected 0.1% increase in the unemployment rate and marginal slowdown in wage growth. We expect today's release to leave markets still searching for a higher Fed terminal rate, ultimately keeping the dollar bid. A decisive break above 113.00 in DXY appears on the cards: if not today, probably in the coming days.  Francesco Pesole  EUR: Caught in the crossfire EUR/USD remains primarily a function of dollar moves, and today's US payrolls release should continue to put pressure on the pair in our view. Having now moved back to the trading ranges seen before the late-October correction (which has proven exceptionally short-lived), we think markets have switched back to a more structurally bearish tone on EUR/USD, and a return to 0.9500 is our base case in the near term. Domestically, markets will keep an eye on ECB president Christine Lagarde's comments this morning. With the OIS curve currently embedding 60bp of tightening at the ECB December meeting, there is surely room for speculation in either direction on the size of the next hike. From an FX perspective, the implications for the euro have been quite limited, and we doubt this will change drastically in the very near term.  Francesco Pesole  GBP: A very dovish hike We had highlighted downside risks for sterling as we approached yesterday's Bank of England (BoE) announcement. Our call was for a 50bp dovish surprise, and while the BoE hiked by 75bp, it seemed to tweak the policy message to the dovish side as much as reasonably possible, ultimately triggering a GBP reaction (-1.5% vs USD) quite similar to what we would have seen if it only hiked by 50bp.  As discussed in our BoE review note, the Bank pushed back quite firmly against what markets were previously pricing in terms of tightening (i.e. a 5% peak rate), adding in its forecasts that following the market-implied rate path could cause a three percentage point economic contraction over several quarters and inflation at zero in 2025. The bottom line is that the BoE is essentially shutting the door to another 75bp, and we expect a 50bp hike in December.  The negative reaction in the pound was – in our view – not just due to the dovish repricing in rate expectations, but also a re-connection of FX dynamics with the rather concerning domestic economic outlook, which was flagged quite clearly by the BoE. The fiscal rigour brought by the new UK government may have already had a beneficial effect on the pound, and now the size of the current UK recession may become a primary currency driver. Indeed, the downside risks are still quite significant, and next week's GDP numbers will surely be watched quite closely: consensus is currently around a 0.4% quarter-on-quarter contraction.  Today, BoE chief economist Huw Pill will deliver some remarks, but there are no other key events to monitor in the UK. Risks are skewed towards a re-test of 1.1000 in cable over the next few days, with today's US payrolls possibly adding pressure on the pair. Francesco Pesole  CEE: Speaking of selloffs... As expected, the Czech National Bank (CNB) left interest rates unchanged at 7.00% today, in line with surveys and market expectations. In a statement, the phrase "...the CNB will continue to prevent excessive fluctuations of the koruna exchange rate" returned after a hiatus in September. If we are looking for a surprise at this meeting we can find it in the new forecast, which has undergone a significant transformation. Overall, the CNB forecasts slower economic growth, including a recession next year and lower inflation, alongside a massive tightening of monetary conditions. However, despite the big changes in the CNB's forecast, nothing has changed in our view of the main story yesterday. The board considers interest rates high enough and FX interventions are doing their job well with no end in sight for now. Thus, we continue to see the risk of additional rate hikes as low and consider the hiking cycle to be closed, the only one in the CEE region. On the FX side, the situation remains unchanged. CNB interventions will continue and the line in the sand is clearly drawn at 24.60-70 EUR/CZK. Given the low central bank costs, we do not expect any changes in the CNB's approach anytime soon. This setup coupled with relatively high carry may serve as a good base against the Polish zloty or Hungarian forint, which are much more vulnerable in global emerging market selloffs especially ahead of the upcoming winter. And speaking of selloffs, the CEE region, surprisingly for us, remains stable despite global conditions deteriorating further. EUR/USD passed another milestone on the way lower again yesterday, the selloff in equity markets clearly indicates a risk-off mood and gas prices also cannot deliver much optimism. Thus, despite the resilience in the region, we continue to believe that the current strong levels are not sustainable. Next week we have a heavy calendar including a National Bank of Poland meeting and CPI prints across the region which we believe can easily serve as a selloff trigger. At the moment, we see room for a move higher in the Polish zloty towards 4.75 EUR/PLN and the Hungarian forint towards 415 EUR/HUF. Frantisek Taborsky Read this article on THINK TagsUS dollar Payrolls FX Federal Reserve Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Upcoming Corporate Earnings Reports: Ashtead, GameStop, and DocuSign - September 5-7, 2023

Positive PMI Results In Europe And Great Britain | Waiting For The Result Of US Nonfarm Payrolls

Kamila Szypuła Kamila Szypuła 04.11.2022 10:48
In the first half of the day, attention will be paid to PMI reports in Europe. In the second half of the day, attention will shift to the results of the North American labor market. Retail Sales The first important data for the market came from Australia at the beginning of the day. the published retail sales report for another consecutive reading remains unchanged at 0.6%. This means that the demand for manufactured goods in this country remains unchanged, which may be due to the economic situation. European Services PMI The largest economies of the euro zone today published their reports for Services PMI. The overall picture is positive. Spain was the first country in the European bloc to provide a positive report. Services PMI indices reached the level of 49.7 and it was an increase against the expected 48.3 and against the previous reading of 48.5. In France, the result was also higher than expected (51.3) and reached the level of 51.7. The current reading is much lower than the previous 52.9. In the largest economy of the European Union, i.e. Germany, this indicator also increased from the level of 45.0 to the level of 46.6. These three positive readings significantly influenced the European Services PMI score which reached 48.6 and was only 0.2 from the previous reading. Only in Italy did this indicator drop. The current reading in this country is at 46.4. UK Construction PMI For the UK, the most important event of today is the Construction PMI report. The reading turned out to be really positive. The result for this sector was higher not only than the forecasts but also higher than the previous result. Construction PMI increased from 52.3 to 53.2 ECB President’s speech At the end of the week, an important speech will be from the European Union. At 10:30 CET, the following spoke: European Central Bank (ECB) President Christine Lagarde. Her comments may determine a short-term positive or negative trend. As the most important person in a European bank, he can provide very valuable comments and guidelines regarding future actions within the framework of monetary policy. Nonfarm Payrolls The United States will publish data on the number of people employed outside the agricultural sector. This number is expected to reach 200K. This forecast shows that the downward trend continues. After March, the number dropped significantly and maintained this trend until it broke out in August which was a false sign of a change in the trend. After a positive August, the decline will begin again. It may be a positive fact that he achieved better results than expected. Source: investing.com US Unemployment Rate The unemployment rate is expected to reach 3.6%. If the results met the expectations, it would mean an increase of 0.1% and thus a return to the level obtained between April and July. Canada Employment Change Canada also share the results of its job market. The outlook for the Canadian labor market is not very good. Employment Change is expected will reach the level of 10K over the previous 21.1K. The latest reading was a positive reflection from the negative levels from previous periods, but it may turn out to be one-off. Although expectations are above zero, it is not a good picture of the Canadian economy. The unemployment rate can reflect this as well. The unemployment rate is expected to increase by 10 porcet points to 5.3%. Summary 1:30 CET Australia Retail Sales (MoM) 9:15 CET Spanish Services PMI 9:45 CET Italian Services PMI 9:50 CET French Services PMI 9:55 CET German Services PMI 10:00 CET EU Services PMI (Oct) 10:30 CET UK Construction PMI 10:30 CET ECB President Lagarde Speaks 13:30 CET US Nonfarm Payrolls (Oct) 13:30 CET US Unemployment Rate (Oct) 13:30 CET Canada Employment Change (Oct) Source: https://www.investing.com/economic-calendar/
German labour market starts the year off strongly

Speech By The German Chancellor Olaf Scholz

TeleTrade Comments TeleTrade Comments 04.11.2022 11:07
German Chancellor Olaf Scholz is speaking at a press conference with Chinese Premier Li Keqiang on Friday, noting that “in these times, it's even more important than usual to talk and exchange with each other.” Further comments   It's good and right for me to be here. Xi andIi are of the same opinion that nuclear threats are not acceptable. It was clear China and Germany were no friends of "decoupling". But both need reciprocity and the same access for investments on both sides, and also prevent dependencies, Scholz said during his visit to Beijing. China will allow Biontech vaccine for expatriates in China, hopefully soon for more approval. We notice that in China self-sufficiency efforts are more and more discussed, whereas before economy was in the foreground. Want to support China in climate goals, work on goals until consultations next year. Urge Putin not to refuse an extension of Ukraine grain deal.   Market reaction EURUSD is trading listlessly below 0.9800, adding 0.32% on the day, awaiting the US Nonfarm Payrolls (NFP) release. 
Technical picture of Euro to US dollar affected by the market's reaction to Fed chair rhetoric

Technical picture of Euro to US dollar affected by the market's reaction to Fed chair rhetoric

Alex Kuptsikevich Alex Kuptsikevich 04.11.2022 12:46
The market reaction to Powell's comments on Wednesday has shattered the nice technical picture that has been forming in EURUSD for a month since late September. In this environment, the question of whether the dollar could renew the highs made at the end of September is becoming more relevant. Having lost over 22% since May 2021, EURUSD climbed from 0.9530 in late September to 1.0080 a month later. The current rate was above the previous local highs and the 50-day moving average, giving a double signal to end the downtrend. During this one-month bounce, local support was formed, and the 50 SMA has been in place for three consecutive days. Powell and the technical picture of EUR/USD However, the market reaction to Powell's comments after the FOMC meeting broke this nice technical picture. With a strong move, EURUSD went under its 50-day average and broke the support. The frustration of the speculators was so intense that the downside movement in the pair continued yesterday, dropping it to the area of 0.9730. Strictly speaking, the recovery of the dollar momentum of the last ten days created the technical prerequisites for the EURUSD pair to renew multi-year lows, suggesting that by mid-November, it could fall under 0.9500. At the same time, it would be wrong not to point out the fundamental resistance to dollar growth. ECB officials are becoming increasingly outspoken about their willingness and need to sacrifice economic growth to fight inflation, which means they intend to raise rates despite falling GDP. Other important actions are the continuing and increasing interventions by Asian countries, which are fighting the fall of their currencies through the sale of USD reserves, thus increasing the supply of USD on the markets. History also teaches us that while the Fed often leads the monetary cycle, others quickly catch up. The USD, meanwhile, on average, begins its rally six months before the reversal to tightening and six months after it begins. In this context, the current rally looks very ageist. On the balance sheet, we anticipate great difficulty with the dollar's rise and assume more chances for a sideways formation than a sustained retreat to new EURUSD lows. Moreover, we would not be surprised if EUR buying already strengthens at 0.9700 with a more measured reversal than in October, but still an upside in the pair will follow.
US Treasury Yields Surge: Implications for Global Markets and Economies

There Is Still A Possibility Of A New Fall In Stock Indices

InstaForex Analysis InstaForex Analysis 04.11.2022 12:10
The outcome of the Fed meeting continues to influence world markets. However, there is a high chance that another local decline will be seen in the stock markets, while the dollar will have a new wave of strengthening. This is because the latest inflation data is coming, as well as the employment report in the US. Earlier, analysts have pointed out that the Fed will continue its aggressive rate hike if the US economy slide into recession despite the labor market having a good condition. The central bank signaled the same thing, saying that a strong labor market and economy near the edge of a recession will allow them to fight inflation vigorously. This means that if the US jobs report for October exceeded expectations, the Fed will raise rates again by 0.75%, if necessary. That is why it is better to be cautious and moderately optimistic about the end of the bear market in the equity markets. As mentioned above, there is still a possibility of a new fall in stock indices, which will once again be accompanied by a rise of dollar. This is further evidenced by the dynamics of treasury yields, which are still close to local highs. Forecasts for today: EUR/USD The pair is trading above 0.9750. If the US employment data turn out to be higher than expected, the quote will fall to 0.9650. AUD/USD The pair is above 0.6335. Further selling pressure will push it to 0.6250.     Relevance up to 07:00 2022-11-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326248
Unraveling UK Inflation: The Bank of England's Next Move

The Dovish Decision Of The Bank Of England (BoE) Puts A Heavy Burden On The GBP

Saxo Bank Saxo Bank 04.11.2022 13:39
Summary:  The FOMC meeting this week forced the market to adjust to the idea that the Fed could continue to take rates higher than had previously been priced. But clearly, to drive tightening expectations higher still, we’ll need to continue to see hotter than expected US data, with today’s US jobs report the next test on that. Elsewhere, sterling is in a world of hurt after BoE’s very dovish guidance. FX Trading focus: US incoming data focus after hawkish FOMC. BoE in dovish pushback against market hike expectations. The US dollar followed through stronger yesterday on the momentum off the back of the hawkish Powell presser Wednesday, but has come in for a chunky reversal overnight and today since a somewhat softer than expected ISM services survey yesterday (nudged lower to 54.4 vs. 55.3 expected and 56.7 in September, with the employment sub-index dipping back below 50 at 49.1 vs. 53.0 in September). Wouldn’t it be ironic if we also were to get a soft US jobs report today that takes US yields back to their starting point of the week, making Powell’s hawkish message so much noise, at least until the next incoming data point jerks the market the other way? Interestingly, the USD is selling off ahead of today’s US data releases even as short US yields are posting new highs for the cycle Specifically in today’s jobs report, in addition to any strong directional surprise in payrolls (multi-month grain of salt needed with this data series, as single releases require further corroborating evidence), we should keep both eyes on the average hourly earnings survey. Arguably, if we get the expected 0.3% month-to-month average hourly earnings print today after a couple of prior prints of a similar size, observers may begin to judge that the annualized rise in earnings is beginning to look far less threatening at sub-4.0%. The year-on-year is expected to drop to a 15-month low of 4.7% today. A significant upside surprise in earnings is perhaps could generate significant volatility. Chart: EURGBPWorth considering how the dovish Bank of England meeting yesterday (see more below) is weighing heavily on sterling, as it should, with the Bank of England reluctant to signal much tightening energy when it sees an incoming recession. Sterling is down sharply across the board, with EURGBP suddenly well backed up within the old range and now far away from the sub-0.8600 range support. The next area between the 0.8800 and pivot high of 0.8870 area looks key for whether sterling weakness is set to become a bit more unhinged, and the next key event-risk test is likely how the market greets an austere Autumn budget statement on November 17. Bank of England wrap. The BoE hiked by 75 bps to 3%, as most expected and as was mostly priced in, but Bailey and company strongly pushed back against expectations for the scale of future moves, saying that the terminal rate priced in currently by the markets would induce a two-year recession. There were also two dovish dissenters at the meeting, one calling for 50 bps rate hike and another for a mere 25 bps. New forecasts were also released, which gave a particularly grim outlook for the economy, looking for a GDP print of -0.5% QoQ in Q3 2022 vs -0.1% expected in September. The inflation forecast now shows a peak around 11% in Q4, which is marginally hotter than the prior meeting’s projection. Sterling was crushed lower, having already fallen heading into the meeting, and it speaks volumes that even though the BoE pushed back against the forward implied expectations for further tightening, which it said would trigger a 2-year UK recession, the market did not budge those expectations. In short: the market refuses to acknowledge what the BoE thinks it might do, probably figuring that the BoE will have no choice due to sterling weakness but to pursue the path to 4.50% or higher rates before mid-next year. I was surprised by the lack of discussion or journalist questioning in the press conference around the risk that currency weakness drives worse inflationary outcomes if the BoE fails to do as much as the market is pricing. Sterling remains in a heap of trouble. Table: FX Board of G10 and CNH trend evolution and strength.The USD needs to stick the move off the back of the FOMC meeting after the US jobs data today, otherwise we’ll suddenly be back to square one. The hottest movement in FX was clearly the sterling sell-off yesterday on a very clearly dovish Bank of England meeting. CNH is making waves on a lot of movement overnight and noise (unconfirmed) of an eventual opening up. Table: FX Board Trend Scoreboard for individual pairs.While the US dollar flipped to a positive trend in many places, we must still consider the risk that incoming data complicates the plot. GBP is already registering a negative trend in many new GBP pairs after yesterday’s BoE meeting. Interesting that the NOK failed to roll over to the downside in a couple of key pairs after the small hike from the Norges Bank yesterday. Upcoming Economic Calendar Highlights 1215 – UK Bank of England Chief Economist Huw Pill to speak 1230 – US Oct. Nonfarm Payrolls Change 1230 – US Oct. Unemployment Rate 1230 – US Oct. Average Hourly Earnings 1230 - Canada Oct. Unemployment Change/Rate 1400 – Canada Oct. Ivey PMI 1400 – US Fed’s Collins (Voter 2022) to speak Source: https://www.home.saxo/content/articles/forex/fx-update-us-incoming-data-sterling-pays-price-after-dovish-boe-04112022
The EUR/USD Pair: There Are Still No Sell Signals

The ECB Has Little Choice But To Deliver An Oversize Rate Hike

Kenny Fisher Kenny Fisher 04.11.2022 14:02
EUR/USD has rebounded and is in positive territory. In the European session, the euro is trading at 0.9794, up 0.45%. The upswing has ended a 3-day slide, in which the euro fell as much as 270 points. German factory orders sink The manufacturing sector in the eurozone continues to struggle. German and eurozone manufacturing PMIs are mired in contraction territory and German Factory Orders for September, published today, declined by a sharp 4.0%. A weak global economy has dampened manufacturing activity, and the war in Ukraine and the energy crisis in Western Europe will likely continue to take a toll on the eurozone economy. The grim economic outlook is a major headache for ECB policymakers, who must maneuver delicately between soaring inflation and a weak eurozone economy. The ECB joined the rate-hiking dance late and finds itself well behind the inflation curve, as headline inflation in the eurozone jumped to a staggering 10.7% in October, up from 9.9% in September. The ECB has little choice but to deliver an oversize rate hike in order to tackle double-digit inflation, and ECB President Lagarde has said that she would use “all the tools” available to bring inflation back to the ECB’s 2% target. All eyes are on today’s US nonfarm payroll report. The labour market has been resilient in the face of steep rate hikes, although we are seeing a jump in job cuts. The consensus for the October NFP stands at 200,000, lower than the September reading of 263,000. The release will be carefully watched by the Fed, as the strength of the labor market is an important factor in the December rate decision. The markets have priced in a 50/50 toss-up between a hike of 0.50% or 0.75%, which could translate into volatility for the US dollar in today’s North American session.   EUR/USD Technical EUR/USD is putting pressure on resistance at 0.9818. Next, there is resistance at 0.9956 0.9669 and 0.9531 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

Geopolitical Backgrounds Do Not Favor The Euro Currency (EUR)

InstaForex Analysis InstaForex Analysis 06.11.2022 09:20
Long-term perspective. The EUR/USD currency pair has not gained or lost a single point during the current week. Although the euro did nothing but fall during the first four days, it managed to recover all the losses on Friday. We think the pair's movement this week has been strange, and here's why. The Fed meeting was scheduled for Wednesday evening as the most significant event of the week. Why was the dollar strengthening up until this time? It is because the Fed rate was supposed to rise for the fourth time in a row by 0.75%, so the market worked out the tightening in advance. However, after the Fed raised the rate, the market continued to buy dollars, although we expected a backlash, as it had a week earlier with the ECB meeting. However, Jerome Powell's rhetoric turned out to be a little more "hawkish" than expected, so the market continued to sell the pair on Thursday. But on Friday, the US currency collapsed when the most important statistics on the labor market and unemployment were published in the States. And this is even stranger than its growth on Thursday. The Nonfarm report turned out to be quite strong. In October, 261 thousand of new jobs were created outside the agricultural sector, which is at least 20 thousand more than predicted. Once again, the US labor market showed its excellent condition, and the dollar had to continue to grow. In addition, the September report's value was revised upward to 315 thousand. The only negative moment was the unemployment rate, which rose to 3.7%. However, the unemployment rate had already increased to this level a couple of months ago and then returned to 3.5%. And in any case, unemployment in the United States remains at the lowest level in half a century, so if this report provoked a fall in the dollar with an excellent value of Nonfarm, then this is a very strange reaction of the market. The pair on the 24-hour TF has grown back to the Senkou Span B line and will try to overcome it again next week. There are certain chances of an upward trend, but they are still small. On Monday and Tuesday, the market may realize the illogical reaction on Friday and start selling the pair again. COT analysis. COT reports on the euro currency in 2022 are becoming more and more interesting. Half of the year, they showed a frank "bullish" mood among professional players, but at the same time, the European currency was steadily falling. Then they showed a "bearish" mood for several months, and the euro also steadily fell. The net position of non-profit traders is bullish again and is strengthening, and the euro has barely moved away from its 20-year lows by 500 points. This is happening because the demand for the US dollar remains very high against the backdrop of a difficult geopolitical situation. Therefore, even if the demand for the euro currency grows, the high demand for the dollar does not allow it to grow. During the reporting week, the number of buy-contracts from the non-commercial group increased by 13 thousand, and the number of shorts decreased by 17 thousand. Accordingly, the net position increased by about 30 thousand contracts. However, this fact does not matter much since the euro remains "at the bottom" anyway. The second indicator in the illustration above shows that the net position is now quite high. Still, a little higher, there is a chart of the pair's movement, and we can see that the euro cannot benefit from this seemingly bullish factor. The number of buy contracts is higher than that of sell contracts for non-commercial traders by 106 thousand, but the euro is still trading very low. Thus, the net position of the "non-commercial" group can continue to grow, and it does not change anything. If you look at the general indicators of open longs and shorts for all categories of traders, then sales are 23 thousand more (617k vs. 594k). Analysis of fundamental events. This week, all the main data came from overseas, but there was also something to pay attention to in the European Union. On Monday, it became known that the GDP grew by 0.2% in the third quarter, which was generally in line with forecasts, and that inflation rose to 10.7%, forcing the ECB to continue to adhere to the plan to tighten monetary policy. However, this did not save the euro currency from a new fall. Only a strange movement on Friday allowed it not to finish another week in the red. Also, in the European Union, business activity indices were published this week, which are forecast to remain below 50.0. Trading plan for the week of November 7–11: 1) On the 24-hour timeframe, the pair rose again to the Senkou Span B line, but now, to continue growing, this line needs to be overcome. In this case, we will seriously consider forming a new uptrend and recommend small purchases of the pair with a target of 1.0177. However, it should be remembered that the fundamental and geopolitical backgrounds do not favor the euro currency. 2) As for the sales of the euro/dollar pair, they have now become temporarily irrelevant since the price has overcome the critical line and increased to Senkou Span B. Thus, a rebound from Senkou Span B will mean a possible resumption of the downward trend. Fixing below the critical line will mean the resumption of the downtrend. We believe it is still too early to speak confidently about the end of the downward trend that has been forming for two years. Explanations of the illustrations: Price levels of support and resistance (resistance and support), Fibonacci levels – targets when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger Bands (standard settings), MACD (5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "non-commercial" group.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326322
The Upside Of The EUR/USD Pair Remains Limited

Summary Of Situation Of The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 06.11.2022 09:31
Review : The EUR/USD pair has faced strong resistances at the levels of 1.0009 because support had become resistance. So, the strong resistance has been already formed at the level of 1.0009 and the pair is likely to try to approach it in order to test it again. The bullish trend is currently very strong on the EUR/USD pair. As long as the price remains above the support levels of 0.9946, you could try to benefit from the growth. The hourly chart is currently still bearish. At the same time, some stabilization tendencies are visible between 1 USD and 0.9854. However, if the pair fails to pass through the level of 1.0009, the market will indicate a bearish opportunity below the new strong resistance level of 1.0009 (the level of 1.0009 coincides with a ratio of 78% Fibonacci). Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength above the moving average (100) and (50). The market is indicating a bearish opportunity below 1.0009, for that it will be good to sell at 1.0009 with the first target of 0.9946. It will also call for a downtrend in order to continue towards 0.9900. The daily strong support is seen at 0.9854. However, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1.0094. As a rule, the market is highly volatile if the previous day has huge volatility. But if the last week range was very large, then next week range will be probably moved between the weekly pivot point and resistance 1 or support 1. Please check out the market volatility before investing, because the sight price may have already been reached and scenarios might have become invalidated. The basic trend of EUR/USD pair is neutral, and the short term is tentatively bearish. With such a pattern, it is difficult to favour buying or selling. The first support is located at 0.9706. The first resistance is located at the level of 0.9798. However, the probabilities of moving towards the first support before the first resistance are slightly higher. Without a basic trend, it is important to monitor the price response at these levels. A bearish break in the support or a bullish break in the resistance could provide a signal that would set the new direction of the basic trend. On the other hand, if the price is blocked by support or resistance, it could be attractive to trade against the trend on the last short-term movement recorded by EUR/USD pair. Technical indicators are bearish in the very shrot term and could soon allow change to a bearish sentiment. Bearish range between the levels of 0.9600 and 0.9854. The EUR/USD pair faced resistance at the level of 0.9854, while minor resistance is seen at 0.9798. Support is found at the levels of 0.9706, 0.9633 and 0.9600. Also, it should be noted that a daily pivot point has already set at the level of 1.1836. Equally important, the EUR/USD pair is still moving around the key level at 0.9854, which represents a daily pivot in the H1 time frame at the moment. The EUR/USD pair continues to move downwards from the areas of 0.9900 and 0.9854. Yesterday, the pair dropped from the level of 0.9900 which coincides with a ratio of 50% Fibonacci on the H1 chart to 0.9753. Today, resistance is seen at the levels of 0.9854 and 0.9900. So, we expect the price to set below the strong resistance at the levels of 0.9900 and 0.9854; because the price is in a bearish channel now. The RSI starts signaling a downward trend. Consequently, the market is likely to show signs of a bearish trend. Thus, it will be good to sell below the levels of 0.9900 or/and 0.9854. Amid the previous events, the price is still moving between the levels of 0.9854 and 0.9600 in coming hours. Always, we use the time frame of H1 to determine the lower and the higher price of yesterday, because it is more precise. Moreover, we use the hourly time frame with a view to determine the lower and the higher price of last week. In overall, we still prefer the bearish scenario as long as the price is below the level of 0.9854. Furthermore, if the EUR/USD pair is able to break out the bottom at 0.9706, the market will decline further to 0.9633 (daily support 2). The price will fall into a bearish trend in order to go further towards the strong support at 0.9600 to test it again. The level of 0.9600 will form a new double bottom. Conclusion: The EUR/USD pair increased within a downtrend channel from the prices of 1.0009 and 0.9804 since a week. The bulls must break through 1.0009 in order to resume the uptrend. The trend is still bearish as long as the price of 1.0009 is not broken. Thereupon, it would be wise to sell below the price of at 1.0009 with the primary target at 0.9954. Then, the EUR/USD pair will continue towards the second target at 0.9900. We should see the pair will fall towards the next target of 0.9854. The pair will move downwards continuing the development of the bearish trend to the level 0.9804 in coming days.   Relevance up to 11:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299810
EUR: German IFO Data and Central Bank Hawkishness Impact Euro/USD Range Trade

US President Joe Biden Will Continue To Sit In The White House

InstaForex Analysis InstaForex Analysis 06.11.2022 11:01
In 2022, Forex does not let investors get bored. Strong trends, numerous shocks and volatility growing by leaps and bounds attract increased attention to the international currency market. It is not for nothing that the trading volume on it, according to BIS research, has grown to $7.5 trillion per day, which is 14% more than in 2019. Still, Forex lacks the spice that Donald Trump once added with his antics. And now the eccentric Republican has the opportunity to return. Will the spectacle become even more interesting? Investors are shifting their attention on the US midterm elections. Markets predict with a 70% probability that Republicans will seize control of the Senate and the House of Representatives, while the chances of Democrats to remain in power are estimated at a modest 10%. However, US President Joe Biden will continue to sit in the White House until 2024, and in theory this means that fewer laws will be passed in the next couple of years. For Forex, the Republicans' emphasis on fiscal consolidation is important, which will lead to a reduction in the budget deficit, reduce the volume of bonds issued and increase demand for them from non-residents. The inflow of capital into America will support the US dollar. Dynamics of the US budget deficit However, no matter how much politicians would like to influence the exchange rate, the prerogative in this matter clearly belongs to the Federal Reserve. Following the November FOMC meeting, CME derivatives raised expectations for expected rates for 2023-2025. The ceiling has shifted to 5.15%, above the Open Market Committee's September forecast of 4.6% and is bullish for the US dollar. Dynamics of the expected federal funds rate As the cost of borrowing rises, so will the yield on US Treasury bonds, which has already reached its highest level since 2007-2008. This worsens the fundamental valuation of US stocks, contributes to the fall of stock indices, worsening global risk appetite and increases demand for the dollar as a safe-haven asset. Yield The yield on debt obligations will fall only in case of deterioration of macroeconomic statistics in America. However, as long as the US labor market remains strong and inflation wanders at the highest levels in the last 40 years, the Fed will consider its work not done and will continue to raise rates. This circumstance gives grounds to classify any growth of EURUSD as a correction. The downward trend remains in force, especially since due to the relative weakness of the eurozone labor market compared to the US, the European Central bank cannot afford to raise rates as high as the Fed. EUR/USD Technically, on the EURUSD daily chart, returning above the fair value by 0.978 to the limits of the corrective ascending channel delays the sad end for the bulls, but does not cancel it. The rebound from the resistance at 0.9845 and 0.987, as well as the fall below the support at 0.978 are the basis for short positions. The bearish targets are 0.964 and 0.949.     Relevance up to 13:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326298
The Euro May Attempt To Resume An Upward Movement

EUR/USD: Downward Movement In The Current Situation Is Limited

InstaForex Analysis InstaForex Analysis 07.11.2022 08:08
US employment data came out strong on Friday, but markets appear to have tipped the risk side at the wrong time, confused about the Federal Reserve's next move. The market managed to set the probability of a 0.50% hike at the December meeting as 61.5% (from the previous 47.2%), but investors lost sight of the inflation factor, exactly what the Fed is fighting against. Inflation promises to rise even faster as the EU plans to ban purchases of Russian oil, and the G7 countries and Australia have decided to set a price ceiling for Russian oil. Oil (#CL) jumped 5.26%. Therefore, a number of economists believe another rate hike of 0.75%, or a protracted series of 0.50%. The euro rose by 211 points on Friday, but over the weekend investors rethought the current situation and Monday opened with a falling gap. But it is desirable to close the gap, so the euro can still grow, up to the upper limit of the price channel of the daily chart, to the area of 1.0025. Downward movement in the current situation is limited by support at 0.9864. Now, even from the technical side, the uncertainty of the market is visible. This uncertainty for the bears will end with the price's movement below the MACD line (0.9825). For bulls, the situation is more complicated. The exit of the price from the descending price channel does not promise to keep the upward trend, as this exit can easily turn out to be false. In this case, the resistance levels are 1.0051, 1.0100 and above. On the H4 chart, the price decides the issue with the MACD line - whether it should overcome this line and the level of 0.9950 with it, or ease the pressure for a small rollback and subsequent growth in order to close the window. We are watching.     Relevance up to 03:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326354
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

On The New York Stock Exchange, Over 2000 Of Securities Rose In Price

InstaForex Analysis InstaForex Analysis 07.11.2022 08:14
At the close of the New York Stock Exchange, the Dow Jones rose 1.26%, the S&P 500 rose 1.36%, and the NASDAQ Composite rose 1.28%.  Dow Jones The leading performer among the components of the Dow Jones index today was Nike Inc, which gained 5.43 points (6.01%) to close at 95.83. Quotes Dow Inc rose by 2.52 points (5.41%), ending trading at 49.01. Caterpillar Inc rose 4.37% or 9.58 points to close at 228.84. The least gainers were Salesforce Inc, which shed 6.54 points or 4.47% to end the session at 139.79. UnitedHealth Group Incorporated rose 5.46 points (1.00%) to close at 538.15, while Apple Inc shed 0.27 points (0.19%) to end at 138. 38.  S&P 500 Leading gainers among the S&P 500 index components in today's trading were Freeport-McMoran Copper & Gold Inc, which rose 11.53% to 35.20, Estee Lauder Companies Inc, which gained 8.69% to close at 210.62, as well as Newmont Goldcorp Corp, which rose 8.55% to end the session at 41.02. The least gainers were Warner Bros Discovery Inc, which shed 12.87% to close at 10.43. Shares of Live Nation Entertainment Inc shed 7.25% to end the session at 70.88. ServiceNow Inc lost 6.12% to 361.95. NASDAQ Among the components of the NASDAQ Composite Index today, the leaders of growth were Huadi International Group Co Ltd, which rose 70.26% to 180.00, Sentage Holdings Inc, which gained 34.54% to close at 4.09 , as well as shares of Digimarc Corporation, which rose 29.35% to close the session at 18.95. The least gainers were Pulmonx Corp, which shed 60.94% to close at 4.82. Shares of Funko Inc lost 59.38% and ended the session at 7.92. Quotes of Sensus Healthcare Inc decreased in price by 51.23% to 6.34. The numbers On the New York Stock Exchange, the number of securities that rose in price (2275) exceeded the number of those that closed in the red (839), while quotes of 85 shares remained virtually unchanged. On the NASDAQ stock exchange, 2070 companies rose in price, 1658 fell, and 202 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.96% to 24.55, hitting a new monthly low. Gold Gold futures for December delivery added 3.30%, or 53.90, to $1.00 a troy ounce. In other commodities, WTI crude for December delivery rose 5.08%, or 4.48, to $92.65 a barrel. Futures for Brent crude for January delivery rose 4.24%, or 4.01, to $98.68 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 2.16% to hit 1.00, while USD/JPY shed 1.12% to hit 146.60. Futures on the USD index fell 1.91% to 110.65.     Relevance up to 04:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/299846
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

The EUR/USD Pair Will Try To Resume The Upward Direction

InstaForex Analysis InstaForex Analysis 07.11.2022 08:20
Analysis of EUR/USD, 5-minute chart Last Friday, the euro/dollar pair soared up unexpectedly for many. Naturally, such a powerful movement could not take place from scratch, it began after the release of macroeconomic statistics in the US, in particular, reports on unemployment and Nonfarm. We have already said in previous articles that both of these reports in aggregate cannot be regarded as negative for the dollar. And even more so, it was impossible to expect the dollar to fall by 200 points, when the number of Nonfarm exceeded all the most optimistic forecasts. However, we have what we have. The pair rose by 200 points and completely confused the technical picture. Last week, it mostly fell and there were reasons for this, but now it is very difficult to say what will happen next. After Friday's upward spurt, a downward correction is needed. The market reaction to Friday's events was illogical. The ascending trend line has been overcome, but now the quotes are already above it. The Senkou Span B line on the 24-hour timeframe has not been overcome, but the price will try to surpass it again. In general, the most confusing situation. Unfortunately, on Friday it was not possible to catch the upward movement from the very beginning. On the other hand, it started at the time when the US reports were released, and at that time it was clearly not recommended to open any positions. Therefore, the first trading signal was formed only in the area of 0.9844-0.9852, and it should have been worked out with a long position. The price quickly returned to the indicated area, but on the second attempt it continued to grow and almost reached the level of 0.9945. It was possible to close the position manually in the late afternoon, or it was possible by a signal near the Senkou Span B (second) line. In any case, there was profit worth around 50 points. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000). Analysis of EUR/USD, 1-hour chart You can see that the pair will try to resume the upward direction on the one-hour chart, but what will come of it? We have already noted that the market traded illogically on Thursday and Friday, so we can see a downward movement on Monday-Tuesday. Moreover, there will be no statistics and events these days. On Monday, the pair may trade at the following levels: 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, as well as the Senkou Span B (0.9900) and Kijun-sen lines (0.9852). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events and reports are expected in the US and the EU for today, so traders will have to go "bare" or go on the events of last week, which may still not be fully worked out. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 01:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326342
The EUR/USD Pair Is Showing A Potential For Bearish Drop

German industrial production adds 0.6% month-on-month. The print impresses the most when compared to the August one

ING Economics ING Economics 07.11.2022 08:49
Industrial production held up well in September, illustrating how the economy stumbled but didn't fall in the third quarter. Macro data and events of the last week, however, confirm our view that the economy's long slide into recession continues German exports staged an unexpected rebound in April German industrial production increased by 0.6% month-on-month in September, from a downwardly revised -1.2% MoM in August. On the year, industrial production was up by 2.6%. Production in the energy-intensive sectors, however, dropped by 0.9% MoM and is now down by almost 10% compared with September last year. Global supply chain frictions as well as the impact of low water levels on logistics combined with high energy prices continue to weigh on German industry. Industry didn’t fall off a cliff in the third quarter but stagnated. Third quarter growth weaker than headline data suggest While the first estimate of third quarter GDP growth came in at a surprisingly positive 0.3% quarter-on-quarter, seemingly defying the recession talk of recent months, the batch of September data paints a clearly more pessimistic picture. Here is a brief overview: The order book deflation has continued with monthly industrial orders dropping by 4% MoM in September; the seventh monthly drop since February. At the same time, inventories have started to increase again. Shrinking order books and inventory build-up has never really boded well for future industrial production. At the same time, exports dropped marginally in September. Adjusted for price developments, exports have stagnated compared with 2021. With export order books also shrinking, the outlook for exports has worsened. As a result of increased energy imports at much higher prices, the famous German trade surplus has almost disappeared. While Germany was used to trade surpluses between €10bn and €20bn per month, the surplus has shrunk to a range of €1bn and €4bn. Finally, despite good headline numbers and seasonally-unadjusted unemployment dropping in October, there are tentative signs of the labour market turning. Monthly movements since the summer were the worst in a long time and the number of employees on short-term work schemes has started to increase again, though still shy from the numbers seen during the first lockdowns. Hiring plans in both the manufacturing and services sector have started to drop significantly since the summer, providing additional evidence of a cooling labour market. All in all, the state of the economy is clearly worse than the third quarter GDP data suggested. We wouldn’t even rule out that the second estimate will show a downward revision. German government to the rescue? Last week, the federal government and the 16 federal states agreed on a number of key measures and details, which were already announced by the federal government a few weeks ago. Details of the (up to) €200bn package: The introduction of a €49 monthly transport ticket enabling travellers to use short-and-medium-distance public transportation nationwide. The scheme is the successor of the so-called 9-euro-ticket that was implemented in the summer months of this year. The ultra-cheap monthly pass gave people access to regional train, metro and bus services across Germany. The exact timing of the introduction remains unclear. Gas prices will be capped at 12 cents per kilowatt hour, while electricity would be capped at 40 cents. According to the plan, 25,000 larger businesses and nearly 2,000 hospitals and schools would benefit from the gas price cap in January next year. Households and smaller firms may have to wait until March. Households and companies will get one-off compensation (not payment) in December based on the gas invoice downpayment (not actual consumption) in September. The federal government and state governments also confirmed that the state rent subsidy would be increased by an average of €190 a month and would be paid to 1.4 million more people than before, coming in at a cost of €5.1 billion. Also, a hardship fund would be set up for hospitals, nursing homes and social institutions and some companies that could not manage without some form of relief. An amount of €12 billion would be provided for health care and social institutions. According to the government, the above measures amount to close to €90bn euro - fiscal stimulus worth more than 2% of GDP. The problem with many of these measures, however, is the timing and implementation. One example is the December compensation. Tenants who directly pay for energy via the landlord will only receive this compensation a year from now when the actual utility consumption invoice is charged. Gradually sliding into recession Today’s industrial production data confirms that the German economy stumbled but didn't fall in the third quarter. But this does not suggest that the recession calls are wrong. In fact, the latest macro data shows that the long slide into recession continues. Read this article on THINK TagsIndustrial propduction Germany Eurozone Economy Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
FX Daily: Hawkish Powell lends his wings to the dollar

The inflation print and mid-term elections make the line-up of events which could influence greenback

ING Economics ING Economics 07.11.2022 09:38
The dollar long squeeze on Friday was likely triggered by optimism on China's Covid rules. We suspect this is too premature, and macro factors continue to point to dollar strength. But there are two key risk events for the dollar this week: US CPI (we expect a 0.5% MoM core reading) and mid-term elections (Biden losing control of Congress may be a USD negative) USD: Room for recovery, but watch for the mid-terms Last week was a hectic one in FX. Fed Chair Jerome Powell’s hawkish press conference left markets searching for an even higher peak rate (currently at 5.1%) and highlighted the divergence between the still hawkish Fed and the growing list of developed central banks that are turning more cautious on tightening (Bank of England, Bank of Canada, Reserve Bank of Australia, Norges Bank). This was a clear bullish narrative for the dollar, which was well supported until Friday when optimism in risk assets triggered some heavy position-squaring on dollar longs. A key risk-on driver on Friday was the apparent loosening of Covid restrictions in China. Indeed, China’s economic woes have been a major factor weighing on global sentiment in recent months. However, a larger relief rally appears a bit premature. First, because the course of Beijing’s health policy has been very hard to interpret, and Chinese officials have already pushed back against any speculation they will drop the zero-Covid policy. Second, this morning’s drop in Chinese exports is yet another signal that slowing global demand is a major drag on Chinese growth. Third, China has been only one factor in the negative risk equation: the search for a higher Fed peak rate and elevated uncertainty around the medium-term economic outlook and energy crisis should keep a cap on risk assets for longer – and ultimately may still favour defensive trades like long dollar positions. The dollar correction that started in late October was fully unwound in about a week, and this indicated – in our view – how macro factors continue to favour dollar strength and the corrections are mostly related to position-squeezing events. We, therefore, expect a re-appreciation of the dollar in the near term, although there are two major risk events to watch this week in the US: the CPI report and mid-term elections. Our US economist expects inflation numbers this week to be important, but not critical for future policy action by the Fed. Most of the focus will be on the monthly change in core CPI, which we expect to come in at 0.5%, in line with consensus. That would indicate further resilience in underlying price pressures and may prevent markets from completely discarding another 75bp hike in December, ultimately offering the dollar a floor. Below-consensus readings may force a dovish re-pricing in rate expectations though. When it comes to the US mid-term elections, we discussed the scenarios and market implications in this article. The bigger downside risk for the dollar is that the Republicans secure control of both the House and the Senate, which would imply a hamstrung administration unable to deliver fiscal support in a downturn. A split Congress (House control going to the Republicans) may be mostly priced in, and the implications for the dollar could be relatively limited. We expect more FX volatility this week, but retain a near-term bullish USD bias and expect DXY to climb back above 113.00 in the coming weeks. Today’s calendar in the US only includes speeches by Fed’s Loretta Mester and Tom Barkin. Francesco Pesole EUR: China's push looks premature Europe’s elevated exposure to the China growth story means that the euro should benefit from speculation that Beijing will loosen Covid restrictions. As discussed in the USD section above, this appears premature speculation, and Chinese growth is still facing the grim prospect of slowing global demand. In line with our view that the dollar should recover in the near term, we don’t think EUR/USD will be able to climb back above parity on a sustainable basis – even though the two risk events this week (US CPI and mid-term elections) could trigger another USD long squeeze. There are not many key data releases in the eurozone this week, and most focus will be on European Central Bank speakers. A pre-registered video of Christine Lagarde on the digital euro will be released this morning, and we’ll hear from Fabio Panetta later today. There are a plethora of other speakers during the week, but the direct impact of expected ECB policy on the euro looks set to remain rather contained. Francesco Pesole GBP: In an uneasy position Despite the dollar’s correction on Friday, the pound still has to fully recover from the post-Bank of England blow. Indeed, the combination of a highly concerning economic outlook and a forced dovish repricing in rate expectations look set to keep the pound rather unattractive. This week, 3Q growth figures are the highlight in the UK calendar, and our economist forecasts a 0.5% quarter-on-quarter contraction, which should all but endorse the BoE’s more cautious approach. There are a few MPC members speaking this week, including Chief Economist Huw Pill and Silvana Tenreyro, the latter having voted for a 25bp hike last Thursday. Cable may be primarily driven by dollar moves this week, but EUR/GBP could extend gains to the 0.8850/70 area. Francesco Pesole CEE: Local story replaces global factors We have another heavy week ahead in the Central and Eastern European region. Today, we start with industrial production in the Czech Republic, where PMIs show a steep decline in production at the end of the year. Tomorrow, in addition to retail sales and industrial production in Hungary, we will see the Romanian central bank's last meeting of the year. We expect a slowdown in the tightening pace to 50bp to 6.75%, in line with market expectations, which could be the last hike in this cycle. But an additional 25bp hike cannot be ruled out in January. Hungarian inflation for October will be published on Wednesday. We expect another jump from 20.1% to 21.0% YoY. Also, on Wednesday we will see the Polish central bank meeting. Our call is for a 25bp hike to 7.00%, but no change will also be on the table, in our view. Thursday will see the release of October inflation in the Czech Republic. We expect only a slight increase from 18.0% to 18.2% YoY, slightly above market expectations, but the risk is new government measures and the approach of the statistical office. Then on Friday, we will finish the series of October inflation prints in Romania, where we expect a slowdown from 15.9% to 15.2% YoY, slightly below market expectations. In the FX market, surprisingly for us, CEE has survived tough weeks which have seen ECB and Fed rate hikes, a stronger dollar and gas prices at higher levels. This week, the local story will come into play. EUR/USD and gas prices are back to more CEE FX-friendly levels, which should be positive for the region in the first half of the week. On the other hand, interest rate differentials are still pointing to weaker FX in the region, and central bank decisions and CPI readings (except in Hungary) support a rather dovish mood, which is negative for FX. From this perspective, we see the Polish zloty as most vulnerable at the moment, which should suffer from the central bank's dovish decision. Moreover, the cost of funding has fallen from its peak in recent days, making shorting less expensive. Thus, we see the zloty closer to 4.750 EUR/PLN in the second half of the week. The Hungarian forint shows the biggest gap in our models at the moment against a weaker interest rate differential. However, higher inflation should again support market expectations and hold the forint slightly above 400 EUR/HUF. The Czech koruna reached its strongest levels since August after the Czech National Bank meeting and is benefiting from temporary short position liquidation. However, we see its value rather closer to 24.50 EUR/CZK. The Romanian leu is down from NBR intervention levels and is closely following global sentiment. Therefore, we expect it to remain below 4.90 EUR/RON for longer. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Apple Q3 2023 Results – Surpassing Expectations and Aiming for New Heights

Analysis Situation Of The EUR/USD Pair And The GBP/USD Pair

InstaForex Analysis InstaForex Analysis 07.11.2022 10:15
EUR/USD Higher timeframes Today, at the opening of the week, a fairly deep downward gap has formed. Now bulls are trying to close it and restore their positions to the closing point of last week. The main task for the bulls to gain new prospects in this area is to go beyond the resistances of 0.9952 - 1.0000 - 1.1014 (upper limit of the daily cloud + weekly and psychological level). The nearest most important supports today can be noted at 0.9912 (daily short-term trend) and 0.9863–68 (daily medium-term + weekly short-term trend). H4 – H1 Having worked out the last target for the breakout of the H4 cloud at the first target (0.9744), bulls managed to end the decline and, having seized the initiative, changed the current balance of power in the lower timeframes. As of writing, the main advantage belongs to the bulls, and their benchmarks for continued rise today can be noted at 1.0037 - 1.0114 - 1.0262 (resistance of the classic pivot points). Key levels form support now at 0.9862–89 (central pivot of the day + weekly long-term trend). Consolidation below will change the distribution in the preponderance of forces. *** GBP/USD Higher timeframes Today, the opening of the new week is marked by a downward gap. The market thought. We look forward to what will happen next. For bulls to continue recovering positions and moving towards the unification of monthly and weekly resistances (1.1781 - 1.1842 - 1.1895), they first need to reliably overcome the nearest zone 1.1411 - 1.1511, where bearish interests protect the historical level and weekly medium-term trend. At the same time, it should be noted that the upper limit of the daily cloud (1.1324) currently influences the situation, and the main supports today are at the boundaries of the weekly levels of 1.1238 and 1.1046. H4 – H1 The day before, bulls performed a fairly effective rise and captured the support of the central pivot point of the day (1.1302). The key resistance today is located at 1.1390 (weekly long-term trend). The breakdown and reversal of the moving average will change the current balance of power, giving the main advantage to the side of the bulls. The classic pivot points (1.1457 – 1.1537 – 1.1692 ) will become benchmarks for continuing the rise within the day. If the bulls decide to complete the ascent, then the support on their way today can be noted at 1.1222 – 1.1067 – 1.0987 (classic pivot points). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Relevance up to 08:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326376
The EUR/USD Price May Fall Under 1.0660

The Euro (EUR) Approached Parity With The US Dollar (USD)

Conotoxia Comments Conotoxia Comments 07.11.2022 13:00
The end of the first week of November saw above-average volatility in the financial markets, possibly related to rumors about the lifting of China's anti-Covid policy. China's economy seems to be suffocated by restrictions, and the lifting of the zero Covid policy could lead to faster growth in China. EUR/USD exchange rate The financial market seemed to react with euphoria to this rumor, which could lead to a weakening of the USD against the Chinese yuan in particular, as well as to increases in the EUR/USD exchange rate. As a result of the weakening dollar, we could also see commodity prices rise, including silver, which jumped more than 6 percent, surpassing $20 per ounce. China, however, dismissed the aforementioned rumor over the weekend, leaving its restrictive approach to the outbreak. This, however, seems to have failed to change the positive sentiment. Source: Conotoxia MT5, EUR/USD, Daily The euro approached parity with the US dollar, extending the gains above the $0.99 level. This may also be related to expectations that the European Central Bank  would  further tighten monetary policy to counter high inflation. Last week, President Lagarde said the bank should continue to raise interest rates even as the likelihood of a recession in the eurozone increased. Recent data showed that inflation accelerated to a new record of 10.7 percent in October. The rise in inflation, the data showed, is being driven by energy and food prices. At the same time, GDP growth in the region slowed to 0.2 percent in the July-September period. This was the weakest growth in six quarters.  Statements important for the euro exchange rate Bank of France Governor Francois Villeroy de Galhau said Monday that peak inflation in the eurozone should be reached in the first half of 2023. The impact of the energy crisis on overall price growth "will fade starting probably next spring," he - A member of the European Central Bank's Governing Council, quoted by the BBN website, told The Irish Times. He also called for interest rate hikes to continue until it is clear that core inflation has peaked, but declined to predict where final rates will be. "Our goal is not to trigger a recession, but to tame inflation." - Villeroy de Galhau stressed. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Read more reviews and open a demo account at invest.conotoxia.com Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The EUR/USD Pair: There Are Still No Sell Signals

German economy faces headwinds, Lagarde is determined to hit 2% inflation. Latest NFP makes 50bp probable, but it's premature to be sure

Kenny Fisher Kenny Fisher 07.11.2022 23:21
EUR/USD has extended its impressive rally and is trading at 1.0019, up 0.60% on the day. The US dollar was broadly lower on Friday after the nonfarm payroll report and the euro rocketed 2.1%. German industrial orders rebound The week started on a high note in Germany, as Industrial Production for September rose for the first time in two months, up 0.6% MoM. This followed a -1.2% reading in August and beat the forecast of 0.2%. The reading was surprisingly strong, given that industrial companies continue to complain about bottlenecks and a  shortage of products. Last week, German Factory Orders fell by 4.0% and the war in Ukraine and the energy crisis remain significant headwinds for German industry and the economy as a whole. The grim economic outlook is a major headache for ECB policymakers, who must maneuver delicately between soaring inflation and a weak eurozone economy. The ECB joined the rate-hiking dance late and finds itself well behind the inflation curve, as headline inflation in the eurozone jumped to 10.7% in October, up from 9.9% in September. The ECB will have to double down on its rate hikes in order lower double-digit inflation and ECB President Lagarde has said that she will use “all the tools” available to bring inflation back to the ECB’s 2% target. The US dollar retreated against all the major currencies on Friday, and the euro took full advantage, with gains above 2%. Investors were looking for any excuse to plow into equities after a dreadful spell, and the employment report provided the opportunity, as nonfarm payrolls fell to 200,000, down from 315,000, the lowest level since December 2020. As well, unemployment rose from 3.5% to 3.7%, while the increase in wage growth was conveniently ignored. The likelihood of the next rate hike being 0.50%, rather than 0.75%, has risen since the NFP release, which sent the dollar sharply lower. Still, the rate forecasts are sure to change, with another NFP release and two inflation reports still to come before the meeting. EUR/USD Technical EUR/USD faces resistance at 1.0047 and 1.0134 There is support at 0.9888 and 0.9801 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Soaring euro punches past parity - MarketPulseMarketPulse
FX Daily: Testing the easing pushback

The Fall Of The EUR/USD Pair Can Be Expected

InstaForex Analysis InstaForex Analysis 08.11.2022 08:05
Here the euro has reached the upper limit of the price channel, which begins on February 10 of the current year, marked in green on the daily chart. And it reached this limit at hour X - on the day of the elections to the American Congress. The first results will be known tomorrow morning, although exit polls will be broadcast in real time throughout the night. In the media, the main idea is the scenario of the weakening of the dollar in the event of the defeat of the Democrats. But the Republicans, on the contrary, are in favor of budget cuts, especially the "Not a cent to Ukraine" thesis, so in reality the Republicans are in favor of a stronger dollar. And here, with a high political and technical probability, we can see the fall of the EUR/USD pair to the levels of 0.9950, 0.9864 and further to 0.9710. If the euro consolidates above 1.0051 (high on September 20), then the price will be able to reach the target range of 1.0100/20. On the four-hour chart, the price starts consolidating under the range of the price channel line and the target level – 1.0035/51. The price is above the indicator lines, the Marlin Oscillator is not very informative in the current acute situation. Slightly below the support of 0.9950 is the MACD indicator line, falling below the level will have an important technical downward aspect.       Relevance up to 03:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326462
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The Euro To US Dollar Pair (EUR/USD) Is Growing For Almost No Reason

InstaForex Analysis InstaForex Analysis 08.11.2022 08:12
Analysis of EUR/USD, 5-minute chart The euro/dollar pair continued its upward movement on Monday and added more than 100 points in a day. On level ground. There were no macroeconomic statistics or "foundations" on Monday either in the US or in the EU, however, traders found reasons to buy the pair. Thus, the price is again above the lines of the Ichimoku indicator and again rose to price parity. Despite the strongest growth over the past two trading days, the prospects for the euro remain rather vague. On the 24-hour timeframe, the price finally broke through the Ichimoku cloud, but at what cost! All the most important events of the month are behind us, but this week we still have to "survive" the US inflation report. We believe that the euro's current growth will not last for long, but technical buy signals are slowly starting to appear. Maybe we will finally see the end of a long-term downward trend! There were only two trading signals on Monday. At first, the price bounced off the extreme level of 0.9945 not very accurately, but managed to go in the right direction only by 9 points. Then it returned to the level of 0.9945 and settled above it, so the short position closed at a loss of about 20 points. However, the buy signal also had to be worked out, and it covered the losses on the first position, and also made it possible to earn, because by the end of the day the pair reached the nearest target level of 1.0019, near which the position should have been closed. Profit amounted to at least 55 points. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000). Analysis of EUR/USD, 1-hour chart has overcome the Ichimoku cloud on the 24-hour timeframe, as well as all the Ichimoku lines on the 4-hour timeframe. So far, the movement seems confident, but what are the reasons for it? It confuses us that the pair is growing for almost no reason. We can assume that these are echoes of the previous week, but in this case it would be more logical if the pair fell rather than grew. On Tuesday, the pair may trade at the following levels: 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, as well as the Senkou Span B (0.9900) and Kijun-sen lines (0.9874). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. Today, the European Union will publish a report on retail sales. Meanwhile, there is nothing in the US. Therefore, there will be nothing to react to, but the volatile movement may persist. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.         Relevance up to 01:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326450
The EUR/USD Pair: There Are Still No Sell Signals

Technical Outlook Of The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 08.11.2022 08:19
EUR/USD held nicely above the key support at 0.9704 which keeps our preferred count alive. As long as the key support at 0.9704 protects the downside, we see the test of 0.9536 as the completion of the 11-year corrective decline from 1.6038 and the start of a new impulsive rally that ultimately will break above the former peak at 1.6038. That said, we still have a bit more evidence to confirm that the corrective low is in place. The two factors are first the support at 0.9704 is able to protect the downside and two that the short-term resistance at 1.0094 is broken for a continuation higher towards 1.0465 and longer-term the peak of wave B at 1.2350.   Relevance up to 07:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/300009
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Bullish Trend Of The Euro (EUR) Will Start To Slow Down Sharply

InstaForex Analysis InstaForex Analysis 08.11.2022 08:25
Analysis of transactions in the EUR / USD pair The test of 0.9949 happened when the MACD line was just starting to move up from zero, which was a good reason to buy. This led to a price increase of more than 50 pips. No other signals appeared for the rest of the day. Euro continued to grow, thanks to the statements made by ECB members Christine Lagarde and Fabio Panetta, as well as the Sentix investor confidence indicator for the Euro area. As for the speeches made by FOMC members Loretta Mester and Susan Collins, they did not affect the market. There are no important statistics scheduled to be released in Europe today, so investors will have to rely on the September retail sales data and speeches of Bundesbank and ECB representatives. Even so, it is likely that euro's growth will be limited and the bullish trend will start to slow down sharply. FOMC member Loretta Mester is expected to comment in the afternoon, followed by the NFIB's report on small business optimism. The latter is unlikely to support dollar, so EUR/USD will trade within the side channel. For long positions: Buy euro when the quote reaches 1.0019 (green line on the chart) and take profit at the price of 1.0079. But growth is unlikely to occur today, so be careful with buying at the highs. Nevertheless, remember that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9986, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0019 and 1.0079. For short positions: Sell euro when the quote reaches 0.9986 (red line on the chart) and take profit at the price of 0.9929. Pressure will return after hawkish statements from Fed representatives, although at best only a small correction can be seen. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0019, however, the MACD line should be in the overbought area, as only by that will the market reverse to 0.9986 and 0.9929. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.       Relevance up to 07:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326476
USA: Mid-term election are said to be stock market driver. Republicans' gains may play in favour of stocks and bonds

USA: Mid-term election are said to be stock market driver. Republicans' gains may play in favour of stocks and bonds

ING Economics ING Economics 08.11.2022 09:10
China's re-opening story doesn't seem to be getting much traction outside social media, and US mid-term election expectations may play a bigger role ahead of results expected tomorrow morning Asia time Source: shutterstock Macro outlook Global Markets: There was another day of equity market gains on Monday following on from the almost inexplicable gains made after the stronger-than-expected payrolls number on Friday. Newswires are pinning the latest increases onto a pre-Mid-term election rally, with expected Republican gains being cited as positive for bonds and therefore for equities. Flying in the face of that theory, 2Y US Treasury yields rose 6.3bp, while the 10Y put on 5.5bp, taking it to 4.214%. There was virtually no data of note yesterday to pin market moves on. Chinese stocks were pretty flat on the day, and you might expect them to improve today on the Wall Street Journal’s re-opening story, but equity futures don’t seem to have made much of this (see also below). Against this happy-go-lucky backdrop, the EURUSD has again made it back above parity. Other G-10 currencies also made decent gains yesterday and we might expect some catch-up today from the likes of the CNY, which was weaker yesterday, trading in a range around 7.23.  The KRW and INR made robust gains yesterday. The KRW is now trading just above 1400. G-7 Macro: The US NFIB small firm optimism index is our pick of the day, with its deep mine of activity and price indicators. Recent results have shown price and wage pressures coming off sharply. We’d anticipate more of the same today. We had September consumer credit for the US early this morning, which was quite soft, which will support “pivotists”. Eurozone retail sales may also be worth a look later if you want convincing that the region is already in recession. China:  The WSJ reported that the Chinese government is considering relaxing Covid measures. This could theoretically move the market, though doesn't seem to be having much impact yet. After Beijing’s marathon and Shanghai Expo, China should be better able to gauge how big events stress their healthcare system. But we believe that relaxation from existing measures is more likely after 2022. China re-allocated some of its Local Government Special Bond quotas for 2023, aiming for bond sales in the last two months of 2022. Local governments have to use up funding from this bond sale by 1H23. This should be supportive for the economy via finishing uncompleted home projects and existing infrastructure projects. It also highlights the fiscal stress faced by local governments. Taiwan: Taiwan will release trade data later today. Our forecast is for a year-on-year contraction as demand for semiconductors should be weak from China, the US and Europe What to look out for: US NFIB survey and Fed speakers Australia consumer confidence (8 November) South Korea BoP balance (8 November) Japan leading index (8 November) Taiwan trade and CPI inflation (8 November) US NFIB business optimism (8 November) Fed’s Mester, Barkin and Collins speak (8 November) South Korea unemployment (9 November) Japan trade balance BoP (9 November) China CPI and PPI inflation (9 November) US mortgage application (9 November) Fed’s Williams speaks (9 November) Philippines GDP (10 November) US CPI inflation and initial jobless claims (10 November) Fed’s Barkin, Logan and Waller speak (10 November) Japan PPI inflation (11 November) Malaysia GDP (11 November) US Univ of Michigan sentiment (11 November) Fed’s Mester and George speak (11 November) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Hang Seng Index Plummets -2% Amid Weak China Data, Short-Term Trend Intact

The Demand For Euro (EUR) And For The Pound (GBP) Can Strengthen

InstaForex Analysis InstaForex Analysis 08.11.2022 09:17
Consumer activity is important as it is the main driver for economic growth. The best indicator of its condition is retail sales, so a slowdown in Europe, from -2.0% to -1.5%, could strengthen the demand for euro, as well as pound. However, the report does not matter today as dollar is already losing position amid increasing fears brought about by the midterm election results in the US. The Republican Party is likely to take control of both houses of Congress, leading to many decisions to be delayed. This does not bode well in the context of the growing economic crisis. The market will stand still all day, waiting for the first preliminary voting results. Retail sales (Europe): Euro has skyrocketed in value against dollar. Since last Friday, the growth amounted to almost 300 points, which returned the quote to the parity level. However, euro is now overbought, so there may be a rebound or stagnation in the market. GBP/USD also rushed up by about 400 points, hitting 1.1410/1.1525. Signals show that it is overbought, so it is likely that there will be a rebound in the market.   Relevance up to 20:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326486
Upcoming Corporate Earnings Reports: Ashtead, GameStop, and DocuSign - September 5-7, 2023

Good Retail Sales Result In Europe | Household Spending In Japan Has Declined

Kamila Szypuła Kamila Szypuła 08.11.2022 11:14
There are no important reports scheduled for today that could significantly affect the markets. Today the attention is focused on the mid-term election in the USA and on the speeches of representatives of central banks on the old continents. Japan Household Spending Japan has published a report on household spending. The result of this report was not satisfactory. The current level of 2.3% was lower than expected. It was expected to drop from 5.1% to 2.7%. This year in Japan, spending is not looking very well. They reached the level below zero several times, and the last scare was a false signal. The monthly change in household spending is already more positive. The current score of 1.8% has increased from 1.7%. Which means that within a month there was an increase in expenses, but compared to last year, the result was negative. Household expenditure is an important factor in building the country's economy and has a significant impact on the GDP level. The less households spend, the smaller the turnover is, which affects the number of companies. The profits of companies in such a situation can sleep. This situation will significantly affect individuals. Observing this indicator, it can be concluded that households have started to save to a greater extent, and thus it gives a signal about the plunging situations of life in this country. BRC Retail Sales Monitor The value of same-store sales in BRC-member retail outlets in the U.K decreased from 1.8% to 1.2%. This is a negative result despite the fact that a decrease has been reported. this decline was 0.5% larger than expected. This year is not the best. After the record level in February, there were declines and sales were negative for several months. Speeches At 9:15 CET there were speeches from the old continent. Speakers were the German Buba President Nagel, member of German Buba Wuermeling and ECB's Enria. They probably spoke at 10:00 CET. Information provided in speeches that the focus is on closing inflation and thus on raising rates. At 10:30 CET, the SNB Gov Board Member Maechler also took the floor and thus gave instructions on Switzerland's moetary policy. At 11:00 CET a representative of the Bank of England also took the floor. The speaker was Huw Pill. His statement may turn out to be a signal for the motoring policy, and thus it may direct the pound's (GBP) situation in the present day. He is expected to speak again at 18:00 CET. Outside the European continent, a representative of the Reserve Bank of Australia (RBA) also spoke at 11:30 CET. The speaker was Governor Philip Lowe. As a key adviser to RBA board members, who decide short term interest rates, Lowe has considerable influence over the value of the Australian dollar. Traders scrutinize his public engagements for clues regarding future monetary policy. EU Retail Sales Retail sales figures from the European bloc were also published today. An improvement was expected in the monthly and in the annual shift. As a result of retail sales, y/y growth was expected from -2.0% to -1.3%. Also in the monthly change, the projected increase from -0.3% to 0.4%. The current readings are positive. The annual change in retail sales rose to 0.6%, and the monthly change met expectations. The current result in such a difficult economic situation is interpreted as a slight improvement, i.e. a positive report. Summary 1:30 CET Japan Household Spending 2:01 CET BRC Retail Sales Monitor 9:15 CET German Buba President Nagel Speaks 9:15 CET German Buba Wuermeling Speaks 9:15 CET ECB's Enria Speaks 10:30 CET SNB Gov Board Member Maechler Speaks 11:00 CET BoE MPC Member Pill Speaks 11:30 CET RBA Governor Lowe Speaks 12:30 CET EU Retail Sales (MoM) (Sep) 18:00 CET BoE MPC Member Pill Speaks Although there were no important reports today, one should watch the following days. Source: https://www.investing.com/economic-calendar/
Oanda Podcast: US Jobs Report, SVB Financial Fallout And More

Ahead Of The Midterm Elections In The USA | The EUR/USD Pair Is In Downtrend

InstaForex Analysis InstaForex Analysis 08.11.2022 11:58
Markets are anticipating the preliminary results of the midterm elections in the US, which are expected to have a significant impact on government financial policy, on inflation and, of course, the actions of the Fed. Many believe that a change will be seen if Republicans take control of both houses of Congress. This means that many decisions may be changed, especially in taxes, spending and support for the Ukrainian regime, which largely caused the high inflation in the country as demand increased amid significantly low supply, primarily in goods for everyday life. Such a scenario may cause a cautious rally in the stock markets and the weakening of the dollar. And if the data on consumer inflation, which will be presented on Thursday, show at least a slight downward correction, positive sentiment will grow, So far, about half of the Fed members are in favor of raising the rate not by 0.75%, but by 0.50% at the December meeting. This in itself may serve as a signal that the bank may start easing the rate hike, moreso if US inflation does not show a sharp increase. Forecasts for today: EUR/USD The pair is demonstrating a local downward reversal on the wave of a possible downward rollback on the stock markets today ahead of the results of the US Congress elections. But it found support at 0.9990, so a rise above this level may lead to a growth, albeit short-lived. Meanwhile, the pair's decline below 0.9990 may lead a local fall to 0.9895. GBP/USD The pair broke through 1.1465 amid lower risk appetite ahead of the midterm elections in the US. A further decline below this level will lead to a fall to 1.1350.     Relevance up to 09:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326503
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

Technical Analysis Of The Euro Situation (EUR) By Jozef Kovach

InstaForex Analysis InstaForex Analysis 08.11.2022 12:51
EUR/USD The euro is seem to be trading in the 0.9750-1.0050 range. Expectations that the ECB may raise the interest rate by 0.75% at the next meeting provide support for the euro although the currency is now hovering around its all-time lows against the dollar. At the same time, the instrument has strong resistance on its way. Indeed, the US Federal Reserve is likely to remain aggressive. The regulator is anticipated to lift interest rates by 0.75% or at least 0.5% in December. Therefore, we may observe such a price range on the chart. Final thoughts: Consider selling EUR at 1.0050, the upper limit of the range, and above. Likewise, it will be possible to go short after a breakout through today's low.   Relevance up to 11:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326517
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

The Dow Jones Hit A Monthly High, The S&P 500 Index Also Rose

InstaForex Analysis InstaForex Analysis 09.11.2022 08:00
At the close on the New York Stock Exchange, the Dow Jones rose 1.02% to hit a monthly high, the S&P 500 index grew 0.56%, the NASDAQ Composite index climbed 0.49%. Dow Jones Amgen Inc was the top performer among the components of the Dow Jones in today's trading, up 15.37 points or 5.55% to close at 292.39. Quotes Boeing Co jumped by 4.71 points (2.86%), closing at 169.62. American Express Company rose 2.19% or 3.22 points to close at 150.20. The worst performers were Walgreens Boots Alliance Inc, which shed 0.30 points or 0.78% to end the session at 38.29. The Walt Disney Company was up 0.53 points (0.53%) to close at 99.90, while Chevron Corp was down 0.27 points (0.15%) to close at 185. 34. S&P 500 The top performers in the S&P 500 index today were SolarEdge Technologies Inc, which surged 19.13% to 251.73, Expeditors International of Washington Inc, which gained 9.06% to close at 104.40, as well as Welltower Inc, which increased by 8.22% to end the session at 66.51. The least gainers were Take-Two Interactive Software Inc, which shed 13.68% to close at 93.57. Shares of Medtronic PLC lost 6.25% to end the session at 80.19. Quotes of International Flavors & Fragrances Inc decreased in price by 4.96% to 91.41. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Taskus Inc, which rose 37.22% to hit 22.01, GrowGeneration Corp, which gained 35.05% to close at 4.47, and Skywater Technology Inc, which rose 31.60% to end the session at 11.37. The least gainers were Bioventus Inc, which shed 57.51% to close at 3.00. Shares of R1 RCM Inc lost 49.76% and ended the session at 7.41. Quotes of Athersys Inc decreased in price by 43.36% to 1.28. The numbers On the New York Stock Exchange, the number of securities that rose in price (1834) exceeded the number of those that closed in the red (1256), while quotes of 125 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,894 stocks fell, 1,771 rose, and 259 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 4.89% to 25.54. Gold Gold futures for December delivery added 2.15%, or 36.20, to $1.00 a troy ounce. In other commodities, WTI crude for December delivery fell 2.83%, or 2.60, to $89.19 a barrel. Brent futures for January delivery fell 2.39%, or 2.34, to $95.58 a barrel. Forex Meanwhile, in the Forex market, EUR/USD climbed 0.56% to hit 1.01, while USD/JPY fell 0.73% to hit 145.55. Futures on the USD index fell 0.46% to 109.49.     Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/300198
The Euro May Gradually Climb To The Target Level

EUR/USD Pair: There Are Also Support And Resistance Levels

InstaForex Analysis InstaForex Analysis 09.11.2022 08:01
Analysis of EUR/USD, 5-minute chart     The euro/dollar pair continued its upward movement on Tuesday and added another 80 points in a day. Again, for no reason. The pair traded rather calmly for most of the day, but in the US trading session it soared up within a few hours. Thus, the euro is finally growing, but it is extremely difficult to explain this growth. On the one hand, it is good for the euro that it is able to grow not only when there are specific reasons for this. This gives reason to still expect a new upward trend. On the other hand, won't this growth be "accelerated" before a new protracted fall? Recall that many respected experts believe that the pair will fall, and will also continue to do so next year! In general, the situation is rather strange and ambiguous. Only two trading signals were formed yesterday. First, the pair broke the level of 1.0019, and then 1.0072. Therefore, traders had to open a long position on the first signal, and close the position above the level of 1.0072, which brought them a profit of at least 55 points. Although the euro's current movement is strange, it still allows you to earn money, which means everything is fine. COT report     In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000). Analysis of EUR/USD, 1-hour chart     You can see that the pair continues to rise on the one-hour chart, has overcome the Ichimoku cloud on the 24-hour timeframe, as well as all the Ichimoku lines on the 4-hour timeframe. So far, the movement appears confident, but it is very difficult to explain it from a fundamental or macroeconomic point of view. It confuses us very much that the pair is growing for almost no reason. We can assume that these are echoes of the last week, but in this case it would be more logical if the pair fell rather than grew. On Wednesday, the pair may trade at the following levels: 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as the Senkou Span B (0.9900) and Kijun-sen lines (0.9905). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events planned in the European Union and the United States. Thus, there will be nothing for traders to react to, but at the same time, the pair can continue to trade in a volatile manner and trend. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326588
Assessing 'Significant Upside Risks to Inflation': Insights from FOMC Minutes

High Inflation, The Aggressive Fed And Geopolitical Uncertainty Increases The Likelihood Of A US Recession

InstaForex Analysis InstaForex Analysis 09.11.2022 08:15
In my previous reviews, I pointed out that the wave structures of the two instruments I analyze daily were about to see the completion of the ascending sections of the trend. These sections will comprise 5 waves, and they won't be impulse ones. This is the most likely scenario because demand for the dollar may soar in the near term. Let's now analyze possible reasons for a stronger greenback. Future decisions This article is mostly about Goldman Sachs Group. Its analysts have downgraded their forecasts for EUR to $0.94 from $0.97 for the coming three months. In the course of its latest fall, the instrument approached $0.95. Given the latest forecast, we may expect the descending section of the trend to resume its formation or a new section to build up. According to Goldman Sachs, having a floating target, the US Federal Reserve may raise interest rates to 5% by March 2023, with one increase of 0.50% and two increases of 0.25%. Meanwhile, other central banks, including the Bank of England and the ECB, won't have any floating targets. Therefore, monetary policy divergence may deepen towards the US dollar. Economic growth in the United States In addition, Goldman Sachs says there is a 35% probability of the United States entering a recession in the coming 12 months, citing high inflation, the aggressive Federal Reserve, and geopolitical uncertainty. The company underlined that its forecast is more optimistic compared to the outlooks from other firms and banks because it foresees a realistic scenario of an economic path from high inflation to low inflation and without a recession. Economic growth in the United States is expected to fall below the trend line but remain above zero. The balance in the labor market is likely to be restored, and unemployment growth to be limited. The euro and the pound If it is an accurate forecast, the US economy is unlikely to get hurt badly. If a recession is weak and inflation gets back to 2% rather fast, there will be still no reason for an increase in demand for the dollar because analysts do not expect an easy path for the European or British economy. BoE Governor Bailey announced the British economy entered a recession in the third quarter, which may last for 2 years. Meanwhile, the ECB will hardly lift interest rates to 5% because the European Union is not a single country but a union of nations in different financial situations. Some countries will survive high rates painlessly, some may need economic support for quite a long time. By economic aid, we mean new allocations and stimulus programs, and this is something the ECB would like to avoid. Thus, the dollar again looks more promising than the euro and the pound. The sum up Based on the analysis, we may anticipate that the formation of the ascending trend section will become more complex and comprise up to five waves. It may be that the fifth wave of this section is now building up. Therefore, consider buying with targets located above the peak of wave c, based on the reversals of the MACD to the upside. The entire section of the trend after September 28th now has the a-b-c-d-e structure. However, once it is complete, the formation of a new downtrend section may begin.     Relevance up to 05:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326596
Technical Analysis Of The EUR/USD Pair By Jakub Novak

Technical Analysis Of The EUR/USD Pair By Jakub Novak

InstaForex Analysis InstaForex Analysis 09.11.2022 08:24
Analysis of transactions in the EUR / USD pair The test of 0.9986 happened when the MACD line moved down quite a lot from zero, which limited the further downside potential of the pair. Some time later, another test took place, but this time the MACD line was in the oversold area, so the pair rose by about 35 pips. As for short positions at 1.0079, they led to losses. Although retail sales in the Euro area coincided with forecasts, the market was not affected in the morning. But by afternoon, euro shot up as the start of the US midterm elections weakened dollar's position due to the majority in Congress being taken by the Republicans Today, ECB member Frank Elderson is scheduled to speak, but it will be of little interest. There are also no important fundamental statistics, so the market will return to balance ahead of tomorrow's inflation data in the US. Statements by FOMC members John Williams and Thomas Barkin, along with US wholesale inventory changes, will also be of little interest. Only the next election results will lead to a surge in volatility. For long positions: Buy euro when the quote reaches 1.0088 (green line on the chart) and take profit at the price of 1.0141. But growth is unlikely to occur today, so be careful with buying at the highs. Nevertheless, remember that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0044, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0088 and 1.0141. For short positions: Sell euro when the quote reaches 1.0044 (red line on the chart) and take profit at the price of 1.0004. Pressure will return after hawkish statements from Fed representatives and news on the midterm elections in the US. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0088, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0044 and 1.0004. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326608
The EUR/USD Pair Has A Potential For Drop

EUR/USD Pair: There Are No Signs Of Growth Or Reversal

InstaForex Analysis InstaForex Analysis 09.11.2022 10:09
In the elections to the US Congress, the "red revolution" (Republican control of both chambers), as we thought, is not happening. In the elections to the Senate – to the main house of Congress, the Democrats are leading – 48 seats against 47 for Republicans (you need to get control of 50 seats), the Democrats are lagging behind in the lower house - 162 seats against 193 for Republicans. Control of the House of Representatives will occur when 218 seats are reached. The results will be announced later in the evening. In the current elections, as they write in American newspapers, the counting of votes will be delayed. Meanwhile, the euro managed to go above the upper limit of the price channel. The target range of 1.0100/30, taking into account fluctuations, is almost reached. Now the price has to choose one of the options: overcome the range and continue to rise to 1.0205, or return to the downward price channel with the support of 0.9950 being reached. The price channel in this case will be eliminated. We noted earlier that the programs of both competing parties are at least indirectly aimed at strengthening the dollar, so the factor of today's elections will quickly fade away as a typical psychological moment. There are no signs of growth or reversal on the four-hour chart. But this is an indicator of market neutrality. We are also in no hurry to get ahead of events, keeping both scenarios in mind.   Relevance up to 09:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326634
In China coronavirus cases exceeded this Spring's levels what could lead to declines of local stocks on Tuesday. In the USA US100 and S&P 500 gained ca. 0.5%.

In China coronavirus cases exceeded this Spring's levels what could lead to declines of local stocks on Tuesday. In the USA US100 and S&P 500 gained ca. 0.5%.

ING Economics ING Economics 09.11.2022 10:13
Covid cases rise in China to levels last seen in April, knocking sentiment and raising the spectre of lockdowns and supply disruptions again  Source: shutterstock Macro outlook Global Markets: US stocks made some unconvincing gains yesterday, recovering from a steep loss at one stage after pulling back from higher levels. Both NASDAQ and S&P500 were up about half a per cent at the close. Chinese stocks fell again, probably as covid cases pushed up to levels we haven’t seen since April (see also China section below). Despite all the positive talk about slowly unwinding zero-Covid and experimenting with bigger events, it looks as if more lockdowns might be on their way. US equity futures are still pointing to small increases at today’s open. EURUSD pushed a little bit further above parity, reaching 1.0078 now. The AUD has recrossed above 65 cents. Cable has risen to 1.1548 and the JPY has dropped back to 145.50. Asian FX was mostly positive across the board yesterday. The KRW was the main outperformer, dropping to 1385. Bond yields did at least stop rising, which means that the bond and equity/currency markets are more in synch than they have been in recent days. The 2Y US Treasury yield backed off by 7.1bp, while the 10Y yield came back by 9bp taking the yield to 4.123%. G-7 Macro: US Mid-term elections took place yesterday, though the absence of much on the newswires suggests that we still don’t have much idea what the outcome is going to be, though most observers are looking for Republican gains. Our US team will be posting updates as and when possible, so keep an eye out on https://think.ing.com/macro/north-america. Yesterday’s US October NFIB survey came in a little lower, but in line with expectations. There was a further small decline in the index for higher selling prices, which now sits right on 50% of firms. Eurozone retail sales yesterday were actually a little stronger than expected, but still fell 0.6% YoY. It is a very light calendar for macro releases today.  China: Covid cases have climbed. In Guangzhou city, and factory delivery is now being affected by restrictive land logistics, which could impact export delivery even though ports are currently operating “normally”. These effects should be reflected in the coming November export data.  October CPI should show inflation remaining very subdued due to weak consumption and as indicated by recent service sector PMIs even though the data is for October, the month of the Golden Week holidays. In contrast, PPI should be in year-on-year contraction but should show faster month-on-month growth from higher energy prices. Still, there is no inflation risk as producers cannot pass increased costs to consumers. Instead, this should result in thinner profit margins. Korea: The jobless rate stayed unchanged at 2.8% in October, which was slightly better than the market consensus of 2.9%. But we think the details were soft. Major industries such as manufacturing, whole/retail sales and transportation lost jobs. And only the hotel and restaurant sector saw an increase in employment. By employment type, the numbr of wage workers declined for a second month with temporary employment (less than one year of contract) down the most. This is probably because the public vocational program ends at the end of the year. Nonetheless, the labour market, especially services, seems like it is holding up relatively well despite higher interest rates and the slowdown in economic activity.  On the KRW, the last couple of days' price action shows why we call the KRW a high beta currency. The KRW is now around the 1380 level and we will probably see a stronger KRW for a while. However, it is still difficult to interpret this as a change of direction. Foreign investment returned back to local equity markets and credit stress has been relieved temporarily. But the dollar supply/demand conditions have not changed.  Until 1Q23, the  Fed’s tightening and the possibility of a further deterioration in the trade balance due to high energy demand over winter remain negative factors for the KRW. What to look out for: US midterm election results and China inflation South Korea unemployment (9 November) Japan trade balance BoP (9 November) China CPI and PPI inflation (9 November) US mortgage application (9 November) Fed’s Williams speaks (9 November) Philippines GDP (10 November) US CPI inflation and initial jobless claims (10 November) Fed’s Barkin, Logan and Waller speak (10 November) Japan PPI inflation (11 November) Malaysia GDP (11 November) US Univ of Michigan sentiment (11 November) Fed’s Mester and George speak (11 November) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The UK Demanding That The European Court Of Justice Be Stripped Of Its Role In Settling Brexit Disputes

InstaForex Analysis InstaForex Analysis 09.11.2022 12:09
UK and the European Union are rumored to be close to a major breakthrough in the months-long dispute over Northern Ireland's post-Brexit trading rules. Initially, the problem threatens a full-scale trade war, but the current crisis in which both regions experience record inflation seem to have made authorities do everything to find common ground. According to reports, the EU has begun testing the current UK database that tracks goods moving from the UK mainland to Northern Ireland. If they are satisfied with the system's performance, an agreement on customs checks in the Irish Sea may be signed. This recent upswing regarding negotiations allows Prime Minister Rishi Sunak's government to hope the deal will defuse tensions in the region and help the government resolve a number of problems. However, another key point to be addressed is the UK demanding that the European Court of Justice be stripped of its role in settling Brexit disputes in the region, which is not acceptable to the EU. The representative of the European Commission declined to comment on the progress of the talks, as did the British Foreign Office. Nevertheless, resolving the issue is beneficial as it would help correct supply chain disruptions and ease price pressures, especially if the Bank of England continues to increase rates at the current pace, which could push GDP down by up to 3.0% next year. GBP/USD In terms of GBP/USD, buyers are now focused on defending the support level of 1.1510 and breaking through the resistance level of 1.1590. This limits the upside potential as only a breakdown of 1.1590 will lead to a rise to 1.1690, 1.1730 and 1.1780. If pressure returns and sellers take control of 1.1510, the pair will drop to 1.1430 and 1.1360. EUR/USD In EUR/USD, sellers are not very active yet, so buyers have a chance to push the pair above 1.0090. A breakdown will spur growth to 1.0140, while a drop below 1.0030 will push euro back to 0.9970, 0.9920, 0.9880 and 0.9830.   Relevance up to 08:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326624
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

The USD Could Yet Reject This Breakdown Attempt | Weak Risk Sentiment Could Provide The Strongest Support For The JPY

Saxo Bank Saxo Bank 09.11.2022 13:25
Summary:  Market sentiment improved further yesterday before dipping slightly overnight, as China Covid cases are on the rise, pushing back against hopes for a lifting of Covid restrictions. In the US mid-term elections, Democrats are slightly outperforming expectations, possibly set to retain control of the Senate even if Republicans look set to take narrow control of the House of Representatives. FX Trading focus: Next test for struggling USD over tomorrow’s US CPI data. The US mid-term election results are still rolling in this morning in Europe, with the Republicans set to take a small majority in the House and the Senate outcome looking at risk of riding on the outcome of a Georgia run-off election on December 6th as neither candidate looks set to achieve the 50% required for elections there. Remember that we had a similar setup after the 2020 election when two Senate races in Georgia were only decided in a January 5 run-off. There are no real market conclusions from the outcome, even if the Georgia race gives the Republicans a majority in the Senate, as the only scenario that would have guaranteed dramatic potential for fiscal policy would have been the Democrats surprisingly retaining both houses. Other conclusions: Trump is a liability for the Republican party, which likely would have done far better without his involvement, and forensic studies of split-ticket voting will likely confirm this, and it will be interesting to see if this deters his possible renewed ambitions for the presidency. Finally: razor thin Georgia results keep alive the narratives around election fraud, etc. Can the US move beyond its dysfunctional elections by 2024 or will the republic face an existential test in that election cycle? Back to incoming data, with tomorrow’s US October CPI in focus. Let’s recall that the September CPI data point was a real shocker as many qualified slicers and dicers of the data were looking for a deceleration in the core data rather than the acceleration we got. That has me leaning for a slightly softer release tomorrow. But I am far more interested in the nature of the market reaction. As I have discussed the last couple of days on the Saxo Market Call podcast, I find the most interesting test for the US dollar one in which we see inflation decelerating and US treasury yields perhaps easing a bit lower, but in which we also see risk sentiment weak as equity and bond markets are starting to decouple, as equities begin to fret recession rather than being merely led around by the nose by the treasury market. If that is the scenario we get and the USD weakens, then I think USD weakness can extend a bit more forcefully for a time, if not, then the USD could yet reject this breakdown attempt. I withhold judgement for now, as the USD has not yet broken down. But the easiest thing to do is to simply judge what happens on the charts in the wake of the data release (not knee-jerk, but how the day closes), as we have a number of clear-cut levels in play for the major USD pairs. Chart: USDJPY USDJPY has traditionally been a strong focus over US data surprises over the years and will be in focus with the macro event risk of the week, if not the month, coming up tomorrow in the form of the US October CPI release. Reaction in yields and risk sentiment are both worth watching as I have cooked up some thoughts of late (see above) on whether US treasury markets and equity markets could move out of correlation, i.e., that risk sentiment may have a hard time celebrating a drop in treasury yields. So, a weaker than expected US CPI report together with falling treasury yields, but also together with weak risk sentiment could provide the strongest support for the JPY here in a broad sense, though it might be felt more forcefully in JPY crosses. Regardless, if the JPY finds bids tomorrow, the 145.00 level will be a huge focus in USDJPY. Table: FX Board of G10 and CNH trend evolution and strength.The USD is clearly down, but will only be out on sticking further weakness in the wake of the US CPI release tomorrow. Elsewhere, note the sterling momentum turning badly south and SEK trying to look higher, not a surprise given European equities having rallied vertically for weeks – looking a bit much. Table: FX Board Trend Scoreboard for individual pairs.EURGBP is one to focus on around the 0.8800 level. JPY crosses are interesting in places as well as yields have consolidated a bit lower – look at the 165 area in GBPJPY, for example. But it is all about key USD levels after the US data tomorrow, including 1.0100 in EURUSD, 0.6522 in AUDUSD, etc… Upcoming Economic Calendar Highlights 1200 – Mexico Oct. CPI 1300 – UK Bank of England’s Haskel to speak 1530 – EIA's Weekly Crude and Fuel Stock Report 1630 – UK Bank of England’s Cunliffe to speak 1700 – World Agriculture Supply and Demand Estimates (WASDE) 0001 – UK Oct. RICS House Price Balance 0100 – US Fed’s Kashkari (Voter 2023) to speak   Source: https://www.home.saxo/content/articles/forex/fx-update-usd-on-edge-ahead-of-the-us-cpi-data-tomorrow-09112022
Oanda Podcast: US Jobs Report, SVB Financial Fallout And More

Republicans Will Call On Reducing Budget Spending On Social Security And Medical Care

InstaForex Analysis InstaForex Analysis 09.11.2022 13:33
The euro/dollar pair is trying to settle above the resistance level of 1.0060, which is the upper border of the Bollinger Bands indicator on the D1 timeframe. If the pair succeeds, it will definitely resume a long-term bull run. However, the midterm election may limit its upside potential. Fundamental factors of political nature tend to have a short-lived impact on Forex. Traders are now assessing the possibility of a split in Congress. This is why the EUR/USD pair is unlikely to settle above the parity level for a long time. Buyers need stronger drivers to push the pair higher. Apart from that, the US will unveil inflation data tomorrow, which may drastically change the trajectory of the pair. Let's discuss the main political event of this week and of the month, namely the preliminary results of the midterm elections. Overall, we can draw some conclusions. Before the vote, many analysts assumed that Republicans would wrestle control over the Senate and the House of Representatives. Apparently, the battle will last until December. According to preliminary estimates, the ratio of seats in the Senate is 50:49 in favor of the Democratic Party after the second round in Georgia and a mixed result in Nevada. It means that Democrats may retain control even if Republicans win in Georgia but lose in Nevada. In this case, the situation of the last two years may repeat itself. In the previous elections, Republicans and Democrats had 50 seats each in the Senate. Kamala Harris, the Vice President of the United States, supports the Democratic party. She had the decisive vote back then. Under certain circumstances, if the above-mentioned states do not give their votes to Republicans, there will be no change in power in the Senate for the next two years. As for the House of Representatives, as widely expected, Republicans won the majority of seats. However, it hardly surprised anyone. The Republican Party has approximately 223-225 mandates, while Democrats have 210-212. Republicans have already won the majority of seats (218). So, Democrats lost the battle for the House of Representatives. Although the Republican Party failed to regain the upper hand in both chambers, it definitely took control of the House of Representatives. When it comes to the gubernatorial election, the situation is as follows: Democrats won 21 seats (they won in two states) and Republicans won 24 seats (they lost in two states). Therefore, it is quite logical why traders are alert now. For almost two years, the House of Representatives, the Senate, and the White House have worked in unison. There were almost no conflicts. Now, the situation will change sharply as Republicans will call on reducing budget spending on social security and medical care. otherwise, they could block an increase in the debt limit. Among the possible risks of a split Congress is a shutdown. It refers to a funding gap period that causes a full or partial shutdown of federal government operations when the government fails to pass funding legislation for its next fiscal year The greenback is also facing bearish pressure. In my opinion, this political driver will have a short-term influence on the market. No economic or political changes will happen in the foreseeable future because the Congress with its new members will begin work only in January 2023. As a rule, market participants rarely focus on long-term hypothetical events that could occur in several weeks or months. Apart from that, Democrats still have leverage in the House of Representatives (the filibuster tactic, the right of the President's veto, the Republicans' inability to revoke the veto, etc.), including possible control over the Senate. However, Democrats will have the same leverage if they lose control over the upper chamber. Therefore, there will hardly be crucial shifts in the political situation in the United States. Do not forget about tomorrow's release of inflation data. If the report is positive, traders will switch their attention to the Fed. They will be waiting for hints on whether the Fed will raise the key rate by 75 or 50 basis points. It is rather risky to open short and long positions in times of market uncertainty. Therefore, I would recommend you today to take a wait-and-see approach e and wait for the release of inflation data.   Relevance up to 12:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326653
Crude decreases amid risk boosting greenback and unclear situation in China

Marc Chandler talks midterm election, greenback, crude oil and much more

Marc Chandler Marc Chandler 09.11.2022 23:54
November 09, 2022  $USD, Brazil, China, Currency Movement, ECB, EMU, Federal Reserve Poland, Japan, Mexico Overview: It is difficult to see the impact of the US midterm election in the immediate aftermath. The dollar is stronger against all the major currencies, but this seems to be mostly position adjusting ahead of tomorrow’s CPI report after a pullback in recent days. While Japanese, Chinese and Hong Kong shares fell, strong foreign buying lifted Taiwan’s shares by nearly 2.2% and South Korea’s Kospi rose more than 1%.  The Stoxx 600 in Europe is snapping a three-day advance and its 0.85% decline is giving back yesterday’s gains in full.  US equity futures are trading with a heavier bias.  US and UK 10-year yields are a couple basis points higher, while most European benchmark yields are off 1-3 bp.  Among the G10 currencies, sterling and the New Zealand dollar are bearing the brunt of the greenback’s recovery, while the Japanese yen and Swiss franc are the most resilient. Among emerging market currencies, the South Korean won continues atop the leaders’ board.  Central European currencies are among the weakest. Firmer Hungarian inflation (21.1% year-over-year) is dragging the forint lower, and there is some uncertainty ahead of Poland’s central bank meeting outcome that is weighing on the zloty. Gold jumped 2.2% yesterday to move above $1700 for the first time in a month and is holding above there today as it pulls back a bit. December WTI fell 3% yesterday, its biggest loss since mid-October and follow-through selling pushed it to around $87.25. It settled above $91 last week. A few weeks delay in reopening the Freeport export platform sent US natgas prices down 11.6% yesterday and there has been a little additional selling today. Europe’s benchmark rose 4.7% yesterday and is slightly higher today. Regulators extended support to the Chinese property market, and this may have held iron ore and extended its rebound for the seventh consecutive session.  On the other hand, December copper is giving back half of yesterday’s 2.2% gain.  December wheat is trading softer ahead of the USDA’s World Agricultural Supply and Demand estimates.   Asia Pacific Japan reported a larger than expected current account surplus in September but a larger than expected trade deficit.  The current account rose to JPY909 bln from a revised JPY694.2 bln in August (initially reported as JPY58.9 bln).  The trade balance, on a balance-of-payments basis, was JPY1.759 trillion.  The median forecast in Bloomberg's survey was for a JPY1.684 trillion shortfall.  Japan's current account report includes some details about Japanese foreign investment.  We note that after buying US Treasuries in August for the first time in 10 months, Japanese investors returned to the sell side (`JPY2.4 trillion or ~$16.5 bln).  While Japanese investors sold most other sovereign bonds in September, they bought a small amount of Swedish bonds.  The dollar value of Japan's reserves fell by $43 bln last month.  This is about what one would expect given the intervention (~JPY6.3 trillion). Other aspects of valuation adjustments look to have largely netted out.  Most other reserve currencies appreciated against the dollar while bond prices tended to have retreated.  Since the end of last year, the dollar value of Japan's reserves has fallen by about $200.5 bln.  Most of the decline reflects the sharp decline in bond prices this year and the strength of the dollar against other reserve currencies.   China's October producer prices fell 1.3% year-over-year, the first negative print in nearly two years.  Part of the drop in PPI can be explained by the base effect and the surge in prices last year after shutdowns in the US, Europe, and elsewhere ended.  In addition, commodity prices have eased this year.  The year-over-year decline in construction commodities intensified last month and energy prices (oil and coal) softened.  China's consumer inflation slowed to 2.1% in October from 2.8%. Food inflation, the main driver of Chinese CPI slowed from 8.8% in September to 7.0%, though pork prices rose.  Core CPI was unchanged at 0.6%. It has been at or below 1% for seven consecutive months. The easing of service prices (0.4% from 0.5%) is thought to reflect weaker demand related to the zero-Covid policy.    Many observers are focused on China's zero-Covid policy that they may be missing new efforts to bolster the economy.  Just like the typically LDP policy thrust is for easy monetary and easy fiscal policy, new lending is the go-to-answer for China.  Large banks are under pressure to boost lending starting now in Q4 to manufacturing and infrastructure projects.  At the same time, local governments are being allocated quotas for 2023 infrastructure bonds.  They will launch in January and ostensibly will be used for key prospects in transportation, new/green energy, and infrastructure.  Consistent with this could be another cut in reserve requirements.  There are two other reasons why the reserve ratio may cut in addition to supporting the economy.  First, some are identifying the tightening of the ratio of reserves to deposits.  Cutting reserves would help address that.  Second, this month, there are around CNY1 trillion of maturing loans from the PBOC to the commercial banks.  A 50 bp cut in reserve requirements frees up that amount.  The PBOC has also been a bit stingy lately in its reverse repo operations.  The funds could be rolling into the Medium-Term Lending Facility, where the rate and volume is expected to be announced in the middle of next week.   The JPY145 level is a key support for the dollar.  The greenback has not traded below there since October 7. It has been approached several times and has held, though the reaction bounce has become more muted.  A convincing break could quickly see JPY143.50-JPY144.00.  Initial resistance is seen in the JPY146.00-20 area.  The Australian dollar is hovering around yesterday's settlement a little above $0.6500 after reaching its best level yesterday since late September (~$0.6550).  Initial support is seen around $0.6480 and near $0.6445.  The greenback continues to trade well within the broad range against the Chinese yuan seen last Friday amid speculation that the zero-Covid policy was going to be relaxed.  It is within yesterday's CNY7.2210-CNY7.2625 range. The US dollar also remains well below the CNY7.3275 peak recorded last week.  The PBOC set the dollar's reference rate at CNY7.2189 compared with the projection (median in Bloomberg's survey) of CNY7.2275.   Europe While the market is focused on the Fed and where its terminal rate may be, yields in Europe have risen quickly.  The yield on the two-year German bund has risen from about 1.95% on November 1 to 2.35% yesterday, though it has pulled back today. The yield is rose for the past six sessions. As prices gapped lower yesterday, the yield gapped higher, and it is the highest since 2008. The gap has not been filled today. The US 2-year premium over Germany posted a two-month peak when the Fed met last week near 2.65%.  It has fallen every session through yesterday when it dipped below 2.40%.  It had not traded below 2.40% since late September, the 2.35% area may be more important.  It is the 200-day moving average and the US premium has not been below the average since June 2021.   We looked for the rate differential to peak before the dollar peaked against the euro.  Its two-year premium peaked three months ago near 2.77%.  The euro bottomed, so far, in late September around $0.9535.  We lean to that being an important low and note that the euro's downtrend line, drawn off he February, March, June, August, and September highs was violated last month but it was not sustained.  The euro moved back above it on Friday after the jobs data and amid talk of China changing its Covid policy.  The trendline comes today near $0.9850.   The ECB's monthly survey found consumer expectations for one-year inflation edged up to 5.1% in September from 5.0% in August.  The median three-year view was steady at 3%.  Pessimism over the economic outlook increased as a deeper contraction is now expected over the next 12 months (-2.4% from -1.7%).  Separately, a study by the Irish central bank and Indeed, found that wages were 5.2% higher than a year ago in October but appear to have steadied.   Yesterday, the euro took out the October high by 1/100 of a cent as it extended its rally to about 3.5 cents over the past three days.  The euro held again, slightly below $1.01. Today it is consolidating in about a fifth of a cent on either side of $1.0065. It approached support, which we peg near the $1.0035 high seen Monday, in the European morning. We had expected the dollar to trade stronger ahead of tomorrow's US CPI figures.  Sterling rose to almost $1.16 yesterday.  It had risen 4.5 cents over the past three sessions but today has slipped through yesterday's low near $1.1430 in European dealings but found a bid near $1.1420. A break of $1.1400 could see a test on $1.1375. A break of that would be disappointing, though the week's low in another cent lower.  Lastly, the central bank of Poland meets, and the market is mixed about the outlook.  It paused last month over three dissents and year-over-year CPI rose to a new cyclical high of 17.9% in October.  A slight dovish majority led by central bank Governor Glapinski may prevail.  In any case, Poland is seen to be at or near its terminal rate.   America No fewer than nine Fed officials talk between today and Thursday.  Williams, Barkin, and Kashkari speak today, but Williams has already spoken in Switzerland, and Kashkari speaks after the markets close.  That leaves Barkin.  The president of the Richmond Fed, Barkin does not have a vote on the FOMC this year and is a centrist.  Barkin is in favor of slowing the pace down while recognizing the Fed’s work is not done.  Last week, he said that is it conceivable that the terminal rate is above 5%, but that is not a plan, Barkin admitted.  The takeaway for him from last week's employment report is that the labor market remains tight.  Barkin also explained that inflation has not eased much because business have not met much resistance from customers or competitors.  Some businesses, he said, are still announcing price increases.   Mexico reports its October CPI figures today ahead of Banxico's rate decision tomorrow.  The monthly report is expected to show a slower year-over-year rate (8.45% vs. 8.70% in August and September).  The core rate is a bit stickier and made a new cyclical higher in September (8.28%) and may have extend it toward 8.45% last month.  Almost regardless of the print, Mexico is widely expected to hike its target rates by 75 bp, matching the Fed's move.  The new rate will be 10%.  Mexico is one of the few countries that have a target rate above the current inflation rate.  The swaps market sees the terminal rate in Mexico at around 10.80%.  There is some risk, we subjectively put it at around 1-in-3 that there is some discussion of some greater degrees of freedom, even if limited, from Fed policy going forward.  The peso is near its strongest level since March 2020.   We have suggested that the US dollar has formed a large head and shoulder pattern against the Canadian dollar broke the neckline at CAD1.35 last week.  It projects toward CAD1.30.  Yesterday, the greenback briefly traded below CAD1.34 for the first time since September 21.  Ideally, in today's consolidation, it will hold below CAD1.3500.  The US dollar's downside momentum against the Mexican peso stalled in front of MXN19.43 over the past two sessions.  It is bid today above MXN19.57.  Initial resistance maybe encountered in the MXN19.60 area.  The dollar jumped to almost BRL5.25 yesterday after approaching BRL5.02 on Monday, its lowest level since last August.  However, it reversed to settle a little below BRL5.15.  The market appears a bit nervous about the composition of the new government and its fiscal plans.       Disclaimer
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The Euro (EUR) Is At The Highest Levels But Can Drop

InstaForex Analysis InstaForex Analysis 10.11.2022 08:02
EUR USD The euro is at the upper limit of the range. The euro is staying at the highest levels of the week - but there is a possibility of a fall. A new round of Federal Reserve rate hikes is still ahead - +0.75% is quite likely. There is a good option to sell euros from the current one hundred with a stop of 50-70 points with possible sales higher in case of local growth with targets for a drop of 150-200 points. Relevance up to 16:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326687
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The EUR/USD Pair Is Likely To Continue Its Unstable Dynamics

InstaForex Analysis InstaForex Analysis 10.11.2022 08:10
On Wednesday, the greenback was recovering from three consecutive days of rollbacks, while votes in the congressional elections continue to be counted in America. Over the past three days, the dollar has declined by more than 3% against its main competitors, including the euro. During the same time, the S&P 500 index gained about 2.8%. Market participants preferred risky assets amid increased confidence that Republicans would regain a majority in at least one or even both chambers of Congress in the midterm elections. "The idea that the Republicans will regain the House of Representatives has caught on well in the market. We're not saying it won't be good for stocks, or we won't have a few pleasant days, or it won't provide some stability. But we think that in order for the S&P 500 to really rise, Republicans also need to regain the Senate," said strategists at RBC Capital Markets. Apparently, investors were putting in quotes a scenario according to which the outcome of the midterm elections would be either a so-called "split government" (when the executive power is controlled by a Democratic president and the legislative power is controlled by Republicans), or a divided Congress (if Republicans gain control in the lower house and Democrats retain a slight advantage in the upper house). It is assumed that such an outcome will have negative consequences for the dollar and positive for stocks. According to RBC Capital Markets, the average annual return of the S&P 500 with a divided Congress is 14%, and with a Republican-controlled parliament and a Democratic president – 13%. The yield of the index under the full control of the Democrats is 10%. According to experts, a possible political impasse in Washington may exclude US President Joe Biden's proposed increase in taxes on corporate income and wealthy citizens. At the same time, the prospect of another dispute about raising the US debt ceiling is more important. The Republican Congress can put an end to fiscal stimulus and make it a little easier for the Federal Reserve to curb inflation, FS Investments analysts say. "If Republicans do get some power in the House and Senate, they could make raising the federal debt ceiling a really difficult process," Ingalls & Snyder analysts said. US politics is once again becoming a burning topic in connection with the midterm elections. Republicans are on track to achieve a majority in the House of Representatives, while Democrats may lose the Senate. In this case, the shares may rise, which will harm the dollar, Credit Suisse believes. "Although the final results of the midterm elections may be known only in a few days, it is highly likely that the Democrats will lose control of the House of Representatives, and possibly the Senate. This will lead to another phase of the "split government". We are inclined to believe that the likely result of such an outcome will be a strengthening of stocks," the bank's economists said. "Since the growth of stocks also usually goes hand in hand with the weakening of the dollar, it is logical to expect that the strengthening phase of stocks associated with the midterm elections may damage the greenback," they added. The political impasse in Washington will dispel investors' concerns about increased budget spending, exacerbating inflation, and increase the chances of the party freezing spending with the help of the debt ceiling. This will facilitate the work of the Fed, help stocks extend their recent growth, and also restrain the yield of US Treasury bonds and the dollar, analysts at Morgan Stanley believe. Meanwhile, the unexpected victory of the Democrats, according to experts, will lead to an increase in the yield of treasuries, a strengthening of the dollar and will put pressure on stocks, since a possible budget expansion will require a greater increase in rates from the Fed. Berenberg analysts believe that the election results will not have any significant impact on fiscal or monetary policy in the United States, and that the Fed's actions to curb inflation will continue to set the tone for the markets. The S&P 500 index may fall by another 16% before it reaches the "bottom" in nine months after the Fed refuses to raise interest rates, UBS strategists say. They expect that the slowdown in economic growth in the US will continue to pull stocks down until the second quarter. According to the bank's forecast, in 2023, global GDP will grow by only 2.1% year-on-year, which will be the third lowest in the last three decades. "Our forecast is approaching something like a 'global recession,'" UBS economists said. "For the US, we now expect almost zero growth in both 2023 and 2024, and a recession will begin in 2023," they added. According to experts, this economic downturn is likely to lead to a period of disinflation. Given that the US central bank has quickly raised interest rates to try to curb inflation, which has reached a 40-year high, this would give policymakers the opportunity to switch to lowering rates to stimulate economic growth, according to UBS. "In combination with the rapid fall in inflation, the Fed will reduce the key rate from the current 4% to 1.25% by the beginning of 2024," the bank's analysts said. "The speed of this reversal will stimulate every asset class next year," they believe. According to UBS estimates, expectations of a Fed reversal could raise the S&P 500 to 3,900 points by the end of 2023. The bank also predicted that future rate cuts would cause the yield on 10-year treasuries to drop by 155 basis points to 2.65%, and the dollar would slowly fall against a basket of leading currencies. US stock indexes showed a steady rise on Tuesday. Thus, the S&P 500 rose by 0.56% to 3,828.11 points. Meanwhile, the greenback fell in price against its main competitors by almost 0.5%, sinking to multi-week lows around 109.25 points. The market's increased hopes that Republicans would gain a majority in the Senate and the House of Representatives allowed risk appetite to dominate financial markets, as a result of which the safe dollar lost demand. Increased selling pressure on the US currency spurred the EUR/USD rally, as a result of which the pair reached the highest values in almost two months in the area of 1.0090. However, on Wednesday, investors were forced to turn to the defensive dollar again, since there was no clarity as to who would control Congress following the midterm elections. It is possible that the final results will have to wait a few days or even weeks, as it was in 2020. As you know, markets most of all do not like uncertainty. Key Wall Street indicators are trading in negative territory on Wednesday. In particular, the S&P is losing about 0.9%. Meanwhile, the greenback attracted bulls and tested the area just above 110. Amid renewed demand for the dollar, the EUR/USD pair lost its bullish momentum. Cautious market sentiment limits the pair's growth opportunities while investors wait for the final results of the midterm elections in America. In addition, important data on consumer inflation in the United States are looming on the horizon, which will be published on Thursday. Recently, the greenback has been under downward pressure from expectations that the Fed will soon abandon a tough rate hike cycle, possibly as early as December. However, a surprise in the form of an increase in inflation may change this opinion and contribute to the strengthening of the US currency. "The worst outcome for the markets will be core inflation, which will exceed expectations not at the expense of housing, which is easy to write off as a lag, but due to a wide range of rapidly rising prices in various categories. Given that expectations of a Fed rate hike by 75 bps next month have already been largely played back, there is a risk that such a surprise will force investors to re-evaluate at least a 50% probability of such an outcome, which will put pressure on risky assets and lead to a rise in the dollar," Credit Suisse economists said. Markets interpret any weaker data in favor of a reversal of the Fed's policy, pushing EUR/USD up. However, Thursday's high value of the consumer price index (CPI) in the US may send the pair down, Nordea believes. "Of course, the recent fluctuations in EUR/USD contradict our opinion about the upcoming strengthening of the dollar, but we believe that the recent price movements are more a reflection of tactical positioning, rather than changes in fundamental indicators," the bank's strategists said. "The Fed has clearly stated that a pause in raising rates is not discussed as long as inflation is high. Fighting inflation means raising rates and even more pain for risky assets and the real economy. It seems that investors in the stock markets refuse to take this into account and interpret any softer data in favor of a reversal of the US central bank, which leads to an increase in risk appetite and a weakening of the dollar. Eventually, the situation should change, and investors will feel the pain again and remember the old adage: "don't fight the Fed," they noted. "The US inflation report is the next key indicator in the short term. Higher-than-expected CPI data are a trigger for strengthening the dollar (6 out of 10 recent inflation releases this year), and this may well happen this week, especially if players hold a net short position on the US currency. In the future, EUR/USD is likely to continue its unstable dynamics, but we still adhere to our opinion that the pair will decline to the area of 0.9500 by the end of this year," Nordea said.   Relevance up to 18:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/326693
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

The Price Of The EUR/USD Pair Is Still In An Upward Position

InstaForex Analysis InstaForex Analysis 10.11.2022 08:41
The elections to the American Congress turned out to be far from being as tragic for the Democrats as the US and other world media predicted. Seats in the Senate were distributed equally 48/48. There will be re-elections in several states in December to determine the winners. The seats in the lower house this morning were distributed as follows: 182 for the Democrats, 205 for the Republicans. As a result, conflicts are already brewing in the Republican camp, a number of functionaries are demanding that Trump be removed from influence on the party, and several Republican governors have already spoken out on their nominations for the presidency (DeSantis, Hogan). Well, the markets continued their fall: S&P 500 -2.08%, euro -0.58%, oil (CL) -3.42%. A divergence has formed with the Marlin Oscillator on the daily chart. The price returned under the level of 1.0051, where it is most likely to close the day. Thus, the nearest target for the euro is the level of 0.9950. Further, we are waiting for the advance to 0.9864. The price is still in an upward position on the four-hour chart, as the development takes place above the indicator lines and Marlin is in the growth zone. A bit above the support of 0.9950 is the MACD line, which will make it difficult and slow down the price to work out this support.   Relevance up to 03:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326715
The Euro Will Probably Continue Its Upward Movement In The Near Future

The ECB Will Not Bring The Situation To A Critical Mass

InstaForex Analysis InstaForex Analysis 10.11.2022 08:44
On Wednesday, the EUR/USD currency pair began a new round of corrective movement while failing to update its previous local maximum. We've said before why this is important. If the previous highs are not updated, then there is no upward trend. Thus, a price reversal near the level of 1.0010 followed by a fall to the moving average line is very bad for the euro currency. However, we have already talked about the illogical growth of the pair in the last few days. We believe that the events of last week should have provoked a new powerful strengthening of the US currency, but not the growth of the European one. From our point of view, non-farms were strong enough, and the unemployment rate did not rise critically to sound the alarm and shout about a recession. Moreover, the recession itself may still be avoided. Some forecasts say the probability of its occurrence in the coming year is no more than 35%. And a year later, the Fed may already start lowering the key rate, which will slowly accelerate the economy again. Based on this, we believe the most logical development would be a new fall in the euro. Recall that Alan Greenspan, the former head of the Fed, believes that the US dollar will strengthen next year. Goldman Sachs lowered its 3-month forecast for the euro/dollar pair from 0.9700 to 0.9400. Thus, many significant experts do not believe that now the European currency will move to the formation of a long-term uptrend. We fully agree with this assessment because we also do not see how the euro can increase over a long distance. The Fed is not even thinking about stopping raising the rate yet, the ECB is unlikely to catch up with the Fed in terms of the rate level, and even these two factors alone suggest that the pair, at least, will not grow much and for a long time. Therefore, we believe that the decline will resume. Maybe it will no longer be large-scale and collapse, but the euro will not grow to 1.1000. Goldman Sachs forecast the Fed rate at 5%, but this may not be the limit. As mentioned above, almost all experts believe the Fed rate will continue to rise. The only question is to what level it will eventually grow. Recall that at the beginning of the year, the most "hawkish" member of the Fed monetary committee, James Bullard, spoke about raising the rate to 3.5%. Now no one doubts that the rate will rise to 4.75%, and some experts predict stronger growth. For example, Goldman Sachs economists believe the rate will rise to 5%. We believe that everything will depend on inflation. If it shows the same rate of slowdown as in the last two months, the Fed will receive the necessary grounds for further tightening monetary policy. Naturally, the higher the rate, the longer it will grow, and the more reason the dollar will continue to enjoy increased demand and strengthen against its competitors with lower rates. ECB head Christine Lagarde said last week that her department also intends to continue to fight high inflation. Still, in the case of the European regulator, it is unclear how far it can go in tightening monetary policy. We have already written earlier that not all EU countries can withstand the burden on the economy in the form of a 5% key rate. Most likely, the ECB will not bring the situation to a "critical mass." We believe that the ECB will stop somewhere in the middle to slow down inflation as much as possible, but at the same time, not bring the state of weak economies to a catastrophic state. This will mean that the rate will rise to a maximum of 4%, which is unlikely enough to return inflation to 2%. Therefore, the cost of borrowing will be more expensive in the United States, and bank deposits are also more profitable in the United States. You can make elementary money by taking a European loan and placing it on a deposit in the USA. This is a joke, but cash flows can continue to flow from Europe overseas. The average volatility of the euro/dollar currency pair over the last five trading days as of November 10 is 134 points and is characterized as "high." Thus, we expect the pair to move between 0.9897 and 1.0165 on Thursday. The upward reversal of the Heiken Ashi indicator signals the resumption of the upward movement. Nearest support levels: S1 – 1.0010 S2 – 0.9888 S3 – 0.9766 Nearest resistance levels: R1 – 1.0132 R2 – 1.0254 R3 – 1.0376 Trading Recommendations: The EUR/USD pair continues to be located above the moving average. Thus, now we should consider new long positions with targets of 1.0132 and 1.0165 in the case of a reversal of the Heiken Ashi indicator upwards. Sales will become relevant again no earlier than fixing the price below the moving average line with targets of 0.9888 and 0.9766. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 01:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326707
The Outlook Of EUR/USD Pair For Long And Short Position

The Overall Technical Picture Of The EUR/USD Pair Is More Like A Swing

InstaForex Analysis InstaForex Analysis 10.11.2022 08:51
Analysis of EUR/USD, 5-minute chart Yesterday, the euro/dollar pair finally began to move down after several days of illogical and groundless growth. The euro fell by only 80-90 points, which is certainly not enough to speak of the start of a new even short-term downward trend. Today the pair may shoot up again if the US inflation report turns out to be very good. And in order for it to be very good, the consumer price index should fall by more than 0.3% y/y. Moreover, the dollar's fall in this case will be logical, but this does not mean at all that the market will react in this way to such data. In recent days, and even last week, we have seen little logical movement. The overall technical picture is more and more like a "swing". Formally, the euro has certain grounds to continue rising. At least because it overcame the Ichimoku cloud on a 24-hour timeframe. But from the point of view of the foundation, it is still difficult to believe in a sharp euro growth. In regards to Wednesday's trading signals, the situation on the 5-minute timeframe was not the best. Two false signals were formed near the level of 1.0072 during the European trading session. Both traders could work out and both received a loss, since neither in the first nor in the second cases the price managed to move even 15 points in the right direction. Therefore, the third sell signal should have been ignored, but it just turned out to be correct. Then a buy signal formed around 1.0019, but the pair began to grow so rapidly that it was already a difficult task to enter the market in time. However, about 20 pips could be earned on this. The new bounce from 1.0072 was to be ignored. And the last long position from the level of 1.0019 was closed by Stop Loss. As a result, the day ended with a minimal loss. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000). Analysis of EUR/USD, 1-hour chart You can see that the pair continues to rise on the one-hour chart, has overcome the Ichimoku cloud on the 24-hour timeframe, as well as all the Ichimoku lines on the 4-hour timeframe. However, it was not possible to surpass its last local high, and there is no trend line or channel. Everything looks as if we are faced with a series of short-term trends and now the pair will go down 200-300 points. On Thursday, the pair may trade at the following levels: 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as the Senkou Span B (0.9912) and Kijun-sen lines (0.9919). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events are expected in the European Union today, but in America the main report of the week on inflation will be released. So today the pair can show a fairly strong trend movement. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 06:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326719
Bank of England Faces Rate Decision: Uncertainty Surrounds Magnitude of Hike

A slower decrease of inflation has made Jerome Powell confused recently. Today's headline inflation print is expected to hit less than 8%

ING Economics ING Economics 10.11.2022 09:03
Today's focus will be the October US CPI release which will have implications for Fed policy, risk assets and the dollar. News from Canada that a mortgage investment fund is suspending redemptions could also be a first signal of the cross-over from higher interest rates to financial stability risk. We would continue to favour the dollar USD: What has core inflation got to say? At last month's FOMC meeting, Federal Reserve Chair Jay Powell concluded the press conference with a sense of frustration that inflation had not fallen more quickly. Inflation data understandably is now one of the biggest market movers of the month and today sees the US October CPI release. Headline inflation is expected to dip to 7.9% from 8.2% year-on-year, but the market's focus will be on the core rate - i.e. what is happening to underlying prices outside of food and energy. Here, the market will be looking at the core monthly figure - expected at 0.5% after two months at 0.6% month-on-month. Our US economist, James Knightley, favours a 0.5% core MoM figure, with the range of analyst expectations stretching from 0.3% to 0.6%. James says medical costs have been generating upside pressure of late, but that pressure could start to ebb. Elsewhere, core goods prices are being lowered by falling freight costs, the strong dollar, and weakening demand, while used car prices should fall and anecdotal evidence of rent declines is spreading. However, as Chair Powell noted last month, the point when rents start dragging down core CPI may be some time off. Today's release will have some bearing on what the market prices for the Fed meeting on 14 December, where a 56bp rate increase is currently priced. Today's CPI data will not be the final say on that decision (we have jobs data and another CPI release before then), but it can set the tone regarding the Fed's comfort level. Expect the dollar and the positively correlated bond and equity markets to trade off today's data - where any upside surprise could do some damage to the recent benign risk environment and end the recent correction in the dollar. Separately, an item catching our attention was that a Canadian fund, the Rompsen Mortgage Investment Fund, had halted redemptions since 'loan payoff activity remains suppressed'. The real estate sector is on the front line when it comes to aggressive rate increases and we wonder whether investors will view this as one of the first casualties and a possible cross-over from macro risk (recession) to financial stability risk. Let's see how the Canadian dollar deals with the news today and whether any pressure builds on those currencies normally associated with stretched housing markets, which beyond Canada are normally seen as those in Scandinavia. DXY to trade 109.50-110.50 range, with a slight upside bias. Chris Turner EUR: Rangebound EUR/USD continues to drift towards the upper end of recent ranges. As above, the US inflation data will be a key driver. Despite the recent recovery in equities, the external environment is still mixed, including lockdowns spreading across China. For today, the eurozone data calendar is light and we have a few European Central Bank speakers at an event at 14CET. The market is currently split on whether the ECB hikes 50bp or 75bp at the 15 December meeting. Our team favours 50bp. Today's US data is big enough to put an end to the recent EUR/USD correction - should inflation surprise on the upside.  Chris Turner GBP: House prices starting to feel the crunch Earlier today we saw the RICS house price balance data for October. UK estate agents now see house prices declining for the first time since the summer of 2020 - a clear response to the recent surge in mortgage rates. This will again question the market's pricing of the Bank of England's tightening cycle, where we think rates priced at 4.65% next summer are way too high. Sterling saw a big intra-day sell-off yesterday - which looked more flow than macro-driven. 1.1150 is a clear target for GBP/USD were the dollar to strengthen today. Again, we doubt any gains over 1.15 endure. Chris Turner CEE: Czech inflation to test CNB new forecast Today, we will see inflation data for October in the Czech Republic. We expect a further rise from 18.0% to 18.2% YoY. However, the main issue, as in recent months, is energy prices and since October the impact of government measures on CPI. The unclear approach of the statistical office is reflected in the extremely wide range of surveys from 17.2% to 19.0% YoY. The Czech National Bank expects a decline to 17.4% YoY. However, it is clear that we can expect surprises on both sides. We believe the CNB has a solid buffer for upside surprises and any market bets on additional central bank rate hikes would be short-lived. The Czech koruna has been moving to stronger levels since the November meeting and briefly touched its strongest levels since the beginning of February. Higher inflation should again support the interest rate differential and keep the koruna at its current strong levels.  Later today, National Bank of Poland Governor Adam Glapinski is set to speak in a press conference after the Bank left the policy rate unchanged at 6.75% yesterday, against the consensus of a 25 basis point hike. The central bank's new forecast brought lower economic growth and also higher inflation, especially next year. The post-meeting statement indicates that the NBP targets a reversal of the inflation trend and wants to facilitate a soft landing for the economy rather than bring inflation down to 2.5% as quickly as possible. Today we will hear more details of the governor's view and what we can expect next from the NBP. As we mentioned earlier, we see the zloty as vulnerable and just yesterday it lost 0.9% against the euro. We expect it to continue to trade above 4.75 EUR/PLN today.  Frantisek Taborsky  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

The Elections In The US Can Significantly Increase The Negative Trends

InstaForex Analysis InstaForex Analysis 10.11.2022 10:27
It seems that the Republicans were not so strong in the US, so the results of the midterm elections remain unclear. This means that the balance of power in the two houses are unchanged, which significantly affected market sentiment and led to a sell-off in the US stock market. Dynamics of trading in Europe and Asia was also influenced. Earlier, many were betting heavily that a noticeable shift in power, at least in Congress, will lead to cuts in various financial costs and tax increases. But this did not happen, which was the reason for yesterday's disappointment in the markets. In addition, data on US consumer inflation is due, which is expected to grow by 0.6% m/m and fall to 8.0% y/y in October. This is also important as it will affect the dynamics in the markets, particularly in the demand for the dollar. So far, the disappointment that befell the markets as a result of the elections in the US can significantly increase the negative trends and lead to a new collapse in the stock markets, primarily in the US. And if the data shows an increase in consumer prices, albeit insignificant, the Fed will have every reason to raise the discount rate again in December by 0.75%. In this case, the dollar will definitely receive support again against the backdrop of because of a likely resumption in growth of Treasury yields. But if the inflation rate goes down, even if slightly, there will be a new wave of purchases as investors will once again expect the Fed to gradually reduce the pace of its rate increases. Forecasts for today: XAU/USD Gold is trading below 1713.60. If dollar comes under pressure in the wake of the release of US inflation data, prices will grow to 1730.00 after overcoming the level of 1713.60. EUR/USD The pair is consolidating in the range of 0.9987-1.0090 ahead of the release of inflation data in the US. If they show growth, dollar will rise again and the pair may fall to 0.9895. But if it decreases, the pair will surge above 1.0090 and head to 1.0200.   Relevance up to 07:00 2022-11-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326727
German Business Confidence Dips, ECB's Lagarde Hosts Central Banking Conference in Portugal, EUR/USD Drifts Higher

The World's Leading Economies Not Doing Well And This Is Keeping High Demand For USD

InstaForex Analysis InstaForex Analysis 10.11.2022 12:42
Why did the euro shoot up in early November? The answer to this question can be easily found in the securities market. In October, European stock indices rose by 11% compared to 5–6% for their US counterparts. German bond yields edged up amid hawkish rhetoric from members of the ECB's Governing Council, including a higher peak deposit rate than the 3% expected by investors. The flow of capital from North America to Europe has been the catalyst for the EURUSD rally, which is one step away from completion. Indeed, despite the changed dynamics of stocks, bonds and other financial assets, their ratios still testify to the persistence of the downward trend in the main currency pair. A typical example is the interest rate swap market. Dynamics of EURUSD and interest rate swap differential Plus, the US dollar rarely falls when the Fed hasn't done its job of tightening monetary policy and the global economy is on its last legs. It may have seemed to some that falling gas prices in the eurozone would allow it to avoid a recession, and thanks to a strong labor market, the US economy would make a soft landing. Alas, the substantially increased electricity bills for European households suggest otherwise, as is the slowdown in consumer spending in the US and the depletion of their savings and falling property prices. According to UBS, these data indicate that the US is in a hard landing. If things are not going well in the world's leading economies, including the US, the eurozone and China, causing global business activity to decline, then demand for the dollar as the main safe-haven asset should remain strong. Dynamics of global business activity Keeping the trump cards "bears" on EURUSD allows large banks and investment companies to argue that the current rise of the pair is a temporary phenomenon. There can be no question of any change in the downward trend. At least for now. So TD Securities claims that in 2023 the USD index will lose 10% of its value, but its collapse will begin only in the second quarter, and not now. The return of the US dollar to the game will most likely be associated with strong inflation statistics in the US. Just yesterday we discussed the question why the Fed looks more at the monthly dynamics of indicators than at the annual one. And forecasts of +0.5–0.6% MoM on consumer prices and core inflation do not give the Fed reason to relax. With such dynamics of CPI, the chances of a 50 bps increase in the federal funds rate in December will fall from the current 52%, which will support the "bears" on EURUSD. Technically, the Three Indians reversal pattern is being implemented on the daily chart of the pair, as expected. I recommended selling euros from the levels of $1.007–1.008, which by that time were current. Due to the formation of an internal bar, we have the opportunity to increase short positions on EURUSD on a breakout of support by 0.995.   Relevance up to 10:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326769
S&P 500 ended the session 1.4% higher. This evening Japan's inflation goes public

Fed's Nael Kashkari called the deliberation on a pivot "premature". Eurodollar trading close to 1.00

Conotoxia Comments Conotoxia Comments 10.11.2022 13:58
This year the word inflation may be considered the word of the year. It looks like it might not lose its popularity as the year comes to an end, and still, the phenomenon of rising prices in the economy may arouse great interest. Today we will learn the inflation rate for the United States, on which further decisions of the Federal Reserve on interest rates may depend. The above decisions may in turn affect the behavior of the U.S. dollar, stock market indices or commodities. According to the tradingeconomics website, the annual inflation rate in the US may retreat to 8% in October from the 8.2% recorded the previous month. Core inflation is also possible to fall to 6.5% from a 40-year peak of 6.6%, according to market consensus. At the same time, it seems expected that the monthly inflation rate could accelerate to 0.6% in October from 0.4% in September, as gasoline prices rose for the first time in four months. U.S. inflation was recorded at 8.2% in September, the lowest in seven months, compared to 8.3% in August. What are Fed officials saying? U.S. Federal Reserve Bank of Richmond President Tom Barkin shared on Wednesday that if the central bank decided to retreat due to "fear of a slowdown, inflation would come back even stronger." Barkin stressed that while the Fed's current monetary policy path could lead to a slowdown, as the central bank aims to bring "supply and demand back into balance" and pull inflation down to 2%, BBN reported. Meanwhile, Federal Reserve Bank of Minneapolis President Neel Kashkari said discussion of a pivot in current Fed monetary policy is "completely premature." He said that the central bank's dual mandate of keeping inflation at 2% and maximizing employment will encounter problems "at some point," but that moment is "very far away." Kashkari stressed that wages are not driving inflation, but rather trying to catch up with it. He expressed regret that the Fed did not start raising interest rates earlier, but noted that inflation will continue to be high due to external factors, according to the BBN release. Dollar exchange rate ahead of inflation data Source: Conotoxia MT5, EURUSD, Daily The EUR/USD pair's exchange rate seems to be consolidating at the 1.0000 level ahead of the release of US inflation data. This could be a potential resistance level, the overcoming of which could lead to a possible appreciation of the euro towards 1.0300. However, for this to happen, it is possible that the inflation data would have to be slightly weaker than market expectations. Meanwhile, potential support could be in the region of 0.9750. The inflation data will be published today at 14:30 GMT+1. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
RBI's Strategic INR Support: Factors Behind India's Stable Currency Amidst Global Challenges

The Positive Close Of The New York Stock Exchange, A Significant Part Of The Indices Increased

InstaForex Analysis InstaForex Analysis 11.11.2022 08:00
At the close of the New York Stock Exchange, the Dow Jones rose 3.70% to a one-month high, the S&P 500 rose 5.54% and the NASDAQ Composite rose 7.35%. Dow Jones  Salesforce Inc was the top gainer among the components of the Dow Jones in today's trading, up 14.24 points or 10.02% to close at 156.30. Quotes of Apple Inc rose by 12.00 points (8.90%), ending trading at 146.87. Home Depot Inc rose 24.95 points or 8.70% to close at 311.70. Shares of McDonald's Corporation led the decline, losing 1.91 points (0.69%) to end the session at 275.88. Merck & Company Inc was down 0.30 points (0.30%) to close at 101.89 while Amgen Inc was up 0.47% or 1.36 points to close at 291. .01. S&P 500 Leading gainers among the S&P 500 index components in today's trading were Invesco Plc, which rose 17.85% to hit 18.75, Caesars Entertainment Corporation, which gained 17.83% to close at 50.62, and shares of T. Rowe Price Group Inc, which rose 16.36% to close the session at 124.65. The least gainers were McKesson Corporation, which shed 4.12% to close at 370.32. Shares of Cardinal Health Inc shed 2.79% to end the session at 77.93. Quotes of Altria Group decreased in price by 2.19% to 44.22. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Fast Radius Inc, which rose 156.19% to hit 0.26, SHF Holdings Inc, which gained 85.78% to close at 3.79, and also shares of EpicQuest Education Group International Ltd, which rose 73.79% to close the session at 1.79. The least gainers were Apyx Medical Inc, which shed 60.45% to close at 1.74. Shares of Veru Inc lost 53.56% and ended the session at 6.97. Quotes of AGBA Acquisition Ltd decreased in price by 50.89% to 5.50. Numbers On the New York Stock Exchange, the number of securities that rose in price (2830) exceeded the number of those that closed in the red (347), while quotes of 80 shares remained virtually unchanged. On the NASDAQ stock exchange, 3,100 companies rose in price, 694 fell, and 216 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 9.81% to 23.53, hitting a new monthly low. Gold Gold futures for December delivery added 2.68%, or 45.95, to $1.00 a troy ounce. In other commodities, WTI crude for December delivery rose 0.55%, or 0.47, to $86.30 a barrel. Futures for Brent crude for January delivery rose 0.90%, or 0.83, to $93.48 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 2.03% to 1.02, while USD/JPY shed 3.97% to hit 140.62. Futures on the USD index fell 2.55% to 107.65.     Relevance up to 03:00 2022-11-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/300576
The EUR/USD Price May Fall Under 1.0660

The Euro (EUR) Will Be Under Pressure Today

InstaForex Analysis InstaForex Analysis 11.11.2022 08:11
Yesterday's release of data on inflation in the US stirred up the markets. So much so that the prospect of completing the upward correction on September 28 was broken from the technical side, options with medium-term growth (several months) appeared, and additional multiple scenarios appeared within this emerging growing trend. One of them is a long sideways trend in the range of 0.9710-1.0360, this range is marked on the weekly chart. In fact, this is a continuation of the correction of some long-term downward trend, the correction can continue to the 138.2% Fibonacci level, to the 1.0950 area, and the long-term trend can continue to 0.9340 or lower. The option with a flat in the range of 0.9710-1.0360 is still considered as the main one. The idea of this option is based on the idea that the market is waiting for the next Federal Reserve meeting on December 14, which should confirm the assumptions about raising the rate by no more than 0.50%. To date, the price has reached the target level of 1.0205 and is slightly rolling back from it. Yesterday's growth was 196 points. The greatest dynamics of the euro (but falling) was on March 19, 2020 (-247 pp) at the beginning of the anti-COVID hysteria. Now we are waiting for the price to roll back to the range of 1.0100/20. If the range stays, then the price may then try to overcome 1.0205. If the range does not, then the bears' next target will be 1.0051. The price even formed a divergence with Marlin on the four-hour chart. Most likely the euro will be under pressure today and on Monday. We are waiting for the price to drop to the range of 1.0100/20. Further according to the circumstances described above.     Relevance up to 04:00 2022-11-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326847
The Price Of EUR/USD Pair Will Develop Sideways Movement

The Inflation Report Was The Reason For The Growth Of The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 11.11.2022 08:17
Analysis of EUR/USD, 5-minute chart Yesterday, the euro/dollar pair continued to fall quietly until the US inflation report was released. In principle, there is nothing to analyze on Thursday other than this report. The consumer price index in America slowed down to 7.7% y/y from 8.2%. Thus, the slowdown was 0.5%, which is quite a lot. We have reiterated that the more and faster inflation slows down, the less reason the Federal Reserve has to continue aggressively raising rates. After all, the rate is being raised precisely in order to curb inflation! Of course, 7.7% is still too far from the target 2%, but inflation should not only come down in the event of continuous Fed rate hikes. At this time, the rate exceeds the "neutral" level, so monetary policy will in any case have a "cooling" effect on the economy. Therefore inflation in any case should fall. The only question is at what speed. And the Fed's succeeding decisions depend on this speed. In regards to trading signals, the picture on Thursday was simply amazing. One signal was formed during the day, available for processing, but with one big "but". It was formed exactly 5 minutes before the release of the inflation report. We usually recommend not entering the market before important events, but experienced traders could try to work out this signal by placing Stop Loss at a distance of 20-30 points. In this case, it was possible to make a profit of up to 200 points. But remember that the price could easily go in the opposite direction, as the market does not always react logically. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000). Analysis of EUR/USD, 1-hour chart You can see that the pair continues to rise on the one-hour chart, has overcome the Ichimoku cloud on the 24-hour timeframe, as well as all the Ichimoku lines on the 4-hour timeframe. Yesterday, naturally, the inflation report was the reason for the growth. If it weren't there or if it turned out to be weak, then the dollar could continue its growth and we would see a reverse movement. Therefore, it is not worth making loud conclusions about the euro's strength based on yesterday. On Friday, the pair may trade at the following levels: 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, 1.0340-1.0366, as well as Senkou Span B (0.9912) and Kijun-sen (1.0019). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events are planned again in the European Union, and a report on consumer sentiment will be released in America today. However, today the pair may continue to trade in a volatile manner. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 01:00 2022-11-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326837
The Upside Of The EUR/USD Pair Remains Limited

Technical Outlook Of The Euro To US Dollar Pair (EUR/USD) By Analytical Expert Of InstaForex

InstaForex Analysis InstaForex Analysis 11.11.2022 08:19
EUR/USD has now broken clearly above resistance at 1.0095 removing the risk of the rally from 0.9538 to 1.0095 as an A-B-C correction. So, we should at least expect EUR/USD to continue higher to 1.0302 and ideally even higher. That said, we see strong resistance building up in the 1.0228 - 1.0363 area and expect the rally to be rejected for a while for a setback towards 1.0000 before the next upside assault should be expected. According to our long-term scenario, the correction from 1.6038 to 0.9538 is complete. We consider the ongoing price action as part of the new impulsive price action and ultimately a rally above the former peak at 1.6038 but that is years ahead in the future.   Relevance up to 07:00 2022-11-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/300608
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

The US Dollar (USD) Suffered Heavy Losses | UK Gross Domestic Product (GDP) Grew

TeleTrade Comments TeleTrade Comments 11.11.2022 09:05
The upbeat market mood remains intact on the last trading day of the week as investors cheer the soft inflation data from the US and news of China easing the Covid-related restrictions. The US Dollar Index continues to edge lower below 108.00 after having lost more than 2% on Thursday and global stock indices push higher. Bond markets in the US will be closed in observance of the Veterans Day holiday but Wall Street will operate at the usual hours. The US economic docket will feature the University of Michigan's Consumer Sentiment Survey (preliminary) for November and investors will keep a close eye on central bank speakers ahead of the weekend. The US Bureau of Labor Statistics announced on Thursday that inflation in the US, as measured by the Consumer Price Index (CPI), declined to 7.7% on a yearly basis in October from 8% in September. The Core CPI, which excludes volatile food and energy prices, fell to 6.3% from 6.6% in the same period. With both of these readings coming in below market expectations, the CME Group FedWatch Tool's probability of a 50 basis points Fed rate hike in December jumped above 80% from 50% earlier in the week. In turn, major equity indexes in the US registered impressive gains, the US Dollar suffered heavy losses and the benchmark 10-year US Treasury bond yield declined toward 3.8%, losing nearly 7% on the day. US Inflation Analysis: Hiking is hard in the fog, Dollar set to decline (until the next CPI). Earlier in the day, China's National Health Commission announced that they have decided to reduce the required quarantine times for travellers and people who had close contact with identified Covid cases. The Shanghai Composite Index was last seen rising nearly 2% on the day and Hong Kong's Hang Seng Index was up 6.8%. Reflecting the risk-positive market environment, US stock index futures are rising between 0.5% and 0.7%.  The UK's Office for National Statistics (ONS) reported on Friday that the Gross Domestic Product (GDP) grew at an annualized rate of 2.4% in the third quarter, compared to the market expectation of 2.1%. Other data from the UK showed that Industrial Production expanded by 0.2% on a monthly basis in September. GBPUSD largely ignored the latest data and was last seen moving sideways slightly above 1.1700. EURUSD registered impressive gains on Thursday and continued to edge higher during the Asian trading hours on Friday. The pair was last seen trading at its highest level since mid-August slightly above 1.0200. USDJPY lost more than 400 pips on Thursday and touched its weakest level in seven weeks near 140.00 before staging a rebound on Friday. At the time of press, USDJPY was up 0.5% on the day at 141.65. Fueled by plunging US Treasury bond yields, gold price rose nearly 3% on Thursday and registered one of its largest one-day gains of the year. XAUSD is currently trading above $1,750 and it's up nearly 5% since the beginning of the week. Bitcoin gained 10% on Thursday after having lost more than 20% in the first half of the week. BTCUSD, however, seems to be having a difficult time gathering bullish momentum early Friday as markets keep a close eye on developments surrounding the FTX drama. As of writing, Bitcoin was down nearly 2% on the day at $17,250. Ethereum trades in negative territory at around $1,250 early Friday following Thursday's 17% gain. California financial regulator announces FTX investigation. Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Cryptos bounce as FTX CEO vows to do right by investors.
The EUR/USD Pair Maintains The Bullish Sentiment

The Price Of The EUR/USD Pair Will Meet With The Support

InstaForex Analysis InstaForex Analysis 14.11.2022 08:04
The euro continued rising on Friday and reached the upper limit of our estimated range, marked on the weekly chart. Now you can expect a small rollback, if the price chooses a medium-term development of growth (1.07), or a deeper rollback if a flat trend develops. The first target of the correction is the support at 1.0205. The daily Marlin Oscillator has charted a downward reversal from the overbought zone. If, nevertheless, the growth continues, then the price will face resistance at 1.0470 – a low on April 28. The Marlin Oscillator is also turning down on the four-hour chart. Corrective decline may continue below 1.0205, to the range of 1.0100/20, in which the price will also meet with the support of the MACD line.   Relevance up to 04:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326988
The EUR/USD Pair Chance For The Further Downside Movement

The Situation Of The EUR/USD Pair Is Close To Ideal, The Euro (EUR) Is Expected To Grow

InstaForex Analysis InstaForex Analysis 14.11.2022 08:12
Analysis of EUR/USD, 5-minute chart Last Friday, the euro/dollar pair continued to grow non-stop and by the end of the day it was near the level of 1.0366. A week ago it was hard to imagine what could provoke such a sharp strengthening of the euro. As it turned out, one report on US inflation with a deviation of 0.5% from the previous value was enough. We have already said that from our point of view, such a movement does not correspond to the nature and strength of the single report that provoked this movement. But the market has its own opinion on this matter. The euro has certain grounds for growth, but at the same time, it still has quite a lot of grounds for falling. In any case, there is now an ascending trend line, which perfectly visualizes what is happening in the market. In addition, the price is confidently above the lines of the Ichimoku indicator, so most of the technical factors are now on the side of the pair's growth. As for trading signals, the situation here is close to ideal. The first trading signal was formed immediately at the opening of the European trading session near the level of 1.0195. Afterwards, the price rose to the level of 1.0269, from which it initially bounced. At this moment, long positions should have been closed in profit of about 45 points. Shorts also had to be opened, and the pair, fortunately, managed to go down 15 points, so Stop Loss had to be set, at which the position was closed. Then a new buy signal was formed near 1.0269, but it was also closed by Stop Loss at breakeven. The last signal to buy near the same 1.0269 should no longer be worked out, because at that moment two false signals had already been formed near this level. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000). Analysis of EUR/USD, 1-hour chart You can see that the pair continues to rise on the one-hour chart, has overcome the Ichimoku cloud on the 24-hour timeframe, as well as all the Ichimoku lines on the 4-hour timeframe. Last week, the reason for the growth was, of course, the US inflation report. If it didn't exist or if it turned out to be weak, then we could see a reverse movement. Now, until the moment when the pair settles below the trend line, we should expect the euro's growth. On Monday, the pair may trade at the following levels: 1.0072, 1.0124, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as the Senkou Span B (0.9912) and Kijun-sen (1.0147). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. The European Union will publish a report on industrial production, meanwhile, there's nothing in the US. We believe the pair should start correcting today. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 01:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326976
The EUR/USD Price May Fall Under 1.0660

Technical Analysis Of The EUR/USD Pair By Torben Melsted

InstaForex Analysis InstaForex Analysis 14.11.2022 08:20
EUR/USD has rallied nicely and more upside progress is expected towards at least the 161.8% extension target at 1.0480. With the break above resistance at 1.0302, our preferred scenario of a long-term bottom being in place has been confirmed. So, we will be looking for much more upside progress in the weeks and months ahead. Of course, it will not be in a straight line, but the downswings should be corrective in nature and only temporary setbacks in the underlying uptrend. Relevance up to 06:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/300805
The Euro To US Dollar Instrument Did Not Change In Value

The Euro To US Dollar Pair Has Room To Grow (EUR/USD)

InstaForex Analysis InstaForex Analysis 14.11.2022 08:26
On Friday, the EUR/USD pair extended gains despite an empty macroeconomic calendar. Nevertheless, jitters were still felt in the market, resulting in a weaker dollar against the pound. The fact that the US inflation rate has started to slow down faster means the Federal Reserve may reduce the pace of tightening. Nevertheless, fundamentally, the situation has not changed. The interest rate is now seen at 5%, meaning there should be a 0.5% increase in December and two 0.25% hikes in early 2023. That is, it is likely to be just the reduction that Powell and the FOMC members spoke about last week. One successful inflation report will hardly make the Federal Reserve change its stance. Since the interest rate will reach 5% anyway, it turns out that the inflation report has had no importance. Moreover, it remains to be seen whether inflation will keep falling every month from now on. It may well be that we will see a modest decrease in the figures or non at all next month. Technically, the pair has room to grow although a week ago, it seemed unlikely that the uptrend would continue. In the H4 time frame, the quote is above the moving average, with the lower linear regression channel heading up and the upper one reversing to the upside. In the H24 time frame, the price broke through the Ichimoku cloud. These technical factors indicate the continuation of the uptrend. It remains to be seen whether fundamental or geopolitical factors will not spoil the picture, as they are the main reason behind the fall in risk assets in 2022. Democrats keep Senate majority Last week, the midterm election was held in the United States. Various reliable media sources report that Democrats will keep the Senate, as control of the House of Representatives remains undecided. Yesterday, it became known that Democrats would keep the key 50 seats in Senate. If seats were equally divided, it would be the vice president to cast the decisive vote. To win in the US House of Representatives, one of the parties must reach 218 seats. As of Sunday, 211 Republicans won House seats and Democrats won 204 seats. Even if Democrats do not win control of the lower house, they will still be able to block any decisions and proposals of Republicans in the Senate. Therefore, one thing is clear for now: the power situation in the United States has not changed, which means that Republicans have lost the midterm election again. On November 14th, the 5-day average volatility of EUR/USD totals 168 pips and is evaluated as high. On Monday, the pair is expected to move in the range between 1.0186 and 1.0521. Heiken Ashi's downward reversal will mark the beginning of a bearish correction. Closest support levels: S1 – 1.0254 S2 – 1.0132 S3 – 1.0010 Closest resistance levels: R1 – 1.0376 R2 – 1.0498 R3 – 1.0620 Outlook: The EUR/USD pair keeps moving north. So, long positions could be held with targets at 1.0498 and 1.0521 until Heiken Ashi reverses to the downside. Short positions could be considered after consolidation below the moving average with targets at 1.0010 and 0.9888. Indicators on charts: Linear Regression Channels help identify the current trend. If both channels move in the same direction, a trend is strong. Moving Average (20-day, smoothed) defines the short-term and current trends. Murray levels are target levels for trends and corrections. Volatility levels (red lines) reflect a possible price channel the pair is likely to trade in within the day based on the current volatility indicators. CCI indicator. When the indicator is in the oversold zone (below 250) or in the overbought area (above 250), it means that a trend reversal is likely to occur soon.   Relevance up to 01:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326980
The Euro May Attempt To Resume An Upward Movement

Technical Outlook Of The EUR/USD Pair In Long And Short Positions

InstaForex Analysis InstaForex Analysis 14.11.2022 08:31
Analysis of transactions in the EUR / USD pair The test of 1.0244 happened when the MACD line went up quite a lot from zero, which limited the upward potential of the pair. In the afternoon, sell-offs surged around 1.0317, prompting a price decrease of about 30 pips. No other signals appeared for the rest of the day. CPI in Germany, as well as forecasts for the EU economy, did not affect the market. But today, the upcoming report on industrial output and speeches of ECB representatives may prompt growth in euro, albeit not as rapid as last week's. By afternoon, the situation could even put as there are no statistics scheduled to be released. For long positions: Buy euro when the quote reaches 1.0325 (green line on the chart) and take profit at the price of 1.0383. Growth is likely to occur, especially if the statements by ECB representatives remain hawkish. But remember that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0283,, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0325 and 1.0383. For short positions: Sell euro when the quote reaches 1.0283 (red line on the chart) and take profit at the price of 1.0231. Pressure will return after unsuccessful consolidation above monthly highs and weak reports on the eurozone. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0325, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0283 and 1.0231. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327006
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

Inflation In The Eurozone Will Affect Risk Appetite

InstaForex Analysis InstaForex Analysis 14.11.2022 09:25
The previous week ended with a noticeable increase in risk appetite and weaker demand for dollar. The main reason was the growing purchases of government bonds in the US, accompanied by a strong drop in yields. The scenario happened because of the latest inflation data in the US, which showed a sharp decrease in the year-on-year ratio and growth in the month-over-month one. Markets have been hoping for this kind of positive news for a long time, believing that the measures taken earlier by the Fed put further pressure on the economy. Now that the figures improved, the US central bank may start easing the pace of rate increases, then take a break. Much will depend on the values of inflation indicators for November, which will be presented in December. If they show, if not a continuation of a strong decline, but at least a stabilization or a slight decrease, then a strong rally may occur in all markets without exception. It could be accompanied by the depreciation of dollar and decrease in Treasury yields. Be that as it may, positive sentiment will continue today. Although stock indices in Europe and the US remain in negative territory this morning, everything may change by the start of the US trading session. In this case, dollar will continue to weaken, then decline further towards the end of the week, especially if the published data on retail sales and their volumes show better values than expected. Data on consumer inflation in the euro area is also important as its figure will affect risk appetite. US statistics will also play an important role since the very position of the ECB on the issue of further aggressive rate hikes remains unclear. Forecasts for today: EUR/USD The pair is trading above 1.0300. If market sentiment worsens, there will be a decline to 1.0235. GBP/USD The pair is trading above 1.1735. If buying pressure remains, it will rise further to 1.1900. But if market sentiment worsens, there will be a decline to 1.1635.   Relevance up to 08:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327022
FX: The SNB Is Getting Its Stronger Swiss Franc Via Gains Against The Dollar

According to ING, dollar index may reach 105. Swiss National Bank talks selling Forex reserves

ING Economics ING Economics 14.11.2022 09:44
FX markets are struggling to come to terms with last week's huge correction in global asset markets, which owed as much to one-way positioning as it did to a re-assessment of the US monetary/China macro story. In this quiet week for data, the correction could have a little more to run. However, this should be good news for those needing to buy dollars USD: Not very often that DXY falls 4% in a week You only need one hand to count the number of times that DXY (a trade-weighted measure of the dollar) has fallen 4% in a single week. The severity of last week's correction owes in large part to the fact that dollar ownership has been the most 'crowded trade' in the global investment community. Equally, that community was substantially underweight equities and last week's combination of the softer core US CPI data and some supportive measures in China was the catalyst for a huge short squeeze in risk assets. This week is a quiet one for data and central bank policy action - meaning it is hard to rule out this correction running a little further. Could the DXY correction extend to 105 (from 106.90 currently)? Yes, but we would think 105 might be the extent of it. Assessing how far position adjustment can drive asset classes is always a challenging task, but some of the FX moves have come very far indeed. For example, USD/KRW in a few sessions has retraced half of the January-October rally. That does seem a little excessive in that the Fed has yet to sound the 'all-clear' on its battle with inflation. Indeed, Fed hawk Christoper Waller said that 'we've still got a ways to go' before the Fed stops raising rates - comments which have stopped the fall in US rates. In fact, we have only seen a modest 20-30bp repricing of the Fed cycle over the last three days - not particularly large by this year's standards. For those short dollars, the recent correction will be a welcome reprieve. There are no guarantees that these better levels will last, however. The Fed is still tightening and 2023 world growth forecasts are still being cut - including the IMF recently warning of even lower world growth than the downward revision to 2.7% made in its world economic outlook last month. The US data calendar is light today and the focus will be on; i) President Biden and Xi meeting at the G20 in Indonesia and ii) Fed speakers in the form of Lael Brainard (dove) and John Williams (mild hawk). Let's see whether this pair wants to push back against the big easing of financial conditions that the recent risk rally and softer dollar have delivered.  We do have a preference for DXY going higher later this year, but we have to allow position adjustment to run its course. That could see DXY trade 106.50-107.50 today. Chris Turner  EUR: Caught out The severity of the EUR/USD correction has caught out many (including ourselves). As above, this largely looks like a function of position adjustment. Even the European Central Bank's Luis De Guindos said on Friday that he felt markets had overreacted to the US CPI data. The very difficult question is whether this short EUR/USD squeeze has run its course near 1.0365 or needs to trade higher still. Given the depth, conviction, and one-sided nature of long dollar positioning (quite understandable given a sustained dollar rally since summer 2021), we all need to be careful about prematurely calling an end to this correction. Indeed, EUR/USD could easily trade to 1.05 were conditions/data to fall into place. It is not a particularly busy week for the eurozone data calendar, but there are lots of ECB speakers including several today. Pricing of the ECB tightening cycle has remained quite resilient over recent days - prompting quite a sharp narrowing in the two-year EUR:USD swap differential - normally a EUR/USD positive. Those caught short EUR/USD may mean EUR/USD struggles to trade under 1.0250/70 today. Elsewhere, EUR/CHF came lower on Friday as the Swiss National Bank sounded hawkish again and said it could sell FX reserves. This looks like a reference to being on both sides of EUR/CHF, rather than the continued buying of EUR/CHF seen over recent decades. We favour EUR/CHF lower over coming months as the SNB tries to keep the real exchange rate stable. Chris Turner GBP: This is going to hurt The UK Chancellor, Jeremy Hunt, has been ramping up the rhetoric that Thursday's autumn statement is going to hurt - comprising tax rises for all and a large cut in government spending. None of the choices are politically palatable, but failure to deliver would trigger another round of Gilt and sterling sales. 1.1670/1.1750 could be the short-term corrective low for GBP/USD before a possible push to 1.20 on a further short-squeeze (short GBP had been a conviction call amongst fund managers). But in the bigger picture, even these current GBP/USD levels near 1.18 should prove attractive for those with GBP receivables. We suspect that cable may trade back to 1.10 over coming months. The UK data calendar is quiet today and more interest will be had in tomorrow's UK jobs and earnings data. Chris Turner CEE: Region to confirm strong levels due to global conditions The Central and Eastern Europe region will see a bit of a lull this week but will still have the attention of the markets. Today we start with the September current account results for Poland, the Czech Republic and Romania. The entire region has fallen into record deficits in recent months, and we do not expect much change in September either. Third-quarter GDP for Poland, Hungary and Romania will be published on Tuesday. In the Czech Republic, the result was already published two weeks ago (-0.4% quarter-on-quarter) slightly below market expectations. In Poland, we expect a return to positive (0.2% QoQ) in line with market expectations after a negative surprise in 2Q. In Hungary, we forecast a significant decline (-1.0% QoQ), below market expectations, but in any case, the economy is expected to slow down compared to 2Q. A contraction in the economy is also expected in Romania (-2.0% QoQ) compared to a strong second quarter. Also on Tuesday, we expect October inflation in Poland to be confirmed at 17.9% year-on-year. On Wednesday, Poland's core inflation will then follow, and we expect a further rise from 10.7% YoY to 11.2% YoY.  In the FX market, the CEE regional picture remains mixed. At the global level, EUR/USD has moved well above parity in recent days, supporting emerging markets. The gas story seems to be no longer a problem for this winter with record full storage and gas prices below 100 EUR/MWh. The sentiment in Europe has improved significantly over the past two weeks with the DAX index hitting its highest levels since June this year. Overall, all point to stronger CEE FX.   On the other hand, rates across the region have fallen significantly following a dovish result from the National Bank of Poland, a massive downside inflation surprise in the Czech Republic and lower US inflation. Interest rate differentials thus collapsed, pointing to weaker FX. Overall, we expect CEE to maintain current stronger levels and further benefit from favourable global conditions. However, the biggest focus will be on the Polish zloty, which did not have much opportunity to react to governor Adam Glapinski's press conference due to closed markets. Therefore, we expect pressure on a weaker zloty towards 4.75 EUR/PLN at the beginning of the week. The Hungarian forint is teetering between the incoming EU dispute headlines, but we believe it will hold slightly above 400 EUR/HUF. The Czech koruna should maintain its current very strong levels thanks to low inflation protection and no pressure on Czech National Bank. The Romanian leu remains far from the National Bank of Romania's intervention levels, and we believe the RON should benefit the most from global conditions in the region, testing the EUR/RON 4.88 levels.  Frantisek Taborsky  Read this article on THINK
The EUR/USD Pair: There Are Still No Sell Signals

US inflation reached 7.7%, then eurodollar has touched the highest level since summer

Conotoxia Comments Conotoxia Comments 14.11.2022 10:11
The end of last week brought a strong turnaround in the US dollar following the release of inflation data from the US. The annual inflation rate in the US slowed to 7.7% in October, the lowest since January. The consensus was for a reading of 8%. Following the publication, the EUR/USD exchange rate hit its highest since August 2022. In the United States, energy costs rose 17.6%. The slowdown was also seen in food (10.9% vs. 11.2% in September) and used cars and trucks (2% vs. 7.2%). Compared to the previous month, the CPI rose 0.4%, below expectations of 0.6%, tradingeconomics calculated. At the same time, the cost of medical services pushed the CPI down. Nonetheless, the data could still point to strong inflationary pressures and broad price increases across the economy, mainly in the services sector, while commodity prices benefited from some improvements in supply chains, according to data released Friday. As a result, the dollar index lost about 4% last week, as the lower inflation reading seemed to strengthen the case for a less aggressive tightening path from the Fed. Investors are betting that the U.S. central bank would limit the size of rate hikes to 50 basis points from December, after a series of 75 basis points over the past four meetings. Source: Conotoxia MT5, USDIndex, Daily Dollar exchange rate at the start of the week The dollar index rose toward 107 points on Monday, recovering slightly from near three-month lows after Federal Reserve Chairman Christopher Waller warned investors against too much optimism over a single inflation report and said the central bank "still has a long way to go" with interest rate hikes. Waller acknowledged that the Fed may slow the pace of interest rate hikes at upcoming meetings, but stressed that markets should focus on the final level, which is possibly still "a long way off," rather than the pace of any move, tradingeconomics reported. Meanwhile, Boston Federal Reserve President Susan Collins said Friday that she believes the Fed will continue to raise interest rates at upcoming FOMC meetings. The next FOMC meeting is scheduled for December 14. Commenting on the latest inflation data for October, Collins said it is still too early to determine the peak of the Fed's rate cycle. However, she noted that the risk of excessive tightening has increased, BBN reported. Cryptogeddon continues On Monday morning, bitcoin cost less than $16,000, approaching a two-year low. This marks a drop of nearly 80 percent from last year's peak, bringing the current correction on BTC closer to similar percentage levels as after 2012 and 2016. (then BTC corrected by 86 and 83 percent from its peak). The FTX exchange has officially filed for bankruptcy, which may also involve problems for its affiliated companies (130 entities are in question) and its investors. Within days, FTX, one of the world's largest cryptocurrency exchanges, collapsed after concerns about its financial situation triggered a "run on the bank" and a wave of withdrawals from the exchange. It turned out that the exchange couldn't withdraw all of its customers' funds because it didn't have any. Fears of insolvency intensified after Binance abandoned its plan to acquire FTX. On top of that, Sam Bankman-Fried allegedly used customer funds to support the exchange's sister company, Alameda Research. Additionally, top-level employees of both FTX and Alameda are said to be looking for a way to leave the United States or are already outside the U.S., The target is said to be countries without an extradition treaty with the United States. In just one week, the price of bitcoin fell by 23 percent, ETH by nearly 25 percent, Solana took a dive of nearly 60 percent, and the Binance exchange token fell by 20 percent. The bitcoin cash seemed to lose the least during this time with a drop of 15 percent. Source: Conotoxia MT5, BTCUSD, Weekly Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Read the article on Conotoxia.com
Riksbank's Role in Shaping the Swedish Krona's Future Amid Economic Challenges

Eurozone Continue To Expect Weaker Production

ING Economics ING Economics 14.11.2022 13:41
The third quarter saw remarkably strong production as easing supply problems helped production growth. Don’t expect this to continue much from here on as new orders, production expectations and increasing inventories point to weakening production ahead Industrial production increased by 0.9% in September and that resulted in a total quarterly increase of 0.5% for 3Q. This was a surprise that added to the positive GDP figure for the quarter. It is most likely caused by fading supply side problems which industry has battled since mid-2020. This is helping backlogs of work to be dealt with, which is boosting production, despite survey data having disappointed consistently over recent months. In September, production categories were a mixed bag, so there was no broad-based improvement in production. Capital goods and non-durable consumer goods production saw strong growth – just like last month – while intermediate, durable consumer goods, and energy production all declined. Germany was the only large country that recorded growth, while France, Spain and Italy all saw production contract. While August and September both saw surprisingly strong production, there is little hope for this to be the start of a strong recovery. Businesses continue to report falling new orders as demand is fading and inventories have increased. For the winter months we, therefore, continue to expect weaker production as the catch-up effect for production is unlikely to last much longer. TagsGDP Eurozone   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Eurozone industrial production: a meaningful boost in September

Eurozone industrial production: a meaningful boost in September

Alex Kuptsikevich Alex Kuptsikevich 14.11.2022 21:52
According to the latest estimates, Eurozone industrial production added 0.9% for September and 4.9% y/y. The figures are much better than the expected +0.1% m/m and 2.8% y/y, showing that the euro-region economy is in no hurry to slip into recession despite high energy prices. The seasonally adjusted index was at its highest level in almost five years, remaining within the framework of multi-year global stagnation. The apparent reason for the sector's resilience is the massive backlog of orders formed on the back of the easing of pandemic restrictions. There are two sides to the solid industrial production figures in the Eurozone. The strong figures for September create a high base from which a further decline may seem particularly deep and painful. On the other side, they show the relative vitality of the European economy and its positive reaction to the collapse of the euro. In absolute terms, the Eurozone recession may not be as deep as feared a few months ago, despite high energy costs and a sharp rise in the ECB rate. We note that commodity prices have fallen significantly in recent months. A relatively strong economy by the start of the extreme hike cycle forms more room for an ECB rate hike, which is suitable for the euro. The EURUSD will likely face a few obstacles for the upside up to the area of 1.0400-1.0430, where the 200-day MA and the support of the pair in May-June are concentrated. Here, the pair could face local profit-taking, and there will be a fierce tug-of-war between the dollar bulls and the bears in the markets.
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

The ECB Should Consider The Interests Of All EU Members

InstaForex Analysis InstaForex Analysis 15.11.2022 08:00
The EUR/USD currency pair moved very calmly on Monday. We admit that we expected a noticeable correction on the first trading day of the week and throughout the week, but so far, our calculations have yet to be justified. So far, there is a clear upward trend for the euro/dollar pair, and, from a technical point of view, everything now speaks in favor of further growth of the euro currency. Recall that on the 24-hour TF, the price managed to overcome all the important lines of the Ichimoku indicator, so finally, we can witness a reversal of the long-term downward trend. At the same time, the "foundation" and geopolitics can break the entire "raspberry" of the European currency at any moment. After all, it is not the euro that is growing but the dollar that is falling. Let's read more: the dollar has been growing for almost two years, and traders have been busy buying American currency. And now they are reducing purchases, reducing the demand for the dollar, so the pair is growing, but this does not mean that the demand for the euro currency is growing. COT reports If we talk about the demand for a particular currency, it is best to turn to COT reports. However, they do not give a clear answer to what is happening in the minds of traders and investors. The net position on the euro among professional traders has long been "bullish," and the euro currency began to grow only in the last couple of weeks. Moreover, according to the logic of things, this "bullish" position should increase for the European currency to continue growing. Or it should decline against the US dollar. As we can see, there are certain reasons for the pair's growth in the future, but they still need to look more convincing as the factors for the growth of the US dollar at the beginning or middle of this year. We rely on technical analysis when we make forecasts and recommendations, so now we need to look more toward purchases. But at the same time, we must keep in mind that the current growth of the euro is quite doubtful from a fundamental background point of view. The EU inflation report will be quite formal. Industrial production The current week began with the publication of a report on industrial production in the EU. It turned out to be slightly better than predicted, which could support the euro on Monday. However, this is different from the scale of inflation or central bank meetings, so count on a long and strong market reaction. Let's go through the other events of the week in Europe. GDP The second estimate of the GDP report for the third quarter will be published today. The market is waiting for a slowdown in the growth rate of the European economy to 0.2% q/q. Still, in principle, all indicator estimates do not have much significance for the market. Some reactions may follow this report, but it is too "stretched" in time to "see" a reaction to it. Recall that three estimates are always published for GDP, which rarely differs much from each other. And in any case, the market is more interested in the ECB's monetary policy, which directly impacts GDP. The speech of ECB President  Thus, a much more important event will be the speech of ECB President Christine Lagarde on Wednesday. The ECB seems to have decided to raise the rate "to the bitter end" or at least "significantly" to lower inflation in the Eurozone as much as possible. This is good news for the euro, but the market needs to understand to what level the regulator will be ready to raise the key rate. We have already said earlier that not all member countries of the alliance can bear the high cost of borrowing relatively smoothly for their economies. The ECB should consider the interests of all EU members, so the rate will not rise to 5%, as, for example, in the USA. EUR/USD Christine Lagarde can refute this assumption or confirm it. She may want to do this, but her comments may dissuade traders from continuing to buy the euro currency (if they even have a place to be). So far, the euro is growing more on the fact that the Fed will stop raising its rate in a few months, and since traders had plenty of time to work out all the tightening of monetary policy, now the actions of the ECB, which is behind schedule from the Fed, are more important. The average volatility of the euro/dollar currency pair over the last five trading days as of November 15 is 168 points and is characterized as "high." Thus, we expect the pair to move between 1.0177 and 1.0513 on Tuesday. The reversal of the Heiken Ashi indicator downwards signals a new round of downward correction. Nearest support levels: S1 – 1.0254 S2 – 1.0132 S3 – 1.0010 Nearest resistance levels: R1 – 1.0376 R2 – 1.0498 R3 – 1.0620 Trading Recommendations: The EUR/USD pair continues to move north. Thus, we should stay in long positions with targets of 1.0498 and 1.0513 until the Heiken Ashi indicator turns down. Sales will become relevant again by fixing the price below the moving average line with targets of 1.0010 and 0.9888. Explanations of the illustrations: Linear regression channels – help to determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.       Relevance up to 01:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/327095
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

Technical Analysis Of The Euro/US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 15.11.2022 08:05
Technical outlook: EURUSD tested swing highs at 1.0358 on Monday, just below 1.0364, producing a Doji Candlestick pattern on the daily chart as seen here. A high probability remains for an evening star bearish signal to be produced indicating a potential drop in the next few trading sessions. The single currency pair is seen to be trading close to 1.0320 at this point in writing and prepares to drag lower towards 0.9950. EURUSD has taken out two resistances at 1.0200 and 1.0350 levels last week. This calls for a potential pullback from the current levels, before pushing further towards 1.0600, projected as the Fibonacci extensions on the daily chart. Having said that, also note that the larger-degree corrective wave might have terminated around 1.0364. EURUSD needs to at least produce a pullback towards the 0.9950-1.0000 area if not a bearish reversal, before resuming higher again. Also, note that the recent upswing between 0.9740 and 1.0364 could be worked upon in the next few trading sessions. The potential support zone is seen around 0.9900 and 1.0000 levels. The bullish structure stays until the 0.9740 immediate support remains intact. Trading idea: Potential bearish turn against 1.0450 Good luck!     Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/300973
Euro-dollar Support Tested Amidst Rate Concerns and Labor Strikes

The Close Of The New York Stock Exchange Was Mostly Red

InstaForex Analysis InstaForex Analysis 15.11.2022 08:09
At the close of the New York Stock Exchange, the Dow Jones fell 0.63%, the S&P 500 fell 0.89%, and the NASDAQ Composite index fell 1.12%. Dow Jones Merck & Company Inc was the top gainer among the components of the Dow Jones index today, up 2.39 points or 2.44% to close at 100.35. Quotes of Johnson & Johnson rose by 2.66 points (1.57%), ending trading at 171.91. Visa Inc Class A rose 1.86 points or 0.91% to close at 206.86. The least gainers were Walmart Inc, which shed 4.19 points or 2.94% to end the session at 138.39. Home Depot Inc was up 2.55% or 8.02 points to close at 306.92 while Dow Inc was down 2.24% or 1.19 points to close at 51. 95. S&P 500 Leading gainers among the components of the S&P 500 in today's trading were CF Industries Holdings Inc, which rose 5.21% to hit 107.76, PENN Entertainment Inc, which gained 4.59% to close at 37.63. as well as Moderna Inc, which rose 4.57% to close the session at 179.03. The least gainers were Hasbro Inc, which shed 9.86% to close at 57.16. Shares of Bath & Body Works Inc. lost 8.17% and ended the session at 33.06. Quotes of SVB Financial Group decreased in price by 6.73% to 219.76. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Opiant Pharmaceuticals Inc, which rose 111.58% to hit 20.10, Freight Technologies Inc, which gained 113.15% to close at 0.44, and also shares of Toughbuilt Industries Inc, which rose 72.27% to end the session at 3.79. The least gainers were Satsuma Pharmaceuticals Inc, which shed 83.22% to close at 0.68. Shares of Sellas Life Sciences Group Inc lost 43.96% to end the session at 2.55. Quotes of Nuwellis Inc decreased in price by 40.00% to 0.12. Numbers On the New York Stock Exchange, the number of securities that fell in price (2188) exceeded the number of those that closed in positive territory (956), while quotes of 111 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,257 companies fell in price, 1,538 rose, and 202 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 5.37% to 23.73. Gold Gold Futures for December delivery added 0.30%, or 5.30, to $1.00 a troy ounce. In other commodities, WTI crude for December delivery fell 4.24%, or 3.77, to $85.19 a barrel. Futures for Brent crude for January delivery fell 3.57%, or 3.43, to $92.56 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged at 0.21% to 1.03, while USD/JPY advanced 0.77% to hit 139.86. Futures on the USD index rose 0.53% to 106.73.       Relevance up to 03:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/300975
The EUR/USD Price May Fall Under 1.0660

Analysis Of The EUR/USD Pair By Laurie Bailey

InstaForex Analysis InstaForex Analysis 15.11.2022 08:22
Yesterday, the euro created the initial conditions for a reversal - it closed the gap, turned the technical indicators down. The structure of the reversal can be complicated, even after the price goes below the level of 1.0205, it cannot be said that the reversal has taken place, so it is recommended to open short positions with lower volumes. The upward trends of the weekly chart have not yet run out of steam, perhaps they are late. The risk lies in the fact that a slight decline in the euro is associated with profit taking. Producer price data (PPI) will be released today. Monthly growth for October is projected at 0.4%, the annual index is expected to decline from 8.5% to 8.3% y/y. If the data does not differ greatly from the forecast, the euro may continue to fall. We are cautiously waiting for the price to drop below 1.0205. Further, the 1.0100/20 target will become available. On the four-hour chart, the Marlin Oscillator is approaching the zero line at a high speed; having overcome it, it will pull the price down with greater force. The MACD indicator line is being introduced into the range of 1.0100/20, so this area can be considered critical for growth, that is, the upward trend will be broken if the price can overcome it.   Relevance up to 03:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327103
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The EUR/USD Pair May Settle Below The Trend Line

InstaForex Analysis InstaForex Analysis 15.11.2022 08:25
Analysis of EUR/USD, 5-minute chart The euro/dollar pair "pretended" that it had corrected. The total volatility of the day was 80 points, which is quite small in the current realities. In the past few months, both currency pairs have shown enviable volatility, so we can expect stronger movements even on Mondays. Yesterday fundamental and macroeconomic backgrounds were virtually absent. There was only one report and it was the industrial production in the European Union, which turned out to be slightly better than expected. However, the market did not react to the data and traded sluggishly and in different directions for most of the day. Therefore, in fact, there was no correction. The ascending trend line remains relevant, and the price is above the Ichimoku indicator lines. Therefore, the trend is definitely up now, but we still expect a significant correction during this week, most likely towards the trend line. In regards to trading signals, the picture on Monday was close to ideal, despite the flat movement. At first, the pair did not bounce very accurately from the level of 1.0340, which was paired with the level of 1.0366. This signal should have been worked out with a short position. Subsequently, the quotes fell to the target level of 1.0269 and fell short by only a couple of points. However, this is an acceptable error. The profit on the first trade was 45 points, and at the same moment a long position should have been opened. The price rose back to the level of 1.0340 until the evening, where the long positions should have been closed (or a little earlier). Profit - about 45 more points. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000). Analysis of EUR/USD, 1-hour chart You can see that the pair continues to rise on the one-hour chart, has overcome the Ichimoku cloud on the 24-hour timeframe, as well as all the Ichimoku lines on the 4-hour timeframe. Last week, the reason for the growth was, of course, the US inflation report. If it didn't exist or if it turned out to be weak, then we could see a reverse movement. Now we should expect the euro's growth until the moment when the pair settles below the trend line. On Tuesday, the pair may trade at the following levels: 1.0072, 1.0124, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as the Senkou Span B (0.9912) and Kijun-sen (1.0151). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. The European Union will publish a report on GDP for the third quarter in the second assessment, and there's nothing in the US. We believe that the pair should start correcting. The next estimate of GDP should not cause a strong market reaction. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 01:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327091
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

FX Daily: General Optimism After Meeting Between US President And Chinese President At The G20 Meeting

ING Economics ING Economics 15.11.2022 12:46
The dollar is inching lower again this morning and we think the ongoing correction could extend a bit more as optimism on US-China relations appears to be lifting sentiment. That said, a broader and sustained USD downtrend on the back of the China and/or Fed pivot story appears premature. Today, keep an eye on the ZEW and UK pre-Budget headlines In this article USD: A bit more pain EUR: Eyes on ZEW GBP: More Budget-related headlines SEK: Riksbank may go for 75bp after all USD: A bit more pain The dollar showed tentative signs of recovery yesterday, but appears to be lacking any strong support at the moment. While we don’t buy the one-way traffic, and the USD-bearish narrative in the longer run, there may be extra downside room for the greenback this week. With the US calendar being rather light, the two main drivers of global sentiment are China and Fed speakers. With respect to the first, there are two aspects to consider: data and diplomatic talks. As discussed here, Chinese industrial production and fixed asset growth numbers for October were in line with consensus, but the retail sales drop (-0.5% year-on-year) came as a surprise. Still, retail sales are highly sensitive to Covid restrictions, and the recent progress towards more flexible rules suggests room for recovery. Asian equities are rallying this morning, and this appears to be due to general optimism after a long meeting between US President Joe Biden and Chinese President Xi Jinping at the G20 meeting yesterday, which was followed by mildly encouraging remarks about diplomatic cooperation. We still suspect it is too early to point at China as the key driver for a broader recovery in risk sentiment (and dollar descent), considering the still sizeable economic challenges affecting China going beyond its Covid policy (e.g. real estate fragility, slowing global demand). On the Fed front, we heard from both sides of the hawk-dove spectrum yesterday. The hawk Christopher Waller dismissed the deceleration in core inflation as just “one data point” and that more data was needed to conclude tightening should slow. The dove Lael Brainard also signalled there is more work to do, but explicitly said the Fed will likely shift to slower rate increases soon. It appears that the FX market was primarily affected by Waller’s remark, with the ultra-Fed-sensitive yen dropping around 1% yesterday. For now, we read recent Fedspeak as further indication that a bearish dollar call on the back of Fed dovish pivot bets still appears premature. Today, we’ll hear from the Fed’s Patrick Harker, while the data calendar includes October Empire Manufacturing and PPI figures. Some extra near-term USD weakness is possible, but we suspect we are reaching the bottom of the recent downtrend. Francesco Pesole EUR: Eyes on ZEW November’s ZEW survey is the main release to watch in the eurozone’s calendar today, and expectations are for a generalised improvement on the back of lower energy prices. Later this morning, it will be worth watching for any revision in the eurozone’s third-quarter GDP numbers. We’ll also hear from the ECB’s Francois Villeroy. EUR/USD strength is largely a USD story, and any support to the euro appears largely driven by energy prices, if anything. We could see another leg higher in the pair over the coming days, and 1.0500 could be at reach, even if we expect a relatively fast descent over the winter. Francesco Pesole GBP: More Budget-related headlines Ahead of the Autumn Budget announcement in the UK this Thursday, markets are being flooded with reports about which measures will be announced. Chancellor Jeremy Hunt is now widely expected to deliver a 40% windfall tax on energy companies’ excess profits, while it’s been reported that the minimum wage will be raised from £9.50 to £10.40 an hour. Expect more headlines – and some sterling reaction – today. On the data front, jobs numbers were released in the UK this morning. As expected, the unemployment rate edged higher but was mostly driven by hiring freezes rather than rising redundancies. Reduced labour supply remains a bigger concern, especially as long-term sickness numbers continue to rise. Our economics team continues to expect a 50bp hike by the Bank of England in December. Francesco Pesole SEK: Riksbank may go for 75bp after all The Swedish inflation report this morning was a mixed bag. Headline inflation rose less than expected (from 10.8% to 10.9% YoY), CPIF inflation surprisingly declined (from 9.7% to 9.3%) but core CPIF rose (7.4% to 7.9%). Ultimately, the latter may matter more than the others for the Riksbank, which announces policy on 24 November, and that may tilt the balance towards a 75bp rate hike. Implications for the krona should however remain quite limited – today’s muted FX reaction to CPI was a case in point. We think SEK remains in a disadvantageous position compared to other procyclical currencies to benefit from an improvement in risk sentiment given the still clouded European outlook. We see room for a return toward 10.90/11.00 in EUR/SEK in the near term. Francesco Pesole TagsUS dollar SEK GBP FX EURUSD   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
USA: retail sales print may show a noticeable growth

USA: retail sales print may show a noticeable growth

FXStreet News FXStreet News 15.11.2022 15:42
Retail Sales in the US are expected to rise by 1% following a stagnant September. Risk perception is likely to continue to drive the US Dollar's (USD) valuation. Market participants will pay close attention to the Q3 earnings reports of big retailers. Retail Sales in the United States (US) are forecast to rise by 1% in October after staying unchanged at $684 billion in September. The US Dollar (USD) has been struggling to find demand following the softer-than-expected Consumer Price Index (CPI) figures for October and the Retail Sales report is unlikely to impact the USD’s valuation in a meaningful way. According to the CME Group FedWatch Tool, the probability of a smaller, 50 basis points (bps), Federal Reserve rate increase in December stands at 80%, up significantly from 50% before the October inflation report. Although some FOMC policymakers urged markets not to get ahead of themselves by pricing in a less aggressive tightening outlook, the sharp decline witnessed in the US Dollar Index showed that investors had been looking for an opportunity to unwind crowded Dollar longs. Market implications Since the US Census Bureau’s Retail Sales data is not adjusted for price changes, it will not offer an accurate picture of consumer activity. Nevertheless, an unexpected decline in Retail Sales could trigger a “bad news is good news” reaction in financial markets as it would point to a slowdown in consumer demand, which the Fed has been trying hard to achieve by hiking rates. In that scenario, risk flows could continue to dominate the markets and make it difficult for the US Dollar (USD) to hold its ground against its risk-sensitive rivals, such as the Euro (EUR) and the Pound Sterling (GBP). On the other hand, better-than-expected growth in sales could help the USD stage a recovery. However, a USD-positive market reaction should remain short-lived unless there is a noticeable negative shift in risk sentiment. It’s worth noting that several big retailers in the US are scheduled to report third-quarter earnings this week. Investors are likely to pay closer attention to these numbers rather than the Retail Sales report. At the time of press, Walmart's shares were up nearly 5% on the day after the retail giant announced that it expects sales in the US to increase by 5.5% in fiscal 2023, compared to 4.5% in the previous earning report. Lowe’s, Target and TJX Companies will release earnings figures on Wednesday. Macy’s, Kohls, Ross Stores and Gap will report on Thursday before Foot Locker and Buckle Inc. wrap up the week. To summarize, October Retail Sales report should do little to nothing to influence the market pricing of the Fed’s rate. Hence, overall risk perception should continue to drive the US Dollar’s action in the short term. In case Wall Street’s main indexes remain bullish in the second half of the week with big retailers reporting better-than-forecast earnings, the USD could have a hard time staging a rebound. US Dollar Index technical outlook US Dollar Index trades within a touching distance of 106.00. The 200-day Simple Moving Average (SMA) and the Fibonacci 50% retracement of the March-October uptrend reinforce that support. In case the index drops below that level and fails to reclaim it, it could target 105.00 (psychological level) and 104.00 (Fibonacci 61.8% retracement) next. On the upside, interim resistance seems to have formed at 107.00 (static level) ahead of 108.00 (Fibonacci 38.2% retracement). With a daily close above the latter, the index could extend its recovery toward 109.00, where the 100-day SMA is located. In the meantime, the Relative Strength Index (RSI) indicator on the daily chart stays near 30, suggesting that there could be a technical correction before the next leg lower.
The EUR/USD Pair: There Are Still No Sell Signals

Technically, The Euro (EUR) Has Outlined A Reversal

InstaForex Analysis InstaForex Analysis 16.11.2022 08:12
On Tuesday, the euro made a desperate attempt to rise, reaching the target level of 1.0470 (April low), after which the price returned to the level of 1.0360. Now we have only one thing left - to wait another day to let the price decide - whether to repeat the attempt at growth, or settle under 1.0360 and return to 1.0205 and then to 1.0100/20. From a purely technical point of view, the euro has outlined a reversal, as the Marlin Oscillator tells us. The influence of the oscillator is increasing on the four-hour chart - a divergence with the price has been formed. With the transition of the signal line of the oscillator into negative territory, the pressure on the price will increase even more. But we are waiting for the price to settle under 1.0360. The immediate support at 1.0205 will soon be strengthened by the MACD indicator line, as it approaches it. Here the medium-term direction of the price will be decided.       Relevance up to 03:00 2022-11-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327226
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

Technical Outlook Of Movement Of The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 16.11.2022 08:30
Technical outlook: EURUSD rose through the 1.0480 high intraday on Tuesday before hitting resistance and reversing sharply. The single currency pair slipped to 1.0280 thereafter and is seen to be trading close to 1.0355 at this point in writing. Furthermore, it has carved a Pinbar candlestick pattern on the daily chart, indicating a potential bearish reversal against the 1.0480 mark. EURUSD has easily taken out two significant resistances at 1.0200 and 1.0350 last week. Also, note that prices rallied more than 120 pips further before hitting resistance, which calls for a meaningful pullback at least towards 1.0000 before resuming higher again. A break below 1.0280 will confirm that a pullback is underway. The recent larger-degree upswing is seen between 0.9740 and 1.0480 now. Prices could drop towards the 1.0000 mark, which is close to the Fibonacci 0.618 retracement of the above upswing. A bullish turn there will resume the rally towards the 1.0600 mark before giving in to the bears again. On the flip side, a break below 0.9740 would trigger a further selloff. Trading idea: Acpotential drop against 1.0550 Good luck!   Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301166
The Euro Will Probably Continue Its Upward Movement In The Near Future

The EUR/USD Pair Are Looking For Much Higher Levels

InstaForex Analysis InstaForex Analysis 16.11.2022 08:35
EUR/USD rallied nicely to resistance at 1.0480 and was rejected for a corrective set-back towards 1.0208 and possibly even closer to 1.0090 before the next swing higher through resistance at 1.0480 for a rally towards 1.0777 and likely even closer to 1.0944. In the longer term, we are looking for much higher levels as wave 3 really starts to act like a third-wave impulsive rally as it is, but as always let's take it in baby steps as wave 3 progresses higher.   Relevance up to 06:00 2022-11-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301168
The Euro May Gradually Climb To The Target Level

The EUR/USD Pair Managed To Resume Its Upward Movement Without Any Reason

InstaForex Analysis InstaForex Analysis 16.11.2022 08:41
Analysis of EUR/USD, 5-minute chart Yesterday, the euro/dollar pair managed to resume its upward movement without any reason, but in the afternoon it lost almost everything gained by "overwork". It is still too early to talk about the strong correction we are waiting for. "Early" - in the sense that yesterday's fall in comparison with the previous growth is too small. However, we remind you that all of the euro's recent growth is practically not supported by anything. Yes, there were important statements by members of the Federal Reserve, there was an important report on US inflation, which could have provoked a fall in the dollar. But not as strong. Yesterday, for example, traders did not pay any attention to the EU GDP report. Although we already said that there might not be a reaction, not only did the market not react, it continued to work "according to its own rules". The ascending trendline continues to signal an upward trend, most of the indicators are also pointing up. In regards to trading signals, the situation on the 5-minute timeframe was close to ideal. At the beginning of the European trading session, the level of 1.0340 was overcome, so traders should have opened long positions immediately. This was followed by surpassing 1.0366 and growth almost to the level of 1.0485. The "error" of working out this level was only 4 points, but after the growth by 130 points at least it was possible to close the position without waiting for the target to be worked out pointwise. A sell signal near the level of 1.0485 could be worked out, but it could not be, if the "error" was embarrassing. In the first case, it was possible to earn another 70 points. In any case, the day turned out to be very profitable. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000). Analysis of EUR/USD, 1-hour chart You can see that the pair continues to rise on the one-hour chart, has overcome the Ichimoku cloud on the 24-hour timeframe, as well as all the Ichimoku lines on the 4-hour timeframe. Last week, the reason for the growth was, of course, the US inflation report. However, it is rather difficult to say why the steady and strong growth is still present this week. On Wednesday, the pair may trade at the following levels: 1.0072, 1.0119, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as the Senkou Span B (0.9912) and Kijun-sen (1.0210). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. European Central bank President Christine Lagarde will make a speech in the European Union, which can be very interesting, since traders will be waiting for comments on monetary policy from her. On the other hand, there are only minor reports on retail sales and industrial production in the US. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 06:00 2022-11-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327232
The Challenge to the Dollar: De-dollarisation and Geopolitical Shifts

Investors Can Start Beliving That The Fed Would Consider A Decrease Of Interest Rate Hikes

InstaForex Analysis InstaForex Analysis 16.11.2022 09:57
Positive sentiment surged on Tuesday, thanks to the latest data in the US, which confirmed the overall inflation dynamics in October both in monthly and yearly terms. According to the report, producer prices rose 0.2% m/m and 8.0% y/y, while the previous value was revised down to 8.4%. This allowed investors to believe again that the Fed would start considering the gradual decrease of interest rate hikes, if not stop it completely. But even though equity markets in both Europe and the US benefited from the news, the reaction in the forex market was rather weak. The reason could be the stabilization of Treasury yields before the release of data on US retail sales. Forecasts say the core retail sales index will show a 0.5% increase in October, while retail sales will rise by 0.9%. If the figures turn out to be no worse than the forecast or exceed it, another growth in stocks will be seen. In this case, Treasury yields may resume their decline, which should also put pressure on dollar. That will push the ICE dollar index down below 106 points, towards 105 points. Forecasts for today: EUR/USD The pair is trading near the strong resistance level of 1.0375. Positive data from the UScould push it towards 1.0500. GBP/USD The pair is below the level of 1.1900. If data from the US does not disappoint or turns out to be higher than expected, pound will resume growth to 1.2000, and then to 1.2020.   Relevance up to 08:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327256
The Drop In German Inflation Is Welcome News, But It Is Mean That Can We Say That Inflation Has Peaked?

Germany: There Is Little Risk Of Blackouts This Winter

InstaForex Analysis InstaForex Analysis 16.11.2022 10:22
Germany is reportedly taking emergency measures in case of power outages this winter. One of them is the accumulation of billions of euros by the Bundesbank German Central Bank, which will be helpful if there is a bank run. Also among the options is the ability to set limits on withdrawals. Government officials said there was little risk of blackouts this winter, but earlier this year the head of the country's energy regulator warned that without significant reductions in gas consumption, the situation could become quite bleak. "We are unlikely to avoid a gas accident in winter without saving at least 20% in the private, commercial and industrial sectors," Klaus Muller said last month. "The situation could become very serious if we do not significantly reduce gas consumption." Reducing consumption is already difficult, but as winter approaches and heating demand increases, it will become even more difficult. This is why many citizens are now attending training courses on what to do in the event of a power outage. Authorities are worried that they will run into local banks, which is exactly what happened when the coronavirus pandemic began in 2020. Back then, they withdrew 20 billion euros more than they invested. Thus, banks are preparing for the possibility of a repeat of those days and are considering restrictions on cash withdrawals to prevent cash leakage. According to financial regulators, the country's banks are currently underprepared for major power outages. A recent survey in Germany showed that about 40% of people expect such a shutdown within the next six months.     Relevance up to 09:00 2022-11-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327276
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

The Impact On The Volatility Of The Forex Market Is Mainly Geopolitical Risk In Europe

ING Economics ING Economics 16.11.2022 13:03
FX markets are maintaining very high levels of realised volatility. Driving markets in the very short term is the stand-off between geopolitical risk in Europe and the powerful short squeeze in risk assets on the back of softer US price data. On the calendar today are US retail sales, industrial production, and a host of Fed and ECB speakers In this article USD: Buy-side wants and needs a weaker dollar EUR: Ongoing correction GBP: BoE speakers in focus JPY: Wild ride continues Source: Shutterstock USD: Buy-side wants and needs a weaker dollar Realised levels of FX volatility remain near the highs of the year. For example, one-month EUR/USD realised volatility, at 14%, is back to levels not seen since April 2020. The dominant near-term theme is the aggressive position adjustment in FX, perhaps more so than in other asset classes, on the back of softer US price data. The dollar took another sharp leg lower on yesterday's release of soft October PPI data. Clearly, US price data is the hottest commodity in the macro space right now. Dollar price action does suggest the market is caught long dollars at higher levels and that corrective rallies in the dollar are tending to be relatively shallow. There is also a lot of buy-side interest in expectations (and hopes) that the dollar has peaked. If so, that will release some handsome gains for emerging market local currency bond and equity markets. For example, were it not for the recent dollar correction, returns in the EM local currency bond index would be a lot lower than the current -10% year-to-date figures, and EM hard currency bond indices are down closer to 20% year-to-date.  Given the weight of long dollar positioning after a major 18-month bull trend, it looks too early to expect that this position adjustment has run its course. Yet developments in Poland late yesterday have somewhat clouded the picture. The market will await any announcement from NATO representatives today on the source of the explosion - although President Biden has partially defused the situation by suggesting the missile was not fired from Russia.  Beyond geopolitics today, the focus will be on US retail sales and industrial production data. Both should be reasonably strong, but less market-moving than price data. We will also hear from the Federal Reserve's John Williams and Mary Daly around 16CET. For the DXY today, we did note that the dollar seemed to find a little natural buying interest after the PPI data, but before the Polish news broke. That might tend to favour a 106.00-107.20 DXY trading range today. In terms of the bigger picture, the question is whether 105 is a large enough correction for DXY.   Chris Turner EUR: Ongoing correction EUR/USD turned from a high of 1.0480 yesterday - driven there by the softer US PPI data. By comparison, today's US data is second tier and might prove a weak dollar positive if retail sales and industrial production emerge on the strong side. Attention may also return to the energy markets given events in Poland. And this will also serve as a reminder of the upcoming embargo on Russian oil exports due to start in early December. This potentially is a downside risk to European currencies should energy prices take a leg higher. On the calendar today are plenty of European Central Bank speakers. The ECB will also release its semi-annual financial stability report. Expect plenty of focus on the regulation of the non-bank financial sector after the recent debacle amongst the UK pension fund industry with its LDI hedges in the UK Gilt markets. Remarks earlier this week from the ECB relating to this report drew a conclusion that financial risks had increased. We noted yesterday that EUR/USD seemed to turn naturally from 1.0480, suggesting the corrective rally might have run its course - at least for the very short term. But the bottom of the short-term range has now been defined at 1.0270 - pointing to a 1.0270-1.0500 range over coming sessions. This assumes no major escalation in geopolitics. Bigger picture, we are in the camp that something like 1.05/1.06 may be the best EUR/USD levels between now and year-end. Chris Turner GBP: BoE speakers in focus Bank of England speakers will be in focus today after the release of the October CPI data. This is expected to be peaking around the 11%year-on-year level around now.  BoE Governor Andrew Bailey and colleagues testify to the Treasury Select Committee at 1515CET today. We suspect the message will be very much the same as that given at the policy meeting earlier this month - i.e. do not expect 75bp hikes to become common and that the market pricing of the tightening cycle is too aggressive.  GBP/USD briefly peaked over 1.20 yesterday. We think 1.20 is a good level to hedge GBP receivables. Equally, we have a slight preference for EUR/GBP staying over 0.8700. Tomorrow is the big event risk of the autumn budget - which on paper should be sterling negative. Chris Turner  JPY: Wild ride continues USD/JPY continues to deliver 20% annualised readings in volatility (as do the high beta commodity currencies and those in Scandinavia). We suspect the next five big figures in USD/JPY come to the upside. We see this because the US 10-year Treasury yield typically only trades 50-75bp below the Fed funds rate towards the end of the tightening cycle. And given that our team is looking for the policy rate to still be taken 100bp higher, we think US 10-year Treasury yields will probably return to the 4.25/4.35% area before the end of the year. Equally and once position adjustment has run its course, the yen rather than the dollar should become the preferred funding currency should market conditions begin to settle. Although that does seem an unlikely prospect right now. Chris Turner Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

FX Market: Range Of 2023 The EUR/USD Pair Outcomes

ING Economics ING Economics 16.11.2022 13:57
The dollar is tumbling from multi-decade highs. Calling the FX market in 2023 requires taking a view on the Federal Reserve, the war in Ukraine, China, and the overall investment environment. We suspect that the dollar can stay stronger for a little longer. But the main message in our 2023 FX Outlook is to expect fewer FX trends and more volatility Source: Shutterstock The dollar's highwire act Having risen around 25% since the summer of 2021, the dollar has recently taken quite the tumble. For 2023, the question is whether this is the start of a new bear trend or whether the factors that drove the dollar to those highs still have a say.  Given that the most liquid FX pair, EUR/USD, was such a large driver of global FX trends in 2022, we use a scenario approach to look at a range of 2023 EUR/USD outcomes – derived from the expected volatility priced into the FX options market. The range of scenarios and end-year FX levels extend from ‘Permacrisis’, where EUR/USD could be trading at 0.80, to ‘Safe and Sound’, where EUR/USD could be closer to 1.20. Key inputs to that scenario approach are factors like: i) how aggressive the Fed will be, ii) Ukraine, Europe, and energy, iii) China, and iv) the overall risk environment. Given ING’s house view of the Fed taking rates to 5.00% in early 2023, four quarters of recession in Germany amid higher energy prices, relatively weak Chinese growth, and a still difficult equity environment, our baseline view favours softer EUR/USD levels. 2023 will see fewer FX trends and more volatility But perhaps the strongest message to get across in our outlook is that FX markets in 2023 will see fewer trends and more volatility. We say this because conditions do not look to be in place for a clean dollar trend – no ‘risk-on’ dollar decline nor ‘risk-off’ dollar rally. And central banks tightening liquidity conditions through higher policy rates and shrinking balance sheets will only exacerbate the liquidity problems already present in financial markets. Volatility will stay high. Softening global activity and trade volume growth at less than 2% will likely limit the gains of pro-cyclical currencies in 2023. EUR/USD could be ending the year near 1.00. If the positive correlation between bonds and equity markets does break down next year, it will likely come through a bond market rally. Our forecast for US 10-year Treasury yields at 2.75% year-end will argue for USD/JPY to be trading at 130 or lower. EUR/USD will set the tone for European currencies in general. We favour the Swiss franc to outperform and sterling to underperform. Scandinavian currencies may continue to struggle with the high volatility environment. Further east, we see scope for the Hungarian forint to be re-assessed positively, while the overvalued Czech koruna and Romania leu look more vulnerable as FX intervention slows. In the commodity bloc, the uncertain outcome for China continues to place a question mark on the Australian and New Zealand dollars. We again prefer the Canadian dollar – although how the housing market correction plays out will be a risk. USD/CNY itself may struggle to sustain a move sub-7.00. And in a more mixed FX environment, expect local stories to win out – one of which may be Korean debt being included in world government bond benchmarks – helping the won. EUR/USD: Four scenarios for 2023 Source: ING, Refinitiv Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Gold Market Sentiment and Analyst Forecasts: Bond Yields and China's Impact

The Bulls Are Making Their Second Attack On The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 16.11.2022 14:30
The three pillars of the upward trend in the USD index were American exceptionalism, an aggressive increase in the federal funds rate, and high demand for the dollar as a safe-haven currency. The US economy looked more resilient than others. The Fed ran ahead of the rest of the central banks like the leader of the pack on the road of tightening monetary policy, and numerous shocks in the global economy and politics forced investors to hide in safe-haven assets. In November, everything turned upside down. So, should we be surprised at the EURUSD trend reversal? When the Fed began the process of monetary restriction in March, the ceiling of the federal funds rate was estimated by the futures market at 2.8%. The FOMC's September forecast raised it to 4.6%, and Jerome Powell's words that the peak will be even higher – up to 5%. Before the release of the US inflation data for October, rumors about 6% even circulated on the market, but the slowdown in consumer prices forced investors to lower the bar. As a result, the cost of borrowing may not reach 5%. At the same time, inflation in the eurozone has not yet reached its maximum, which forces the market to maintain high expectations for the ECB deposit rate. The difference between the supposed extreme rates in the US and the eurozone is shrinking, which plays into the hands of the EURUSD bulls. Dynamics of expected extreme rates of central banks The more aggressively the Fed and other central banks tightened monetary policy, the higher were the risks that the global economy would plunge into recession. Regulators were focused on beating inflation and were often willing to sacrifice economic growth. Over time, their position has changed. First, the Reserve Bank of Australia and the Bank of Canada slowed down the rate of monetary restriction, then the Fed and the Bank of England made hints about this. Even ECB hawk Robert Holzmann noted that the Governing Council should be mindful of too drastic actions that could drive the eurozone into stagflation or recession. Dynamics of Central Bank Rates As a result, the idea of a soft landing for the US economy has been revived, suggesting a growing chance that it will still avoid a recession. In such conditions, the demand for safe-haven assets decreases, and the USD index falls. Finally, warm weather in the euro area, an increase in the filling of gas reserves to 95% instead of the usual 80–85%, and a fall in prices for blue fuel gave rise to talk that the eurozone economy is not so bad compared to the United States. It is also able to avoid recession. If so, then American exceptionalism can be forgotten, which gives strength to fans of the euro. Technically, on the EURUSD daily chart, the bulls are making their second attack in the hope of breaking both to the psychologically important level of 1.05 and to the 161.8% target according to the AB=CD pattern. Note that it is located near 1.061. The strategies for buying the euro on pullbacks, voiced in the previous two materials, continue to work like clockwork. Why give them up?     Relevance up to 11:00 2022-11-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327286
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The Reversal Of The Euro (EUR) Price's Technical Features Only Intensified

InstaForex Analysis InstaForex Analysis 17.11.2022 08:11
Despite the euro's attempt to rise yesterday (closing the day with a growth of 45 points), the reversal of the price's technical features only intensified. The Marlin Oscillator starts to accelerate downwards after the reversal on the daily chart. The price subtly senses the 1.0360 level, as a result, settling below it opens the 1.0205 target. But a decline to 1.0205 or below would still be corrective. To change the trend, the price should go under the MACD indicator line, which is now very deep for the price - in the range of 0.9864-0.9950. At the same time, the MACD line itself turned into growth, which will make it difficult and complicate the development of the expected reversal. Marlin has not yet consolidated in negative territory on the 4-hour chart, which retains the potential to create a divergence, that is, another attempt to overcome 1.0470. The MACD line is approaching the support of 1.0205 and will soon break above it. The level is strengthening, so its breakthrough will be the first possible signal for price to overcome the MACD line of the daily chart. We are waiting for any more stable signals and signs.   Relevance up to 04:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327347
The EUR/USD Price May Fall Under 1.0660

The Euro To US Dollar Pair (EUR/USD) Is Likely To Turn Lower

InstaForex Analysis InstaForex Analysis 17.11.2022 08:20
Technical outlook: EURUSD has eased off from its swing highs at 1.0480 registered early this week. The single currency pair has slipped over 120 pips after hitting an intraday low at 1.0354 on Thursday. It is seen to be trading close to 1.0380. at this point in writing as the bears prepare to test the 1.0280-1.0300 area before the bulls are back in control. EURUSD has taken out two resistances at 1.0200 and 1.0350 levels and hit the 1.0480 mark. Ideally, a meaningful pullback should be due towards the 1.0000 zone before finding support. We need to see a break below 1.0350 now to open the door for prices to drop through 1.0280 and further. On the flip side, a push above 1.0480 will confirm that 1.0550 is within reach. The recent upswing, which could be worked upon is between 0.9740 and 1.0480 levels respectively. Immediate price support is seen at 0.9740 on the daily chart. Only a break below that level will confirm that the trend has turned down and the bears are poised to drag the price below 0.9500. All in all, EURUSD is likely to turn lower either from here or after printing another high. Trading idea: Potential bearish reversal against 1.0550 Good luck!     Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301349
The Price Of EUR/USD Pair Will Develop Sideways Movement

The Euro To US Dollar (EUR/USD) Pair Maintains A Bullish Bias

InstaForex Analysis InstaForex Analysis 17.11.2022 08:29
The EUR/USD pair changed little in the short term. It's trading at 1.0376 at the time of writing. The price moves sideways trying to attract more buyers and accumulate bullish energy before resuming its growth. Technically, the Dollar Index moved sideways after reaching a resistance zone. Unfortunately for the USD, the US data came in mixed. The Retail Sales, Core Retail Sales, and Business Inventories came in better than expected, while Industrial Production and Capacity Utilization Rate reported poor data. Today, the Eurozone is to release the Final CPI and Final Core CPI. On the other hand, the US Philly Fed Manufacturing Index, Unemployment Claims, Building Permits, and Housing Starts could drive the market. EUR/USD Accumulates More Bullish Energy! EUR/USD maintains a bullish bias as long as it stays above the median line (ml) of the ascending pitchfork. The 1.0368 represented an upside obstacle, so stabilizing above it may signal more gains ahead. Still, the minor downtrend line represents a dynamic resistance. The price action developed a potential triangle pattern. EUR/USD Outlook! Staying above the median line (ml) and making a valid breakout through the downtrend line activates further growth at least towards 1.0481. This is seen as a new long opportunity. A new downside movement could be announced only by a valid breakdown below the median line (ml) and after making a new lower low.     Relevance up to 07:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301355
UK Budget: Short-term positives to be met with medium-term caution

FX: Credible UK Budget Will Deliver Substantial Fiscal Tightening

ING Economics ING Economics 17.11.2022 10:56
Today's FX highlight will be the UK's autumn statement. Given that the UK's bond market has largely regained its composure from the sell-off in September, we struggle to see what upside there is for sterling today. Positioning could be the wild card, however. Elsewhere, we have five Fed speakers and favour further dollar consolidation In this article USD: Softer renminbi helps support the dollar EUR: Could be dragged around by sterling GBP: Caution advised BRL: Reality check USD: Softer renminbi helps support the dollar Yesterday, we published our 2023 FX Outlook and for professional customers our FX Top Trade ideas. Our core message for FX markets in 2023 is to expect fewer FX trends - i.e. a repeat of a clean 18-month dollar trend is unlikely - and instead look for more volatility as central banks tighten rates into a recession. Feedback on the report is welcome! For today, the dollar has entered a consolidative mode. We note the rise in USD/CNH which may be giving the dollar a little support. Somewhat conversely, the better news out of China seems to be giving the local banks some problems. Here, retail investors have en masse withdrawn from Chinese bond markets in favour of equities, prompting authorities to check with local banks whether they have sufficient liquidity to meet these withdrawals. For today, we have five Fed speakers. Market pricing for the 14 December FOMC meeting is settling on a 50bp hike - such that any further reference to that today need not demand a much weaker dollar. Our slight bias near term is that long dollar position adjustment may have a little further to run, but that something like the 105 area in DXY proves a 4Q22 base. Chris Turner EUR: Could be dragged around by sterling EUR/USD remains in corrective mode and is not reacting much to press reports of the European Central Bank favouring a 50bp over a 75bp hike in December. Notably, the FX options market has shown no more signs of distress - i.e. investors are not scrambling to buy euro call options - and one can argue that this makes the 1.05 area a slightly firmer ceiling for 4Q22. Expect EUR/USD to be dragged around by GBP/USD today - just as it was in September. 1.0270-1.0500 remains our expected near-term trading range for EUR/USD. Chris Turner GBP: Caution advised The big day has arrived. Chancellor Jeremy Hunt will unveil the autumn statement aimed at plugging the fiscal hole that led to the collapse of Gilts and sterling in September. Investor views of UK fiscal credibility have largely returned to pre-Truss levels, where the 10-year German Bund-Gilt spread is now 115bp (versus 228bp in September) and the UK's 5-year sovereign CDS has narrowed to 27bp from 52bp. Arguably then, the positive re-assessment of the UK fiscal position has largely taken place and suggests that sterling does not have to rally a lot more on a credible budget. Indeed, a credible budget will deliver substantial fiscal tightening and cement views of a multi-quarter UK recession and one in which the Bank of England will continue to hike rates into 2023. As a pro-cyclical currency, this cannot be a good environment for sterling. And were Chancellor Hunt to try and back-load fiscal tightening - e.g. until after the next election in 2024 - Gilts and sterling would sell off. Overall, we expect GBP/USD to be unable to hold any gains above 1.20 and would prefer sub 1.15 levels before year-end. Equally, EUR/GBP should find support near 0.86/87. The only thing going for sterling is buy-side positioning. Being short the pound had been one of the most popular buy-side trades going into October. We have seen what positioning has done to crowded long dollar trades over the last week. It is hard to see what sterling positives the market could take from today's budget - but there is an outside risk that investors have some residual sterling shorts to cover. The outside risk near term is a very painful sterling short-squeeze taking GBP/USD to 1.23. However, that squeeze should not last long. Chris Turner   BRL: Reality check It seems fair to say that the Brazilian real has disappointed some of the more bullish expectations made when Luiz Lula won the Presidential election run-off in October. Investors had been attracted to the real because of Brazil's high real interest rates and the idea that a centrist congress could keep some of President-elect Lula's spending plans in check. However, concerns about Brazil's fiscal position and welfare spending plans have come back to the fore. The new administration, taking office in January is looking at a constitutional amendment to exclude around $30bn of welfare spending from the nation's fiscal debt limit. Reuters is also reporting that Lula may be favouring a left-wing choice for Finance Minister - typically a very sensitive topic for Latam currencies. Equally, further choices for Lula's new team are said to be coming from the administration of former left-wing President, Dilma Rousseff, who was widely associated with Brazil's last fiscal crisis. We have been more bearish on the Brazilian real than consensus for some time and in our recently published FX Outlook, we make the case for USD/BRL to be ending 2023 much closer to the 5.80 highs than the consensus estimate of 5.15. Investors looking for yield in Latam should instead continue to favour the less volatile and better fiscally positioned Mexican peso. And near term, BRL/MXN can trade back to the 3.50 lows.  Chris Turner Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
ECB press conference brings more fog than clarity

The ECB May Well Opt For A Less Aggressive Move

InstaForex Analysis InstaForex Analysis 17.11.2022 13:16
Euro hovered at monthly highs after some ECB members hinted at a lesser rate hike next month. Of course, inflation will play a key role, but although prices have not slowed down lately, at least there is no significant upward spurt. With no momentum for another 75 basis point move, the European Central Bank could hold off on further aggressive policies, which will pull euro down as there are no other reasons to buy it. The Board of Governors and its meetings are closed, but the leaked information gives a certain reason to think about whether it is worth buying the currency now. Obviously, unless there is another unexpected spike in inflation, the ECB may well opt for a less aggressive move. Decision of the ECB The reasons why the central bank may look towards a softer policy include growing risks of a recession, the likelihood that pressure on consumer prices will ease in the near future, and the prospect that a half-point increase in the deposit rate will move closer to the neutral a level that will no longer stimulate the economy and thereby limit inflationary pressures. With four weeks before the final decision of the ECB, there is still enough time for officials to think carefully. Amid market expectations for a half-point increase, hawkish ECB politicians have made little effort to refute this view, only calmly insisting on a third consecutive 75 basis point increase. Austrian central bank governor Robert Holzmann said that now is not the time to change course, although he also kept silent about the size of the next increase. Joachim Nagel, president of the Bundesbank, took a similar approach to the situation. Their Estonian and Latvian counterparts, suffering from the most runaway inflation in the eurozone, called 50 and 75 basis points possible, but did not express a preference for which side they would take. Meanwhile, the head of the Bank of France, Francois Villeroy de Gallo, said the ECB is likely to take a less aggressive path, which could also point to 50 basis points. Inflation in the eurozone However, inflation in the eurozone remains at 10.7%, and even if the rate falls today, it will remain a record in the history. The next meeting of the Board of Governors will coincide with the publication of inflation data for November. A week later, politicians begin a period of calm before their December decision. EUR/USD With regards to the forex market, risk appetite decreased significantly, but sellers are yet to be active. For further growth in EUR/USD, it is necessary to break above 1.0440 as only that will prompt a rise to 1.0480, 1.0525 and 1.0570. If pressure persists, the pair will fall to 1.0350, then to 1.0280 and 1.0220. GBP/USD GBP/USD has halted, so buyers are focused on protecting the support level of 1.1850. They want to breaking through the resistance level of 1.1920 because that will prompt a further rise to 1.2020 and 1.2080. But if pressure returns and sellers take control of 1.1850, the pair will fall to 1.1790 and 1.1740.   Relevance up to 10:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327395
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

The EUR/USD Pair Could Bring Back The Bulls Into Action Again

InstaForex Analysis InstaForex Analysis 18.11.2022 08:00
Technical outlook: EURUSD dropped through the 1.0305 lows on Thursday before finding support. The single currency pair is seen to be trading close to 1.0370 at this point in writing as a probability remains for yet another low towards the 1.0250-80 mark before the rally could resume. A break above 1.0405 from here would confirm that the euro is heading north again. EURUSD might still have some upside momentum left within its last-leg rally, which began from 0.9740 earlier. The intraday support zone is seen towards the 1.0250-80 area. If prices manage to drop there, the bulls will be looking to come back in control. Immediate price support on the daily chart is seen at 0.9740 and only a break below turns the structure bearish. EURUSD is working on its recent upswing between 0.9740 and 1,0480 as discussed earlier. Furthermore, the past resistance-turned-support zone is seen around 1.0000. A drop there remains possible and could bring back the bulls into action again. The overall structure remains bearish with one more shallow high left around the 1.0600 mark. Trading idea: A potential rally towards 1.0600 from 1.0280 Good luck! Relevance up to 02:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301515
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

Analysis Of Future Movement Of The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 18.11.2022 08:14
Despite the euro's strong desire to go down yesterday, it was not possible to overcome the support of 1.0360, the day closed higher. This morning the price is at the level, waiting for external incentives for further action. Yesterday, such incentives were the fall of oil by 3.76% and the decline of gold by 0.79%. The daily Marlin Oscillator is declining smoothly, while there are no signs that the price may abandon attempts to break through 1.0360. If this happens, the 1.0205 target will become available. On the four-hour chart, the price is supported by the balance indicator line (red moving line), but, nevertheless, the Marlin Oscillator has been in the negative area for a long time, so the price is unlikely to stop trying to overcome the supports. On the way to 1.0205, there is a MACD line (1.0260). It is also an important support to overcome. If the price fails to overcome it, then it could return to 1.0470 or even surpass the high on November 15 to form a divergence. Relevance up to 03:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327457
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Euro To US Dollar (EUR/USD) Pair Maintains An Upward Trend

InstaForex Analysis InstaForex Analysis 18.11.2022 08:30
30M chart of the EUR/USD pair The EUR/USD currency pair was trading with a slight downward bias on Thursday, just like on Wednesday. We obviously did not count on such a strong correction. The ascending trend line is still relevant, and the price is well above it. Therefore, from a technical point of view, quotes can rise at almost any moment. From a macroeconomic point of view, there is practically nothing to analyze this week. In the European Union, inflation for October was released in the second assessment. But this second valuation was only 0.1% different from the first valuation, which the market had worked out long ago. Therefore, there was no response to this report. Retail sales and industrial production were released in the US, which in themselves are not extremely significant. In addition, one of them turned out to be worse than forecasts, and the second one was better, so they simply offset each other. We repeat: we believe that the pair's growth in the last two weeks is illogical and we are waiting for a more powerful downward correction. 5M chart of the EUR/USD pair The pair's movement on the 5-minute chart was just terrible, despite the downward bias. It's not even about the levels near which the signals were formed, the fact is that the euro could not decide which way to move during the European trading session, and the total volatility of the day was 100 points, which seems to be quite a lot, but Thursday's movement can hardly be called a trend even within the day. The first buy signal turned out to be false, and even Stop Loss could not be placed at breakeven. The long position was closed at a loss. The second sell signal was formed when the price was already near the next level of 1.0354. The rebound from the level of 1.0354 is the same. It was possible to work out the fourth, fifth and sixth signals, which spoke about the same thing - about a possible fall in quotes. After each of them, the pair went down 15, 26 and 37 points. Therefore, there could no longer be a loss on these transactions (Stop Loss at breakeven when passing 15 points in the right direction), but novice traders also hardly managed to make money. Therefore, the day ended, most likely, in a small loss. There is nothing wrong with this, since the newcomers managed to make good money on the upward rally of the euro earlier. How to trade on Friday: The pair maintains an upward trend and is quite far from the trend line on the 30-minute chart. We still expect a serious correction, but it will be possible to speak about a downward trend when the pair overcomes the ascending trend line. On the 5-minute TF it is recommended to trade at the levels 1.0123, 1.0156, 1.0221, 1.0269-1.0277, 1.0354, 1.0383, 1.0433, 1.0465, 1.0483. When passing 15 points in the right direction, you should set Stop Loss to breakeven. European Central bank President Christine Lagarde will deliver a speech in the European Union. The calendar of macroeconomic events is empty in America. However, Lagarde's speech may be enough for traders to start trading more in a trend. Everything will depend on what Lagarde says. Basic rules of the trading system: 1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal. 2) If two or more positions were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored. 3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading. 4) Trade positions are opened in the time period between the beginning of the European session and until the middle of the US one, when all positions must be closed manually. 5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance. On the chart: Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines). Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.     Relevance up to 04:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327459
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

FX: G10 Currencies Should Face Less Trend And More Volatility

ING Economics ING Economics 18.11.2022 09:47
In our 2023 FX Outlook, we argued that G10 currencies should face less trend and more volatility in 2023. We saw an example this week, as the fading bear-dollar trend did not prevent some wide swings in risk-sensitive currencies (like NOK and SEK). In the UK, the pound survived the Autumn Statement, but downside risks persist in GBP/USD In this article USD: Bearish sentiment cooling off EUR: Lagarde's speech in focus GBP: Most painful fiscal measures delayed NOK: Strong domestic story may not matter USD: Bearish sentiment cooling off As recently discussed in our 2023 FX Outlook, we are quite sceptical of a clean bear dollar trend from the current levels. This week’s moves in the FX market may have offered a glimpse of what we expect to be the main theme in G10 FX next year: less trend, more volatility. The dollar has stabilised after the big correction, but regional stories triggered significant swings in some crosses. Scandinavian currencies fell by around 2% this week, hit by equity volatility and geopolitical tensions, while NZD and GBP have appreciated on some domestic optimism. In New Zealand, next week’s central bank meeting will be a key risk event: here is our preview. We think this consolidation phase in the dollar may extend for a little longer, before a re-appreciation of the greenback into the end of the year. Indeed, markets will remain highly sensitive to Fed speakers: today, only Susan Collins is scheduled to speak, but we have a number of other members lined up for next week. FOMC minutes will also be released on Wednesday. So far, post-CPI comments have indicated some lingering caution on the inflation battle as most Fed members tried to curb the market’s enthusiasm about an imminent dovish pivot. The future market has now fully priced back in a 5.00% peak rate in the first half of 2023. The US calendar is rather light today and only includes existing home sales and the Leading Index. With the dovish pivot narrative softening, we expect some re-appreciation of the dollar in the near term, but that is a trend that could only start from next week or the one after. DXY may stay around 106/107 today.    Francesco Pesole EUR: Lagarde's speech in focus ECB President Christine Lagarde will deliver a keynote speech at a banking conference this morning. Two more ECB speakers are on the list today: Joachim Nagel and Klaas Knot, both hawkish voices in the Governing Council. If the Fed remains the key driver for the dollar, the ECB continues to have a rather marginal role for the euro, which instead remains primarily tied to global risk sentiment and geopolitical/energy dynamics. EUR/USD may stay in the 1.0350-1.0400 trading range into the weekend and while we don’t exclude another short-term mini-rally, we think that the macro picture continues to point to sub-parity levels in the coming months. Francesco Pesole GBP: Most painful fiscal measures delayed The pound survived the much-feared Autumn Statement by Chancellor Jeremy Hunt yesterday. The build-up to the statement seemed to signal more restrictive measures on the economy, but Hunt counted on a calmer market backdrop and – as discussed in detail by our economist – delayed some of the most painful measures. Ultimately, the impact on next year's growth should not prove huge, especially compared to expectations. The tax hike will only affect high incomes and energy companies, and the National Insurance cut by the previous government has not been reversed. The most relevant change was the increase in the energy bill guarantee from £2,500 to £3,000 from April 2023, which should generate some drag on consumers. That is only marginally more generous than the average household energy bill under current wholesale prices (which we estimate at around £3,200). The risk is obviously that wholesale prices spike again, meaning a higher cost for the energy support package. We think it is too early to call for a prolonged stabilisation in the gilt market, and our debt team notes that there is still a lot of extra supply for private investors to absorb. We continue to see downside risks for GBP/USD as the dollar may start to recover into year-end, and target sub-1.15 levels in the near term. However, we forecast some outperformance in EUR/GBP (primarily due to EUR weakness), which could rise to 0.89 by year-end. Francesco Pesole NOK: Strong domestic story may not matter Norwegian GDP data for the third quarter surprised on the upside this morning, showing a rather strong 1.5% quarter-on-quarter growth. This is a testament to how the domestic story should remain largely supportive of NOK, also into the new year. Whether this will ultimately feed into a stronger krone is another question, and mostly depends on whether markets will prove calm enough to allow fundamentals to play a role. The last week clearly showed that the road to a recovery in NOK is going to prove quite uneven, as the low-liquidity krone should continue to face large swings. We really think volatility will be the name of the game for EUR/NOK next year, even though our base-case scenario is downward-sloping in 2023. In the short run, a return to 10.60+ is a tangible possibility. Francesco Pesole TagsNOK FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Drop In German Inflation Is Welcome News, But It Is Mean That Can We Say That Inflation Has Peaked?

A Lot Of Attention On German Wage Settlements Across The Eurozone

ING Economics ING Economics 18.11.2022 10:25
A regional wage agreement in Baden-Wuerttemberg yesterday will pave the way for broader wage developments and shows the European Central Bank that second-round effects will kick in next year but should be dampened Last night, employers and unions in the metal and electronics industry in Baden-Wuerttemberg reached a new wage agreement. Wages will be increased by 5.2% in June 2023 and by 3.3% in May 2024. There will also be a one-off payment of €3,000, exactly the amount the German government had offered to exempt from tax and social security contributions. While this is "only" a regional wage agreement, it will have knock-on effects on other regional and sectoral wage negotiations. Almost four million people in Germany work in the metal and electronics industry. Traditionally, there has been a lot of attention on German wage settlements across the eurozone. The takeaway for German wage developments and the risk of second-round effects is that last night's deal shows what a compromise can look like. It won’t be enough to fully offset the drop in purchasing power caused by higher inflation, but it softens the damage. For the ECB, it signals that second-round effects remain dampened and that a lower, subdued inflationary pressure can last for longer than markets currently think. TagsInflation Germany Eurozone ECB   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

G10 Forex Market in 2023 To Be Characterised By More Volatility

ING Economics ING Economics 20.11.2022 11:30
After an 18-month bull trend in the dollar, the FX outlook has become less clear. Further position adjustment could prompt a little more short-term dollar weakness, but we do not believe the conditions are in place for a major dollar bear trend just yet. Instead, we expect FX markets in 2023 to be characterised by less trend and more volatility. Source: Shutterstock G10: Less trend, more volatility The final quarter of 2022 has seen a breakdown in the otherwise orderly dollar bull trend – a trend which had been worth 5% per quarter over the first nine months of the year. That dollar rally had largely been driven by a Federal Reserve wanting to take policy into restrictive territory – a trend only exacerbated by the war in Ukraine. For all the current discussions about peak dollar and peak macro pessimism, we think it is still worth examining whether the conditions will be in place to deliver an orderly dollar bear trend in 2023. We think not and here are three reasons why: Driving the dollar bull trend since summer 2021 has been a Fed at first abandoning Average Inflation Targeting and then trying to get ahead of the inflation surge. A call on a benign dollar decline in 2023 requires the Fed to be taking a back seat. That seems unlikely. The stark message from both the Fed’s Jackson Hole symposium and the IMF autumn meetings was that central banks should avoid relaxing too early in their inflation battle – a move which would deliver the pain of recession without any of the sustained gains on inflation. We suspect it will be too early for the Fed to sound relaxed at its 14 December meeting and March 2023 may be the first opportunity for a decisive turn in Fed rhetoric. While a softer Fed profile may be a necessary condition for a turn in the dollar, a sufficient condition requires a global economic environment attractive enough to draw funds out of the dollar. 2023 global growth forecasts are still being cut – dragged lower especially by recession in Europe. ING forecasts merchandise world trade growth below 2% in 2023 – not a particularly attractive story for the trade-sensitive currencies in Europe and emerging markets. A liquidity premium will be required of non-dollar currencies. 2023 will be a year when central banks are initially still hiking into a recession and shrinking balance sheets. The Fed will reduce its balance sheet by a further $1.1tn in 2023 and the European Central Bank will be looking at quantitative tightening, too. Lower excess reserves will tighten liquidity conditions still further and raise FX volatility levels. Again, the bar not to invest in dollar deposits remains high – especially when those dollar deposits start to pay 5% and the dollar retains its crown as the most liquid currency on the planet. What do these trends mean for G10 FX markets? This probably means that the dollar can bounce around near the highs rather than embark on a clean bear trend in 2023. If the dollar is to turn substantially lower, we would favour the defensive currencies such as the Japanese yen and Swiss franc outperforming. Here, the positive correlation between bonds and equity markets may well break down via the bond market rallying on the back of a US recession and easier Fed policy. ING forecasts US 10-year Treasury yields ending 2023 at 2.75% - USD/JPY could be trading at 130 under that scenario.  Recession in Europe means that EUR/USD could be trading in a 0.95-1.05 range for most of the year, where fears of another energy crisis in the winter of 2023 and uncertainty in Ukraine will hold the euro back. Sterling should also stay fragile as the new government attempts to restore fiscal credibility with Austerity 2.0. We cannot see sterling being rewarded much more on austerity and suspect that GBP/USD struggles to hold gains over 1.20.  Elsewhere in Europe, some differentiation could emerge between the Scandinavian currencies. The Swedish krona may struggle to enter a sustained uptrend next year given its elevated exposure to the eurozone’s growth story, while the Norwegian krone could benefit from its attractive commodity exposure. However, NOK is an illiquid and more volatile currency, and would therefore face a bigger downside in a risk-off scenario. As shown in the chart below, commodity currencies look undervalued versus the dollar on a fundamental basis. However, a stabilisation in risk sentiment is a necessary condition to close the misvaluation gap. For the Australian and New Zealand dollars, an improvement in China’s medium-term outlook is also essential, so the Canadian dollar may emerge as a more attractive pro-cyclical bet given low exposure to the economic woes of Europe and China. Another factor to consider is the depth of the forthcoming house price contraction. We think central banks will increasingly take this into consideration and will try to avert an uncontrolled fall in the housing sector. However, this is potentially a very sizeable downside risk, especially for the currencies of commodity-exporting countries, which generally display the most overvalued property markets in the G10. To conclude, we think FX trends will become less clear in 2023 and volatility will continue to rise. FX option volatility may seem expensive relative to historical levels, but not at all when compared to the volatility FX pairs are actually delivering. We suspect risk management through FX options may become even more popular in 2023.   Valuation, volatility and liquidity in G10 Source: ING, Refinitiv EUR/USD: Dollar bromance will take some breaking   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/USD 1.035 Bearish 0.98 0.95 0.98 1.00 1.00 Bullish leap of faith is too dangerous: We are bearish on EUR/USD into the end of the first quarter of 2023. Key factors which have driven EUR/USD lower this year will remain largely in place. The softish US October CPI print may give the Fed some pause for thought, but should not be enough to derail it from some further tightening – taking the policy rate close to 5.00% in the first quarter of 2023. Another key factor for EUR/USD this year has been energy. Here, our team sees prices for both natural gas and oil rising from current levels through 2023. A difficult 2023 European winter for energy may well restrain the EUR/USD recovery later in the year, continuing to depress the eurozone’s traditionally large current account surplus.   Necessary but not sufficient: Tighter Fed policy has been at the forefront of this year’s dollar rally and a shift in the Fed tone (more likely in March 2023 than December 2022) will be necessary to see the short end of the US yield curve soften appreciably and the dollar weaken. But the sufficient condition for a EUR/USD turnaround is the state of affairs amongst trading partners. Are they attractive enough to draw funds away from USD cash deposits potentially paying 5%? That is a high bar and why we would favour the EUR/USD 2023 recovery being very modest, rather than the ‘V’ shape some are talking about. ECB will blink first: The case for a central bank pivot is stronger for the ECB than the Fed. The German economy looks set to contract 1.5% next year and at its 15 December meeting, the ECB may well use its 2025 forecast round to show inflation back on target. We see the ECB tightening cycle stalling at 2.25% in February versus the near 3% currently priced by the market for 2023. This all assumes a seamless ECB introduction of quantitative tightening and one that does not upset peripheral bond markets. Add in global merchandise trade barely growing above 1% next year (recall how the 2017-19 trade wars weighed on the euro) plus the risk of tighter liquidity spilling into financial stability – all suggest the market’s bromance with the dollar will continue for a while yet.  USD/JPY: 1Q23 will be a crucial quarter   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/JPY 140.00 Bearish 145.00 145.00 140.00 135.00 130.00 Clash of the titans: The stark divergence in monetary policy between the Fed and the Bank of Japan has been the primary driver of this year’s 15%+ rally in USD/JPY. In 2023, investors may question whether the BoJ is ready to tighten. The default view is that the perma-dovish BoJ Governor, Haruhiko Kuroda, will not be moved. However, the end of Governor Kuroda’s term on 8 April 2023 will no doubt lead to frenzied speculation on his replacement and whether a less dovish candidate emerges. Interest rate markets are starting to price a change – e.g. the BoJ’s 10-year target sovereign yield of 0.25% is priced at 0.50% in six months’ time. March 2023 will be especially volatile: The first quarter of 2023 will also see huge focus on the Japanese wage round, where a rise in wages is a prerequisite for the BoJ to tighten policy. Japanese politicians have been encouraging business leaders to raise wages, while at the same time, the government has been quite aggressive with fiscal stimulus to offset the cost-of-living shock. This period will also see the Fed release its dot plots (22 March), which may be the first real chance for the Fed to acknowledge a turn in the inflation profile. As such, this period (March/April) could see a big reversal lower in USD/JPY. FX Intervention slows the move: Most agree that USD/JPY is higher for good reasons (including the energy crisis) and that Japanese FX intervention can only slow, not reverse the move. The Japanese have already spent around $70bn in FX intervention between the 146 and 151 region in USD/JPY and will likely be called into further action based on our view of a stronger dollar over coming months. FX reserves are not limitless, of course, but Japan’s large stockpile of $1.1tn means that this campaign can continue for several more months. The purpose here is to buy time before the Fed cycle turns. Unless we end up with 6%+ policy rates in the US next year, we would expect USD/JPY to be ending 2023 nearer 130. GBP/USD: Running repairs   Spot Year ahead bias4Q221Q232Q233Q234Q23 GBP/USD 1.19 Mildly Bearish 1.10 1.07 1.11 1.14 1.14 Fiscal rescue plan: After September’s government-inflicted flash crash, GBP/USD is now recovering on the expectation of more credible UK fiscal plans and the softer dollar. As above, we doubt 2023 will prove the year of a benign dollar decline. And the risk is that the Fed keeps rates at elevated levels for longer. Given sterling’s large current account deficit and its transition to high beta on the external environment, we think it is too early to be expecting a sustained recovery here. Instead, we favour a return to the 1.10 area into year-end as the government introduces Austerity 2.0 and the Bank of England cycle is repriced lower. Tighter fiscal/looser monetary mix: At its meeting in early November, the BoE pushed back against the market pricing of the rate cycle – arguing that hikes close to 5% would see the UK economy contract 5%. Our call is that the BoE terminal rate will be closer to the 3.75% area than the 4.50% that the market prices today. As the BoE assesses the degree of tightening needed to curtail inflation, the government is discussing ways to fill around a £60bn hole in the budget. The plan will be revealed on 17 November, probably in a roughly 50:50 split between tax hikes and real terms spending cuts. We look for the UK economy to contract every quarter in 2023 – making it a very difficult environment for sterling. Sterling suffers from liquidity outages: This year’s BIS triennial FX survey saw sterling retain its position as the fourth most traded currency pair. Despite this, sterling does occasionally suffer from flash crashes. We think liquidity will be at a premium in 2023 and that a Fed taking real rates even higher as economies head into recession is a dangerous combination for sterling – where financial services make up a large section of the economy. GBP/USD realised volatility is now back to levels seen during Brexit and our market call for 2023 is that these types of levels will become more, not less, common. EUR/JPY: A turn in the cycle   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/JPY 144.50 Bearish 142.00 138.00 137.00 135.00 130.00 Downside risks into 1Q23: EUR/JPY has defied typical relationships with risk assets by gently rallying all year even as both bond and equity benchmarks sold off 20%. Driving that JPY underperformance has probably been BoJ policy and USD/JPY’s strong relationship with US 10-year yields. Both the eurozone and Japan have been hit by the energy shock, where external surpluses have quickly dwindled. As above, we tend to think there are downside risks to EUR/JPY in the first quarter of 2023 as speculation mounts over BoJ Kuroda's successor as well as the ECB potentially calling time on their tightening cycle at the February meeting. US10yr can drag EUR/JPY to 130 in 2H23: A large part of the JPY underperformance during 2022 has been driven by developments in the US bond market. USD/JPY consistently shows the most positive correlation to US 10-year Treasury yields of any of the G10 FX pairs – and far higher than EUR/USD. Consistent with ING’s view on the Fed cutting rates in the third quarter of 2023, our debt strategy team sees US 10-year yields starting to edge lower in the second quarter of 2023, and then falling 100bp in the second half of 2023. In theory, this should heavily pressure EUR/JPY into the end of the year. Financial stability risks increase: Lower growth and tighter liquidity conditions – at least through the early part of 2023 – increase the prospect of financial stability risks. Recall the Fed will be shrinking its balance sheet by $1.1tn in 2023 even as liquidity and bid-offer spreads continue to create difficult market conditions. The yen lost its shine as a safe-haven currency in 2022, but we suspect relative to the euro, some of that shine can be regained in a softer US rate environment. The EUR/JPY cycle should also turn if the ECB calls time on its tightening cycle at the 2 February meeting. EUR/GBP: Listless in London   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/GBP 0.87 Neutral 0.89 0.89 0.88 0.88 0.88 In the same macro boat: Both the eurozone and UK economies have been hit hard by the war in Ukraine and the surge in energy prices. Both saw sharp terms of trade declines into August and then a sharp reversal as natural gas prices dipped into the warm winter. There is not a substantial amount of difference between our German and UK quarterly growth profiles for 2023 – both contracting every quarter of the year. Perhaps one could argue that the UK is more exposed to higher mortgage rates given the shorter duration of fixed-rate mortgages in the UK. This could all make for a trendless EUR/GBP environment. Energy price guarantees could differentiate: One important determinant for UK growth in 2023 will be how the new government handles the Energy Price Guarantee. Former UK Prime Minister, Liz Truss, offered a two-year programme – subsequently cut back to six months after the UK fiscal crisis. How the UK consumer copes with having to pay market prices for energy will be key to the UK story in 2023 as well as how the EU as a whole copes with similar challenges. Currently, it seems that the ECB is concerned that the fiscal programmes in Europe are too generous and not particularly targeted – adding to the inflation challenge.    Political wild cards: To pick out a few political wild cards, the first is a re-run of the Scottish independence referendum. The Scottish National Party (SNP) has picked 19 October 2023 as the date – although such an exercise would likely have to be approved by the UK parliament. Currently, the SNP is pursuing an action through the Supreme Court to see whether London can indeed still veto the referendum. In Europe, the focus will probably be on the fiscal path taken by the new right-wing Meloni government and also the reform of the Stability and Growth Pact. Budgets submitted in late 2023 could become an issue were the rules to be tightened again.   EUR/CHF: Swiss National Bank to guide it lower   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/CHF 0.98 Bearish 0.95 0.93 0.90 0.90 0.92 Does the SNB want a stronger Swiss franc?: The Swiss National Bank this year said it made a conscious decision to allow nominal Swiss franc appreciation in light of the inflation environment. The three-month policy rate has been raised 125bp to 0.50% and the SNB says it wants to keep the real exchange rate stable. With inflation running at 3% in Switzerland versus 10% in its largest trading partner, the eurozone, the SNB in theory should be happy with something like 5-7% per annum nominal appreciation in the Swiss franc. That certainly was the story into the end of September but does not quite explain the Swiss franc's weakness over the last six weeks. Two-sided intervention: When hiking rates earlier this year the SNB also said it would be engaging in two-sided FX intervention. Ever since the start of the financial crisis in 2008, the SNB has been more familiar as a seller of the Swiss franc – including its 1.20 floor in 2011-2015. Now its strategy is changing and we read that as an objective to potentially manage the Swiss franc stronger in line with its ambitions to tighten monetary conditions. Earlier this year, we estimated that the SNB could possibly drive EUR/CHF to the 0.90 area in summer 2023 based on expected inflation differentials and the need for a stable real exchange rate. The risk environment should favour the franc: Central banks are communicating that they need to tighten rates into recession and remove the excess liquidity poured out during a series of monetary bailouts. Tighter monetary and financial conditions typically spell stormy waters for risk assets. With its still sizable current account surplus (worth 8% of GDP in the second quarter of 2022) the Swiss franc should perform well during this stage of the global economic cycle. Closer to home, the European economic cycle and the ECB discussing quantitative tightening into early 2023 will prove a challenge to peripheral eurozone debt markets and likely reinforce the franc as a eurozone hedge. EUR/NOK: Not for the faint of heart   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/NOK 10.33 Bearish 10.30 10.15 9.95 9.70 9.60 Risk sentiment remains key: The krone is not a currency for the faint of heart. It is the least liquid currency in the G10 space, making it considerably exposed to negative shifts in global risk sentiment and equity market turmoil. It is, at this stage, way too early to call for a turn in equities, and a hawkish Fed into the new year may actually mean more pain for risk assets, at least in the near term. A recovery in global sentiment should offer support to NOK in the second half of next year, but restoring market confidence in a very high-beta currency is no easy feat. Norges Bank policy: The krone’s underperformance in 2022 was exacerbated by Norges Bank effectively sterilising oil and gas profits via a large increase in daily NOK sales. In November, FX daily sales have been scaled back from NOK4.3bn to NOK3.7bn, and we think there could be some interest by NB to further ease the pressure on the currency via smaller FX sales. With recent dovish hints suggesting that the NB hiking cycle may peak at 3.0% (with most of the country on variable mortgage rates, many more rate hikes could be difficult to tolerate), allowing a stronger currency to do some inflation-fighting sounds reasonable.  Energy prices: If indeed markets enjoy a calmer environment in 2023 and NB favours a stronger currency, then NOK is left with considerable room to benefit from a still strong energy market picture for Norway. There is probably an optimal range for oil and – above all – gas prices to trade at elevated levels but not such high levels that would significantly hit risk sentiment. For TTF, this could be somewhere around 150-200 €/MWh. This a plausible forecast for next year, but the margin for error can be very large. We see EUR/NOK at 10.50 in the fourth quarter of 2023, but NOK hiccups along the way are highly likely. EUR/SEK: Eurozone exposure a drag on SEK   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/SEK 10.80 Neutral 10.85 10.70 10.60 10.40 10.50 Riksbank’s policy: The Riksbank delivered more than one hawkish surprise in 2022, including a 100bp rate hike. This appeared to be part of a front-loading operation where lifting the krona was seen as a welcome side effect. In practice, and like in many other instances in the G10, the high volatility environment meant that short-term rate differentials played a negligible role in FX. So, despite a wide EUR-SEK negative rate differential throughout 2022, SEK was unable to draw any real benefit. That differential has now evaporated, but we expect 125bp of tightening (rates at 3.0%) in Sweden versus 75bp in the eurozone, which could suggest some EUR/SEK downside room in a more stable market environment. Also, a slowdown in FX purchases by the RB, now that reserves are back to the 1H19 levels, should remove some of the pressure on SEK. European picture: Sweden is a very open economy with more than half of its exports heading to other EU countries. Our expectations are that 2023 will see a rather pronounced eurozone recession and that the energy crisis will extend into the end of next year. Barring a prolonged period of low energy prices (and essentially an improvement in the geopolitical picture) in Europe, we doubt SEK will be able to enter a sustainable appreciation trend in 2023 as sentiment in the eurozone should remain depressed. Valuation: We are not fans of the euro in 2023, which means that our EUR-crosses forecasts reflect the weaker EUR profile. We see some room for EUR/SEK to move lower throughout the year – also considering that we estimate the pair to be around 9.0% overvalued. However, the high risk of a prolonged energy crisis in the eurozone means that SEK is significantly less attractive than other pro-cyclical currencies next year. Incidentally, SEK is highly correlated to the US tech stock market, which looks particularly vulnerable at the moment. A return to 10.00 or below would likely require a significant improvement in European sentiment. USD/CAD: Loonie is an attractive pro-cyclical bet   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/CAD 1.33 Bearish 1.34 1.32 1.30 1.26 1.24 Commodities and external factors: Our commodities team expects Brent to average slightly above $100/bbl next year, and Western Canadian Select around $85/bbl. Along with our expectations for higher gas prices, the overall commodity picture should prove rather supportive for the Canadian dollar in 2023. In our base-case scenario, where global risk sentiment gradually recovers but two major risk-off forces – Ukraine/Europe and China – remain, CAD would be in an advantageous position, since Canada has much more limited direct exposure to China and Europe compared to other commodity-exporting economies.  Domestic economy: If the US proves to be a relative 'safe-haven' in the global recession, therefore withstanding the downturn better than other major economies like the eurozone, this should offer a shield to Canada’s economy, which is heavily reliant on exports to the US. There is probably one major concern for the domestic economy: house prices. Canada is among the most vulnerable housing markets in the world, with price-to-income ratios around 9x in many cities (compared to 5-6x in the US). Whether we’ll see a sizeable but controlled descent or a fully-fledged housing crash will depend on the Bank of Canada and the depth of the recession. Monetary policy and valuation: It does appear that the BoC has started to consider domestic warning signals (probably, also house prices), and recently shifted to a more moderate pace of tightening. Markets are currently expecting rates to peak around 4.25/4.50% in Canada, and we tend to agree. Barring a rapid acceleration in the unemployment rate, a housing crash should be averted. It is also likely that the BoC will start cutting before the Fed in 2023. All in all, accepting the downside risks stemming from the housing market and/or a further deterioration in risk sentiment, we see room for a descent in USD/CAD to the 1.25 level towards the end of 2023. In our BEER model, CAD is around 20% undervalued in real terms. AUD/USD: Riding Beijing’s roller coaster   Spot Year ahead bias4Q221Q232Q233Q234Q23 AUD/USD 0.68 Mildly Bullish 0.66 0.66 0.68 0.69 0.70 Exposure to China: The Australian dollar is a high-beta currency, and the direction of global risk sentiment will be the key driver next year. We think that a gradual recovery in sentiment will be accompanied by a still challenging energy picture, which may force investors to choose which pro-cyclical currencies to bet on. When it comes to AUD, the China factor will remain very central, as Australia has the most China-dependent export machine in the G10. Our economics team’s baseline scenario is that the real estate crisis will be the main drag on growth in China and while retail should recover on looser Covid rules, slowing global demand should hit exports. One positive development: the new Australian government is seeking a more friendly relationship with Beijing, paving the way for the removal of export curbs next year. Commodities and growth: Iron ore remains Australia’s main export (estimated at $130bn in 2022), and it is a very sensitive commodity to China's real estate sector. Our commodities team thinks a return to $100+ levels is unlikely given the worsening Chinese demand picture, but still forecasts prices to average $90/t in 2023. The second and third largest exports are oil and natural gas ($100bn combined). Here, we see clearly more upside room for prices, especially on the natural gas side. On balance, we expect the commodity picture for Australia to be rather constructive next year, which could offer a buffer to the Australian economy during the downturn. Growth in 2022 should have topped the 4% mark, but that will be much harder to achieve in 2023. The combination of higher rates, reset mortgages, a slowing housing market and possibly softening labour market should bring growth back closer to 3%. This would still be an extremely strong outcome against the backdrop of global weakness.   Monetary policy and valuation: The Reserve Bank of Australia has been one of the 'pioneers' of the dovish pivot, and a return to 50bp increases seems unlikely, as the Bank is probably monitoring the rather overvalued housing market, and the inflation picture is less concerning than in the US or in Europe. Most Australian households have short-term fixed mortgage rates, and we could see a deterioration in disposable income (especially at the start of the year). We think the RBA will be careful to avert an excessively sharp housing contraction, and we expect rates to peak at 3.60% (well below the Fed and the Reserve Bank of New Zealand) and cuts from 3Q23. This would mean a less attractive carry – and less upside risk in an optimistic scenario for global sentiment; but also less damage to the economy, which may play in AUD’s favour in our baseline scenario. Valuation highly favours AUD, as the positive terms of trade shock means that AUD/USD is 20% undervalued in real terms, according to our behavioural equilibrium exchange rate (BEER) model. We have a moderately upward-sloping profile for the pair in 2023, but high sensitivity to risk sentiment and China suggests downside risks remain high. NZD/USD: Dodging the housing bullet   Spot Year ahead bias4Q221Q232Q233Q234Q23 NZD/USD 0.62 Mildly Bullish 0.60 0.60 0.62 0.63 0.64 Monetary policy: The Reserve Bank of New Zealand has given very few reasons to believe it is approaching a dovish pivot. Markets are currently expecting the Bank to hike well into 2023, and take rates to around 5.0%. While inflation (7.2% year-on-year) and job market tightness (unemployment at 3.3%) both remained elevated in the third quarter, there are growing concerns about the rapid downturn in the New Zealand property market, which in our view will trigger either an earlier-than-expected end to the tightening cycle or a faster pace of rate cuts in 2023. Housing troubles: The RBNZ recently published its financial stability report, where it showed relatively limited concern about households’ ability to withstand the forthcoming downturn in house prices. In its August 2022 forecasts, the RBNZ estimated that the YoY contraction in house prices will reach 11.6% in the first quarter of 2023. However, that implied an Official Cash Rate at 4.0%, so only 50bp of extra tightening from now, which seems too conservative now. House prices have fallen 7.5% from their first quarter 2022 peak so far, but the trend may well accelerate, especially given a hawkish RBNZ and the risk of slowing global demand hitting the very open New Zealand economy. External drivers and valuation: Even assuming a constructive domestic picture in the housing market and an attractive yield for the currency in 2023, external factors will determine how much NZD can draw any benefit. As for AUD, risk sentiment and China are the two central themes. The New Zealand dollar is more exposed to risk sentiment (as it is less liquid and higher-yielding) than AUD, but probably less exposed to China’s story. In particular, the real estate troubles in China may well hit Australia via the iron ore channel, while NZ exports (primarily dairy products) are much more linked to China’s Covid restrictions, which look likely to be gradually scaled back. In our base case, the two currencies should largely move in tandem next year. The real NZD/USD rate is 15% undervalued, according to our BEER model. EUR/DKK: Tricky mix of intervention and rates   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/DKK 7.44 Neutral 7.44 7.44 7.44 7.44 7.45 Central bank policy: Danmarks Nationalbank delivered FX intervention worth DKK45bn in September and October to defend the EUR/DKK peg. On 27 October, it opted for a smaller rate hike (60bp) compared to the ECB (75bp), which briefly sent EUR/DKK close to the 7.4460 February highs before rapidly falling back to 7.4380/90. We think it will be a busy year ahead for the central bank, as we expect very limited idiosyncratic EUR strength and potentially more pressure on EUR/DKK. Having now exited negative rate territory, DN has much more room to adjust the policy rate for a wider rate differential with the ECB if needed. However, with inflation running above 10% in Denmark, DN may prefer FX intervention over dovish monetary policy to support the peg. We have recently revised our EUR/DKK forecast, and expect a return to 7.4600 only in 2024. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

In Contrast To The ECB, The Fed Will Keep Raising Interest Rates

InstaForex Analysis InstaForex Analysis 20.11.2022 12:38
Long-term outlook. The EUR/USD currency pair moved slowly during the current week, resulting in no significant price changes. We predicted a significant downward correction at the start of this week, but it has yet to materialize. Traders have been trying to decide whether to continue making speculative purchases of the euro currency or to return to a more stable dollar. The market was uninterested in the fundamental events that occurred. For example, the European Union's October inflation report was only the second assessment with which everyone was already familiar. As a result, the market did not react to the 10.6% y/y increase in inflation. The US elections were incredibly fascinating, but it's fair to say that the outcomes were predictable. Republicans narrowly won the House of Representatives, while the Democrats kept control of the Senate with a majority. Given that they previously held control of both chambers of Congress, the Democrats' situation has worsened. In contrast, many American journalists and experts refer to this loss as "the defeat of the Republicans" because of the Republicans' confidence in the prospect of a decisive defeat. Many believed that Donald Trump, the party's leader, was laying the groundwork for the elections of 2024. He congratulated the Republicans on their victory and asserted that it was his merit before the vote count was finished. Trump then began his favorite record about "numerous violations at polling stations" after it became apparent that there would be no victory in the Senate and a slight advantage in the House of Representatives. In the end, he did submit a formal application to run in the 2024 presidential election. Recall that the Democrats receive the most criticism from Americans regarding high inflation and the current economic downturn. Inflation can safely return to 2% over the following two years, and the recession can end without actually beginning. Therefore, we predict that Biden will win a second term in office rather than Trump winning another term as US president in 2024. COT evaluation. The predictions from the COT report for the euro in 2022 are paradoxical. They displayed the openly "bullish" attitude of professional traders for the first half of the year, but the value of the euro was steadily declining at the same time. Then they displayed a "bearish" attitude for a while, and the value of the euro also steadily declined. The euro has barely budged from its 20-year lows, and the net position of non-profit traders has turned bullish again and is strengthening. As we've already mentioned, this is taking place due to the continued high demand for the US dollar against a challenging geopolitical backdrop. As a result, although demand for the euro currency is rising, the strong demand for the dollar prevents the euro currency from experiencing significant growth. The number of buy-contracts from the "non-commercial" group increased by 7,000 during the reporting week, while the number of shorts decreased by 2,000. The net position consequently increased by roughly 5,000 contracts. Recent weeks have shown a gradual increase in the value of the euro, which already accords with the COT report's indications. However, the geopolitics are likely to remain the same, or there may not be enough reasons for the euro to continue to grow. The upward trend may end as the green and red lines of the first indicator are very far apart from one another. For non-commercial traders, there are 113 thousand more buy than sell contracts. As a result, although the net position of the "Non-commercial" group may continue to increase, the euro may not experience a similar increase. Sales are 39 thousand more if you look at the overall open long and short position indicators for all trading categories (635k vs. 596k). Fundamental event analysis This week, there were no significant macroeconomic reports. Last week, when the US inflation report had the effect of a bomb detonating in the market, traders were very active in buying the pair. However, we stated that while the reaction in the form of a fall in the dollar is quite logical, the strength of its fall raises concerns. The inflation report wasn't so significant or shocking that traders started selling off US currency in large quantities. Many people are still determining the best course of action when buying the euro currency, which appears to be in the early stages of developing a new upward trend. In contrast to the ECB, the Fed will keep raising interest rates. Furthermore, neither the timing nor the identity of the party whose final bid will be higher is known. Technical factors favor the euro, and the fundamental environment offers limited support for this currency. Trading strategy for the week of November 21–25 : 1) The pair crossed all of the Ichimoku indicator's lines in the 24-hour time frame, giving it a real chance of long-term growth for the first time in a long time. Of course, if geopolitics deteriorates again, these opportunities could vanish quickly. However, we can confidently anticipate an upward movement with a target of 1.0636 (100.0% Fibonacci) and cautiously buy the pair. 2) The sales of the euro/dollar pair are no longer significant. You should now wait for the price to return below the important Ichimoku indicator lines before thinking about short positions. Explanations of the illustrations: Price levels of support and resistance (resistance and support), Fibonacci levels – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger Bands (standard settings), MACD (5, 34, 5). The net position size of each trading category is represented by Indicator 1 on the COT charts. The net position size for the "Non-commercial" group is indicated by indicator 2 on the COT charts.     Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327564
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange Most Of Securities Rose

InstaForex Analysis InstaForex Analysis 21.11.2022 08:00
At the close of the New York Stock Exchange, the Dow Jones rose 0.59%, the S&P 500 rose 0.48% and the NASDAQ Composite rose 0.01%. Dow Jones UnitedHealth Group Incorporated was the top performer among the Dow Jones index components in today's trading, up 14.69 points or 2.85% to close at 530.00. Quotes of Cisco Systems Inc rose by 1.20 points (2.58%), closing the session at 47.79. Merck & Company Inc rose 1.92 points or 1.88% to close at 104.23. The least gainers were Salesforce Inc, which shed 1.65 points or 1.10% to end the session at 148.04. Walgreens Boots Alliance Inc was up 0.95% or 0.38 points to close at 39.75 while Chevron Corp was down 0.60% or 1.10 points to close at 182. .99. S&P 500 Among the S&P 500 index components gainers today were Ross Stores Inc, which rose 9.86% to hit 107.59, Gap Inc, which gained 7.55% to close at 13.67, and shares of Lincoln National Corporation, which rose 4.37% to close the session at 37.73. The least gainers were Live Nation Entertainment Inc, which shed 7.85% to close at 66.21. Shares of Fortinet Inc lost 3.66% to end the session at 52.16. Diamondback Energy Inc lost 3.44% to 156.22. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were AGBA Acquisition Ltd, which rose 50.67% to hit 6.78, Paxmedica Inc, which gained 37.42% to close at 2.13, and shares of Mercurity Fintech Holding Inc ADR, which rose by 32.91%, ending the session at around 1.05. Shares of Kiora Pharmaceuticals Inc were the biggest losers, losing 35.85% to close at 3.83. Shares of Bit Origin Ltd lost 29.80% and ended the session at 0.15. Quotes of InMed Pharmaceuticals Inc decreased in price by 28.13% to 2.76. Numbers On the New York Stock Exchange, the number of securities that rose in price (1884) exceeded the number of those that closed in the red (1211), while quotes of 138 shares remained virtually unchanged. On the NASDAQ stock exchange, 1985 companies rose in price, 1772 fell, and 237 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 3.38% to 12/23. Gold Gold futures for December delivery lost 0.66%, or 11.65, to hit $1.00 a troy ounce. In other commodities, WTI crude for December delivery fell 1.73%, or 1.41, to $80.23 a barrel. Futures for Brent crude for January delivery fell 2.17%, or 1.95, to $87.83 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged at 0.36% to 1.03, while USD/JPY rose 0.13% to hit 140.37. Futures on the USD index rose 0.25% to 106.86. Relevance up to 03:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/301736
The Euro To US Dollar Instrument Did Not Change In Value

The Bears Of The EUR/USD Pair Will Soon Take The Target Level

InstaForex Analysis InstaForex Analysis 21.11.2022 08:10
On Friday, the euro managed to settle below the upper limit of the wide range at 0.9710-1.0360. The Marlin Oscillator is now moving downwards. Apparently, the bears will soon take the target level of 1.0205. On the four-hour chart, the price has already crossed the balance indicator line (moving red). The Marlin Oscillator continues to move down in the territory of negative values. After crossing the MACD line (1.0275) the price will continue to move to the target support of 1.0205. Settling below the level opens the target range of 1.0100/20. Relevance up to 03:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327606
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

There Is A Chance That Europe Will Experience A Recession

InstaForex Analysis InstaForex Analysis 21.11.2022 08:17
As it has been for the past week, the EUR/USD currency pair continued its impressive growth on Friday. Therefore, no significant price changes have taken place. The illustration below shows that last week's volatility was not low, but the lack of trend movement gives the impression that the pair barely moved from its position. The European Union only experienced a few noteworthy events. In reality, the market received no new information from Christine Lagarde's two speeches, and the second assessment's report on inflation rarely caused a market reaction. Since we have stopped expecting to see a flat on the 4-hour TF in recent months, it took time to understand last week why the pair was neither rising nor falling. Regarding the other fundamental background, traders were not particularly interested in the results of the US congressional elections because nothing else was more interesting. Remember that the pair haven't grown reasonably over the past few weeks; as a result, we anticipated a strong correction last week. In any case, there is no reason for the euro to keep rising. As a result, if the correction did not occur last week, it should occur this week. At least temporarily, a downward trend will be announced if the price is fixed below the moving average line. A new week without any events in the EU. There won't be much to highlight from this week's significant events in the European Union. Speaking engagements by ECB officials, including Vice-Chairman Luis de Guindos, will take place on Monday, Wednesday, Thursday, and Friday. Even Christine Lagarde was unable to persuade the market of the significance of her speeches last week, which may be why this is interesting. Less significant ECB monetary committee members are also likely to be unsuccessful. The market is now aware that the ECB will keep raising the key rate, and it is unlikely that their members' public statements will suddenly change dramatically. As a result, we don't have high expectations for these performances. There is nothing noteworthy to highlight other than the performances. The November manufacturing and business activity indices will be released on Wednesday, and it is anticipated that all three indices will remain below the critical level of 50.0. There will only be a response to these reports if there is a significant departure from the previous month's values. Christine Lagarde acknowledged that economic and commercial activity would need to be sacrificed to lower inflation. Therefore, it won't surprise us if these indicators continue to decline. There is a chance that Europe will experience a recession, but it is unlikely that it will be severe. The market is no longer motivated to predict the EU economy's decline because it is a well-known and well-established fact. Geopolitics and central bank rates continue to be the most significant factors. Everything is more or less clear when looking at the rates. The Fed will gradually tighten monetary policy to raise the rate to 5%. The European Central Bank must aim for 5%, but it is highly unlikely that the economies of many nations can withstand such a tightening of monetary policy. We continue to think that the ECB rate will weaken and lengthen, which will not be in the European currency's favor. Everything is more challenging in geopolitics because it is virtually impossible to predict how events will unfold over the next month, two months, or three months. Numerous experts predicted that the situation would deescalate in November following the G-20 summit in Bali. We can see that this did not occur. There were simply no discussions about the "Ukrainian issue" at the summit because neither Vladimir Putin nor Vladimir Zelensky attended. Since Kyiv rejects peace talks with Russia and Moscow thinks negotiations can only take place on its terms, the military conflict will only intensify. We are still determining how things might start to get better. As of November 21, the euro/dollar currency pair's average volatility over the previous five trading days was 117 points, which is considered "high." So, on Friday, we anticipate the pair to fluctuate between levels of 1.0208 and 1.0441. An upward turn of the Heiken Ashi indicator will indicate a potential continuation of the upward movement. Nearest levels of support S1 – 1.0254 S2 – 1.0132 S3 – 1.0010 Nearest levels of resistance: R1 – 1.0376 R2 – 1.0498 R3 – 1.0620 Trading Advice: The EUR/USD pair is still fluctuating. In light of this, we should consider opening new long positions with targets of 1.0441 and 1.0498 if the Heiken Ashi indicator reverses its upward trend. Only after fixing the price below the moving average line with targets of 1.0208 and 1.0132 will sales become significant. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels – target levels for movements and corrections. Volatility levels (red lines) – the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.    Relevance up to 01:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327598
EUR/USD Pair Has Potential For The Downside Movement Today

EUR/USD Pair: The Uptrend Line Still Retains Its Relevance

InstaForex Analysis InstaForex Analysis 21.11.2022 08:35
Analysis of EUR/USD, 5-minute chart Last Friday, the euro/dollar pair did not show any interesting movement. Despite the fact that over the past week there was quite high volatility, you still can't tell from the charts whether the price has been moving quite actively. The fact is that there was mainly a sideways movement, which is misleading. There is not much to say about the interesting events of this day. European Central bank President Christine Lagarde gave her second speech last week, and said that the central bank was ready to raise the key rate further and warned of a slowdown in economic activity as a necessary measure to bring down inflation. The market has known all this for a long time, so there was no reaction to this speech. And there was nothing else interesting. Last week was generally quite boring for macroeconomic and fundamental events, and the new one will be no better... The situation with trading signals couldn't be simpler. The pair traded between 1.0340 and 1.0375 all day, only occasionally trying to get out of it. And it was unsuccessful. Thus, traders could open one or two positions when the price tried to leave the horizontal channel, but most likely, they took a small loss on them, because there was no trend. It happens, there is nothing wrong with that. During the last months the pair was in a trend and was volatile, the flat hour has probably come. COT report The Commitment of Traders (COT) reports on the euro in 2022 are a paradox. Halfway through the year they showed an outright bullish mood of commercial players, but at the same time the euro was falling steadily. Then for a few months they showed a bearish mood, and the euro also steadily fell. Now the net position of the non-commercial traders is bullish again and getting stronger, and the euro has hardly moved away from its 20-year lows. This is happening, as we said, because demand for the U.S. dollar remains very high amid the difficult geopolitical situation in the world. So even if the demand for the euro is rising, the high demand for the dollar still does not allow the euro itself to rise as much. In the given period, the number of long positions from the non-commercial group increased by 7,000, whereas the number of shorts - by 2,000. As a result, the net position increased by about 5,000 contracts. The euro has been slowly rising in recent weeks, which already coincides with the readings of the COT report. At the same time we think that the dollar will rise due to the same geopolitics or due to the lack of factors for the euro's growth. The green and red lines of the first indicator are far away from each other, which may indicate the end of the uptrend (which, in fact, never happened). The number of longs exceeds the number of shorts by 113,000. Thus, the net position of the non-commercial traders may go on rising but it may not provoke the same growth for the euro. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 39,000 more shorts (635,000 vs 596,000). Analysis of EUR/USD, 1-hour chart On the one-hour chart, you can see that the pair has been moving sideways for more than a week, while maintaining a fairly high volatility. The uptrend line still retains its relevance, but during a flat, the price can freely overcome it, which would not be considered as a sell signal. We still expect a downward movement. On Monday, the pair may trade at the following levels: 1.0072, 1.0119, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as Senkou Span B lines (1.0111) and Kijun Sen (1.0379). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are no important events for November 21 in the EU and the USA. Therefore, the market will not react to anything today. High volatility is likely to persist and so will the flat. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327594
The EUR/USD Pair Chance For The Further Downside Movement

Technical Analysis Of The EUR/USD Pair's Movement

InstaForex Analysis InstaForex Analysis 21.11.2022 08:40
EUR/USD should move a bit lower towards 1.0236 to complete the corrective decline from 1.0482. Once this correction is complete near 1.0236, a new impulsive rally higher towards 1.0786 and possibly even closer to 1.0926 should be expected. However, for now, let's focus on the final dip closer to 1.0236 before the next move higher to 1.0482 and above. Relevance up to 06:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301757
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

EUR/USD Pair Is Still Unfolding The Last Wave Higher

InstaForex Analysis InstaForex Analysis 21.11.2022 08:50
Technical outlook: EURUSD has slipped towards the 1.0270-80 zone as discussed and predicted earlier. It might be good to exit short positions around the 1.0270-75 area since it is a potential support region. The single currency pair is seen to be trading close to 1.0280 at this point in writing as the bulls prepare for one more leg higher towards the 1.0550-1.0600 area. EURUSD is still unfolding the last wave higher from the 0.9740 lows to complete its larger-degree corrective rally, which began from 0.9535. Potential upside target extensions are close to 1.0600 and higher, for the last wave to terminate. Also, note that 1.0600 is close to the Fibonacci 0.382 retracement of the drop between 1.2266 and 0.9535 levels respectively. A high probability remains for a turn lower from 1.0600. The instrument could resume its larger-degree downtrend. Immediate price support on the daily chart is seen around 0.9740, followed by 0.9535; while interim resistance is just below 1.0500 respectively. A push above 1.0480 will confirm and accelerate the rise further towards the 1.0600 mark. Trading idea: Potential rally towards 1.0600 against 1.0000 Good luck! Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301763
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

CEE FX Will Remain On The Stronger Side This Week

ING Economics ING Economics 21.11.2022 09:16
FX markets start a holiday-shortened week quietly, as the forces that drove the recent dollar correction continue to fade. In China, sentiment is softening as the Covid situation deteriorates again. For the Fed, the market is again pricing 5% rates next year. This week the highlight will be FOMC minutes, European PMIs and a few monetary policy meetings In this article USD: FOMC minutes in focus this week EUR: PMIs in focus this week GBP: Sterling could take a welcome back seat CEE: All eyes on Hungary, again USD: FOMC minutes in focus this week The dollar is continuing to crawl higher after its sharp sell-off earlier this month. Driving that sharp sell-off had been a combination of softer US CPI data and some optimism emerging from China regarding Beijing's stance on Covid Zero and the property market. On the latter, it seems that the recent outbreak of Covid in some Chinese cities is still prompting similarly restrictive measures and that the Covid Zero policy has yet to undergo wholesale changes. Additionally, regulatory forbearance on the Chinese property development sector will not turn the economy around. Here our colleague, Iris Pang, remains concerned over China's export sector into 2023. For reference, Korean trade data for the first 20 days of November released overnight was pretty poor - exports falling 17% year-on-year. USD/CNH has comfortably turned higher from the recent low near 7.00. For the Federal Reserve story, Wednesday will see the release of the minutes of the 2 November FOMC meeting. At the time, we felt that it was still a reasonably hawkish meeting - although the Fed clearly wanted to shift the narrative from the size of rate hikes to the terminal rate. The minutes could pose a risk that the current dollar correction extends - especially since we will be faced with thin markets later this week as the US celebrates the Thanksgiving public holiday on Thursday. But assuming there are no big surprises - e.g. 'many participants wanting to take stock of the tightening undertaken so far', we would expect the dollar to find support on dips. Today's session should be reasonably quiet, too. DXY probably trades a 107.00-107.50 range. Upside risks could emerge from rising US Treasury yields were this week's $120bn of US Treasury issuance to demand concessionary pricing. And for those who missed it last week, please see our 2023 FX Outlook: The dollar's high wire act. Chris Turner EUR: PMIs in focus this week EUR/USD continues to edge lower in quiet markets. The recent outperformance in eurozone equity indices is no longer providing a boost. In addition to the continued wall of European Central Bank speakers, this week will see the advanced November PMIs for the eurozone, Germany and France.  The composite PMIs are expected to be in contraction territory for all three and be a reminder that at some point the ECB will probably call time on its tightening cycle. Our team's view is that the ECB hikes 50bp on 15 December (59bp priced in the markets) and then finishes the cycle with a 25bp hike in February. In other words, we look for the cycle to conclude at 2.25% rather than the 2.90% area priced for the markets in late summer. In the short term, EUR/USD has just sunk below support at 1.0270 and we would not rule out it drifting towards the 1.0200 area near term.  Elsewhere, we note that Swedish house prices dropped 3% month-on-month in October. The Riksbank's recent release of its financial stability report warned about the heavy lending to the property sector (42% of GDP) and potential problems with a housing market downturn. Our team still expects the Riksbank to hike rates 75bp to 2.50% this Thursday - but the housing sector is certainly one of the factors which can see the Swedish krona underperform in early 2023 and EUR/SEK retesting the October 11.10 high seems likely. Chris Turner GBP: Sterling could take a welcome back seat After a wild ride since the late summer, sterling could now begin to take less of the limelight. The chancellor has delivered the autumn statement and we are now left to examine how quickly growth softens and how aggressively the Bank of England will tighten when it next meets on 15 December. On the subject of growth, the next input here will be Wednesday's release of the November PMI, where the composite indicator is expected to remain below 50 - for the fourth month in a row. EUR/GBP is softening as the euro seems to be taking the larger strain of the softer China view.  However, 0.8665 should be good intra-day support. We are more bearish on GBP/USD. And unless Wednesday's FOMC minutes throw up some dovish surprises, GBP/USD could drift back to the 1.1700/1710 area this week. Our year-end GBP/USD target remains a reasonably aggressive 1.10 - largely on the back of renewed dollar strength. Chris Turner CEE: All eyes on Hungary, again Last week, we saw the third quarter GDP results across the region, and with the exception of Hungary, we saw rather positive surprises. This week we will see a number of monthly indicators from Poland, including industrial production and labour market data, and the National Bank of Hungary meeting on Tuesday. We do not expect any fireworks from the central bankers at the November rate-setting meeting. The latest data regarding inflation and GDP were broadly in line with the central bank's expectations and the next staff projection update is only due in December. But Hungary will also be in the spotlight at the government level this week. A decision on Hungary's access to the recovery plan is expected to be taken by the European Commission on Tuesday. However, reports last week suggested that the decision could be delayed, which would be a problem for the EU finance ministers' meeting scheduled for 6 December, when a final decision on the matter is due. We expect Hungary to find a deal with the EU, but given the timing constraints, it could be a bumpy road.  In the FX market, conditions were almost unchanged for the CEE region over the past week. While global conditions remain strongly positive for the region, domestic conditions still remain on the negative side in our view though slightly better than they were. The dollar index remains near its lowest levels since mid-August, sentiment in Europe has improved slightly again, and the CEE region continues to unwind its relationship with gas prices as issues are resolved for this winter. On the other hand, local rates remain volatile and interest rate differentials are unchanged or only slightly higher.   Thus, we expect CEE FX to remain on the stronger side this week, but the situation remains fragile. Of course, the main focus will be on the Hungarian forint, which will be driven purely by incoming headlines, and given last week's indications, we can expect moves in both directions before a deal with the EU is agreed upon and the forint heads below 400 EUR/HUF. The Polish zloty maintains the largest gap against the interest rate differential and has also leveraged the most improvement in global conditions in recent weeks. Therefore, we see a move up to 4.72 EUR/PLN.   Frantisek Taborsky  Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Chance For The Further Downside Movement

Eurozone may find it hard to soak up big rate hikes. German PPI decreased by over 4%...

Kenny Fisher Kenny Fisher 21.11.2022 15:50
EUR/USD has resumed its downswing and is in negative territory on Monday. In the North American session, the euro is trading at 1.0238, down 0.81%. The ECB holds its final policy meeting of the year on December 15th, and it’s practically a given that the ECB will raise rates. But by how much? The current benchmark rate of 1.50% is low compared to other central banks, but the ECB is well aware that a weak eurozone economy will have trouble absorbing further oversize hikes. The ECB’s rate-tightening cycle has been steep, with an increase of 200 basis points in just three months. Still, inflation continues to soar, hitting 10.6% in October, up from 9.9% a month earlier. With inflation in double-digits, there is strong pressure to deliver a 50-bp increase next month. However, policy doves would like to see slower rates of 25-bp in order to minimize an economic slowdown. Read next: NVIDIA (NVDA) Q3 earnings results outperformed part of the markets forecasts| FXMAG.COM German PPI slides There was a surprise from Germany’s PPI today, which fell by 4.2%, its first decline since May 2020. The consensus stood at 0.9%. Is the sharp decline a mere blip, or does it point to lower inflation in the eurozone’s largest economy? We’ll get a look at German and eurozone CPI reports next week, and a drop in inflation will raise speculation that inflation may have finally peaked. The Federal Reserve’s barrage of hawkish statements from Fed members has chilled risk appetite and hopes of a Fed pivot. The US dollar has bounced back after taking a beating following the soft inflation report earlier this month. The Fed has long insisted that one or two reports showing inflation is lower does not make a trend, although risk sentiment has soared on every soft inflation report. If November’s inflation data is lower than anticipated, we can expect risk appetite to jump at the expense of the US dollar. The markets have priced in a 50-bp hike next month, although some Fed members have stated that a 75-bp move remains on the table. EUR/USD Technical 1.0359 and 1.0447 are the next resistance lines EUR/USD is testing support at 1.0238. Below, there is support at 1.0150 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro drops below 1.03 as risk aversion climbs - MarketPulseMarketPulse
The Outlook Of EUR/USD Pair For Long And Short Position

EUR/USD long positions - "The Chicago Fed National Activity Index which is due to be out in the afternoon is unlikely to support the euro bulls."

InstaForex Analysis InstaForex Analysis 21.11.2022 15:57
In my morning review, I outlined the level of 1.0268 and recommended entering the market from there. Let's have a look at the 5-minute chart. A breakout and an upside retest of this range coupled with failed attempts of the bulls to regain control created a nice sell signal. By the time of the publication, this move has generated 40 pips in profit. From the technical viewpoint, not much has changed in the second half of the day, including the strategy.     For long positions on EUR/USD: The Chicago Fed National Activity Index which is due to be out in the afternoon is unlikely to support the euro bulls. The most that can happen is profit taking and a slight upside correction by the end of the day. For this, bulls should assert their strength near the support of 1.0214, towards which bears are actively pushing the pair. The best moment to open long positions at this level will be a false breakout which will generate the first buy signal. If so, the pair may start a correction and return to the level of 1.0268 where sellers have been especially active today. A breakout and a downward retest of this range will pave the way to 1.0328 where moving averages supporting bears are located. A move above 1.0328 will open the door to a higher target of 1.0391 where I recommend profit taking. If EUR/USD declines in the North American session and buyers are idle at 1.0214, the euro will come under more pressure and may drop lower. If so, only a false breakout at the support of 1.0167 will be a good moment to open buy positions. Buying EUR/USD after a rebound is possible at 1.0132 or even at the low of 1.0090, bearing in mind an upside correction of 30-35 pips within the day. For short positions on EUR/USD: Bears are steadily selling the euro. If the US data turns out to be better than expected, the EUR/USD pair will continue its downward correction. The best moment to sell the pair will be its failed attempt to move above 1.0268, similar to those I described above. This will create a good entry point and will allow the price to move lower to the support of 1.0214. If the pair settles below this level and performs its upward retest, this will create another sell signal that will trigger stop-loss orders set by the bulls. If so, the pair may extend its fall to the area of 1.0167 where I recommend profit taking. The level of 1.0132 will serve as a more distant target, and testing this mark may cancel the bullish trend. In case EUR/USD rises in the course of the North American session and bears are idle at 1.0268, speculative sellers will start leaving the market. This will strengthen the upward correction and will pave the way to 1.0328. Selling at this pound can be done only after a false breakout. Going short on EUR/USD right after a rebound is possible at the high of 1.0391, keeping in mind a downward intraday correction of 30-35 pips.     COT report The Commitments of Traders report for November 8 showed a drop in both short and long positions. This report does not reflect the reaction to the recent US CPI data so it should not be fully trusted. Despite a slowdown in US consumer prices, and we are talking about a slowdown and not a proper decline, the US Federal Reserve will continue to hike rates. It is expected that the rate increase in December will be between 0.5% and 0.75%. As for the euro, the demand for risk assets has indeed increased. Apart from speculations that the Fed is going to ease the pace of monetary tightening, the euro is driven by the ECB's plan to maintain the rate-hiking cycle. More and more EU officials are saying that borrowing costs should be increased further in order to tackle rising inflation. However, if the EU economy continues to contract at a rapid pace, the regulator may give up the idea of aggressive monetary policy. This will definitely limit the upside potential of the pair in the medium term. According to the COT report, long positions of the non-commercial group of traders dropped by 7,453 to 232,317 while short positions declined by 9,262 to 124,718. The non-commercial net position remained positive at 107,599 versus 105,790 a week earlier. This indicates that investors are taking advantage of a cheaper euro and continue to buy it while it is holding below the parity level. They might also be accumulating long positions in hope that the pair will start to recover sooner or later. The weekly closing price advanced to 1.0104 from 0.9918.     Indicator signals: Moving Averages Trading below the 30- and 50-day moving averages indicates that the euro is set to decline further. Please note that the time period and levels of the moving averages are analyzed only for the H1 chart, which differs from the general definition of the classic daily moving averages on the D1 chart. Bollinger Bands If the pair advances, the upper band of the indicator at 1.0375 will act as resistance. Description of indicators: • A moving average of a 50-day period determines the current trend by smoothing volatility and noise; marked in yellow on the chart; • A moving average of a 30-day period determines the current trend by smoothing volatility and noise; marked in green on the chart; • MACD Indicator (Moving Average Convergence/Divergence) Fast EMA with a 12-day period; Slow EMA with a 26-day period. SMA with a 9-day period; • Bollinger Bands: 20-day period; • Non-commercial traders are speculators such as individual traders, hedge funds, and large institutions who use the futures market for speculative purposes and meet certain requirements; • Long non-commercial positions represent the total number of long positions opened by non-commercial traders; • Short non-commercial positions represent the total number of short positions opened by non-commercial traders; • The non-commercial net position is the difference between short and long positions of non-commercial traders. Relevance up to 12:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327676
Euro to US dollar - Ichimoku cloud analysis - 21/11/22

Euro to US dollar - Ichimoku cloud analysis - 21/11/22

InstaForex Analysis InstaForex Analysis 21.11.2022 16:29
EURUSD is trading around 1.0238 right on top of the Ichimoku cloud as expected. Last week we warned bulls that price was vulnerable to pull back towards the Kumo (cloud). Price had broken below the tenkan-sen and kijun-sen indicators showing vulnerability. Price is now trading on top of the cloud which is very important short-term support. A break inside the Kumo would be a sign of weakness. Next support is at the lower cloud boundary at 1.0105. The tenkan-sen (red line indicator) is resistance at 1.0311 and the kijun-sen (yellow line indicator) resistance at 1.0353. Bulls need to break above the resistance of 1.0353 in order to resume the up trend. Relevance up to 13:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301860
The EUR/USD Pair: There Are Still No Sell Signals

Euro lost about a percent yesterday! Euro to US dollar - forecast - November 22nd

InstaForex Analysis InstaForex Analysis 22.11.2022 07:45
Yesterday, China reported a sharp rise in Covid cases in Beijing, and the return of social restrictions and isolation in several areas in the country. Oil rebounds and stock indices started to decline on risks regarding the collapse of new (after FTX) cryptocurrency platforms (Genesis). Against this backdrop, the euro fell in price by 0.80%.     This morning, the euro is approaching support at 1.0205. The price may correct just a bit, as the Marlin oscillator has a margin to the zero line on the daily chart - up to the limit of the declining territory, and may try to turn up without leaving this area. The bears' success, however, would open the 1.0100/20 target range.     The price has settled under the MACD indicator line on the four-hour chart. The Marlin oscillator is in negative territory, in the area where the direction is downward. These circumstances increase the probability of the attempt to overcome 1.0205. The immediate objective is to settle under 1.0205. Support is technically strong, preliminary price consolidation is likely. Relevance up to 03:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327738
The EUR/USD Price May Fall Under 1.0660

The EUR/USD Pair Started To Move Down On 1-Hour Chart

InstaForex Analysis InstaForex Analysis 22.11.2022 08:04
Analysis of EUR/USD, 5-minute chart The euro/dollar pair showed quite a confident downward movement and managed to overcome the uptrend line on Monday. Thus, the pair will no longer rise, and it may fall to the Senkou Span B line. As a reminder, as long as the price has not crossed both Ichimoku indicator lines (unless it is flat on the higher time frame), we don't consider the trend "hopeless". In other words, the pair still has chances to restore the upward movement if it is above the Senkou Span B line. But if it falls below the Senkou Span B line, then it might rush to its 20-year lows again. Remember that we consider the latest upward trend on the one-hour chart, to put it mildly, as groundless. Thus, the fall is logical. In fact, yesterday the US dollar rose without any reason either, as there were no important events and reports in the USA or the European Union. In any case, we are waiting for the price to fall to the Senkou Span B line. There was only one trade signal on Monday. The pair crossed the level of 1.0269 during the European trading session, and then managed to move down by 30 pips at the most. Therefore, you couldn't lose on the open trade, and the profit, if there was one, was minimal. However, a small profit is better than a loss. COT report The Commitment of Traders (COT) reports on the euro in 2022 are a paradox. Halfway through the year they showed an outright bullish mood of commercial players, but at the same time the euro was falling steadily. Then for a few months they showed a bearish mood, and the euro also steadily fell. Now the net position of the non-commercial traders is bullish again and getting stronger, and the euro has hardly moved away from its 20-year lows. This is happening, as we said, because demand for the U.S. dollar remains very high amid the difficult geopolitical situation in the world. So even if the demand for the euro is rising, the high demand for the dollar still does not allow the euro itself to rise as much. In the given period, the number of long positions from the non-commercial group increased by 7,000, whereas the number of shorts - by 2,000. As a result, the net position increased by about 5,000 contracts. The euro has been slowly rising in recent weeks, which already coincides with the readings of the COT report. At the same time we think that the dollar will rise due to the same geopolitics or due to the lack of factors for the euro's growth. The green and red lines of the first indicator are far away from each other, which may indicate the end of the uptrend (which, in fact, never happened). The number of longs exceeds the number of shorts by 113,000. Thus, the net position of the non-commercial traders may go on rising but it may not provoke the same growth for the euro. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 39,000 more shorts (635,000 vs 596,000). Analysis of EUR/USD, 1-hour chart The EUR/USD pair started to move down on the one-hour chart, which we expected last week. There was a reason why the quotes fell yesterday, but we could not find any reason to back up the pair's strong growth a few weeks earlier. Therefore, at this time, the pair is returning to its balance, which was disrupted a few weeks ago. On Tuesday, the pair may trade at the following levels: 1.0072, 1.0119, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, and also Senkou Span B lines (1.0116) and Kijun-Sen (1.0338). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are no important events scheduled in the EU and the USA for today. Therefore the market will have nothing to react to. High volatility is likely to persist and the price has technical reasons to continue falling. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327724
Credit squeezing into central banks – what next?

Technical Outlook Of The EUR/USD Pair By Oscar Ton

InstaForex Analysis InstaForex Analysis 22.11.2022 08:19
Technical outlook: EURUSD dropped through the 1.0222 lows on Monday before finding bids again. The single currency pair managed to pull back and is seen to be trading at about 1.0250 at this point in writing. Until prices stay above 1.0000, the bulls can come back in control and push the price towards the 1.0550-1.0600 zone before giving in to the bears again. EURUSD is facing interim resistance at 1.0481, while support comes in around 0.9935, followed by 0.9740 on the daily chart. A push above 1.0481 will further confirm and accelerate the climb towards the 1.0550-1.0600 zone. Also, note that 1.0600 is close to the Fibonacci 0.382 retracement of the previous larger-degree downswing between 1.2266 and 0.9535 levels respectively. EURUSD has been in a counter-trend rally after printing lows at 0.9535 earlier. The currency pair seems to be into its last leg higher towards the 1.0550-1.0600 zone before finding strong resistance. Also, note that the next-in-line price resistance is seen at about 1.0600 which could be the next target for bulls. Trading idea: Potential rally towards 1.0550 against 1.0000 Good luck!     Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301962
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

The EUR/USD Pair: New Impulsive Rally Can Begin

InstaForex Analysis InstaForex Analysis 22.11.2022 08:24
EUR/USD has moved down to test support at 1.0236 as we expected. Therefore, we don't need anymore downside progress, but to conclude that the corrective decline has been completed, we also need a break above resistance at 1.0305 and more importantly a break above resistance at 1.0396 that will call for the next impulsive rally towards 1.0782 and 1.0926 as the next upside targets. As we need a break above minor resistance at 1.0305 as an indication that the corrective decline has been completed. We also need to accept the possibility of more downside pressure towards 1.0172 before the correction finally comes to an end and a new impulsive rally can begin.   Relevance up to 07:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301968
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

The Positive Sides Of Lower Energy Prices In Europe Are Overshadowed By The Covid Situation In China And The War In Ukraine

ING Economics ING Economics 22.11.2022 09:13
Despite a goal-rich start at the World Cup in Qatar, markets are all about defense right now. New Covid restrictions in China are fuelling a return to the safe-haven dollar while investors wait for tomorrow's FOMC minutes. This may be laying the groundwork for a broader USD recovery into year-end. Elsewhere, we expect a 50bp rate hike by the RBNZ In this article USD: Recovery mode EUR: Preparing for a longer downtrend NZD: We expect a 50bp hike by the RBNZ CEE: EU disputes turn the spotlight from Hungary's central bank   USD: Recovery mode China’s Covid situation has suddenly returned as a very central driver for global markets this week. Over 27,000 cases were reported today, with the city of Guangzhou being the new epicentre of the outbreak, and local authorities are reportedly scrambling to impose those same restrictive measures that appeared a thing of the past after recent signals from the central government that the zero-Covid policy would be gradually abandoned. In FX, this has fuelled a return to the dollar. After all, optimism on China’s outlook was one of the two key forces - along with speculation about a dovish pivot by the Fed – behind the sharp dollar correction earlier this month. On the Fed side, tomorrow’s minutes will be important to watch, but the recent Fedspeak has undoubtedly added a layer of caution to the dovish pivot enthusiasm, which could mean investors may also be more reluctant to overinterpret dovish signals from the minutes. We have a few speakers to monitor today amid a very light data calendar in the US: Loretta Mester, James Bullard (both hawks) and Esther George (more neutral). Another theme to watch today will be the reported OPEC+ plans to increase output. The news caused an acceleration in the crude sell-off yesterday, with Brent trading below $85/bbl before recovering after the Saudis denied the reports. Should output hike speculation mount again, expect some pain for commodity currencies, as the combination with resurging Covid restrictions in China could prove quite toxic. We continue to see the dollar at risk of new brief bearish waves this week, but we note that the environment has now turned more benign for the greenback, and this may be laying the groundwork for a re-appreciation into year-end, which is our baseline scenario. We could see some consolidation around 107.50/108.00 in DXY today. Remember that liquidity will run significantly thinner in the second half of the week as the US enters the Thanksgiving holiday period. Francesco Pesole EUR: Preparing for a longer downtrend EUR/USD plunged back to the 1.0250 area as markets jumped back into defensive dollar trades yesterday. Indeed, the negative impact of China’s new Covid wave on the rather exposed eurozone economy and of an ever-concerning situation in Ukraine are overshadowing the positives of lower energy prices. We see further room for a contraction in EUR/USD this winter and continue to target sub-parity levels into the new year, as discussed in our 2023 FX Outlook. The eurozone calendar includes consumer confidence data (which is expected to have marginally recovered) and speeches by the European Central Bank's Robert Holzmann, Olli Rehn and Joachim Nagel. Expect some support at 1.0200 in EUR/USD: a decisive break below that level could underpin the return to a bullish dollar narrative and unlock more downside risks. Francesco Pesole NZD: We expect a 50bp hike by the RBNZ The Reserve Bank of New Zealand will announce monetary policy at 0100 GMT tomorrow, and it is a close call between a 50bp and a 75bp hike. As discussed in our meeting preview, we see 50bp as more likely, as signs of an accelerating housing market contraction warn against an overly aggressive approach. Markets (66bp in the price) and the majority of economists are, however, leaning in favour of a 75bp move. New rate and economic projections will also be released, and there are some key questions to be answered. The first of these is where the RBNZ will place the peak rate, which is currently at an unrealistic 4.10% (rates are at 3.50% now), so should be revised to 5.0% or higher, and how many cuts will be included in the profile. The second is how much more pain will be included in the forecasts for the housing market. Third is how fast inflation is projected to drop given the higher CPI readings for 3Q but more aggressive tightening. A half-point hike would likely be seen as a dovish surprise by markets at this point, but a significant revision higher in rate projections could mitigate any negative impact on the New Zealand dollar. Either way, expect any post-meeting NZD moves to be short-lived, as global risk dynamics and China news will soon be back in the driver’s seat for the currency. NZD/USD is at risk of falling back below 0.60 before the end of this year, while we target a gradual recovery to 0.64 throughout the whole of 2023. Francesco Pesole CEE: EU disputes turn the spotlight from Hungary's central bank Today is the busiest day in CEE this week. In the morning we start with the monthly indicators in Poland. The main focus will be industrial production for October, as a leading indicator for the rest of the region. Polish industrial production is benefiting from an improvement in supply chain functioning, which supports export-oriented industries, including automotive and electrical products. We expect only a slight slowdown from 9.8% to 8.8% year-on-year, above market expectations. Labour market numbers should confirm the still tight conditions with wage growth of 13.8% YoY. PPI will confirm continued price pressures in the economy with the YoY number accelerating from 0.2% to 1.1% in October. From a market perspective, today's numbers may be perceived as having implications for the National Bank of Poland's economic outlook and monetary policy. After all, it is wage growth that has been the biggest surprise to the central bank's forecast in the past. Thus, today's numbers may revive market hopes for an additional rate hike and support the zloty in the short term. However, we remain bearish in the medium term with a forecast of 4.90 EUR/PLN at the end of this year. Later today we will see the National Bank of Hungary (NBH) meeting. We do not expect any fireworks at this rate-setting meeting. The latest data regarding inflation and GDP were broadly in line with the central bank's expectations and the next staff projection update is only due in December. Against this backdrop, we don't see any game-changing moves. When it comes to the risk environment, we haven't seen a material improvement in domestic or external risk factors, which were flagged by the central bank as triggers to consider changes in its monetary stance. The Hungarian forint has been hovering in the 400-415 EUR/HUF range for the past few weeks, far from the NBH's pain threshold. The market is pausing in place, awaiting news from the Hungarian government's negotiations with the European Commission. These could theoretically come today, which would overlay today's NBH meeting. However, from last week's hints, it is likely that we will hear more bad news before any good news comes, which may cause further volatility in the FX market. However, a happy ending to this saga should see the forint below 400 EUR/HUF in our view. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Is Showing A Potential For Bearish Drop

The Energy Crisis Is The Main Difference Between EU and USA Situation

InstaForex Analysis InstaForex Analysis 22.11.2022 10:33
EUR/USD There is a slow but smooth reversal in euro, which has been going on for almost two weeks. The new talks of another 0.75% Fed rate hike as early as mid-December are obviously pushing the currency down. But even though inflation in the Euro area is at 10% y/y, which forces the ECB to raise the rate or make formidable statements about their willingness to increase it, there is an important factor that distinguishes it from the situation in the US. That is the energy crisis. In the US, fuel and electricity prices have changed little over the year, while in Europe, both have gone up very much, which is fatalistic. This means that euro will be under pressure, with highs of recent weeks becoming the upper limit of the range. Be careful when selling, especially from rebounds.       Relevance up to 07:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327754
The Euro May Attempt To Resume An Upward Movement

EUR/USD Pair: An Upward Correction Has Begun

InstaForex Analysis InstaForex Analysis 23.11.2022 08:08
On Tuesday, the EUR/USD currency pair showed zero interest in the volatile movement. As we've already stated, it is challenging to anticipate volatile movements without fundamental and macroeconomic backgrounds. After all, these backgrounds weren't just missing last week; they were also missing locally. The market now has nothing to trade on because it has gradually processed all the available data. Because of this, over the past week and a half, we have seen relatively indistinct movements that resemble a flat more than a trend. The pair still fell by 70–80 points on Monday despite consolidating below the moving average line, so there isn't a clear flat. However, the movement is still unsatisfactory, especially on the lowest TF. We are forced to think about the "technique" because macroeconomics and the "foundation" are nonexistent now. The "technique" has made everything clear at this point. Given that the trend has shifted downward and there has been consolidation below the moving average, it is reasonable to anticipate further declines in the euro's value. Also, keep in mind that the pair's entire prior growth was illogical from our perspective; therefore, a potential fall this week or next week will already be logical. Right now, there are a few things that could help the euro's growth. They weren't numerous before, and they're even less prevalent now. Remember that the Fed's slowing pace of tightening its monetary policy is not a "dovish" factor that would be able to cause the dollar to decline. A rate cut or implementing a quantitative stimulus plan is the "dovish" factor. The Fed is not currently engaging in any practice. It's a two-edged sword that the ECB might raise rates for a while at a slightly faster pace than the Fed. After all, the Fed's rate is still higher, and there is more confidence in the US dollar than in the euro. So, in any case, we do not anticipate a significant increase in the euro's value. The majority of Fed members concur. We should reexamine the subject that has been well-known to everyone for a long time since there is, for the most part, nothing to discuss. In theory, even before Mary Daly and Rafael Bostic's speeches this week, we were certain that the Fed would only increase interest rates in December by 0.5%. However, the Federal Reserve board members did nothing more than reiterate what market participants had long believed. The rate will slow down in growth, increasing by 0.5% in December and 0.25% in February and March. The final rate level is 5%, though it may be slightly adjusted upward if inflation slows down too slowly. This forecast is what should guide our current "dancing." The present dollar exchange rate is no longer impacted by knowledge of the Fed's potential future actions. Theoretically, the euro can strengthen further against the dollar as the difference in interest rates between the ECB and the Fed is expected to close in the coming months. The euro currency can now grow, whereas the US currency previously grew as the gap widened. Therefore, we only partially rule out the possibility of the pair continuing to grow. However, the likelihood of further growth is only 30%, while the likelihood of a new fall is 70%. The pair's failure to swiftly reenter the area above the moving average yesterday favors the dollar. The pair has recently grown too quickly, necessitating a technical downward correction that benefits the dollar. The euro has no new growth drivers, which also benefits the dollar. The pair may not experience a significant decline, but another 100 to 200 points should be lost. As of November 23, the euro/dollar currency pair's average volatility over the previous five trading days was 93 points, which is considered "high." So, on Wednesday, we anticipate the pair to fluctuate between 1.0181 and 1.0367. The Heiken Ashi indicator's downward turn indicates that the downward movement has resumed. Nearest levels of support S1 – 1.0254 S2 – 1.0132 S3 – 1.0010 Nearest resistance levels: R1 – 1.0376 R2 – 1.0498 R3 – 1.0620 Trading Suggestions: An upward correction has begun for the EUR/USD pair. Therefore, in the event of a downward reversal of the Heiken Ashi indicator or a price rebound from the moving average, new short positions with targets of 1.0181 and 1.0132 should now be considered. After the price fixing is above the moving average line with targets of 1.0367 and 1.0498, purchases will become pertinent. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels – target levels for movements and corrections. Volatility levels (red lines) – the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327864
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Growth Of The EUR/USD Pair Is Probably Over

InstaForex Analysis InstaForex Analysis 23.11.2022 08:20
The euro rose by 63 points on Tuesday, but this growth looks excessive against the background of the Russian oil price ceiling, which is already being prepared by the G-7 countries today and we also have the release of the minutes from the last hawkish meeting of the Federal Reserve. On the daily chart, the Marlin oscillator reacted weakly to yesterday's growth, and this morning it is already moving down. The growth is probably over and now the price will head towards 1.0205. The eurozone business activity indicators for November will be released today, forecasts are negative. Manufacturing PMI may drop from 46.4 to 46.0, the Services PMI forecast is 48.0 compared to 48.6 in October. Durable goods orders in the U.S. may rise 0.4% in October. On the four hour chart, yesterday's price growth looks flat, which is structurally closer to the consolidation, rather than a pronounced corrective growth. The growth occurred below the MACD indicator line. The Marlin oscillator is still in negative territory, almost touching the zero line. It is highly likely that there will be a synchronous price reversal from the MACD line and the signal line of the oscillator from the limit of the growth area. Relevance up to 03:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327872
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

The Upcoming Fed Minutes Could Be A Strong Trigger For Market Movements

InstaForex Analysis InstaForex Analysis 23.11.2022 09:46
Until now, there is no definite trend in markets, partly due to the upcoming Fed minutes and holiday in the US. But stock markets did close higher on Tuesday because of the uncertainty over future rate hikes and strong rebound in oil prices. The latter not only supported energy and oil production stocks, but also the overall equity markets in both Europe and the US. This clearly shows that investors are carefully waiting for events that would drive the markets. Resultantly, it led to a decrease in market volumes The upcoming Fed minutes could be a strong trigger for market movements, where a prevailing hawkish sentiment will prompt a new wave of sell-offs. Meanwhile, a softer tone will lead to a rally, mainly because the market has already taken into account the likely 75 basis point rate hike in December. On the forex market, there are insignificant movements in the pairs where dollar is present. This is also due to the highly-anticipated Fed minutes and long weekend in the US. Most likely, quotes will move depending on the contents of the protocol, and it will be the same as that of the stock markets. The dynamics of government bonds will also play an important role, in which a noticeable decline in yields would put pressure on USD, while an increase would support it. Forecasts for today: GBP/USD The pair is trading within the range of 1.1740-1.1965. It will break out depending on the contents of the Fed minutes. A rise above 1.1965 might take the pair to 1.2060, while a decline below 1.1740 might push it to 1.1630. EUR/USD The pair is rising amid expectations of continued aggressive rate hikes from the ECB. A rise above 1.0350 could it to 1.0435.     Relevance up to 08:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327900
Hungarian inflation peak is behind us

FX Daily: In Hungary, The Central Bank Left Rates Unchanged

ING Economics ING Economics 23.11.2022 10:11
Risk sentiment is still being driven by news from China, with markets now turning a blind eye to Covid restrictions and instead speculating about an easing in tech regulation. Today, it's all about the Fed minutes, as bulls hope to find signs that Powell's hawkishness was conditional on a strong CPI reading. The USD correction may be nearing its bottom In this article USD: Ready to scan the Fed minutes EUR: Only a dollar function GBP: Hunt to testify CEE: The region remains quiet Source: Shutterstock   USD: Ready to scan the Fed minutes Global risk sentiment has rebounded after absorbing the news about China’s new Covid wave. One factor driving the rally has been increasing speculation that China is loosening its regulatory grip on the tech sector, essentially offering a lifeline to tech shares which have gone through some rough months. This sharp recovery in sentiment appears a bit premature in our view. While there is no clear evidence that the regulatory crackdown has taken a decisive turn (only yesterday, it was reported that China will fine Ant Group $1bn), there is plenty of evidence that Covid restrictions are rapidly being reintroduced into many parts of the country, including Shanghai. But today, all eyes are on the FOMC minutes, the big risk event before a quieter rest of the week as the US enters the Thanksgiving holiday break. Investors will scan the minutes for indications that the “higher for longer” plan is linked to short-term dynamics in CPI releases. Expect another rally in risk assets should the minutes provide hints of conditionality of Powell’s post-meeting hawkishness to a prolonged stickiness in inflation readings, which markets are now more convinced will not materialise after the latest CPI reading. In the absence of such hints, there may not be much for risk bulls to cling on to, given that the November meeting was still a largely hawkish one and the post-meeting (and also post-CPI) Fedspeak has been rather cautious on a dovish pivot. In FX, the dollar has faced a new round of selling. We don’t exclude that this correction will run a little further, but we continue to expect a rather radical inversion in the bearish dollar trend in December as the Fed remains broadly hawkish, energy prices rise again and the global economy slows. Elsewhere in the G10, the Kiwi dollar was stronger after a 75bp rate hike by the Reserve Bank of New Zealand overnight. Policymakers signalled they will take rates to 5.5% in 3Q22, that the economy will enter a recession and that the housing market will contract by 20% (more than previously expected) from its 2021 peak. We remain doubtful that the RBNZ will ultimately deliver this much tightening and tolerate such a sharp house market contraction, but for now, it remains a clear hawkish standout in the developed market. Francesco Pesole EUR: Only a dollar function The risk rally sent EUR/USD back above 1.0300. Indeed, some improvement in China-related sentiment is a positive development for eurozone assets and the euro, but swings in the pair remain primarily a function of broader dollar moves. The eurozone’s calendar includes November’s PMI numbers today. Which are expected to remain rather depressed despite the easing in energy prices. Barring a major upside surprise, it appears unlikely that the release will generate a strong market reaction. The same should be true for ECB speakers (Luis De Guindos, Pablo Hernandez De Cos, and Mario Centeno) today. The Fed minutes are the most important event for EUR/USD today, along with further changes in the market's sentiment on China. An extension of the rally to 1.0400/1.0450 is surely possible in the coming days, but a return to parity in the next few weeks remains our base case as we enter a challenging winter for the eurozone economy. Francesco Pesole GBP: Hunt to testify PMIs will be released in the UK today, and the consensus is looking for a further deterioration in both the manufacturing and composite gauges, possibly due to the prospect of austerity measures by the new UK government. On this topic, Chancellor Jeremy Hunt will testify before the Treasury Committee about his Autumn Statement this afternoon. The extended correction in the dollar is now pushing cable towards the 1.2000 gravity line. Expect some resistance around that level given the lack of strong domestic bullish drivers for the pound though. GBP’s greater sensitivity to risk sentiment compared to the euro means that further improvements in global risk sentiment can push EUR/GBP to test 0.8600 in the coming days. Francesco Pesole CEE: The region remains quiet Today, we expect a second round of monthly data from Poland, led by retail sales. Yesterday's data showed rather softer numbers. In our view, retail sales growth has slowed to low single-digit growth as wages are no longer keeping up with rising prices. We forecast growth of 3.8% year-on-year as high inflation is undermining consumers' purchasing power to such an extent that they are more cautious in their purchasing decisions. However, the attention grabber will be the POLGBs auction. Yields have moved down massively over the past month, completely changing the market picture. In the Czech Republic, we will see the Czech National Bank conference, including an opening speech by the governor, who rarely appears in public. In Hungary, the central bank left rates unchanged yesterday as expected. The National Bank of Hungary repeated its "whatever it takes" stance and the short-term focus remains on market stability until an improvement in risk perception occurs. The Hungarian forint ended slightly stronger after the press conference, but the EU story holds the main role here. Thus, we continue to wait for the European Commission's decision, which should have a positive impact on the market and move the forint closer to 400 EUR/HUF. Elsewhere, this week is more the domain of the rates market and FX remains without much enthusiasm. Impulses for bigger moves are hard to find both on the domestic and foreign side. Thus, our view hasn't changed much since Monday, and we can't expect much momentum from the region today either. The focus will thus be on the global story. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Chance For The Further Downside Movement

The Economy And Inflation In The Eurozone Have Been Less Rate-Sensitive

Alex Kuptsikevich Alex Kuptsikevich 23.11.2022 14:48
Preliminary eurozone PMI estimates are better than expected, although they point to an economic contraction. Germany's manufacturing PMI rose from 45.1 to 46.7 in November, contrary to forecasts of a decline to 44.9. Values below 50 indicate an activity decrease, while higher-than-expected figures indicate its lesser intensity. The service sector PMI declined from 46.5 to 46.4, but above the expected 46.1. The composite PMI rose from 45.1 to 46.4 thanks to manufacturing. Earlier, a positive reversal, albeit from low levels, was also marked by the ZEW indices. Tomorrow will be the turn of the Ifo to confirm or deny this trend. Most likely, the Eurozone and the German economies will shrink in the current quarter and could also lose some money at the start of next year. However, so far, we only see signs of a relatively modest slowdown, and the labour market is displaying the highest employment rate in the history of the Euro-region. The ECB is expected to raise its rate by at least 50 points in December but might take a more drastic step with relatively strong economic data, as we saw in New Zealand earlier today. Until 2009, the eurozone economy grew strongly, even at higher rates than in the US, contributing to the euro's strength against the dollar. The economy and inflation in the Eurozone have been less rate-sensitive than expected and more so than in the USA. The euro, however, has been relatively well worked out the difference between the ECB and Fed rates. If so, the ECB could take rates above US levels, which would gradually restore the position of the single currency lost since the start of 2021.
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

EUR/USD: The Market Is About To Go Through A Period Of Illogical Movements

InstaForex Analysis InstaForex Analysis 24.11.2022 08:00
On Wednesday, the EUR/USD currency pair again displayed this type of movement, which is very challenging to reconcile with the macroeconomic backdrop available to traders. The pair has been moving upward for almost the entire day, although, according to detailed macroeconomic statistics, the pair should have alternated between falling and growing throughout the day. Indicators of business activity in the manufacturing and service sectors were released in the European Union in the morning. All three indices were below the crucial level of 50.0, although variations from the predicted values and the previous month's values were negligibly different. Therefore, they could not be regarded as advantageous for the euro currency. Additionally, business activity indices from the USA were published, either decreasing below the "waterline" or merely remaining below it. Therefore, there was no reason for the dollar to increase. But for some reason, while the euro has not decreased, the dollar has. Orders for long-term goods were among the other reports published in the United States. Even though we don't think this report is significant, a response could have been expected, especially since its value ended up being higher than expected. As a result, everything reported as bad for the euro currency ended up being true, while everything reported as good for it was realized. In the past week and a half, we have stated this point numerous times: in principle, the entire growth of the euro currency does not correspond to the "foundation." The US dollar cannot lose hundreds of value points simply because inflation in the country has decreased. The same logic applies to the statements made by some Fed members who suggested that the rate may begin to rise more gradually in December. However, it will still keep expanding for a few more months. Additionally, for some reason, the market does not consider Jerome Powell's remarks that the rate may eventually rise more slowly than anticipated. This is, after all, a "hawkish" factor. However, as was already mentioned, the market studiously ignores all the "bullish" elements for the dollar. The technical picture on the 24-hour TF is the only factor currently supporting the euro currency. Since the price has crossed all of the Ichimoku indicator's lines, a new uptrend can be formed. What should we do with this? Now that the pair has moved back into the region above the moving average line, the 4-hour TF is moving upward. As a result, you must make a trade to gain an increase, but keep in mind that this growth is illogical. The pair may consolidate after a long downward trend. If so, a downward consolidation will undoubtedly occur and may appear illogical. The market is about to go through a period of illogical movements. We also believe that recent movements have been uniformly positive. It can move in a range between 1.0230 and 1.0450. Although it remains challenging to draw such a conclusion with certainty, it is also possible. As of November 24, the euro/dollar currency pair's average volatility over the previous five trading days was 89 points, which is considered to be "average." So, on Thursday, we anticipate the pair to fluctuate between 1.0266 and 1.0445. The Heiken Ashi indicator's downward turn indicates that the downward movement may resume. Nearest levels of support S1 – 1.0254 S2 – 1.0132 S3 – 1.0010 Nearest levels of resistance: R1 – 1.0376 R2 – 1.0498 R3 – 1.0620 Trading Suggestion: The EUR/USD pair has resumed consolidation above the moving average. To avoid the Heiken Ashi indicator turning down, we should now consider opening new long positions with targets of 1.0445 and 1.0498. No earlier than the price fixing below the moving average line with a target of 1.0132 will sales become significant. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. Moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which you should trade now. Murray levels – target levels for movements and corrections. Volatility levels (red lines) – the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.       Relevance up to 01:00 2022-11-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327979
FX Daily: Testing the easing pushback

The Euro To US Dollar (EUR/USD) Pair Could Rise

InstaForex Analysis InstaForex Analysis 24.11.2022 08:17
Yesterday morning, the euro was rising on speculative sentiment (there was no reason for the single currency to go down), and in the evening the release of the minutes from the last FOMC meeting supported this sentiment. The minutes accurately described the mood of the FOMC members, which has been providing optimism for the last two weeks: further rate hikes may be slower, with the rate approaching a sufficiently "restrictive" level. But that optimism could vanish very quickly. Probably not today, as it is a national holiday in the U.S., but early next week. Breaking through the target level of 1.0470, it would seem, opens the way to the target of 1.0615/42, but a divergence is starting to form with the Marlin oscillator on the daily chart, so the price could fall in the medium-term before it reaches the range I mentioned. Also, the price is slightly above 1.0470 on the weekly chart, and there is the MACD indicator line (1.0485/90), which creates a strong resistance for the reversal. On the four-hour chart, the price has settled above the level of 1.0360. In case of a divergence and reversal, this movement will prove to be false. But for now, as the price grows above the balance and MACD indicator lines and Marlin oscillator moves up in the positive area, we expect the price to rise and be in the range of 1.0470/90.   Relevance up to 03:00 2022-11-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327987
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD Pair Aimed To Resume The Upward Trend

InstaForex Analysis InstaForex Analysis 24.11.2022 08:23
Analysis of EUR/USD, 5-minute chart The euro/dollar pair continued the upward movement that began a few days before. It is noteworthy that during the correction, the price broke through the ascending trend line, which indicates a change of trend to a downward one. As we can see, this did not stop the bulls, who simply took a break for a few days. Yesterday there was a lot of macroeconomic background, but we can't say which report fueled the euro to rise significantly. The thing is that the EU business activity report can hardly be considered strong or optimistic. Therefore, the euro shouldn't have grown due to this report. The US data was disappointing, but only partly, as some reports were stronger than expected. Therefore, in my opinion, the dollar's decline by a total of 100 points was quite illogical. Especially considering the fact that the price went through the trend line. However, for some reason the market does not want to buy the dollar now just as it did not want to buy the euro. The only thing we can assume in such circumstances is that the pound pulled the euro up. Speaking of the situation with technical signals, it was quite simple. Despite the upward movement during the day, the pair was traded in a range with lots of levels and lines. When the price broke through one of them, it immediately hit the next one, so it was necessary to consider them all as a range. The price managed to move out of that range only late at night, when it was definitely not advisable to open any positions. Therefore traders should not have opened any positions on Wednesday. COT report The Commitment of Traders (COT) reports on the euro in 2022 are a paradox. Halfway through the year they showed an outright bullish mood of commercial players, but at the same time the euro was falling steadily. Then for a few months they showed a bearish mood, and the euro also steadily fell. Now the net position of the non-commercial traders is bullish again and getting stronger, and the euro has hardly moved away from its 20-year lows. This is happening, as we said, because demand for the U.S. dollar remains very high amid the difficult geopolitical situation in the world. So even if the demand for the euro is rising, the high demand for the dollar still does not allow the euro itself to rise as much. In the given period, the number of long positions from the non-commercial group increased by 7,000, whereas the number of shorts - by 2,000. As a result, the net position increased by about 5,000 contracts. The euro has been slowly rising in recent weeks, which already coincides with the readings of the COT report. At the same time we think that the dollar will rise due to the same geopolitics or due to the lack of factors for the euro's growth. The green and red lines of the first indicator are far away from each other, which may indicate the end of the uptrend (which, in fact, never happened). The number of longs exceeds the number of shorts by 113,000. Thus, the net position of the non-commercial traders may go on rising but it may not provoke the same growth for the euro. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 39,000 more shorts (635,000 vs 596,000). Analysis of EUR/USD, 1-hour chart The EUR/USD pair aimed to resume the upward trend on the one-hour chart. Just a little more and the last local high could have been updated. The market still finds reasons to buy despite the fact that the price broke through the trend line, and the fundamental background is not exactly supportive of the euro. On Thursday, the pair may trade at the following levels: 1.0072, 1.0119, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, and also Senkou Span B (1.0207) and Kijun Sen (1.0315). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On November 24, European Central bank representatives will give a speech in the European Union. In particular, Isabelle Schnabel and Luis de Guindos may make interesting statements. However, it should be noted that the euro has been growing very well in recent weeks without the support of the ECB representatives. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-11-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327975
Assessing 'Significant Upside Risks to Inflation': Insights from FOMC Minutes

FX: The Fed Minutes Surprised On The Dovish Side

ING Economics ING Economics 24.11.2022 11:55
The Fed minutes surprised on the dovish side, signalling strong support for slower rate hikes and weaker support for Powell's higher-for-longer rhetoric. The dollar could stay pressured for a bit longer, but it's probably embedding a good deal of Fed-related negatives now. US markets are closed for Thanksgiving. Elsewhere, expect a 75bp hike in Sweden In this article USD: Dovish feeling EUR: Enjoying an ideal mix for now SEK: Riksbank to hike by 75bp CEE: Consumer confidence at freezing point   USD: Dovish feeling If the November FOMC event failed to convincingly signal a dovish shift, the minutes of that meeting – released yesterday – were surely more effective in that direction. There are two key points in the minutes that markets are interpreting as dovish statements: 1. “A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate”. 2. “Various participants noted that […] their assessment of the ultimate level of the federal funds rate that would be necessary to achieve the Committee's goals was somewhat higher than they had previously expected”. Point one simply indicates that there is a larger-than-expected (“substantial”) majority of the Committee that is backing a slower pace of tightening. When adding the lower-than-expected October CPI reading to the equation, expecting more than 50bp in December would look quite counterintuitive now, and a switch to 25bp increases from the January meeting appears increasingly likely. In point two, markets may have focused on the term “various”, which indicates a rather vague consensus backing Chair Jerome Powell’s post-meeting “higher-for-longer” statement. This is very relevant, as Powell pushing longer-term rate expectations higher in the November press conference was the main counterargument to the “dovish pivot” narrative: now, it looks like his approach might not have had much backing from other FOMC members. The market reaction has been quite straightforward: risk-on, dollar-off. As we had signalled in recent commentaries, the minutes were set to be a key risk event for the dollar, and we are not surprised to see another leg lower in the greenback in an environment where markets are already shifting away from a longer-term structural long-dollar positioning. Fed funds futures are currently embedding a peak rate at 5.0%, but it might prove harder to see further re-pricing higher in rate expectations after the dovish minutes. At the same time, the degree of cautiousness manifested by Fed officials after the softer CPI figures means that markets may be reluctant to further revise their peak rate bets lower in the near term. This means that one-way traffic in FX, with the dollar staying on a downtrend for longer, still appears unlikely. The greenback has now absorbed a good deal of negatives when it comes to the Fed story, and in our view can still benefit from the deteriorating outlook outside of the US (especially in Europe and China) in the coming months. While we don’t exclude the dollar contraction to take DXY below 105.00, we struggle to see sub-105 levels holding for very long. US markets are closed for Thanksgiving today, and will be open for only half a day tomorrow. There are no data releases or Fed speakers until Monday. Expect a significant drop in liquidity into the weekend. Francesco Pesole EUR: Enjoying an ideal mix for now European currencies are enjoying a strong rally, as lower energy prices (crude was hit by the EU oil price cap proposal) and higher-than-expected PMIs yesterday had already offered some support to European sentiment before the Fed delivered some dovish minutes. We remain doubtful that it will be a smooth ride to recovery for European currencies, and our commodities team continues to see upside risks for energy prices into the new year despite recent developments. EUR/USD has broken above 1.0400 and may extend its rally to 1.0500/1.0550 in the near term, but we suspect the bullish trend may start to run out of steam as we approach year-end. A return towards parity remains our base case for December. Today, the Ifo numbers will be watched in the eurozone, as investors will scan for further evidence of slight improvements in the business outlook. European Central Bank member Isabel Schnabel will speak at a Bank of England event today, where the BoE’s Dave Ramsden, Huw Pill and Catherine Mann will also deliver remarks. Francesco Pesole SEK: Riksbank to hike by 75bp Scandinavian currencies have been the best G10 performers since yesterday, due to the Swedish krona's high sensitivity to EU sentiment and the Norwegian krone's high sensitivity to global liquidity conditions.   SEK is facing an important risk event today, as the Riksbank is set to deliver another rate hike at 0830 GMT. As per our meeting preview, we expect a 75bp hike, which appears to be very much a consensus call. We did see the RB surprise with a 100bp move earlier this year, but that would likely be a risky move given the strains in the Swedish housing market. From an FX perspective, we don’t expect major and long-lasting implications from today’s policy decision for the krona, which is currently enjoying a rather unique combination of positive factors (on the European and global risk sentiment side). We could see a further leg higher in SEK in the coming days, but our longer-term view remains that the krona will underperform as the eurozone enters a prolonged recession in 2023. We forecast a sustained return to levels below 10.50 in EUR/SEK only in the second half of next year. Francesco Pesole CEE: Consumer confidence at freezing point On the calendar today, we have a series of second-tier data prints from the region. Consumer confidence will be published in the Czech Republic and Poland. In both cases, the indicators are currently at record low levels, well below the pandemic years. However, no significant improvement can be expected for November either, given persistent inflation and energy prices. In Hungary, labour market data for September will be published. We expect wage growth of 16.7% YoY, basically the same pace as in August, slightly above market expectations. On the political front, the main focus remains on Hungary. Yesterday, we heard unofficial reports from journalists that the European Commission will recommend freezing part of the cohesion funds with the condition of further reforms, but will also recommend adopting the Hungarian RRF plan. In the end, this gives more flexibility in further negotiations, but the key will be the Ecofin meeting in two weeks' time. Today the saga will continue in the European Parliament, which has on its agenda a vote on Hungary's rule-of-law progress, which, although non-binding, could make a lot of noise in the markets. There is also a V4 meeting scheduled in Slovakia, which the Hungarian PM is expected to attend. The forint jumped up to 410 EUR/HUF after yesterday's news, which the market initially assessed as negative. But in our view, it mitigates the risk that Hungary could lose some money and opens up room for longer negotiations. Hence, we expect the forint to correct down again today closer to 400 EUR/HUF. The potential headlines from the EP meeting, which already caused considerable pain in the FX market last week, are a risk. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

EUR/USD: The Eurozone Readings Were Just Bad

Kenny Fisher Kenny Fisher 24.11.2022 13:26
EUR/USD is unchanged on Thursday, trading at 1.0393. With the US markets closed for the Thanksgiving holiday, we’re unlikely to see much movement from the US dollar. German business confidence edged slightly higher in November. The Ifo Business Climate index rose to 86.3, above the previous reading of 84.5 and the consensus of 85.0. Business confidence has been on a prolonged downturn – the index was above the 100 level in the summer of 2021 but has steadily deteriorated since then. Ifo Business Expectations accelerated as well, to 93.1, up from 84.2 but shy of the consensus of 93.8. Germany releases consumer confidence on Friday. Consumer confidence has been mired in negative territory, which is expected to edge up to -39.6, up from -41.9. German PMIs were lukewarm for October. Both the service and manufacturing PMIs remained in contraction territory, with readings below 50.0. The eurozone readings were just as bad, and France, the number two economy in the bloc, reported a contraction in business activity for the first time since March 2021. The ECB minutes will be released later today, although, like the Fed minutes, they may amount to little more than a repeat of what central bank members have been telegraphing to the markets. The ECB meets on December 15th and it’s uncertain if the bank will press the rate pedal with a third consecutive 75-basis points hike, or opt for a smaller 50 bp move. Inflation rose to 10.7% in October, up from 9.9% and there are no signs of a peak. ECB member Robert Holzmann said this week that he favors a 75-bp hike, but other members are fearful of a deep recession and want the ECB to ease up on the pace of hikes. The Fed minutes stated that members were in agreement that lower rates are coming. This wasn’t anything new, as Fed members have been saying this for the past few weeks. The Fed doesn’t want to be pinned down, saying only that an easing in the pace of rates would happen “soon”. Members also noted that inflation hasn’t shown any signs of easing. The markets have priced in a 50 bp hike at the December 14th meeting, at around 65%, with a 35% of a 75 bp increase. With a nonfarm payroll and an inflation release ahead of the meeting, this rate projection will almost certainly change.   EUR/USD Technical 1.0359 and 1.0238 are providing support There is resistance at 1.0447 and 1.0568 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The EUR/USD Pair Is Showing A Potential For Bearish Drop

European Central Bank's meeting minutes point to recession fears to some extent. ING says a pause can happen

ING Economics ING Economics 24.11.2022 16:05
At first glance, the minutes of the European Central Bank's October meeting do not point to a pivot any time soon. However, reading between the lines, there seem to be growing recession concerns, at least with some members, which could lead to a pause in the hiking cycle in the coming months   The just-released minutes of the ECB’s October meeting underline the ECB’s determination to continue hiking interest rates, while at the same time coping with high uncertainty and growing concerns about the severity of the looming recession. Here are the main takeaways from the minutes: Shallow recession not enough to bring down inflation. There was a discussion on the potential severity of a looming recession, with a common view that a shallow recession would not be enough to bring down inflation. The ECB discussed possible channels through which a shallow recession could become a deeper and longer recession. Interestingly, and despite earlier credit crunches, the ECB did not see the banking sector as a potential channel but rather the housing market and eventually the labour market. “It was argued that, in the event of a shallow recession, the Governing Council should continue normalising and tightening monetary policy, whereas it might want to pause if there was a prolonged and deep recession, which would be likely to curb inflation to a larger extent.” Fiscal policy. The ECB’s view on fiscal stimulus and its impact on the economy was a bit ambiguous, seeing “a risk that fiscal compensation packages would turn out to be bigger than warranted”. Longer-term inflation. Remarkably, there was a common view that most measures of longer-term inflation expectations stood at around 2%. Remarkable as this would take away the necessity to move monetary policy into restrictive territory. Debate on neutral level of policy rate. It remains unclear what the ECB has in mind as a neutral level for interest rates. In some paragraphs, it is said that a “neutral level” should be reached swiftly, while in other paragraphs, the entire concept of a neutral or terminal interest rate is debunked. On the size of the rate hike. Some ECB members argued in favour of a 50bp rate hike but the large majority favoured the 75bp option. Tail wagging the dog? One argument to go for a 75bp rate hike was the fact that financial market participants had also priced in such a hike. “It was argued that falling short of these market expectations would imply an unwelcome loosening impulse, potentially undermining confidence in the Governing Council’s commitment to price stability.” Nothing on pivot. At least according to the minutes, there hadn’t been a discussion on potentially slowing down the pace of rate hikes or starting quantitative easing. All in all, there were only some signs between the lines that the ECB could slow down the pace of rate hikes at the December meeting. What's next for the ECB? While the October decision was very uncontroversial and supported by a large majority, recent comments by ECB officials suggest that the discussion at the December meeting will be much more heated and controversial. In fact, the voices of the doves have again become louder, while the hawks seem to be prepared to slow down the pace of rate hikes. Data releases and the forecasts presented at the December meeting will have something for both: a further increase in headline inflation and no further weakening of the economy but also very likely inflation coming down significantly in 2024 and 2025. As a consequence, we currently expect the ECB to hike rates by 50bp in December and by another 25bp in February. The big question and probably also the big bargain between doves and hawks will be around quantitative tightening (QT) or in other words, the shrinking of the ECB’s balance sheet. Earlier and more significant QT could be the bargaining chip for an end to rate hikes. We expect the ECB to announce a gradual reduction of the reinvestments of its bond holdings under the Asset Purchase Programme (APP) at the December meeting, with the aim to stop the reinvestments by end-2023. The minutes of the ECB's October meeting have some tentative signs that concerns of a more severe recession are growing, at least with some ECB members. This note of caution combined with long-term inflation expectations that are still close to 2% could allow the ECB to at least move towards a pause in its rate hike cycle soon. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Euro May Gradually Climb To The Target Level

The Price Of The Euro To US Dollar (EUR/USD) Slightly Fell

InstaForex Analysis InstaForex Analysis 25.11.2022 08:03
Yesterday's trade was moderate since the US was celebrating a national holiday, but in spite of that markets are still moving away from risk - Lockdowns are expanding across China and market participants are afraid of new gaps in production and trade. The U.S. is still celebrating its holiday, although trade will resume - but it will be short. The euro tried to reach the target at 1.0470 and now, after a failed attempt, it might fall under 1.0360. The signal line of the Marlin oscillator is going down, which sharply increases the probability of a reversal without a divergence, which is another sign that the price growth that started since the end of September has a corrective nature. Essentially there were no major changes during the day - the price is between the levels 1.0360 and 1.0470, and the potential to rise to the target range of 1.0615/42 is still there, even though it has weakened. On the four-hour chart, the price slightly fell before it could rush into the target range of 1.0470/90. A price reversal with a divergence may follow from here. Settling above this range may push the pair to rise to the target of 1.0615/42. Settling below 1.0360 and the MACD line at the same time, will encourage the price to reach 1.0205.   Relevance up to 03:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328096
The Outlook Of EUR/USD Pair Is Downward In The Near Term

The Euro To US Dollar Pair (EUR/USD) Entered A Bearish Correction

InstaForex Analysis InstaForex Analysis 25.11.2022 08:30
M5 chart of EUR/USD On Thursday, the euro/dollar pair entered a bearish correction following the steep growth of the past several days. As a reminder, the price consolidated below the ascending trend line. Given this fact, we could anticipate a continuation of the downtrend. However, the quote failed to settle below the Senkou Span B. So, the euro has been bullish over the past several days. Still, there have been hardly any reasons for this increase. It may well be that the euro simply followed the pound's suit. Indeed, the sterling advanced considerably following the ruling of the Supreme Court against holding a new independence referendum by Scotland's government. Nevertheless, it is just a theory. Speaking of the macroeconomic calendar that contained important releases only on Wednesday, it remains unclear why the euro went up anyway. Given that the price is still below the swing high, the bearish correction may extend to the Senkou Span B. When it comes to trading signals on Thursday, the 5-minute chart shows that the pair traded mostly horizontally. In other words, no trading signals were made on Thursday, so there was no need to open trades at all. COT report: As for COT reports in 2022, they reflected bullish sentiment in the first six months of the year although the euro was bearish. Then, they illustrated bearish sentiment for several months with the euro being also bearish. Currently, the net position of non-commercial traders is again bullish and increasing. Meanwhile, the euro has hardly retreated from its 20-year lows. This is due to the fact that demand for the greenback is high amid a difficult geopolitical situation in the world. Therefore, despite a rise in demand for the euro, buoyant demand for the dollar does not allow the euro to strengthen. During the reporting week, the number of long positions held by non-commercial traders rose by 7,000 and that of short positions increased by 2,000. Consequently, the net position advanced by 5,000. The euro's recent growth is gradually coming in line with the figures illustrated in the COT report. Still, the greenback may resume growth under the influence of geopolitical factors or the lack of factors for further strengthening in the euro. The green and red lines of the first indicator moved far away from each other, which may indicate the end of the uptrend. The number of long positions exceeds that of short positions by 113,000. Therefore, the net position of non-commercial traders may continue to rise further, but without triggering a similar rise in the euro. When it comes to the total number of longs and shorts across all categories of traders, there are now 39,000 more short positions (635,000 vs 596,000). H1 chart of EUR/USD In the H1 time frame, EUR/USD may resume the uptrend and update its latest swing high. Although the price broke through the trend line, fundamental factors provide little support for the euro. Therefore, the market is now bullish. Anyway, we are still anticipating a strong bearish correction. On Friday, trading levels are seen at 1.0119, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as Senkou Span B (1.0207) and Kijun-sen (1.0333). Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. Signals can be generated whenever the price bounces or breaks through extreme levels and lines. Don't forget to place a stop-loss order at the breakeven point when the price passes 15 pips in the right direction. It can help you minimize losses when a signal turns out to be false. On November 25th, Luis de Guindos, the Vice-President of the ECB, will give an interview. Given that the European regulator is likely to remain aggressive, which traders are prepared for, his speech will hardly influence the market. In the United States, no interesting macro releases are due. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. The Kijun-sen and Senkou Span B lines are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.     Relevance up to 06:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328104
ECB press conference brings more fog than clarity

The European Central Bank Is Getting Ready To Slow Down The Pace Of Interest Rate Hikes

InstaForex Analysis InstaForex Analysis 25.11.2022 08:40
The struggle continues for the EUR/USD pair: the bulls need to settle in the area of the 4th figure to show the strength of the upward movement, whereas the bears need to settle near the 2nd price level to finally stop the upward momentum and pave the way for the next surge to the parity level. Both sides of the "conflict", in fact, do not need a third figure, which in the current circumstances acts as a point of transit. Take note that both bears and bulls of the pair can boast of their momentary successes, but in reality they failed to consolidate their gains. The contradictory fundamental background is to blame. At the beginning of November, the dollar weakened across the market due to several factors. U.S. inflation slowed its growth, Federal Reserve officials admitted the possibility of a slowdown in monetary policy tightening, and the results of the G20 summit set the warmer tone for U.S.-China relations. All these factors came together to boost interest in risky assets, while the safe-haven dollar was out of action. The euro surged, reaching 1.0480. Then, the news flow changed a bit. The US central bank represented by many of its Committee members (Bullard, Cook, Daley, Waller and others) claims that slowing down the pace of interest rate hikes does not negate the fact that the upper bar of the current cycle may be reviewed upwards. By the way, Fed Chairman Jerome Powell also spoke about this scenario after the November meeting. The focus of the market attention shifted, the hawkish expectations strengthened and the dollar was back on the horse, due to which the pair fell to 1.0225. But bears couldn't settle in this price area. The dollar was under pressure again due to a new report, thereby, allowing the euro bulls to organize one more counterattack. We are talking about the minutes of the Fed's last meeting, which was published on Wednesday. In my opinion this document was not dovish at all. Moreover, all the key theses of the minutes were played back by the market - this report didn't bring anything sensational. But the fact is that traders reflexively reacted to the facts that have already been regarded, which were presented to the market in a "new cover". The essence of the minutes boils down to one simple conclusion: Fed members are ready to move further by smaller steps, i.e. more moderate rates. The document states that a number of Committee members believe that "a rapid tightening of monetary policy could pose a threat to economic growth and financial stability. Given the fact that the November FOMC meeting took place even before the release of data on October inflation growth in the U.S., we can assume that the central bank will slow down the pace of rate hikes at the next (December) meeting. That is, after four increases of 75 basis points, the central bank will raise the rate by 50 points. The minutes only confirmed the assumptions discussed earlier, putting a thick end to the relevant discussion. But the minutes did not answer the main question: how high can the final rate climb? The fact that the Fed will slow the rate hike is no indication that the upper bar of the current cycle will be lowered. In fact, some Fed officials (notably James Bullard) recently said that the "final stop" would probably be at 5.25%. Incidentally, in the same minutes, Fed members indicated that there has been "clear but little apparent progress" on inflation, and that rates still need to be raised. Therefore, in my opinion, the EUR/USD pair is growing on rather shaky grounds. Again, the bulls were supported by a trivial coincidence: The Fed's minutes were published ahead of Thanksgiving in America, amid low liquidity and high volatility. US statistics also weighed on the greenback: according to the latest data, business activity in the US declined again in November - both in the service sector and manufacturing. At the same time, the new orders dropped to the lowest level in 2.5 years. And yet long positions on the pair look risky. In fact, bulls have already played their game - there are no good reasons to develop an uptrend. Only the shortened Friday session (due to Thanksgiving) is on their side, due to which an inertial price growth is possible. Several factors are in favor of the bearish scenario. Firstly, the European Central Bank is also getting ready to slow down the pace of interest rate hikes in December. This was stated by some ECB officials over the past two weeks (in particular, Philip Lane and Mario Centeno), as evidenced by the minutes of the ECB's last meeting, which was published on Thursday. According to the document, back in October several members of the Governing Council were in favor of raising the rate by 50 basis points, not 75. Secondly, the safe-haven dollar (and consequently the EUR/USD bears) may find support from the news from China, where the number of coronavirus infections is growing. For example, on Wednesday the number of infections in China exceeded the 30,000th mark. Chinese authorities are once again forced to tighten quarantine measures, with partial lockdowns and mass testing resumed in major cities. The "zero-tolerance" policy, which has cost the Chinese (and global) economy so dearly, is back on track after easing the Covid policy. Thus, in my opinion, short positions in the pair look more promising, despite the contradictory fundamental background. The first bearish target is 1.0350 (the line Tenkan-sen on the D1 timeframe). The next (and so far the main) target is 1.0210. At this price point the bottom of the Bollinger Bands indicator coincides with the lower limit of the Kumo cloud on the four-hour chart.     search   g_translate     Relevance up to 01:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328088
The EUR/USD Pair Has A Potential For Drop

Technical Analysis Of The EUR/USD Pair's Situation

InstaForex Analysis InstaForex Analysis 25.11.2022 09:44
EUR/USD It has been ten days since euro fell below 1.0500.Until now it could not move beyond it, but there is a chance that it will rise above 1.0500 soon, heading towards 1.0600 and even 1.0700. Of course, such an increase is difficult to achieve given the current weak state of the EU economy. Uncomfortably high gas and electricity prices remain a problem, but going forward these issues will be solved, most likely as early as spring 2023. For now, it is best to sell the pair in anticipation of a big drop or a big correction.     Relevance up to 07:00 2022-11-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328124
Central Bank Policies: Hawkish Fed vs. Dovish Others"

A Decline In US Treasury Yields Will Be The Determining Factor

InstaForex Analysis InstaForex Analysis 25.11.2022 09:49
Although market activity dropped because of the holiday in the US, European stocks still grew, thanks to the contents of the latest FOMC minutes. Officials said in the protocol that they are considering a gradual reduction of interest rate hikes, which returned risk appetite. Looking ahead, it is likely that the rally will extend today despite the early closure of markets. If the rally does not start today, it is likely to happen early next week. The renewed decline in Treasury yields, which will not only keep dollar down but also put considerable pressure on it, could provide good support. And even though European and US stock indices are slightly down after yesterday's positive dynamics, the picture could change dramatically during today's European or US session. If that happens, increased demand for risky assets will affect dollar, prompting a continued decline. There is also a high chance that the positive dynamics will carry on next week, with stocks rising further and dollar continuing its collapse. A decline in US Treasury yields will be the determining factor. Forecasts for today: EUR/USD If traders manage to push euro above 1.0450, quotes could climb to 1.0580. USD/JPY If traders manage to push the pair below 138.45, quotes will drop down to 136.50.     Relevance up to 07:00 2022-11-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328128
BSP Maintains Rates Amid Moderate Inflation; Eyes Further Tightening if Needed

FX: The US Dollar (USD) Is Getting Close To Some Decent Support Levels

ING Economics ING Economics 25.11.2022 10:33
FX markets are becalmed by holiday trading conditions in the US and a very light data calendar. A further unwinding of long dollar positioning remains the risk, but we think the dollar is getting close to some decent support levels. Elsewhere, 75bp rate hikes are still going through in the likes of Sweden and South Africa In this article USD: Focus on 'Cyber Five' retail sales EUR: A little less pessimism GBP: BoE stays hawkish JPY: Set for out-performance into 2023   US retailers have come up with the 'Cyber Five' sales promotion campaign which should boost retail sales    USD: Focus on 'Cyber Five' retail sales Today sees another holiday-shortened US session following the Thanksgiving public holiday. Innovative US retailers have come up with the 'Cyber Five' sales promotion campaign which stretches from Thursday's Thanksgiving all the way through to Monday. Expect to hear reports as to how this has gone, although high levels of employment and lower levels of petrol prices (now $4.30/gallon versus a high of $5.50 in June) suggest retail sales may hold up despite talk of the looming 2023 recession. FX markets are becalmed and the only stand-outs yesterday were the large 75bp rate hikes in Sweden and South Africa, plus the 150bp rate cut in Turkey in preparation for elections next year. We also note the further legacy of this year's rise in dollar and US yields, where Ghana looks set to impose a 30% haircut on Eurobond holders as it seeks a deal with the International Monetary Fund (IMF). Back to the dollar – buy-side surveys taken right before the big sell-off on 10/11 November still had long dollar positions as 'the most crowded trade' and saw the dollar as the most over-valued on record. We doubt those views will have changed that much and the buy-side will now be eager to sell any dollar rallies, believing the dollar may well have peaked. That may be the case, but as we discuss in our 2023 FX outlook, we doubt conditions will be in place for a major dollar bear trend.  We mentioned earlier that the dollar may be nearing some decent support levels. We think DXY has strong support near 105.00, marking the 200-day moving average, important lows in early August and a big 38.2% retracement level of the whole rally from summer 2021 (when the Fed started this dollar rally with its more hawkish Dot Plots). For those needing to buy dollars, DXY levels near 105 may be as good as any. Chris Turner  EUR: A little less pessimism Business surveys in Germany and France released yesterday showed a little less pessimism. And increasingly there is a view that the forthcoming downturn will be mild because of issues like a) strong employment b) large government support and c) strong household savings. Our eurozone team, however, are a bit more pessimistic. Certainly, Europe's large exposure to the manufacturing cycle and what should be weaker export markets make us sub-consensus on European growth prospects.  Despite the looming eurozone recession, ECB hawks such as Isabel Schnabel suggest it may be premature to scale back rate increases. Currently, the market prices 61bp of hikes on 15 December (we expect 50bp). Clearly, the 50bp versus 75bp debate will continue to run. For EUR/USD, it still looks like the big dollar story is dominating. We cannot rule out a further correction into the 1.05-1.06 region but would see these as the best levels before year-end. These levels could be seen next week should Fed speakers or November US jobs data prove the catalyst. Chris Turner GBP: BoE stays hawkish Recent speeches have seen the Bank of England (BoE) staying pretty hawkish despite the fiscally tight budget and broadening consensus of recession. We think positioning has played a major role in this sterling recovery and GBP/USD could see some further, temporary gains to the 1.22/23 area – which we would again see as the best levels before year-end.  Equally, EUR/GBP has good support in the 0.8550/8600 area, and given our view of a difficult risk environment into year-end and early 2023 as central banks raise rates into recessions, sterling should remain vulnerable. Chris Turner  JPY: Set for out-performance into 2023 Probably the best chance of the dollar having peaked is against the Japanese yen (JPY). USD/JPY is now nearly 10% off its high near 152 in late October. Next week we will find out whether Japanese authorities sold FX in November – having sold a combined $70bn in September and October. So far intervention can be considered to be exceptionally well-timed and effective.   If the dollar is to move lower in 2023, USD/JPY would be the best vehicle to express the view, in our opinion. This is based on the view that the positive correlation between bonds and equities can break down – bonds rally, equities stay soft – and that the US 10-year Treasury yield ends 2023 at around 2.75%. USD/JPY could be trading at 125-130 under that scenario. We now suspect that any dollar rally between now and year-end stalls at 142/145. In addition, USD/JPY will be facing a change in the ultra-dovish Bank of Japan governor next April – a big event risk for local and global asset markets. Chris Turner TagsYen FX Dollar   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Chance For The Further Downside Movement

European Central Bank Noted That The Outlook For Inflation Continues To Deteriorate

Conotoxia Comments Conotoxia Comments 25.11.2022 11:10
The minutes of the European Central Bank's latest meeting, released yesterday, may indicate that policymakers would not back away from further interest rate hikes, even despite the risk of recession. How is the euro exchange rate reacting? Policymakers at the European Central Bank agreed at their last meeting that the central bank should continue normalizing and tightening monetary policy to combat high inflation, even in the event of a shallow recession, according to a report on the central bank's October meeting, Trading Economics reports. Officials noted that the outlook for inflation continues to deteriorate, with inflation running too high and many times above forecasts, and that there is a growing risk of its perpetuation and the emergence of second-round effects and a wage-price spiral. However, the central bank has hinted that it may want to halt ongoing interest rate hikes if there is a prolonged and deep recession, which could curb inflation to a greater extent. The ECB raised its key interest rate by 75 basis points in October, raising borrowing costs to the highest level since early 2009, with broad support for a meeting-by-meeting approach to future monetary policy decisions, depending on the data, according to minutes released yesterday. Euro exchange rate this week and month For the euro, the current month appears to be the best since July 2020. The EUR/USD exchange rate rose more than 5 percent in November, reaching its highest level since late June 2022. It seems that, in addition to improving data from the European economy, there may also be an overestimation of expectations for further Fed actions. The U.S. dollar may already be "rallied" if no new factors emerge in the U.S. pushing up expectations for more interest rate hikes. Source: Conotoxia MT5, EURUSD, Monthly In front of the EUR/USD, however, there are potential resistances from the chart. We are talking about the lows of late 2016 and the low of March 2020. Thus, the potential resistance zone could stretch between 1.0320 - 1.0640. Nevertheless, looking at the chart, we could see that we are dealing with the biggest correction in the trend since the beginning of 2021. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Monitoring Hungary: Glimmering light at the end of the tunnel

Next Week: Industrial Production In Hungary May Show A Better-Than-Expected Performance

ING Economics ING Economics 25.11.2022 14:16
The market is firmly backing a 50bp hike from the Fed in December, and with US economic data so far proving to be resilient, all eyes are on next Friday's jobs report and the core personal consumer expenditure deflator. We expect the number of vacancies to exceed unemployed people by a ratio of 1.9:1 and for the PCE price index to be at 0.3% month-on-month In this article US: Fed may need to toughen its stance Eurozone: All eyes on inflation Hungary: Third-quarter GDP supported by industrial and services sectors   Shutterstock   US: Fed may need to toughen its stance The market remains firmly behind the view that the Federal Reserve will raise interest rates by 50bp on 14 December given Fed speakers have indicated the likelihood of less aggressive step increases in interest rates after four consecutive 75bp hikes. However, the economic data is proving to be pretty resilient and we are a little nervous that a 7% fall in the US dollar against the currencies of its main trading partners, and the 45bp drop in the 10Y Treasury yield, is leading to a significant loosening of financial conditions – the exact opposite of what the Fed wants to see as it battles inflation. Consequently, we wouldn't be surprised to see the Fed language become more aggressive over the coming week, talking about higher terminal interest rates – with some of the more hawkish members perhaps even opening the door to a potential fifth consecutive 75bp hike in December (although we don’t think they would actually do it) to ensure the market gets the message. Currently, only three officials are scheduled to speak, but we wouldn’t be surprised to see more make sudden appearances in the media.  Data-wise, the jobs report on Friday will be the focus, but there will also be interest in the ISM manufacturing index and the Fed’s favoured measure of inflation – the core personal consumer expenditure deflator – both of which are published on Thursday. The ISM is likely to drift just below the break-even 50 level given the softening trend seen in regional manufacturing indicators. The PCE deflator could be interesting too since it doesn’t always match what happens in core CPI. If you remember, that rose “only” 0.3% month-on-month versus expectations of a 0.5% increase and was the catalyst for the recent drop in Treasury yields, as expectations for Fed rate hikes were scaled back. A 0.4%+ print for MoM core PCE deflator could generate quite a sizeable reverse reaction. Meanwhile, the jobs numbers should hold around 200,000 given the number of vacancies continues to exceed the number of unemployed people by a ratio of 1.9:1. Nonetheless, there are more firings going on in the tech sector and the increase in initial claims also points to softer employment growth in the coming months. Eurozone: All eyes on inflation Has a eurozone inflation figure ever been more important than the November reading that is due out on Wednesday? With the ECB focusing more on current inflation developments for determining when to move to smaller rate hikes, the November inflation figure will be very relevant for the December rate hike decision. While energy prices have been moderating and other supply shocks are fading, the question is how quickly this impacts consumer prices. Also keep an eye out for unemployment on Thursday. Any sign of the labour market slowing will also be taken into account at the next policy meeting. Hungary: Third-quarter GDP supported by industrial and services sectors Next week’s events calendar for Hungary is focused on one day. On the first day of December, we are going to see detailed GDP data from the third quarter. Here we expect that industrial production will show a better-than-expected performance, giving support to the net export which has suffered under the pressure of the energy crisis. Along with industry, the services sector is expected to be a key driver, which was able to limit the quarter-on-quarter drop in GDP. The manufacturing PMI has shown significant monthly volatility recently thus we see a down month in November after a significant upside surprise in October. Key events in developed markets next week Refinitiv, ING Key events in EMEA next week Refinitiv, ING TagsUS Inflation Eurozone EMEA Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair: There Are Still No Sell Signals

The ECB Members Remained Concerned About Inflation Becoming Entrenched

Kenny Fisher Kenny Fisher 25.11.2022 14:32
US markets are open for limited hours today, and investors are focussed on the World Cup and Black Friday rather than the US dollar. EUR/USD is trading quietly at 1.0392, down 0.18%. German data has not been spectacular this week, but nonetheless is moving in the right direction, as the German economy is in decent shape. Germany’s GDP for Q3 was revised upwards to 0.4% QoQ, up from 0.3% and ahead of the consensus of -0.2%. This follows a 0.1% gain in GDP in Q1 and is all the more impressive, considering the headwinds on the global scene, in particular the war in Ukraine. Germany has made a mammoth effort to stockpile energy supplies and end its dependence on Russia, which should mean that an energy crisis can be avoided this winter. German Consumer confidence remains weak but improved slightly for a second straight month. The November reading rose to -40.2, up from -41.9, although shy of the consensus of -39.6. Business confidence also edged higher earlier this week, as did Business Expectations. ECB says more rate hikes needed The ECB minutes, released on Thursday, indicated that ECB members remained concerned about inflation becoming entrenched. Members were clear about the need to raise rates in order to bring inflation back down to the 2% target, and most members supported the 75-bp hike at the October meeting, with a few voting for a 50-bp move. The markets have priced in a 50-bp increase at the December 15th meeting, after ECB policymakers hit the airwaves and urged that the ECB slow down the pace of rate hikes. Still, with inflation at a crippling 10.6%, there’s little doubt that the ECB will have to continue raising rates, and the markets expect the deposit rate, currently at 1.5%, to hit 3.0% in 2023.   EUR/USD Technical 1.0359 and 1.0238 are providing support There is resistance at 1.0447 and 1.0568 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The EUR/USD Pair Is Still In A High Position On The 1H Chart

Energy Markets In Europe Are Not Fretting Development

Saxo Bank Saxo Bank 25.11.2022 14:40
Summary:  The US dollar has worked its way into a huge support zone ahead of the next batch of incoming data. The big test ahead across markets is perhaps when we move away from a one-dimensional obsession with US yields and begin to look at how markets start to price an incoming recession. That could complicate the turnaround process from a USD bull to a USD bear market. FX Trading focus: USD eyes huge support ahead of next important incoming data next week. Time for a shift in focus for the greenback? The FOMC minutes Wednesday confirmed the market’s well-established expectation that the Fed is set to downshift to a 50-bp hike in December, with a bit more tightening thereafter and a hold for most of next year. The action in the curve has been farther out, where the market is getting more aggressive in expressing the view that the Fed will be cutting rates quite aggressively in 2024, with the December 24 EuroDollar STIR future pricing some 170 basis points of easing from the mid-2023 peak – that is up from around 100 basis points just a month ago. It is a strong indication that the market is pricing for an oncoming recession, unless inflationary pressures can somehow normalize in a very soft landing scenario. For now, the markets are celebrating US yields falling (from 3-years and further out, at least), but at some point will have to consider what a recession normally entails in terms of impacts on corporate profits, the credit cycle, asset prices etc. – in other words, a more widespread deleveraging. At this point in the cycle, we have mostly only neutralized many of the excesses inspired by the pandemic, not priced a significant recession. As well, we are in a novel environment relative to every cycle since at least 1982. Especially the 2007-09 global financial crisis is not seen as a good model for what comes next and partially for good reason: the Fed and other central banks have thoroughly learned the lesson that raging contagion in the financial system is unacceptable, and they are so used to extreme intervention to prevent disorder, with further lessons learned in the pandemic response. So markets feel comfortable in taking the financial chaos option off the table. Nonetheless, once we do cross into a recession in the US as well as Europe and elsewhere, the central banks, and more importantly governments in this age of rising fiscal dominance, will have to be far more wary of triggering an inflationary rebound when considering new easing/stimulus. In that light, there are perhaps three paths from here. More of the same (another month max): we continue to see softer, but relatively benign data that allows the market to continue to celebrate an easing of Fed tightening and the anticipation that no new inflationary shock awaits. Max USD bearish scenario. Recession fears rising with yields falling: This is the most interesting test of the USD and its correlations across assets. Would the greenback continue lower as yields fall on the anticipation that the Fed is set to eventually ease, or would weak risk appetite and increasingly poor liquidity and the fear that the Fed will prove too slow to pivot toward easing cause more significant deleveraging across markets that keeps the USD well supported? I think the US dollar’s safe haven status will still be around if we do see a new cycle of widespread risk aversion. Inconveniently sticky inflation with or without rising recession fears: Evidence continues to point to an oncoming recession, but that path could take considerable time to materialize and, in the meantime, any sign that the inflation is failing to maintain a steady downward path won’t be welcome. This could be aggravated by a situation in which China eases up on its restrictive Covid policies and is stimulating and driving commodity prices higher just as Europe and the US tilt into a recession? This scenario would be more likely to see USD sensitive to risk sentiment, as yields would have a hard time falling further in this scenario. Chart: EURUSDEURUSD has been interacting with its 200-day moving average again while not quite able to mount an attack on the recent pivot highs near 1.0480. Given our scenarios above, the two+ week into the December 14 FOMC meeting offer an interesting test of the current market backdrop – is data particularly strong and spoils the decelerating inflation narrative, or is it far weaker than expected, raising recession fears? And if the data is indifferent to stronger than expected, how unhappy is the Fed that financial conditions are at their easiest since May, before the Fed even began hiking rates in 75-bp increments? On a somewhat different note, long range weather forecasts are beginning to see very cold weather across Europe starting in about 10 days. Energy markets in Europe are not fretting this development, but if they do, it will remind euro and sterling traders that external deficits remain a risk for the single currency and sterling. Technically speaking, the first sign of weakness would be a run below the 1.0223 pivot low from the start of this week, but the bigger break-down area looks like 1.0100. Source: Saxo Group Yesterday, the Riksbank hiked the policy rate 75 basis points as a strong majority expected, taking the rate to 2.50%. Interestingly, to buy itself some optionality, the bank issued a baseline forecast for its policy rate in which inflation dropped to sub-2% by early-mid 2024, which would mean the policy rate peaks below 3%, while an “alternative scenario” of inflation failing to fall much below 4% would mean that policy rate would have to rise north of 4.50%. It was an interesting sign of central bank insecurity on the path from here, although Swedish rates hardly moving in the wake of this meeting and the alternative scenario discussion. SEK got a solid boost by the end of the day yesterday and it is now well embedded back in the range since September after the recent upside threat. It is hard to see EURSEK threatening 11.00+ again unless we are about to tilt into a severe bout of risk aversion. Table: FX Board of G10 and CNH trend evolution and strength.CNH curiously weak – doesn’t fit with where the also weak USD is trading elsewhere. Sterling strength is getting a bit out of hand here, but could yet continue if the complacent backdrop continues. Still have to believe that nearly all of the short speculation in sterling has been squeezed out. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Note USDCNH close to flipping positive – needs a solid surge above 7.200 for a stronger indication. Source: Bloomberg and Saxo Group Source: https://www.home.saxo/content/articles/forex/fx-update-usd-running-out-of-room-to-fall-on-current-drivers-25112022
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

Euro (EUR) Will Have To React To The European Central Bank's Discussion

InstaForex Analysis InstaForex Analysis 26.11.2022 15:44
Bulls on the EUR/USD pair are desperately trying to rise above the 1.0400 level: they repeatedly tried to attack the 4th figure in November, but failed each time. Traders fail to consolidate the success and, accordingly, are not able to develop it in order to claim the next, fifth price level. Their indecisiveness plays against them: as soon as the upward momentum fades, the bears come in, and they pull the price down. This "push-and-pull" takes place amid a contradictory news flow, which prohibits both bulls and the bears to dominate. In addition, the US celebrated Thanksgiving, which lasted through Wednesday, Thursday and most of Friday. The US trading floors were either closed or did work, but in a shortened period. Traders were "fishing in troubled waters", i.e. they took advantage of low liquidity and high volatility. It is obvious that next week, the market will operate the way it does normally, which means that the overall alignment of forces may change significantly, and probably not in favor of the bulls. The pair is now trying to stay within the framework of the 4th figure only by inertia. The market's interpretation of the minutes of the FOMC's November meeting, published on Wednesday, did not work in the dollar's favor: due to this fundamental factor, the bulls reversed the price, rising from 1.0225 to the 1.0450 target (high of the current week). But traders couldn't hold their positions and the pair went adrift. Bulls cannot move to the area of the 4th figure, bears cannot pull the price down to the area of the 2nd price level. Both parties need more information to push the pair. At the same time, all the previous information and events were played out, and some of them even twice. Thus, the aforementioned minutes confirmed traders' assumptions that the central bank is getting ready to slow down the rate of tightening the monetary policy. Actually, it was the only message that was dovish in nature. But it was enough for the pair to surge upwards. Traders were not confused by the fact that Federal Reserve Chairman Jerome Powell spoke about the slowdown of monetary policy at the beginning of November. In addition, some of the other Fed members repeatedly spoke about such intentions. And after the latest US inflation data reported growth, the probability of a rate hike by 50 points at the December meeting increased up to 80%. The Fed minutes that was released on Wednesday reminded the market of such intentions - nothing more. But amid low liquidity, traders decided to win back this fundamental factor by the second round. Given this disposition, the question arises: can the EUR/USD bulls develop their upward attack on such shaky grounds? Definitely not. Friday's price fluctuations show that the bulls are not confident in their own capabilities. Neither are the bears. And in my opinion, the bulls are definitely losing their grip. Figuratively speaking, you won't get far with just "one minutes", at the same time there are currently no additional arguments for a large-scale growth from the pair. But the U.S. currency may receive substantial support ahead of the December FOMC meeting. According to a number of currency strategists, estimates of the terminal rate are likely to be revised upwards in December's "dot-plot" compared to the previous forecast, which was published in September. Powell admitted such a possibility following the results of the November meeting. And if similar assumptions are made by other members of the Fed (before the 10-day "hush-hush" period), we could be witnessing another dollar rally. Again, this scenario is very likely, given Powell's previous rhetoric. In addition, the U.S. currency could receive support from the Nonfarm Payrolls report. If the unemployment rate returns to 3.5% and the growth rate of non-farm payrolls exceeds at least the 250,000 target, the dollar bulls will feel much more confident, even against the euro. The single currency (euro) will then have to react to the European Central Bank's discussion on the pace of monetary policy tightening. There are calls for the central bank to "moderate its enthusiasm" at the December meeting, that is, to raise the rate by just 50 points, and not 75. In particular, the chief economist of the ECB spoke in favor of this scenario. By the way, the preliminary data on inflation growth in the eurozone for November will be published next week. If the report shows at least minimal signs of a slowdown in CPI growth, then the euro will be under significant pressure, as in this case the issue of slowing down the pace of rate hikes can be considered a done deal. Thus, despite the bulls' attempts to settle within the framework of the 4th figure, they still have no good reasons to develop the uptrend at the moment. Long positions look risky - at least until the price stays above the resistance level of 1.0450 (the upper line of the indicator Bollinger Bands on the daily chart). In the medium term, it is better to consider short positions. The first bearish target is 1.0350 (Tenkan-sen line on the one-day timeframe). The main target is 1.0210 (at this price point, the bottom of the Bollinger Bands indicator coincides with the lower limit of the Kumo cloud on the H4 timeframe).       Relevance up to 23:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328215
The Outlook Of EUR/USD Pair For Long And Short Position

The Recession In The Eurozone Will Be Short-Lived

InstaForex Analysis InstaForex Analysis 26.11.2022 15:55
Thanksgiving day, the closing of the U.S. stock markets and the outflow of liquidity caused the EUR/USD pair to get bored at the end of the last full week of fall. Not surprising, given the tumultuous moves before that. The dollar started the week in good condition and ended it in grief, completely giving up the initiative to the euro. Thanks to the strong data and hawkish speeches of the European Central Bank officials, the euro reclaimed its spot by hitting its 5-month highs and looks forward to important data on eurozone inflation and the US labor market. Strong German GDP statistics for the third quarter also boosted the morale of the euro fans. Positive consumer sentiment, business activity and the business climate were followed by encouraging news from the German economy. It expanded not by 0.3%, but by 0.4%, i.e. it was more resilient to numerous troubles, including the energy crisis, than previously thought. The main driver of growth was the consumers, whose activity increased by 1%. German GDP dynamics The latest data suggest that the recession in the eurozone will be shallow and short-lived, which supports the single currency. The market is optimistic, however the Institute of International Finance decided to add a minor hitch. According to the trade association, which was one of the first to predict the parity in EURUSD, the armed conflict in Ukraine will develop into an eternal war. It will not end in 2023, and the countries that are close to it will suffer first. In particular, the eurozone, whose GDP will shrink 2% next year due to a sharp decline in consumer and business confidence. The U.S. economy will expand by a modest 1% as the Federal Reserve's tightening of monetary policy will have a noticeable effect. The main driver of global GDP will be China, which will defeat COVID-19 and finally open its economy. However, China's efforts will not be enough. The world gross domestic product in 2023 will increase by 1.2%, which will be its worst performance since 2009. It looks like the glass is half empty for the Institute of International Finance, which provides hope to the EUR/USD bears. If the world economy feels as bad next year as it has this year, or maybe even worse, then getting rid of the U.S. dollar is not a good idea. The greenback is the currency of the pessimists. In the short-term, the dynamics of the main currency pair will be determined by releases of data on European inflation and U.S. labor market. Slowing consumer prices in the eurozone and U.S. employment are the keys to reduce the speed of monetary easing by the ECB and the Fed, so EURUSD risks showing mixed dynamics. Technically, the pair has an opportunity to continue the rally towards the 161.8% target on the Crab pattern and to win back the 1-2-3 Reversal pattern. In this regard, let's sell the euro on a breakout of support at 1.038 and 1.033 and buy it in case it grows above 1.044.     search   g_translate     Relevance up to 13:00 2022-11-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328180
ECB press conference brings more fog than clarity

The European Central Bank's Interest Rate Will Increase In the Upcoming Months

InstaForex Analysis InstaForex Analysis 27.11.2022 13:25
The wave marking on the euro/dollar instrument's 4-hour chart is convincing. The upward portion of the trend has corrected itself. Initially, I believed three waves would develop, but it is now abundantly clear that there are five waves. As a result, the waves a, b, c, d, and e have a complex correction structure. If this supposition is accurate, the building of this structure may have already been finished since the peak of wave e is higher than the peak of wave C. In this instance, it is anticipated that we will construct at least three waves downward, but if the most recent phase of the trend is corrective, the subsequent phase will probably be impulsive. Therefore, I am preparing for a new significant decline in the instrument. The market will be ready to sell when a further attempt to breach the 1.0359 level, which corresponds to 261.8% Fibonacci, is successful. The peak of the anticipated wave e was still present, so removing quotes from the lows this week did not violate the wave marking. As a new downward trend segment, most likely segment 2 or b, the most recent increase in quotes can be seen as an internal correction wave. Wave e and the upward portion of the trend will likely take a more extended form if an attempt to break through its current peak is successful. Rates will keep rising, according to an ECB vice president. This week, the euro/dollar instrument experienced positive dynamics. The demand for the euro currency was increasing despite the absence of reports and news. This allowed the instrument to develop an upward wave that still needed to deviate from the established wave pattern. However, the instrument's decline should start as early as Monday or Tuesday to preserve the integrity of the wave marking. A wave 3 or C is supposed to be built right now. The ECB Vice President Louis de Guindos' speech last week was the most interesting for the euro. There were two performances, though they were barely distinguishable from one another. According to De Guindos, the European Central Bank's interest rate will increase in the upcoming months because the European Union's inflation rate is still "indecently high," and the slowdown in economic activity cannot result in a decrease in the consumer price index. As no one who participated in the foreign exchange market questioned further tightening monetary policy, I cannot say that de Guindos' statement sparked a commotion there. The likelihood that the rate will increase further, though, is growing. The euro currency benefits from this, but wave analysis and the news background are now at odds. While the news background suggests an increase, the waves suggest a decrease. We may see both in the end. The tool can create a third wave of a descending trend before starting a new upward trend segment. However, a descending wave needs to be constructed first. If not, the wave markup might become much more difficult to read. Conclusions in general Based on the analysis, the construction of the upward trend section is complete and has become more complicated with five waves. As a result, I suggest making sales with targets close to the estimated 0.9994 level, or 323.6% Fibonacci. There is a chance that the upward section of the trend will become more complicated and take on an extended form, but this chance is currently at most 10%. The wave marking of the descending trend segment becomes more intricate and lengthens at the higher wave scale. The a-b-c-d-e structure is most likely represented by the five upward waves we observed. After the construction of this section is finished, work on a downward trend section may resume.     search   g_translate     Relevance up to 11:00 2022-11-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328232
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

Macroeconomic And Fundamental Backgrounds Have Been Favorable For The Euro (EUR)

InstaForex Analysis InstaForex Analysis 27.11.2022 14:33
Analyzing Friday trades: EUR/USD on 30M chart The EUR/USD trade was very boring on Friday. There were no important events or reports in the EU or the US. The market could not react to anything, and it seemed that the movement was more like a flat. To be honest, the whole week turned out to be very boring from a fundamental and macroeconomic perspective. Basically, traders only had some basis for certain trading decisions on Wednesday. However, most of the macroeconomic reports of that day were, to put it mildly, unimportant and were not really interesting. So traders had nothing to react to during the week. As a result, the euro managed to show growth, which again raises a lot of questions. I mentioned that it is possible to find a reason for this or that movement, but if the euro had two reasons to rise, and five reasons to fall, then is it reasonable to say that the euro is growing? It has crossed the uptrend line, but now the pair is more inclined to grow. The formal downtrend is not yet canceled, because the price has yet to cross the last local high near the level of 1.0465. Therefore, we are still waiting for a significant downward correction. EUR/USD on M5 chart Several trading signals were formed on the 5-minute chart. First, the price rebounded from the level of 1.0391 and managed to go up about 20 pips. Therefore, we managed to put Stop Loss to Breakeven on this trade, but no more than that. The price failed to reach the target level. Then a sell signal was formed near the same level (1.0391). In this case, the price was able to fall to the target level of 1.0354, and beginners gained around 15-20 pips using this signal. The rebound from 1.0354 was not bad, afterwards the price started a new spiral of upward movement and crossed the level of 1.0391, where it remained until the end of trading. Therefore, the long position had to be closed manually, and the profit was about 35 pips. As a result, the day ended with 50 pips of profit, which is very good for an absolutely "empty" Friday. Trading tips on Monday: The uptrend has been canceled on the 30-minute time frame, just as we predicted a week ago. However, the pair is struggling to continue its decline. I still think that both macroeconomic and fundamental backgrounds have been favorable for the euro in the past few days and weeks. That is why we keep waiting for the downward correction, as the uptrend has not officially resumed yet. On the 5-minute chart tomorrow, it is recommended to trade at the levels of 1.0156, 1.0221, 1.0269-1.0277, 1.0354, 1.0391, 1.0428, 1.0465, 1.0483, 1.0535, 1.0582. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. On Monday, European Central bank President Christine Lagarde will give another speech, which might be interesting. However, we don't think Lagarde's rhetoric has changed in recent weeks, so she probably won't say anything new. There is nothing of interest scheduled for the US. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.     search   g_translate     Relevance up to 07:00 2022-11-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328226
India’s Investing In Program For The Green Hydrogen Industry | Covid Situation In China Is Getting Serious

The "Zero Tolerance" Policy Is Costly Not Only To The Chinese Economy

InstaForex Analysis InstaForex Analysis 27.11.2022 16:29
The U.S. dollar index paused its "downward trek" on Thursday after traders played back the release of what they considered the dovish minutes of the Federal Reserve's November meeting. However, it's impossible to be objective about the dollar's behavior right now. Thanksgiving Day, which was celebrated in the USA, distorted the whole picture. U.S. trading floors were closed on Thursday and Wednesday was a short work day, much like Friday. On top of that, there was the "Friday factor" and low liquidity. But even in such conditions, the EUR/USD bulls still failed to settle within the 4th figure. Traders finished the trading week at 1.0398. Actually, at the limit of the fourth price level, however, this is exactly the case when "a little bit doesn't count". The bulls' failure to settle above the 1.0400 mark suggests that the price's growth was passive, after the release of the Fed's minutes. Low liquidity helped the bulls reach the limit of the 4th figure, however, it needed more growth factors in order to climb further. Whereas the current fundamental picture is rather in favor of the greenback. In my opinion, the vector of the EUR/USD movement will be set next week by the level of interest in risk and the dynamics of the main macroeconomic indicators. A decline in anti-risk sentiment can significantly weigh on the greenback - and vice versa, an increase in panic will allow the dollar bulls to open a second wind. China may play a key role here as we continue to receive alarming news. The coronavirus factor has emerged once again: China reported its third straight daily record of new COVID-19 infections. For example, 39,791 new cases of coronavirus have been identified on November 26. Around 32,943 cases were reported on Thursday. And that's a new all-time high since the pandemic began. In other words, there is serious cause for concern. China is the second largest economy in the world, but has a "zero tolerance" policy for COVID. Despite significant negative consequences (including for the global economy), Beijing is adamant on this issue. Only two years after the start of the pandemic, the PRC authorities made minor concessions - the mandatory quarantine for people in contact with COVID patients (as well as for foreign travelers) was reduced from 7 to 5 days. However, even this "light" easing of coronavirus restrictions was received with enthusiasm by many market participants. Interest in risk increased noticeably and the dollar came under pressure. By the way, during this period, in early November, the pair showed a large-scale corrective growth, approaching the limits of the 5th figure. Now, apparently, China is back to tightening the screws. For example, the city of Guangzhou (the largest port city with a population of 17 million) has been undergoing a partial lockdown, affecting about 6 million people. In the largest district of Beijing - Chaoyang - most companies have closed. In addition, authorities also shut down cultural and entertainment venues in Shanghai. Local authorities also urged people to work from home if possible. The "zero tolerance" policy is costly not only to the Chinese economy, but also hits the world economy. Supply chains are collapsing, shortages of some goods are growing, and the inflation flywheel is starting to unwind again. Next week, the situation in China could worsen. In particular, Shanghai authorities have now imposed compulsory testing for all those entering from other regions, as well as a three-day quarantine in isolation. If a strict lockdown is imposed in this metropolis in the coming days (as it was this spring), anti-risk sentiment in the markets will increase significantly. Shanghai, with a population of 25 million, is considered the financial capital of China, and it will not take long for such a move to have an impact. By the way, the spring lockdown in China contributed to the development of the downward trend of EUR/USD - in a few weeks the pair decreased by almost 500 points. Thus, alarming news from China may strengthen the position of dollar bulls next week. The minutes of the Fed, which was interpreted against the U.S. currency, has already exhausted itself. In general, the market played back the possible slowdown in the rate hike even before the release of the minutes of the November meeting. Therefore, we can assume that this topic will fade in the near future. The next focus is another question - how high the Fed's final rate can climb. After all, the fact that the Fed will slow down the rate hike does not indicate that the upper limit of the current cycle will be lowered. If members of the U.S. central bank sound hawkish signals in this context (essentially repeating Powell's rhetoric), the dollar will receive substantial support throughout the market. A new outbreak of Covid in China will only spur traders' interest in the safe-haven greenback. In this case, the pair could fall to the support level of 1.0210 (the lower limit of the Kumo cloud on the four-hour timeframe) in the medium term.     search   g_translate     Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328225
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The Euro (EUR) Touched The Lower Shadow Of The Support

InstaForex Analysis InstaForex Analysis 28.11.2022 08:07
Last Friday, the euro touched the lower shadow of the support at 1.0360, this morning it did the same thing. The price needs to settle under this level so it can reach 1.0205, and it will form a double top on the daily chart. But the price is not in a hurry to do so. Therefore, if today closes with a white candle, then there is a high probability of a breakout of 1.0470 and a divergence may form with the Marlin oscillator. The situation on the weekly chart contributes to the divergence option - here we see that the MACD indicator line still hasn't been reached. But whether it will be reached or not, remains an intrigue. On the four-hour chart, the price crossed the MACD line on the descending Marlin oscillator. There was a similar transition on Friday, it was not reliable. Now, when the Marlin oscillator is involved, the price has a chance of settling under 1.0360. Watch the situation, for a signal for a short-term growth or a medium-term fall.   Relevance up to 03:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328246
The EUR/USD Price May Fall Under 1.0660

The Outlook Of The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 28.11.2022 08:11
Technical outlook: EURUSD dropped to the 1.0340 lows during the Asian session on Monday before finding interim support. The single currency pair is seen to be trading close to 1.0355 at this point in writing as the bulls looking forward to coming back in control. A high probability still remains for a push towards 1.0550 before turning lower again. EURUSD could be still unfolding into its last leg higher within the area of 1.0550-1.0600 before hitting resistance. Please note that 1.0600 is close to the Fibonacci 0.382 retracement of the larger-degree downswing between 1.2266 and 0.9535. The counter-trend rally, which began from the 0.9535 lows earlier, could be into its last phase before the bears are back in control. On the flip side, if a major low is in place at 0.9535, prices would continue further above the 1.0600 mark. But before this happens, a meaningful corrective drop needs to unfold towards 1.0000. It is also the Fibonacci 0.618 retracement of the rally between 0.9740 and 1.0481 levels as marked on the daily chart here. A break below 0.9740 would nullify the bullish outlook. Trading idea: Potential rally through 1.0550 against 1.0200 in the near term. Then lower again. Good luck!   Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/302674
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

This Week In The European Union Will Be Mass Of Events That Could Cause A Market Response

InstaForex Analysis InstaForex Analysis 28.11.2022 08:23
On Friday, the EUR/USD currency pair traded extremely calmly, exhibiting no sudden movements, volatility, or trend. However, the pair ended the day above the moving average, and both linear regression channels point upward. Therefore, the development of the European currency is entirely justified from a technical standpoint. Another concern is that it is obvious that the macroeconomics and foundation do not provide the euro currency with enough support for it to grow almost continuously. But since this issue has already been brought up several times, there is nothing new to add now. As we have repeatedly stated, any fundamental hypothesis should be supported by specific technical signals. It is not worthwhile to test this hypothesis if there are no signals. We can wait as long as we like for a correction, but if the majority decides to buy the euro for any reason, there won't be one. However, a correction could still start soon. The fact is that there are currently no fundamental or macroeconomic justifications for the appreciation of the euro currency. Of course, they can be "discovered" or "invented," but if that doesn't happen, how can one explain, for instance, why the European currency increased last week? Whatever it was, we are still watching for the pair to fall and consolidate below the moving average line. The most intriguing report of the week concerns inflation in the EU. The situation will be more intriguing this week than it was last week because of the macroeconomic backdrop. The European Union will host Christine Lagarde's speech on Monday. With the ECB's final meeting of the year scheduled for December, her speeches are gradually regaining importance. The market currently anticipates an additional 0.75% rate increase because, even if inflation slows by the end of November, it is unlikely that it will be able to return to 2% at the same rate level. As a result, several more significant increases are necessary, as Vice-Chairman of the ECB Luis de Guindos discussed last week. Lagarde will likely use "hawkish" language, which could theoretically support the euro. The word "theoretically" is because the market is confident that the rate will continue to grow at its fastest rate even without Lagarde's new rhetoric. There are numerous reasons why the Fed needs to catch up. First, a higher rate abroad causes an imbalance in cash flow and investment. Money comes to the US. Second, a higher Fed rate causes the dollar to rise while the euro declines. Thirdly, a high rate is necessary to reduce inflation, which is still very high and must be done. Therefore, increasing it at the fastest possible rate is necessary since it is ineffective for the European regulator to "pull the rubber." The November inflation report will be released on Wednesday. The consumer price index is expected to slow to 10.3–10.4% y/y, which can be seen as the first step toward success, according to forecasts made by experts. Nevertheless, since this is only a prediction, it might not pass. And now for something interesting. Recall that a few months ago, the US dollar started to decline relative to its rivals when US inflation started to slow down. Since the beginning of the decline in inflation, the likelihood of further aggressive tightening of monetary policy by the central bank has decreased. It can be concluded that a decrease in inflation = a fall in the exchange rate of the national currency. The European currency could lose market support if inflation in the European Union starts to decline. The European Union will release its unemployment rate and business activity index (manufacturing sector) on Thursday. There will be more significant events this week than these reports in the present context. Luis de Guindos and Christine Lagarde will perform as usual on Friday. It's more intriguing this way. As a result, there will be a lot of intriguing events this week in the European Union alone that could cause a market response. As of November 28, the euro/dollar currency pair's average volatility over the previous five trading days was 86 points, considered "average." So, on Monday, we anticipate the pair to fluctuate between 1.0310 and 1.0482 levels. A potential continuation of the upward movement will be indicated by the Heiken Ashi indicator turning back to the top. Nearest levels of support S1 – 1.0376 S2 – 1.0254 S3 – 1.0132 Nearest levels of resistance R1 – 1.0498 R2 – 1.0620 R3 – 1.0742 Trading Suggestions: The EUR/USD pair is still above the moving average. In light of this, we should now consider long positions with targets of 1.0482 and 1.0498 if the Heiken Ashi indicator reverses direction and moves upward or the price recovers from the moving. Only after fixing the price below the moving average line with targets of 1.0254 and 1.0132 will sales become significant. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     search   g_translate     Relevance up to 05:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328254
The EUR/USD Pair Maintains The Bullish Sentiment

The Price Of EUR/USD Pair Broke Through The Trend Line

InstaForex Analysis InstaForex Analysis 28.11.2022 08:33
M5 chart of EUR/USD During the last trading day of the week, the euro/dollar pair entered a bearish correction after a steep growth of the past several days. As a reminder, the price settled below the ascending trend line. However, it failed to settle below the Senkou Span B, and later on the euro also returned above the critical line. But it failed to update its local high of November 15, which suggests that the downtrend was cut short, which is now far from being evident. Nevertheless, we could anticipate a correction because the uptrend line has been crossed. There were no important and high-profile events in the EU and the U.S. on Friday, as well as during most of the past week. It may well be that the euro's growth was not quite logical again (although the right reasons can be "found", of course), so we still expect the EUR/USD to go down. There is not much to say about Friday's technical signals, since there was only one throughout the day. At the beginning of the US session, the pair rebounded from the 1.0366-1.0340 area, so traders could open long positions there. It hardly made much profit, but you could earn around 20-30 pips, which is not bad either, considering the weak volatility and since there was almost no trend. COT report As for Commitment of Traders (COT) reports in 2022, they reflected bullish sentiment in the first six months of the year although the euro was bearish. Then, they illustrated bearish sentiment for several months with the euro being also bearish. Currently, the net position of non-commercial traders is again bullish and increasing. Meanwhile, the euro has hardly retreated from its 20-year lows. This is due to the fact that demand for the greenback is high amid a difficult geopolitical situation in the world. Therefore, despite a rise in demand for the euro, buoyant demand for the dollar does not allow the euro to strengthen. During the reporting week, the number of long positions held by non-commercial traders rose by 7,000 and that of short positions increased by 2,000. Consequently, the net position advanced by 5,000. The euro's recent growth is gradually coming in line with the figures illustrated in the COT report. Still, the greenback may resume growth under the influence of geopolitical factors or the lack of factors for further strengthening in the euro. The green and red lines of the first indicator moved far away from each other, which may indicate the end of the uptrend. The number of long positions exceeds that of short positions by 113,000. Therefore, the net position of non-commercial traders may continue to rise further, but without triggering a similar rise in the euro. When it comes to the total number of longs and shorts across all categories of traders, there are now 39,000 more short positions (635,000 vs 596,000). H1 chart of EUR/USD In the H1 time frame, EUR/USD tried to resume the uptrend, but stopped just before it updated its previous local high. Although the price broke through the trend line, fundamental factors provide little support for the euro, the market has not yet found any reason to sell, which we are waiting for. Anyway, we are still anticipating a strong bearish correction. On Monday, the pair may trade at the following levels: 1.0124, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as Senkou Span B lines (1.0207) and Kijun Sen (1.0336). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On November 28, European Central Bank President Christine Lagarde will give a speech; however, all of the central bank's representatives are now in favor of further rate hikes, which traders are absolutely ready for. Lagarde may have something important to say (in theory) but the market is probably ready for that. Nothing of interest in America. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate     Relevance up to 05:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328250
FX Daily: Asymmetrical upside risks for the dollar today

FX: Data In The US This Week May Deliver A Little Support To The US Dollar (USD)

ING Economics ING Economics 28.11.2022 09:09
A very inverted US yield curve and Brent crude trading down near $80/bbl tell us that markets are growing more concerned about global demand trends. And uncertainty in China does not help either. We feel scheduled events and data in the US this week may also deliver a little support to the dollar. In general, we favour defensive positions in FX this week In this article USD: Fed-speak, prices and employment to dominate EUR: Waiting for the next inflation print GBP: Settling down CEE: Hungary remains topic number one     USD: Fed-speak, prices and employment to dominate The week starts with a focus on events in China as local authorities struggle to battle rising daily case numbers and enforce lockdowns. While a disorderly exit from China's Covid Zero policy could ultimately prove a positive for global demand, getting to that point will be an exceptionally bumpy ride for the world's financial markets. As it stands currently, events in China are being read negatively for demand trends, where for example Brent crude and industrial metal prices are under pressure. Brent at $80/bbl is a little surprising given what should be the 2mn barrel per day production cut undertaken by OPEC+ this month.  Another big read for global demand trends is the shape of the US Treasury yield curve. The current 2-10 year inversion of the curve to -80bp is exceptional and aptly reflects investors' views that recession is coming but the Fed will not be cutting rates anytime soon. On the subject of the Fed, the week ahead sees Federal Reserve Chair Jerome Powell speaking on Wednesday evening (hawks James Bullard and John Williams speak tonight also). Currently, we would pin Chair Powell to the hawkish end of the Fed spectrum and our colleague, James Knightley, thinks Chair Powell this week could push back against the recent (and perhaps premature in the Fed's mind) easing of financial conditions.  In addition to Fed-speak, the US data calendar picks up again this week, with readings on house prices, confidence, PCE inflation and Friday's release of the November jobs report. The more important data releases come on Thursday and Friday, where any uptick in the core PCE price data or strong job numbers could support potentially hawkish rhetoric from Chair Powell and send US yields and the dollar higher again. As we outlined in our 2023 FX Outlook, we just do not see conditions in place for a benign dollar bear trend - even though the buy-side is desperate to put money to work away from the dollar. Seasonally, the dollar is weak in December, but our call is that this year, the dollar can strengthen into year-end. We continue with the view that any weakness in DXY towards the 105.00 area this week (DXY now 106.18) will prove short-lived and favour a return to 108-110 into year-end. Chris Turner EUR: Waiting for the next inflation print The highlight of the eurozone data calendar this week will be November price data - released for Germany tomorrow and for the eurozone on Wednesday. The question is whether inflation will fall back from the highs (not far from 11% year-on-year) and allow the European Central Bank to potentially soften its hawkish rhetoric a little. Currently, the market prices a 62bp rate hike on 15 December.  EUR/USD is consolidating at higher levels - having been buoyed by the 20% recovery in European equity markets amidst declining energy prices. Equally, business confidence has been holding up a little better than expected. We cannot rule out EUR/USD trading back up to the 1.0480/1.0500 area again (though the reasons for that are far from obvious) but reiterate that the second half of the week could potentially push EUR/USD back to the 1.02 area. Chris Turner GBP: Settling down Three-month GBP/USD traded volatility prices are now under 12% having been near 19% in late September. Clearly, sterling trading conditions have settled down even as recession expectations solidify. Our view is that these GBP/USD gains will not last and we would not be surprised to see fresh selling interest emerging near the 200-day moving average at 1.2177 or at best the 50% retracement of the 2021-22 drop - at 1.2300.  The current inversion in yield curves around the world does, for a change, look to be a likely harbinger of recession. And with its large current account deficit, sterling should be expected to remain vulnerable. The UK data calendar is light this week, but there are a few Bank of England (BoE) speakers who may reiterate hawkish leanings. The market currently prices a 52bp BoE rate hike on 15 December. Chris Turner CEE: Hungary remains topic number one The Central and Eastern Europe (CEE) region will become more interesting in the second half of the week, while today and tomorrow will be more about global numbers. On Wednesday, Poland will see the release of inflation for November and a detailed breakdown of 3Q GDP, which positively surprised a couple of weeks ago in the flash estimate (0.9% quarter-on-quarter). Of course, given the pause in the central bank hiking cycle, the CPI print will get a lot of market attention. We expect an unchanged 17.9% YoY reading, more or less in line with market estimates. On Wednesday, we could hear something new from the European Commission (EC) on Hungary, progress with the rule-of-law and access to EU funds. Thursday will see the release of PMI indicators across the region. While we expect a rebound from the lows in Poland and the Czech Republic, we forecast a drop below the 50-point level in Hungary. Also on Thursday, the 3Q GDP breakdown will be published in Hungary, which was the only country in the region to surprise negatively in the flash reading (-0.4% QoQ). On Friday, the Czech Republic will also release the detail of 3Q GDP, which was -0.4% QoQ in the first estimate as the market expected.  In the FX market, conditions for the CEE region improved again last week. The dollar index touched new lows and sentiment improved again in Europe. On the other hand, local conditions remain negative. Interest rate differentials across the region have reached new lows again in recent days. This week, we see a chance for a reversal in the US dollar and a reality check inflation story at the global and regional level, resulting in negative pressure on the region. The European Commission decision will be a key market mover for the Hungarian forint. Although last week's news was mixed, we see it as rather positive. Thus, confirmation that Hungary no longer faces a permanent loss of EU funds should help the forint move back closer to 405 EUR/HUF. Inflation in Poland will be key for the zloty and the possibility for the market to reassess the priced-in cuts next year, which could add short-term support for the zloty. However, we see the zloty as the most vulnerable to the global story at the moment, so we remain bearish. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Crude Oil Sees Its Biggest Weekly Pull Back Since April

Chinese Protests Send Crude Oil Lower | Bitcoin Under Pressure

Swissquote Bank Swissquote Bank 28.11.2022 10:05
Massive anti-Covid protests in the biggest Chinese cities marked the weekend. So, the week kicked off on a bad mood in the Asian markets. Australian and Chinese stock markets were painted in red. The Hang Seng index dived more than 2% in Hong Kong, and crude oil has already lost more than 3% at the time of shooting. Black Firday In the US, the record Black Day sales could hammer the joy around a potential Federal Reserve (Fed) pivot on softening US economy. The US shoppers spent more than $9 billion in online sales on Friday, and Cyber Monday is also expected to be a record-breaking one, with more than $11 billion to be spent. This is not exactly what you expect to hear when you think that the US will enter a consumer-led recession in couple of weeks from now… FX And S&P 500 The US dollar kicked off the week on a bullish note. The EURUSD slipped below the 200-DMA, near 1.0380. The S&P500 index closed last week at the highest levels since mid-September, and stands a couple of points from the year-to-date descending channel top, which could bring topsellers in, especially if strong data revives the idea that the Fed has no reason to stop hiking its interest rates. Watch the full episode to find out more! 0:00 Intro 0:38 China doesn’t want Covid zero, but it’s not simple… 2:55 Chinese protests send crude oil lower 4:09 Dear Mr. Powell, Black Friday sales hit record this year… 6:32 … what should we expect? 7:03 Watch China EV deliveries, Tesla, Apple on China unrest 8:26 Bitcoin under pressure, again Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #China #Covid #protests #US #Black #Friday #Cyber #Monday #Fed #expectations #USD #EUR #crudeoil #Bitcoin #Tesla #Apple #Xpeng #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
JPY: Assessing the FX Intervention Zone and Market Conditions

This week starts with news about China and COVID and will go on with Eurozone inflation data and other crucial events

Enrique Díaz-Álvarez Enrique Díaz-Álvarez 28.11.2022 15:30
Risk assets rose worldwide last week as the backdrop turned more supportive. Recession fears seem to be easing worldwide, particularly in the Eurozone, but interest rates are not rising in tandem, the best combination possible for stock markets, credit and commodity currencies. The dollar underperformed against every currency in G10, and the biggest winners were Latin American currencies. The major exception was the Brazilian real, which continues to be hobbled by fears that the Lula administration will undo the economic stabilisation achieved over the last year in Brazil.   As this is written, news of the anti-lockdown protests in China are dominating headlines and risk assets are opening softer in Asian early morning trading. In addition to the headlines from China, this should be a very busy week for markets. The flash inflation report out of the Eurozone (Wednesday) is expected to remain at record highs, specially in the core indicator, a stark contrast to the wishful thinking we see in the ECB and elsewhere that inflation will somehow go away on its own. The latter part of the week will be dominated by US macro news, including the PCE inflation report (Thursday) and the critical November payrolls report (Friday). Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 28/11/2022 GBP The pound continues to benefit from the sense of stability brought to UK finances by Prime Minister Sunak. It’s also helpful that market expectations for the terminal rate in the UK continue to creep up towards 5%. A handful of MPC members spoke last week, and there appears a general consensus among policymakers that additional interest rate hikes are required. Last week’s High Court ruling, which deemed that another Scottish Independence referendum cannot take place without Westminster consent, had little impact on sterling. This week is extremely light in terms of UK data, so risk appetite among investors and a couple of speeches by MPC members (Tuesday and Wednesday respectively) will be the main drivers of trading in the pound. EUR While sentiment in the Eurozone economy remains negative, key surveys last week all came out stronger than expected. This includes the PMI survey of business activity, but also consumer and investor confidence. For now, the weakness in the surveys has not fully shown up in the actual economic numbers, which continue to hold up rather well under the circumstances. Figure 2: Euro Area PMIs (2020 – 2022) Source: Refinitiv Datastream Date: 28/11/2022 This week, the focus will be on the flash inflation numbers for November, out on Wednesday. The excitement around the possibility that headline inflation may retreat slightly, while remaining in double digits, should be tempered by the absence of any sign of a pullback in the more persistent core number. The latter will likely remain above 5%, a dizzying and unsustainable 4% above overnight rates in the Eurozone. USD The holiday-shortened week in the US had little economic or policy news to drive markets, aside from the publication of the somewhat stale minutes of the last Fed meeting. The minutes reinforced the notion that the Fed is likely to revert back to a 50 bp hike in December, but told us little about the more important question of what to expect next year. While the payrolls report on Friday should dominate headlines, we think markets are not paying enough attention to the PCE inflation report for October, the Fed’s preferred inflation measure, released the day before. It will be interesting to see whether it confirms the softness of the CPI report that gave so much encouragement to markets, thanks partly to some technical quirks in the report. Should it come out higher than expected we could see some sharp retracement in expectations for the Fed’s terminal rate. JPY The yen traded a touch higher on the US dollar last week, though the general improvement in risk appetite meant that the currency underperformed most of its G10 counterparts. Slowly but surely, the Japanese yen is regaining its status as one of the chief safe-haven currencies in the world, a mantle lost due to the Bank of Japan’s ultra-dovish monetary policy stance. Yet, with central banks globally approaching the end of their tightening cycles, the yen is somewhat back in favour again among investors, with the currency rallying this morning on news of the worsening in the COVID-19 situation in China over the weekend. Japanese inflation data, out last week, came in higher than expected, perhaps a prelude to a slightly less dovish BoJ policy stance. Labour market data (Monday), industrial production (Tuesday), and a speech from Bank of Japan governor Kuroda (Thursday) will be closely watched by investors this week. CHF The Swiss franc ended last week little changed against the euro, and around the middle of the G10 currency performance dashboard. News from Switzerland was scarce, and the US Thanksgiving holidays ensured that trading activity was light in the second half of the week. This week’s economic calendar in Switzerland is unusually busy. Third-quarter GDP growth, sentiment indices, retail sales and PMI data will all be out. The primary focus should, however, be on the latest inflation figures (out on Thursday), as the November print may have the biggest impact on the size of the SNB’s rate hike next month. In the two months prior, the data has surprised to the downside, but at 3% it remains significantly above the SNB’s 0-2% target range. AUD News of anti-lockdown protests in China over the weekend led to a bit of weakness in the Aussie dollar this morning, as investors fret over the possibility of additional mobility restrictions in Asia’s largest economy. AUD does, however, continue to remain well bid against most currencies, as dimming fears over a global recession support high-risk assets. Domestic economic news out last week was a touch on the soft side, which perhaps contributed to the underperformance in AUD relative to its New Zealand counterpart. Both the services and manufacturing PMIs missed expectations, with the latter now at its lowest level since January (47.2). An unexpected drop in this morning’s retail sales print for October (-0.2%) has further clouded the outlook. Figure 3: Australia Retail Sales (2021 – 2022) Source: Refinitiv Datastream Date: 28/11/2022 We suspect that headlines out of China, Australia’s largest trading partner, will be the main driver of the dollar during the remainder of the week. Domestic macroeconomic data releases are few and far between, though a speech from Reserve Bank of Australia governor Lowe on Friday could draw some attention. NZD In line with expectations, the Reserve Bank of New Zealand raised its base rate by another 75 basis points last week. Some analysts had pencilled in a smaller hike in light of the growing downside risks to growth. While the RBNZ noted that a shallow recession was likely on the way in 2023, it also said that this would be a necessary condition in order for the bank to reach its inflation target. The statement remained rather hawkish. The reference to ‘tighten at pace’ was removed, though the bank noted that rates would need to go higher than previously expected. The committee even discussed the possibility of a 100bp hike at last week’s meeting. The New Zealand dollar was well supported in the aftermath of Wednesday’s RBNZ announcement – we suspect that growing expectations for hikes could keep the currency well bid this week. The bank’s commitment to bringing down core inflation is notable, and is likely to ensure that it could raise rates deeper into 2023 than most of its G10 counterparts. CAD The Canadian dollar once again underperformed most of its major peers last week, ending near the bottom of the G10 performance tracker, alongside the US dollar. Some dovish comments out of the Bank of Canada were partly behind this underperformance, with deputy BoC governor Rogers saying last week that higher rates were causing hardship for households. The BoC delivered a dovish tilt at its last meeting, and it will likely take something extraordinary for anything larger than a ‘standard’ 25bp hike at the last policy meeting of the year in December. This week is a very busy one in terms of economic data releases in Canada. Tuesday’s Q3 GDP number to expected to show that the Canadian economy expanded at a modest pace in the three months to September. Meanwhile, economists are bracing for a sharp slowdown in job creation in Friday’s labour report for November (+6k expected in the net employment change number). SEK The Swedish krona appreciated against the euro last week, in line with the general improvement in investor appetite for risk. The outcome of last week’s Riksbank meeting was more or less as expected, perhaps with a slight dovish tilt, which limited further gains for the krona. The Riksbank raised interest rates by 75 basis points to 2.5%, the highest level since 2008. The board stated that the risk of high inflation becoming entrenched is still substantial, and that it is very important that monetary policy acts to ensure a stabilisation around the 2% target within a reasonable time. Figure 4: Riksbank Base Rate (%) (2012 – 2022) Source: Refinitiv Datastream Date: 28/11/2022 In addition, the Riksbank also published its new macroeconomic projections. The target CPIF measure was projected to ease from 7.6% this year to 5.7% in 2023, an upward revision from the previous forecast of 5.1%, and then down to 1.5% in 2024, slightly lower than 1.6% expected last time. The bank expects a GDP contraction of 1% in 2023, before growth of 1.0% returns in 2024. As for the terminal rate, the bank puts it at 2.84% in the third quarter of next year. The revised rate path remains somewhat off-market expectations and, in our view, is somewhat conservative. NOK In the absence of relevant data last week in Norway, the Norwegian krone traded in line with risk assets, ending the week higher against the euro on improved risk sentiment. Expectations of a more dovish Federal Reserve, and the reduced fear of recessions, have contributed to the improvement in risk sentiment. Indeed, NOK was by far and away the best performer in the G10 last week, largely a consequence of its high-risk status. No major data will be published this week either. Therefore, we believe that the currency will continue to trade in line with other risk assets. Protests in China over increased restrictions to curb covid may continue to worsen sentiment, which may weigh on risk assets in the coming days, including the Norwegian krone. CNY The Chinese yuan was among the underperformers last week. Sentiment toward China has taken another turn for the worse, as domestic covid cases continued to hit fresh record highs. This has prompted officials to introduce local restrictions and mass testing, as a number of cities struggle to contain the spread. This will add to the strain on the Chinese economy and policymakers have rushed to provide monetary support. Last week, commercial banks in China announced fresh credit lines to help struggling property developers. For the first time since April, the PBoC also cut its reserve requirement ratio (RRR) for banks, slashing it by 25 basis points to ensure ample liquidity. In the coming days, we’ll receive fresh PMI prints for November, which should help us understand the degree of the economic slowdown. The immediate attention in China is, however, on protests against the country’s zero-Covid policy. These protests have erupted in the past few days in response to a number of tragedies, including a fire that killed 10 in Urumqi, the capital of the northwestern Xinjiang region. Protests have taken place in at least nine cities, including Beijing and Shanghai, which has further soured sentiment towards the yuan at the start of this week. Economic Calendar (28/11/2022 – 02/12/2022) To stay up to date with our publications, please choose one of the below: 📩 Click here to receive the latest market updates👉 Our LinkedIn page for the latest news✍️ Our Blog page for other FX market reports 🔊 Stay up to date with our podcast FXTalk Source: Dollar falls as recession fears recede, yields fall | Ebury UK
ECB decision: 50bp rate hike is on the cards, but this week's data can be game-changing

ECB decision: 50bp rate hike is on the cards, but this week's data can be game-changing

Kenny Fisher Kenny Fisher 28.11.2022 19:49
It has been a busy start to the week for EUR/USD, which gained 100 points earlier in today but has given up almost all of these gains. In the North American session, EUR/USD is trading at 1.0384. German CPI projected to decline Inflation is running at a double-digit clip in the eurozone and Germany, and the ECB is keeping a careful eye on Tuesday’s German CPI for November, with a consensus of -0.2%, compared to a gain of 0.9% in October. Could this be the long-sought peak in inflation? If so, it would allow the ECB to ease up on its pace of rate hikes. The ECB was late getting into the hiking game, as Lagarde & Co. clearly underestimated the stickiness of inflation, which has hit 10.4% in Germany and 10.7% in the eurozone. Read next: Commodities: Crude oil suffers from situation in China| FXMAG.COM The ECB has been aggressive and raised rates by 75 basis points in October, but the main deposit rate is at a relatively low 2.00%. The ECB has moved away from forward guidance and is relying instead on a meeting-by-meeting, data-driven approach. The markets have priced in a 50-bp increase at the December 12th meeting, but the release of German CPI on Tuesday and Eurozone CPI on Wednesday could change expectations. After a short trading week in the US due to the Thanksgiving holiday, the markets will have plenty of US events to digest this week. The US will release GDP for Q3 and the Core PCE Price Index, the Fed’s preferred inflation indicator. The key release of the week is nonfarm payrolls on Friday, which could have a major impact on what the Fed does at the December 14th meeting. Currently, the likelihood of a 50-bp hike is about 75%, versus 25% for a larger 75-bp increase. Investors are viewing a 50-point move as a dovish pivot, which has been putting pressure on the US dollar. Still, even a 50-bp hike would set a record for yearly rate hikes of 4.25%. EUR/USD Technical 1.0359 and 1.0238 are providing support There is resistance at 1.0447 and 1.0568 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro eyes German CPI - MarketPulseMarketPulse
The EUR/USD Pair: There Are Still No Sell Signals

The ECB's Balance Sheet Reduction Should Go Smoothly

InstaForex Analysis InstaForex Analysis 29.11.2022 08:00
On Monday, despite the near absence of news and events, the EUR/USD currency pair was trading higher. The growth started early in the day, much earlier than the only event of the day - Christine Lagarde's speech, and it should be noted immediately. As a result, this event was unable to have any impact on the market's mood. And the current atmosphere is unquestionably "bullish" and does not raise any concerns. As we've already stated, the expansion of the euro is wholly justified and logical from a technical standpoint. Now, every indicator on the 4-hour and 24-hour TF is visible. Therefore, conceptually, there are no issues with the European currency's growth. When we discuss macroeconomics as a foundation, it becomes a different issue. Since the market trades every day, the pair can grow perfectly well without significant newsworthy events or publications, as we have already stated. However, the euro has been expanding rapidly for almost a month, and such a sustained expansion has us scratching our heads. What foundation is the euro currently growing on? Remember that, in theory, a few factors could account for the pair's current movement. For instance, we can state that the risk sentiment in the market is rising right now, but what does this mean, and why is it rising? It is very challenging to respond. Why, then, did traders suddenly start paying attention to risky currencies when the geopolitical situation in the world hasn't changed in any way over the past month? The foundation is the same way. Yes, the ECB rate is rising quickly, and starting next month, it may start to outpace the Fed rate in terms of growth. But is this one factor enough for the euro to rise by 750 points in less than a month? It is extremely difficult to refer to macroeconomic statistics as "supporting the euro" at all. The only theoretical support factor is anticipating a slowdown in the Fed's tightening pace. How much more will the euro currency appreciate based solely on this factor? As we've already stated, it makes sense to trade for an increase while all indicators point upward. Any fundamental theory requires specific technical signals to support it. There is no need to try to predict the reversals or the future movement if there are none. The market may be closing out the short positions it has been building up for the past two years. The ECB is getting ready to reduce its balance sheet. The fundamental background is nonexistent during the first two trading days of the week. Christine Lagarde gave another speech on Monday, but this time she didn't offer any novel insights into the market. The market had no doubts about her assurance that rates would continue to be a crucial tool in the struggle against high inflation. In other words, as long as EU inflation remains sky-high, the ECB rate will rise, which the market did not doubt. Lagarde added that the topic of shrinking the ECB's balance sheet (the QT program) will be discussed in December, which should also cause a slight slowdown in the consumer price index. It's already in the news! Given that Lagarde's speech was quite late in the day on Monday, it hardly had any impact on the appreciation of the euro. The ECB chief also noted that although it is unlikely to occur soon, the central bank's balance sheet reduction should go smoothly, and rates will eventually fall. The state of the economy, the labor market, wages, and inflation expectations will all be important factors. As you can see, traders continue to have formal reasons to purchase the euro from a foundational standpoint. Still, we believe that the current fundamental background needs to be sufficiently strong to cause the euro to increase by 750 points in a matter of weeks. As of November 29, the euro/dollar currency pair's average volatility over the previous five trading days was 95 points, considered "high." So, on Tuesday, we anticipate the pair to fluctuate between 1.0332 and 1.0521 levels. The Heiken Ashi indicator's turning downward indicates a new phase of the corrective movement. Nearest levels of support S1 – 1.0376 S2 – 1.0254 S3 – 1.0132 Nearest levels of resistance R1 – 1.0498 R2 – 1.0620 R3 – 1.0742 Trading Suggestions: The EUR/USD pair is still above the moving average. Thus, until the Heiken Ashi indicator turns down, we should hold long positions with targets of 1.0498 and 1.0521. The price fixing below the moving average line with targets of 1.0254 and 1.0132 will cause sales to become significant. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     search   g_translate     Relevance up to 01:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328375
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The Euro (EUR) Is Losing Support From Related Markets

InstaForex Analysis InstaForex Analysis 29.11.2022 08:18
  Relevance up to 03:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328387
ECB press conference brings more fog than clarity

All ECB Members Agreed That It Was Important To Keep Raising The Rate

InstaForex Analysis InstaForex Analysis 29.11.2022 08:27
The euro's first trading day of the week proved surprisingly active. Although there was no news background on Monday, the movements started in the evening and continued throughout the day and into the evening. There was some news, though, and I will now consider them. The speech by Christine Lagarde, which offered nothing to the market, should be our first point of reference. The market now feels secure in its position and is clear on the actions the European regulator will take in the coming months due to the ECB speakers' appearances just last week. All ECB members agreed that it was important to keep raising the rate as long as inflation was still high. A preliminary report on EU inflation for November will be released this week, and the market now anticipates that it will start to slow down a bit. This might be an exceptional circumstance, or perhaps by the end of November, there won't be any slowdown. Predictions sometimes pan out. Additionally, Isabel Schnabel gave a speech in which she said something crucial. She pointed out that the ECB is currently powerless to halt the rate increase because budgetary initiatives will cause inflation to soar. Budget plans are viewed as various initiatives to reimburse European consumers for rising electricity costs over the past year. Schnabel also pointed out that faulty inflation forecasts by central banks could result in misguided monetary policy. She added that the ECB might need to increase the rate more than initially anticipated. This is reasonable rhetoric, given that budget incentives are almost identical to monetary incentives, which are the primary cause of the EU's (and other nations') current record-high inflation rates. Restrictive measures ought to be more stringent than they would be if the EU implements fiscal stimulus. Such rhetoric is advantageous for the euro. The market will have more justification to increase demand for the euro currency as rates in the European Union rise. We need at least three waves down based on the current wave layout. This is necessary for the markup to be completely unreadable and complex, making it much more challenging to predict something. I do not contest the possibility of a continued quote rise; even yesterday's example demonstrated this. But I'm still hoping to develop a clear trend correction section. The upward trend section's construction is complete and has increased complexity to five waves (or is nearing completion). As a result, I suggest making sales with targets close to the estimated 0.9994 level, or 323.6% Fibonacci. There is a chance that the upward section of the trend will become more complicated and take on an extended form, but this chance is currently at most 10%. The construction of a new downward trend segment is predicated on the wave pattern of the pound/dollar instrument. I can no longer recommend purchasing the instrument because the wave marking already permits the development of a downward trend section. With targets around the 1.1707 mark, or 161.8% Fibonacci, sales are now more accurate. The wave e, however, can evolve into an even longer form. Relevance up to 05:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328393
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The EUR/USD Pair Still Hasn't Started A Downward Movement

InstaForex Analysis InstaForex Analysis 29.11.2022 08:30
M5 chart of EUR/USD On Monday, the euro/dollar pair showed certain movements that are quite difficult to explain. It started to sharply rise early in the morning and crossed a distance of 150 pips. Then it began to fall by the same amount in the afternoon. The only fundamental background was European Central Bank President Christine Lagarde's speech, which took place in the evening, so it could not have provoked such movements. Therefore, the pair has reached 1.0485, near which the previous local high was formed, and sharply fell. I believe that this pullback could be the start of the long-awaited bearish correction, which I already mentioned last week. The price may cross the critical line in the near future, which will be another technical factor for the fall. I expect the Senkou Span B line to be the first target, but the correction might be much stronger, since the euro's growth for the past few weeks was not quite logical and reasonable. As for trading signals, yesterday's situation was almost perfect. At the beginning of the European trading session, the price broke through the level of 1.0366, after which it rose to the nearest target level of 1.0485 and rebounded from it. Therefore, traders had to open a long position first, and then - a short position. They managed to earn about 90 pips on the first position, and also the same amount on the second one since the price went back to the level of 1.0366. As a result, two deals, good profit. COT report As for Commitment of Traders (COT) reports in 2022, they reflected bullish sentiment in the first six months of the year although the euro was bearish. Then, they illustrated bearish sentiment for several months with the euro being also bearish. Currently, the net position of non-commercial traders is again bullish and increasing. Meanwhile, the euro has hardly retreated from its 20-year lows. This is due to the fact that demand for the greenback is high amid a difficult geopolitical situation in the world. Therefore, despite a rise in demand for the euro, buoyant demand for the dollar does not allow the euro to strengthen. During the reporting week, the number of long positions held by non-commercial traders rose by 7,000 and that of short positions increased by 2,000. Consequently, the net position advanced by 5,000. The euro's recent growth is gradually coming in line with the figures illustrated in the COT report. Still, the greenback may resume growth under the influence of geopolitical factors or the lack of factors for further strengthening in the euro. The green and red lines of the first indicator moved far away from each other, which may indicate the end of the uptrend. The number of long positions exceeds that of short positions by 113,000. Therefore, the net position of non-commercial traders may continue to rise further, but without triggering a similar rise in the euro. When it comes to the total number of longs and shorts across all categories of traders, there are now 39,000 more short positions (635,000 vs 596,000). H1 chart of EUR/USD Lately, EUR/USD has shown absolutely inadequate movements on the one-hour chart. It still hasn't started a downward movement even after it crossed the ascending trend line. Yesterday, the pair updated its last local high, but failed to break through the important level of 1.0485. And now it may start a strong bearish correction, which we already expected a week ago. On Tuesday, the pair may trade at the following levels: 1.0124, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as Senkou Span B lines (1.0207) and Kijun Sen (1.0376). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On November 29, there are no important events planned in the EU and the U.S., but Monday showed us that the pair is ready to move in a volatile manner even without them. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate     Relevance up to 01:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328371
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

EUR/USD Pair: One More Leg Still Remains On The Higher

InstaForex Analysis InstaForex Analysis 29.11.2022 08:37
Technical outlook: EURUSD rose through the 1.0496 high on Monday, inching closer to the 1.0550-1.0600 area, before finding resistance. The single currency pair is seen to be trading close to 1.0385 at this point in writing after reversing sharply from 1.0496. The near-term support is seen at 1.0222 as the bulls prepare to push through 1.0560 in the short term. EURUSD is most likely preparing to push through 1.0600 but prices need to stay above 1.0222 to keep the bullish structure intact. A slip lower could drag prices up to 1.0000 which is close to the Fibonacci 0.618 retracement of the recent upswing between 0.9740 and 1.0481. Prices are expected to rally thereafter and break above the 1.0496 high. EURUSD seems to be well supported around 0.9740, followed by 0.9635 and lower; while resistance is seen towards 1.0500, followed by 1.0600 and higher respectively. Also, note that an annual downtrend line is seen to be passing through 1.0600, which could lead to a potential bearish resumption. One more leg still remains on the higher side before the bears are back in control. Trading idea: Potential rally through 1.0550-1.0600 against 1.0220. Then lower again. Good luck! Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/302891
The Euro Will Probably Continue Its Upward Movement In The Near Future

The Entire Corrective Decline Od The EUR/USD Pair Seems To Be Completed

InstaForex Analysis InstaForex Analysis 29.11.2022 08:40
We have seen the expected correction to 1.0237. We will now be looking for a break above resistance at 1.0469 for a continuation higher to the next upside target seen at 1.0783 and 1.0926. Short-term, a break above the minor resistance area between 1.0459 and 1.0469 will confirm a continuation higher to 1.0783 and above. Long-term, we regard the entire corrective decline from the 2011 high at 1.6038 as complete. A new impulsive rally that ultimately will take us above the 2011 peak is now in progress.   Relevance up to 07:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/302893
The Outlook Of EUR/USD Pair For Long And Short Position

Lagarde (Head Of ECB) Said That The ECB Will Continue To Raise Rates

InstaForex Analysis InstaForex Analysis 29.11.2022 08:53
Another attempt to attack the 4th figure ended in failure. On Monday, EUR/USD bulls hit a five-month price high at 1.0498. However, the pair did not stay at this level for long - the price fell during the US session and finished the trading day at 1.0340. If the impulsive growth was unreasonable and unusual (despite the news from China), then the downward momentum was provoked by quite a specific person - European Central Bank President Christine Lagarde. Lagarde delivered her semi-annual report to members of the European Parliament Committee on Economic and Monetary Affairs. The theme of the report was directly related to monetary policy, so the speech triggered increased volatility in the pair. And it was not in favor of the euro. It's notable that Lagarde voiced quite contradictory rhetoric. There were different ways to evaluate her speech, both in its favor and against. In the end, traders chose the second option: as a result, the euro weakened not only against the greenback, but also in many cross-pairs. So, on the one hand, Lagarde said that the ECB will continue to raise rates, despite the slowdown in business activity in the eurozone. She acknowledged that high levels of uncertainty, tighter financial conditions, and declining global demand are putting pressure on economic growth in the European Union. But the record growth of inflation in the eurozone, according to her, is forcing the ECB to move on. Lagarde expressed doubt that the consumer price index in the eurozone has reached its peak values. She noted that the cost of wholesale energy supplies continues to rise (which is the main driver of headline inflation), so a slowdown in CPI growth in November seems extremely unlikely. Lagarde said that she "would be surprised" if inflation reached its peak in October. Certainly, the talking points are hawkish. In other circumstances, EUR/USD bulls would have taken advantage of the situation and rushed upwards, building on their success (i.e. in our case they would have settled in the area of the 5th figure). If it were not for one "but". The fact is that Lagarde made it clear in the European Parliament that slowing down the pace of interest rate increases in December is still a matter of debate. In doing so she took a neutral position in the corresponding dispute of many ECB representatives. Mario Centeno, Philip Lane, Francois Villeroy de Galo and Klaas Knot, among others, spoke publicly in favor of a lower rate of monetary policy tightening. Whereas the hawkish wing of the central bank, such as Robert Holzmann, Isabelle Schnabel and Joachim Nagel, came out in favor of a 75-point rate hike in December. Lagarde stayed "above the fray." According to her, the central bank will make an appropriate decision based on many factors: "...it will be based on our updated outlook, the persistence of the shocks, the reaction of wages and inflation expectations, and on our assessment of the transmission of our policy stance". Based on a comprehensive analysis of these factors, the ECB will decide how far rates should be raised and how fast. Such statements sobered up the EUR/USD bulls and then the price rolled back and headed to the daily lows, to the area of the third figure. Even in the first half of Monday, the ball was on the side of euro-dollar pair bulls, which took advantage of the weakening of the greenback and the strengthening of the hawkish mood regarding the ECB's further actions. But the diplomatic wording of Lagarde, which allows for various scenarios (both dovish and hawkish) did not allow the bulls to consolidate their success. The bears took the initiative and pulled the price back to its previous positions. On top of that, in the afternoon, the market finally reacted to events in China, which unfolded too dynamically and unexpectedly. First, the number of coronavirus cases in China is surging. Last Thursday, Beijing reported 31,000 new infections, noting that this was the strongest daily rate of increase in the history of the pandemic. But a little later, it turned out that PRC anti-records are updated almost daily. For example, the number of diseases has already exceeded the 40,000 mark on Monday. COVID outbreak in China is fraught with another wave of lockdowns. Strict quarantine has already been imposed in many cities across the country, with millions of people locked in their homes. Enterprises and firms have moved their employees to remote work schedules (where this is possible due to the nature of their work). China is known to have a "zero tolerance" policy for the Coronavirus, so it is not surprising that the authorities reacted to the situation with the utmost severity. And this circumstance gave rise to a second problem: Anti-Coronavirus protests broke out in China. At the moment, it is difficult to talk about the prospects of the protest movement. In most cases, people are protesting against the "zero Covid" policy, which, in their opinion, does not bring results, but hits hard on the pocket. However, in some cases, demands for the resignation of Chinese leader Xi Jinping are also heard among the demonstrators. In any case, these protests are already considered the largest in China for the last 33 years, since the 1989 protests (the events on Tiananmen Square). Judging by the dynamics of the dollar index, traders are wary of the unfolding events. The situation is, in a sense, a stalemate: on one side of the coin - possible turbulence in the markets due to the protests, on the other side of the coin - negative consequences from large-scale lockdowns in major cities of China. Thus, the current fundamental background is clearly not favorable for the euro's upward movement (first of all, if we speak about a stable development, but not an impulsive breakthrough). Therefore, it is better to either take a wait-and-see position or consider short positions. The main bearish target is still at 1.0210 (the middle line of the indicator Bollinger Bands on the daily chart). Crossing this target will pave the way for the bears to reach the parity level.     search   g_translate     Relevance up to 01:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328381
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

The Euro Area Is Nearing Recession | Investors Are Looking For Hints About The ECB's Decision

InstaForex Analysis InstaForex Analysis 29.11.2022 09:00
EUR/USD lost 1,500 points after ECB President Christine Lagarde said she would be surprised if inflation in the eurozone peaked. "I would like inflation to peak in October, but I'm afraid I won't go that far," she noted on Monday. "There is too much uncertainty, particularly in the shifting of high electricity costs from the wholesale level to the retail level'. This suggests that interest rate hikes are far from over. Although consumer price growth has slowed in November, the figure remains above 10%. Investors are obviously looking for hints that the ECB will ease its interest rate increases, especially since the Euro area is nearing recession. Some members of the governing council have already called for a slower pace, following the plans to start writing off around €5 trillion ($5.2 trillion) of bonds that were bought during the recent crises. Others, however, do not see any reason to give up as inflation is more than five times the 2% target. Dutch central bank governor Klaas Knot said earlier that Europe should be prepared for a "protracted period", during which the ECB would return inflation to target. Bundesbank president Joachim Nagel said the ECB should not ease measures "too soon".     search   g_translate     Relevance up to 19:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328367
Forex: US dollar against Japanese yen amid volatility and macroeconomics

FX: A US Dollar Recovery May Be On The Cards This Week

ING Economics ING Economics 29.11.2022 10:12
Markets are keeping an eye on developments in China with some concern as they prepare for two key risk events – Jerome Powell's speech tomorrow and payrolls on Friday – which look more likely to push rate expectations higher rather than endorsing dovish speculation. When adding the very inverted US yield curve, a dollar recovery may be on the cards this week In this article USD: Bracing for a hawkish Powell EUR: Few signs of abating inflation GBP: Bailey's testimony in focus CAD: Growth figures should allow 50bp hike next week   Markets are bracing for tomorrow’s speech by Fed Chair Jerome Powell, where he is expected to sound hawkish USD: Bracing for a hawkish Powell Risk assets underperformed at the start of this week, with two major variables affecting global sentiment. First, social unrest in China. Investors appear to be gravitating towards the risk-negative narrative of possible instability in the country, despite the fact that this may prompt China to expedite its exit from Covid restrictions – likely a risk-on development. The second element relates to concerns that this week's events, which include tomorrow’s speech by Fed Chair Jerome Powell (where we see a higher likelihood that he will sound hawkish) and US jobs data (which could stay strong), may cause the Fed's communicated and perceived narrative to drift away from dovish pivot expectations. As mentioned in yesterday’s daily, a 2Y10Y UST curve displaying a 75/80bp inversion is indicating a common perception that the Fed will push forward with tightening into a recession. This should be a dollar-positive combination. Today's US calendar includes some housing data as well as the Conference Board Consumer Confidence Index, which is expected to have dropped further in November. There are no scheduled Fed speakers after hawkish comments by John Williams and James Bullard yesterday. We believe the dollar can find some further support today as markets favour defensive trades ahead of key events later this week. Prior to Powell's speech, a return to 107.00/107.50 levels in DXY is possible. Francesco Pesole EUR: Few signs of abating inflation EUR/USD failed to break the 1.0500 threshold yesterday and has dropped back to the 1.0350/1.0400 area after a widespread recovery in the dollar. The eurozone's exposure to China is one key driver to watch for the euro, and it could easily outweigh the benefits of lower energy prices. Today, however, the domestic story will receive a lot of attention. Inflation readings in Germany and Spain will provide hints about eurozone-wide data due tomorrow. The consensus is for German headline inflation to stabilise at 10.4% and eurozone figures to slow slightly tomorrow. It's difficult to see this significantly altering the ECB's narrative, but an above-consensus print may prompt markets to seriously consider a 75bp hike in December (61bp are currently priced). Still, hawkish ECB expectations have not often translated into a stronger euro, and we continue to see the dollar doing the heavy lifting in driving EUR/USD moves. At this point, we believe a drop below 1.0300 is more likely than a rebound to 1.0500. Elsewhere in Europe, Sweden’s GDP numbers have just been published, disappointing on the downside with 2.5% year-on-year growth for the third quarter. Retail sales for October also came in weaker. The next Riksbank meeting is far out (early February), but a softening in data could favour a 25bp hike after last week’s 75bp move. We expect EUR/SEK to end the year around 10.85/10.95. GDP figures will also be released in Switzerland this morning, and a deceleration to 1.0% YoY in growth is expected for 3Q.  Francesco Pesole GBP: Bailey's testimony in focus Today's UK calendar is light on data, but there is one event to keep an eye on: Bank of England Governor Andre Bailey's testimony to the House of Lords. A significant shift in Bailey's policy rhetoric two weeks before the BoE meeting appears unlikely, but the proximity to the meeting also means that markets tend to over-interpret MPC members' comments. In our opinion, the most likely scenario for the December announcement is a 50bp increase; markets are currently pricing in 57bp. Cable has fallen back below 1.2000 as the dollar regained some ground, and we see room for further depreciation into the end of the year as the greenback finds more support and the pound suffers from a bleak UK economic outlook. Francesco Pesole CAD: Growth figures should allow 50bp hike next week As the dollar corrected lower during the past month, the Canadian dollar has lagged behind its G10 counterparts. The decline in crude prices, which have returned to the trading range observed before Russia's invasion of Ukraine, has been the main factor holding back the loonie's recovery. Our commodities team continues to see the upside risks for oil prices into the new year, and CAD’s limited exposure to China/Ukraine and superior liquidity are good arguments to expect CAD to outperform other procyclical currencies in 2023, should risk sentiment stabilise. Today, Canada’s third-quarter growth data will be published, and expectations are for a 1.5% annualised read. This should enable the Bank of Canada to hike by 50bp next week. Francesco Pesole TagsFX Dollar CAD Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

Germany: Headline inflation reached 10% year-on-year, this print accompanied by also reduced Spanish equivalent, may lead to a smaller rate hike

ING Economics ING Economics 29.11.2022 16:12
German inflation came down somewhat in November, on the back of energy base effects. However, the ongoing pass-through of high wholesale gas prices as well as additional pipeline pressure still make likely another rebound before reaching the final inflation peak. Inflation in Germany could reach 10% A very small breather for German inflation. Headline inflation came in at 10% year-on-year in November, from 10.4% in October. The monthly drop in consumer prices (by 0.5%) was the largest since early 2020. The HICP measure also fell, to 11.3% YoY, from 11.6% YoY in October. Peak still not reached Available regional data suggest that the drop in headline inflation was mainly driven by energy base effects and a drop in prices for leisure and entertainment after the Fall vacation period. Food price inflation still increased. Looking ahead, the November inflation number might not yet be the peak of German inflation. We rather expect headline inflation to rebound in December, before finally reaching a more structural peak in the first quarter. Most importantly, the pass-through of higher wholesale gas prices is still in full swing. Many households will see the first price increase only as of 1 January. Also, even though corporate selling price expectations have started to come down somewhat in the last two months, there is still a lot of inflationary pressure in the pipeline. Don’t forget that during previous episodes of supply-side driven inflation shocks, headline inflation started to come down as the pure result of base effects, while core inflation continued to go up for a while. Needless to say that any forecast for headline inflation is still hugely affected by developments in energy and commodity markets. Read next: Steen Jakobsen: ECB strategy is praying, hoping and waiting... not exactly action which gives hope for real economy| FXMAG.COM According to the German Bundesbank, the recently-announced gas price cap could bring down headline inflation by one percentage point next year. However, the price cap will only become effective in March next year and it is questionable whether the suggested retrospective implementation for January and February will show in the official inflation statistics. In any case, the agreed compensation of one month energy downpayment for December will not have any impact on headline inflation. In general, this is an important distinction to be made: government support schemes that come as compensation for households and companies to offset higher energy costs do not bring down headline inflation but cushion the negative price impact in the short run, while also prolonging inflationary pressure. Direct price caps can immediately bring down headline inflation but open the door for limitless government support measures. All in all, we remain cautious and don't call today's numbers the peak in German inflation, yet. The pass-through of wholesale gas prices as well as still high selling price expectations suggest that there could first be a rebound before the final peak will really be reached. For the ECB, however, today’s German inflation number as well as the sharp drop in Spanish inflation could be reason enough to go for a 50bp rate hike and not another jumbo rate hike by 75bp at the December meeting. Even though, ECB Executive Board member Isabel Schnabel last week said that there was only limited room to slow down the pace of rate hikes. The fact that the rate hikes up to now still need to fully reach the real economy, the uncertainty surrounding the looming recession and the upcoming further shrinking of the ECB's balance sheet all argue in favour of slowing down the rate hike cycle and to eventually shift from policy rates to the size of the balance sheet as the ECB's main instrument to fight inflation.  Read this article on THINK TagsInflation Germany Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
German industry rebounds in January

Germany: Consumer price index shrank by 0.5%

Alex Kuptsikevich Alex Kuptsikevich 29.11.2022 16:25
Germany's consumer price index fell by 0.5% in November, slowing the year-on-year gain to 10.0%, according to the published Destatis preliminary estimate. The fall exceeded the expected 0.2% m/m decline and maintained the year-over-year rate at 10.4%. We previously pointed out that the October data was the peak of inflation in the eurozone. Fresh data from Germany strengthens this hypothesis. However, this reversal will draw more attention to the ECB's stance. Is this data a reason to lower the rate hike step? Recent comments from ECB members suggest that this is unlikely. Read next: Steen Jakobsen: ECB strategy is praying, hoping and waiting... not exactly action which gives hope for real economy| FXMAG.COM Central banks in the G7 are working to contain the unwinding of inflation. By starting too late, they have faced a rise in core inflation, excluding volatile and problematic food and energy, rising 21% and 38.4% y/y, respectively. In such circumstances, monetary policy at the central bank must remain restrained for an extended period. That means raising rates above neutral (around 2% in the eurozone) for an extended period. History has ample examples where policy easing too early led to repeated inflation shocks, which further strengthened consumer confidence in perpetually high inflation and changed consumer behaviour accordingly.
The EUR/USD Pair Is Still In A High Position On The 1H Chart

Market Reactions To Inflation Reports In The European Union Are Significantly Weaker

InstaForex Analysis InstaForex Analysis 30.11.2022 08:00
On Tuesday, the EUR/USD currency pair was already trading considerably more steadily than it had the day before. We are still unsure of what caused those "roller coasters" that we saw. Yes, there were several unscheduled speeches by Fed officials on Monday, but for some reason, it is hard for us to recall the last time Bullard or Williams gave a routine speech that resulted in such "flights." Furthermore, none of them provided any brand-new, crucial information. Recall that a few weeks ago, Jerome Powell said that the Fed rate could rise a little bit longer than initially anticipated. If the market had previously set a rate of 5% for the pair, the upper limit is now gradually moving in the direction of 5.25% or even 5.5%. But given that this year's expectations for the rate have only increased, what is surprising about this? Remember how one of the Fed's most vocal "hawks," James Bullard, suggested raising the interest rate to 3% at the beginning of the year? Then, as time went on, this value increased gradually to 3.5%, then to 4.5%, and now we are discussing "5% or more." As a result, rates are expected to rise throughout the year, but inflation has only recently started to fall and is doing so at a slow pace. As a result, we are not surprised by the upcoming increase in the "upper limit" of the rate. Furthermore, the market had to figure out these performances in a convoluted manner if at all. The dollar should increase in strength and speed if there is a growing likelihood that new monetary policy tightening will occur. Remember that we have been anticipating a significant downward correction since early last week, but the market has been looking for any justifications to avoid purchasing US currency. The moving average line needs to fix below for the US dollar to start strengthening. In two attempts, the pair was unable to surpass the Murray level of "6/8" - 1.0498, and the total increase from its 20-year lows is already close to 1000 points. Although we still anticipate a sharp decline, we think the euro currency has grown sufficiently to this point. The euro currency may be under stress as a result of the EU inflation report. To start, market reactions to inflation reports in the European Union are significantly weaker than those to comparable reports in the United States. It so happened that in 2022, market participants received a larger share of any news and messages coming from abroad. So, from the outset, we don't anticipate a significant response to this report. Additionally, it is now quite challenging to comprehend how the market decides anything at all. Perhaps the decline we observed on Monday evening and Tuesday during the day is the market's "advance" response to the inflation report? After all, the European Union's consumer price index may slow down for the first time in a long time. At least, this is what the most recent official forecasts indicate. The rate of price growth is anticipated to decrease from 10.6% y/y to 10.3-10.4% y/y. Let it be a modest triumph nonetheless. This situation might be the start of the end for the euro as a currency. Remember that the dollar started to lose value precisely after US inflation started to slow down a few months ago. The market perceived a sharp decline in the likelihood of a Fed rate hike as a result of the slowdown in price growth. The euro currency is now capable of the same thing. The ECB will no longer need to raise interest rates as quickly as possible if inflation in the EU starts to decline. Of course, the Fed increased the rate by 0.75% twice more following the initial slowdown, so the ECB may follow. But we're attempting to predict how the market might respond. As soon as the market realized that inflation was decreasing, it started to reject buying dollars. Therefore, it makes no difference when the ECB slows the rate of tightening; the market can start selling off the euro right away or has commenced this process. Given the current technical landscape and historical context, we think that this course of events would be the most logical. As of November 30, the euro/dollar currency pair's average volatility over the previous five trading days was 97 points, which is considered to be "high." So, on Wednesday, we anticipate the pair to fluctuate between 1.0262 and 1.0454. A potential continuation of the upward movement will be indicated by an upward turn of the Heiken Ashi indicator. Nearest levels of support S1 – 1.0254 S2 – 1.0132 S3 – 1.0010 Nearest levels of resistance R1 – 1.0376 R2 – 1.0498 R3 – 1.0620 Trading Suggestions: The EUR/USD pair is still positioned close to the moving average. In light of this, we should now consider opening new long positions with targets of 1.0454 and 1.0498 if the Heiken Ashi indicator reverses its trend upward. No earlier than fixing the price below the moving average line with targets of 1.0254 and 1.0132, sales will become significant. Explanations of the illustrations: Linear regression channels – help determine the current trend. If both are directed in the same direction, then the trend is strong now. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328512
The Euro To US Dollar Instrument Did Not Change In Value

The EUR/USD Pair May Continues To Struggle With The Balance Indicator Line

InstaForex Analysis InstaForex Analysis 30.11.2022 08:33
Yesterday, the euro tried to return to the area above the upper limit of the global range (1.0360), but it closed the day by falling 9 pips. As a result, technically nothing has changed, even on the lower time frames. Like yesterday, the price, under pressure due to divergence on the daily chart, is trying to reach the target level of 1.0205. The stock indices closed yesterday mixed, but mostly in the red zone. The probability of the Federal Reserve rate hike by 0.75% at the December meeting is at 15%. Also, market participants are tuning in to the good employment data on Friday - the Nonfarm payrolls forecast is 200,000. The yields on the U.S. government bonds continue to climb slowly. On the four-hour chart, the price continues to struggle with the balance indicator line. When the price settles below the line, it will indicate the bears' victory and a change in the short-term balance of power. In this case, the Marlin oscillator signal line staying in the negative area helps the bears. We expect the price to reach the target level of 1.0205.     search   g_translate     Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328526
The EUR/USD Pair Has A Potential For Drop

The EUR/USD Pair Is Gravitating Towards Growth

InstaForex Analysis InstaForex Analysis 30.11.2022 08:39
Analyzing trades on Tuesday: EUR/USD on 30M chart Yesterday, EUR/USD traded much more quietly than it did on Monday. Since there was no macroeconomic and fundamental background, traders could use news and events. But there wasn't any of that either. That's why Tuesday's volatility was only 70 pips, which was way below the average, and there was no movement. Even after it climbed to 1.0465 and tried to continue the upward movement, I still expect a strong bearish correction. We have been talking about it for more than a week, but what can we do if the market still refuses to buy the dollar right now. The fundamental background from the last couple of days enabled the dollar to rise. The technical picture allows a downward correction. However, the market waits. It is possibly waiting for Federal Reserve Chairman Jerome Powell's speech or Friday's Nonfarm Payrolls report. And these events can push the dollar to fall, but I still look at the fall as the main option. EUR/USD on M5 chart It is perfectly visible on the 5-minute chart that there was no trend on Tuesday. The price was moving solely between 1.0354 and 1.0391 during the European session. These levels couldn't be considered a wide range, but when the signal formed inside it, the price immediately went near the opposite level. Therefore, it was possible to put 50 pips between them, so there was no point in analyzing each signal because they were all the same. Only the last bounce from 1.0391 caused a sharp fall, and the price even stopped below 1.0354, but soon it returned to the area above that level, so the short position was closed with the same 10 pips as the last four trades. You could have gotten a loss on the last buy signal. Therefore, beginners could gain 20-30 pips in total on Tuesday, which is not bad for the flat. Trading tips on Wednesday: The uptrend has been canceled on the 30-minute time frame, but it may resurface. The pair is gravitating towards growth, but there is no ascending trend line anymore. We witnessed both equally strong growth and decline. In my opinion, the technical picture is very confusing right now. On the 5-minute chart on Wednesday, it is recommended to trade at the levels of 1.0156, 1.0221, 1.0269-1.0277, 1.0354, 1.0391, 1.0433, 1.0465-1.0483, 1.0535. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. Today, three rather important reports will be published and Powell will also deliver a speech. In Europe, we will pay attention to the inflation data for November, in America, we will pay attention to the ADP and GDP reports. Each of them may provoke a reaction, but the most important ones will be European inflation and Powell's speech. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.     search   g_translate     Relevance up to 01:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328508
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The Euro To US Dollar Pair Showed Quite Strange Movements

InstaForex Analysis InstaForex Analysis 30.11.2022 09:03
M5 chart of EUR/USD Yesterday, the euro/dollar pair showed quite strange movements. To be more precise, the movements were quite logical, since there were no important events. Therefore, the flat was quite predictable. But at the same time, there were not so many important macroeconomic and fundamental events either on Monday, and yet the pair still grew by 150 points and went down by the same amount. That is why the "roller coaster" started a flat, and such a move was not profitable. Nevertheless, the pair as a whole continues to correct against an uptrend, but the movement is still sluggish and uncertain. The price can settle below the important Senkou Span B line very soon, which can considerably increase the probability of further declines. Recall that we keep expecting a strong bearish correction, which still hasn't started. The price has already moved below the trend line and crossed the critical line, but traders are still not in a hurry to buy the dollar. Probably waiting for the Nonfarm data or Federal Reserve Chairman Jerome Powell's speech. As for trading signals, the situation was such that there was no point in putting it on the chart. The pair spent almost the entire day in the 1.0340-1.0366-1.0393 range (Kijun-Sen). These three levels should be considered as a range, since the distance between them did not exceed 30 pips. The pair tried to settle below this area during the US session, but by that time it was clear that the market was flat. COT report As for Commitment of Traders (COT) reports in 2022, they reflected bullish sentiment in the first six months of the year although the euro was bearish. Then, they illustrated bearish sentiment for several months with the euro being also bearish. Currently, the net position of non-commercial traders is again bullish and increasing. Meanwhile, the euro has hardly retreated from its 20-year lows. This is due to the fact that demand for the greenback is high amid a difficult geopolitical situation in the world. Therefore, despite a rise in demand for the euro, buoyant demand for the dollar does not allow the euro to strengthen. During the reporting week, the number of long positions held by non-commercial traders rose by 7,000 and that of short positions increased by 2,000. Consequently, the net position advanced by 5,000. The euro's recent growth is gradually coming in line with the figures illustrated in the COT report. Still, the greenback may resume growth under the influence of geopolitical factors or the lack of factors for further strengthening in the euro. The green and red lines of the first indicator moved far away from each other, which may indicate the end of the uptrend. The number of long positions exceeds that of short positions by 113,000. Therefore, the net position of non-commercial traders may continue to rise further, but without triggering a similar rise in the euro. When it comes to the total number of longs and shorts across all categories of traders, there are now 39,000 more short positions (635,000 vs 596,000). H1 chart of EUR/USD Lately, EUR/USD has shown absolutely inadequate movements on the one-hour chart. It still hasn't started a downward movement even after it crossed the ascending trend line. Yesterday, the pair updated its last local high, but failed to break through the important level of 1.0485. And now it may start a strong bearish correction, which we already expected a week ago. On Wednesday, the pair may trade at the following levels: 1.0124, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as Senkou Span B lines (1.0351) and Kijun Sen (1.0407). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On November 30, we can look forward to the following reports: the EU inflation data for November, which is quite significant, and in America, we have GDP and ADP reports, as well as Powell's speech. Therefore, we have a good amount of important events today. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 02:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328516
Decarbonizing Steel: Contrasting Coal-based and Hydrogen-based Production Methods

Forex Market: The Inflation Print Will Be Key For The Polish Zloty (PLN)

ING Economics ING Economics 30.11.2022 09:20
Fed Chair Jerome Powell will remind the market of the central bank's hawkish determination today, supporting the dollar. Meanwhile, softer inflation is trimming expectations in the eurozone. Polish inflation will test the central bank's decision not to raise rates. And the EC will publish a statement on Hungary and its rule-of-law progress In this article USD: Holding pattern EUR: Inflation plays second fiddle to Powell GBP: Lack of domestic drivers CEE: Polish inflation will test central bank dovish camp   Federal Reserve USD: Holding pattern Despite geopolitical challenges to the East, it has been a quiet start to the week for FX markets. The trade-weighted dollar index DXY is tracing out a relatively narrow range in the 105.30 to 108.00 area. The next clear catalyst on the agenda is a speech by Fed Chair Powell tonight at 1930CET discussing the economy and the labour market. This comes at a time when the buy-side report two of their top three tail risks as: i) inflation staying high and ii) central banks staying hawkish. (The third being geopolitics.) We would say that Chair Powell has recently shown to be at the more hawkish end of the spectrum and that tonight’s event risk is a positive one for the dollar. Dollar price action after Chair Powell’s speech should also tell us something about FX positioning. If the dollar fails to rally on a hawkish speech it may continue to tell us that the market is caught long dollars at higher levels and that some further consolidation may be due into December. For the time being, however, we think the macro environment continues to favour the dollar and see Powell’s speech, the October PCE price data (Thursday) and November jobs data (Friday) as upside risks to the dollar. Chris Turner EUR: Inflation plays second fiddle to Powell Spanish and German inflation came in lower than expected yesterday. The German CPI fell 0.5% to 10.0% in November, thanks primarily to the energy base effect and lower prices for leisure and entertainment following the autumn holiday period, while food prices continued to rise. Our economics team remains sceptical that this is the series' peak, and we expect inflation to accelerate again in December. Yesterday’s numbers mean that markets are expecting a lower reading in the eurozone-wide CPI today. However, some impact on European Central Bank rate expectations has already occurred, as markets have trimmed around 7bp from December pricing, which is now at 54bp. President Christine Lagarde is scheduled to speak at least twice more before the 15 December policy announcement, but she may not change markets' expectations of a 50bp hike. The impact of the inflation story on the EUR/USD has been, predictably, limited. External factors and dollar dynamics continue to drive the pair's performance, and we see downside risks today given that Fed Chair Powell is scheduled to speak later. A break below 1.0300 could fuel more bearish momentum, bringing EUR/USD back to the 1.0200/1.0250 levels seen earlier this week. This morning, Norges Bank will publish daily FX sales for the month of December. Higher-than-expected NOK sales in 3Q22 contributed to NOK weakness, but the Bank unexpectedly reduced them in November from NOK 4.3 billion to 3.7 billion. Any further reductions may support the currency today. Francesco Pesole GBP: Lack of domestic drivers Yesterday’s testimony by Bank of England Governor Andrew Bailey did not yield any market-moving headlines. Today we’ll hear from Chief Economist Huw Pill, who recently pushed back against a 75bp hike and may therefore keep BoE rate expectations in check. Cable to test 1.1800 as Powell’s speech may support the dollar today. Francesco Pesole CEE: Polish inflation will test central bank dovish camp Today's calendar offers November inflation in Poland, the first print in the CEE region. We expect inflation to be unchanged at 17.9% year-on-year, close to market expectations. However, as usual, the range of surveys is wide, and in addition, Polish inflation has by far posted the biggest surprise in the region over the past three months. Given the pause in the National Bank of Poland's hiking cycle, we can expect a lot of market attention. We will also see the second release of Poland's 3Q GDP, which surprised positively in the flash reading (0.0% vs 0.9% quarter-on-quarter) a few weeks ago. In Hungary, PPI for October will be published and later today the European Commission is expected to release a statement on the progress made in the rule of law dispute and Hungary's access to EU funds. The statement should have been published last week; however, the EC requested more time. Reports from journalists suggest that the EC will recommend freezing part of the cohesion funds with conditions to be met by Hungary but will also recommend approval of the Recovery Plan. Yesterday's reports also suggest that the Ecofin decision will be postponed from 6 December to 12 December, but Hungarian officials remain optimistic about the final decision. In the Czech Republic, the Czech National Bank will publish its semi-annual Financial Stability Report including possible changes to macroprudential tools. We do not expect significant changes to the current mortgage rules or capital requirements for the banking sector, but we will see a press conference later today, which should be attended by the governor, who has not been seen in public very often in recent months. In the FX market, the inflation print will be key for the Polish zloty, which could revive market expectations and support the zloty in the short term. However, unchanged inflation would leave the zloty under pressure from a stronger dollar, moving back above 4.70 per euro, in our view. The Hungarian forint should benefit from the normalisation of EU relations and the end of the risk of a permanent loss of EU money. This should help the forint below 405 per euro. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

U.S. Interest Rates Could Reach Their Peak In 2024

Conotoxia Comments Conotoxia Comments 30.11.2022 09:55
Financial markets may focus on two events today. The first may be the inflation reading for the Eurozone for November (estimates), and the second will be a speech by Federal Reserve Chairman Jerome Powell. Yesterday's inflation data from Germany showed that German consumer prices rose 10.0% year-on-year in November, slightly less than the 10.3% predicted by analysts, according to data released by the Federal Statistical Office (Destatis). A month earlier, in October, inflation was 10.4%. On a monthly basis, consumer prices fell by 0.5%, the BBN service reported. The softer inflation reading from Germany may carry over into today's inflation publication for the eurozone as a whole. The consensus calls for a reading of 10.4% versus 10.6% a month earlier. Investors in the interest rate market, along with lower inflation readings, have pushed back their expectations for action by the European Central Bank. As Bloomberg calculates, interest rate traders now see only a 24% chance of a move greater than 50 basis points at next month's ECB meeting, while as recently as Tuesday it was as high as 52%. Inflation data from the zone will be released at GTM+1. Source: Conotoxia MT5, EURUSD, Daily Markets ahead of Jerome Powell's speech According to Bloomberg, implied volatility in the FX options market is rising in the shorter term, as investors position themselves ahead of Fed Chairman Jerome Powell's key speech on the economy and labor market. The speech is scheduled to begin at 7:30 pm GTM+1 at the Brookings Institution. Investors could expect the speech to offer clues on further action on interest rates or where the current cycle would end, as well as whether an interest rate cut in 2023 is possible. According to Bloomberg data, the peak of the U.S. hike cycle is priced by the market for May or June 2023 at a level close to 5 percent, while the federal funds rate is expected to fall to 4.4 percent by January 2024. This would mean that U.S. interest rates could reach their peak in the same year, and then, according to the market, the Fed could opt for two cuts of 25 bps each. Source: Conotoxia MT5, US30, Daily Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The Euro May Gradually Climb To The Target Level

European inflation shrank by 0.6%. ING hints at a 50bp rate hike in December

ING Economics ING Economics 30.11.2022 11:59
Inflation dropped more than expected from 10.6 to 10% in November, mainly on energy price developments. Core inflation remained stable at 5% though. While we’re far from out of the woods yet, it does look like the current economic environment could push the European Central Bank to a smaller 50bp hike next month We were due some good news. The eurozone inflation rate ticked down after a few nasty upside surprises. Energy inflation has been the most important driver of the decline going from 41.5 to 34.9%. Food inflation continues to trend up, while core inflation was stable at 5%. This is still far too high, but tentative signs that we’re at or close to a peak are increasing. Read next: Forex Market: The Inflation Print Will Be Key For The Polish Zloty (PLN)| FXMAG.COM Whether this is the peak in inflation remains to be seen. Another episode in the energy crisis could easily push inflation back up again and core inflation usually proves to be sticky after a supply shock. The question is how relevant the talk about a peak in annual inflation actually is. We think it is far more relevant to focus on month-on-month developments as base effects will become significant in the coming months. Using our own seasonal adjustment, we see that monthly inflation was slightly negative for the first time since April and that food inflation is the largest contributor to monthly headline inflation at the moment. We also think the focus should be more on what level inflation will trend down to, as opposed to whether this is the peak or not. The big question, therefore, is how core inflation is going to move in the coming months. Don’t expect a miracle just yet, core inflation tends to adjust slowly to energy shocks and a lot of the higher costs have not yet been priced through to the consumer. The tricky thing here is that the effects of the previous supply shock – the pandemic – are also still playing into the numbers. Large inventory increases at retail stores are the result of falling demand for goods and restocking as supply problems improved. That adds some disinflationary pressures for the months ahead. Overall, more volatility in core inflation can be expected as the effects of two massive supply shocks play out but we don’t expect a quick drop in core inflation anytime soon. For the ECB though, tentative signs of inflation peaking are mounting, evidence of a wage-price spiral continues to remain absent and the environment is turning recessionary. In our view, that is likely to sway the ECB from 75 basis point hikes to a smaller hike of 50 basis point move in December. Read this article on THINK
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Euro feels a bit better after the release of European inflation data

Craig Erlam Craig Erlam 30.11.2022 18:12
Equity markets are off to a positive start on Wednesday as we await a slew of big economic releases and a speech from Fed Chair Jerome Powell. It’s already been a very headline-driven week, particularly where oil is concerned, while Covid restrictions and protests in China have very much set the tone in Asia, and to a lesser extent elsewhere. The headwinds facing China are intensifying and the protests of recent days could make it even more challenging to navigate. That said, what we’ve heard so far has been promising and potentially indicative of a plan that was already in the works. But we shouldn’t kid ourselves. In the event that China commits 100% to its vaccine drive, especially among the elderly and vulnerable, the move away from zero Covid will take time as the virus spreads rapidly throughout the country necessitating swift action to control the spread. Even the best-case scenario is one of significant turbulence for the world’s second-largest economy next year. Chinese PMIs highlight the challenges ahead The PMIs highlight just how difficult the situation is in China, with the zero-Covid stance combined with the property market crackdown severely impacting domestic sentiment, while a slowing global economy weighs on external demand. With both the manufacturing and non-manufacturing PMIs falling deeper into contraction territory than anticipated, the country really has a mountain to climb in order to achieve decent, consistent growth once more. Some rare good news on inflation The euro is a little higher on the day against the dollar after CPI data for the currency bloc slowed to 10%, far below market expectations of around 10.4%. While still extraordinarily high, it does offer hope that inflation may have peaked and the deceleration could be faster than anticipated, in much the same way it was on the way up. The single currency was choppy in the aftermath of the release, while markets now view the possibility of a 50 or 75 basis points hike in December as a coin flip after previously heavily favouring the latter. That could be a positive for the euro if it means less of an economic slump, with the bloc already likely heading for recession. Rising for now Bitcoin is making steady gains in the session, up more than 2% and eyeing a second positive session. It did run into resistance around $1,700 again, the upper end of its range over the last couple of weeks. While we could see a bigger correction to the upside, especially if we’re treated to some dovish commentary from Powell, I’m not convinced it would be anything more than that. The industry has been shaken by the FTX collapse and as a result, bitcoin could remain vulnerable to further plunges in the price. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Cautiously optimistic - MarketPulseMarketPulse
The EUR/USD Pair: There Are Still No Sell Signals

There Was No Movement In The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 01.12.2022 08:05
On Wednesday, there was no movement in the EUR/USD currency pair. We wouldn't have been shocked if this situation had occurred on Monday or Tuesday because there hasn't been a single significant event or report published lately. On Wednesday, there were a ton of macroeconomic statistics. Still, traders paid no attention to the report on European inflation, although it was just as alarming as the last one on American inflation, which sparked this rally. Yet again, we are convinced that the impact of European statistical data on trader sentiment is minimal. But the main point is that quite significant reports from abroad were disregarded yesterday. The ADP report could cause a market reaction if everything in the GDP report is clearer because such reports always come out with three estimates. After the first estimate, it is clear what to expect from the value for a particular quarter. And it's puzzling why the market didn't find anything interesting in them when we consider all the information and data received. As a result, the pair is still relatively close to the moving average line, and it is still determining the direction of its future movement. For the past week and a half, we have been anticipating a significant downward correction, but this calls for a fix that is at least below the moving average. Formally, the consolidation was visible on Tuesday, but 20 points hardly qualify as a confident result. We focus on the second rebound from Murray level "6/8"-1.0498. Two rebounds from this level could signal the start of a corrective movement. As you can see, traders were unmoved by yesterday's data, so we now have to wait for Friday's nonfarm payrolls and unemployment figures. In the third quarter, US GDP increased. Since the GDP report typically includes three estimates, as we mentioned above, traders know what to expect before the second or third estimate is released. However, yesterday's report caught some people off guard because, contrary to expectations of +2.6–2.7% q/q, the actual value was 2.9%. This strong deviation should have benefited the value of the US dollar. Not only was the EU inflation report disregarded, but so was a rather significant GDP with an unexpected value. Even the ADP report received no response. Therefore, even though we think traders still have access to the factors supporting the US currency, they are not yet eager to repurchase the dollar. As a result, the third quarter of the American economy displays very positive dynamics and can easily compensate for the "disadvantages" of the first two quarters. If this occurs, the Fed will have many more opportunities to raise interest rates as much as it wants. It is again good for the dollar because if inflation stops falling, the Fed will still have opportunities to tighten monetary policy more than expected. It will then become very difficult to talk about a recession in the US economy. Additionally, the fact that there isn't a recession is excellent news for the American economy. Similar to how it is for every other economy in the world. For instance, it is unlikely that the European economy will be spared from such "happiness." Additionally, a slower inflation rate in the Eurozone might encourage the ECB to raise the key rate gradually over the next few months. The euro currency may experience the same fate as the dollar, which has been declining for several months due to the Fed's potential decision to raise interest rates more gradually than previously. Although there are more and more signs pointing to a new rise in the dollar's value, more precise technical signals are still needed to test this theory. We will only analyze Jerome Powell's speech today because it is crucial to know how the market will respond. As of December 1, the euro/dollar currency pair's average volatility over the previous five trading days was 103 points, considered "high." So, on Thursday, we anticipate the pair to fluctuate between 1.0331 and 1.0538 levels. The Heiken Ashi indicator's turning downward indicates a new phase of the corrective movement. Nearest levels of support S1 – 1.0376 S2 – 1.0254 S3 – 1.0132 Nearest levels of resistance R1 – 1.0498 R2 – 1.0620 R3 – 1.0742 Trading Suggestions: The EUR/USD pair is still positioned close to the moving average. To avoid the Heiken Ashi indicator turning down, new long positions with targets of 1.0498 and 1.0538 should now be considered. Only after fixing the price below the moving average line with targets of 1.0254 and 1.0132 will sales become significant. Explanations of the illustrations: Linear regression channels help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) determines the short-term trend and the direction to trade now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 02:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328648
EUR/USD Pair May Have A Potential For The Further Rally

EUR/USD Pair: The Technical Picture Is Very Confusing

InstaForex Analysis InstaForex Analysis 01.12.2022 08:16
Analyzing trades on Wednesday: EUR/USD on 30M chart The EUR/USD trade was sluggish and boring on Wednesday, which had nothing to do with the macroeconomic background that traders could use during the day. The volatility of the day was about 80 points, which is not too low, but traders had the right to expect a stronger movement. Take note that at least three relatively important reports were published. Moreover, the word "relatively" hardly applies to the EU inflation report. Since the inflation rate declined by 0.6%, one could expect the euro to fall, just like the US dollar did when the inflation rate in the US started to go down. However, the euro was inclined to rise during the day, which makes no sense at all. There were two important reports in America and they turned out to be "opposite" to each other. While the GDP went up compared to the last report, the ADP report was much weaker than expected. But in this case, too, the euro continued to rise for some reason and not vice versa. If we look at the technical picture of the 30-minute chart as a whole, we can clearly see that there is no trend right now. EUR/USD on M5 chart There were a lot of trading signals on the 5-minute chart, and the price was between 1.0354 and 1.0391 for most of the day. In other words, it was in a flat. Therefore, it is not surprising that some signals turned out to be false. The first signals around 1.0354 appeared first, there were four of them. The first two were definitely false, and the price failed to move down 15 pips in the first case, while it did in the second one. Therefore, the short position closed with a small loss, while the long position closed with no profit using Stop Loss. All subsequent signals near 1.0354 should have been ignored. Two sell signals near 1.0391 did not bring much profit either. In the first case, the pair failed to reach the target level by just a few points. It reached the level in the second one, so it was possible to earn 10-15 points, which was enough to cover losses of the first trade. As a result, it was possible to finish the day in positive or negative. Trading tips on Thursday: The uptrend has been canceled on the 30-minute time frame, but it may resurface. The pair is gravitating towards growth, but there is no ascending trend line anymore. We witnessed both equally strong growth and decline on Monday. Then we saw a total flat on Tuesday and Wednesday. In my opinion, the technical picture is very confusing right now. On the 5-minute chart on Thursday, it is recommended to trade at the levels of 1.0156, 1.0221, 1.0269-1.0277, 1.0354, 1.0391, 1.0433, 1.0465-1.0483, 1.0535. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. There will be quite a few interesting reports on Thursday: EU unemployment, US income and spending and ISM business activity indices in the US. However, if you think about it, there were quite good reports on Wednesday and we all saw how the market reacted. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time. Relevance up to 01:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328644
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The Euro (EUR) Will Try To Break Through The Nearest Resistance

InstaForex Analysis InstaForex Analysis 01.12.2022 08:32
Yesterday, Federal Reserve Chairman Jerome Powell delivered a speech. From his message, it became clear that the Fed will raise the rate by 0.50% at the December meeting (on the 14th) in order to avoid recession as an effect of the rate hike being too fast, although he confirmed that the tightening period itself may take longer and the final rate higher. Also, according to ADP data, there were 127,000 jobs created in the private sector in October against expectations of 200,000. As a result, the dollar index lost 0.79% and the euro gained 0.77% (76 points). Now the euro will try to break through the nearest resistance at 1.0470 and reach the target range at 1.0615/42. Investors are already focusing on the weaker employment data than the economists' consensus forecast (200,000 nonfarm) suggests. As a consequence, if the price rises quickly, a divergence at a flatter angle is possible (dashed line on the chart). If the price settles above the target range, the growth may extend to the next target range at 1.0758/87 to the support area of April 14-19 and resistance on May 30. But we look at such growth with doubts, since the current growth since September is still a correction. On the four-hour chart, the price crossed the MACD line, and the Marlin oscillator has moved into the positive area. We expect the price to reach the nearest range of 1.0470/90, where the price was staying on November 28. Staying above the range opens the way to 1.0615/42. Of course, if tomorrow's US labor data turns out to be weak. If results come out strong, then the euro might confuse traders in a sideways trend for another two weeks, until the Fed meeting.     search   g_translate     Relevance up to 03:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328656
The EUR/USD Price Failed To Exhibit A Strong Trending Movement

EUR/USD Pair: There Is Still No Downward Movement

InstaForex Analysis InstaForex Analysis 01.12.2022 08:34
M5 chart of EUR/USD Yesterday, the euro/dollar pair showed quite strange movements. There were quite a lot of macroeconomic statistics and fundamental events on Wednesday, nevertheless most of them were ignored. For example, there was quite an important report on European inflation, which surprisingly fell by 0.6% y/y. However, traders didn't think it was necessary to pay attention to this report. There were also important data on GDP in the third quarter and the ADP labor market during the US trading session. Here we can understand why traders did not react to it since it was contradictory: one report was very strong, the other was very weak. However, in a couple of hours after their release, the U.S. dollar began to rise sharply, and in another couple of hours - fell sharply. Everything would be fine if there were grounds for the final fall of the US currency in the form of Federal Reserve Chairman Jerome Powell's dovish rhetoric. But he just repeated the theses that everyone already knows. However, this time traders found some kind of "truth" in his speech that was not found in previous reports. There was only one trading signal yesterday. The pair broke out of the 1.0395-1.0340 area in the middle of the US trading session, which could be used to open short positions. However, the price managed to go down only 30 pips, which was enough for the Stop Loss to breakeven, but no more. COT report As for Commitment of Traders (COT) reports in 2022, they reflected bullish sentiment in the first six months of the year although the euro was bearish. Then, they illustrated bearish sentiment for several months with the euro being also bearish. Currently, the net position of non-commercial traders is again bullish and increasing. Meanwhile, the euro has hardly retreated from its 20-year lows. This is due to the fact that demand for the greenback is high amid a difficult geopolitical situation in the world. Therefore, despite a rise in demand for the euro, buoyant demand for the dollar does not allow the euro to strengthen. During the reporting week, the number of long positions held by non-commercial traders rose by 7,000 and that of short positions increased by 2,000. Consequently, the net position advanced by 5,000. The euro's recent growth is gradually coming in line with the figures illustrated in the COT report. Still, the greenback may resume growth under the influence of geopolitical factors or the lack of factors for further strengthening in the euro. The green and red lines of the first indicator moved far away from each other, which may indicate the end of the uptrend. The number of long positions exceeds that of short positions by 113,000. Therefore, the net position of non-commercial traders may continue to rise further, but without triggering a similar rise in the euro. When it comes to the total number of longs and shorts across all categories of traders, there are now 39,000 more short positions (635,000 vs 596,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD is still showing completely inadequate movements and yesterday was just another proof of that. There is still no downward movement even after the euro crossed the ascending trend line. The pair returned to its local peaks after Powell's speech, but we still don't think that the EUR has any reasons for further growth. On Thursday, the pair may trade at the following levels: 1.0124, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, and also Senkou Span B lines (1.0351) and Kijun Sen (1.0392). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 1, the EU will publish unemployment data and the manufacturing activity index. Meanwhile, important ISM business activity indexes and reports on changes in personal income and expenditures of the American population will be released in the US. I believe that traders might react to the ISM data. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 06:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328660
The Euro May Gradually Climb To The Target Level

The EUR/USD Pair Is Preparing To Turn Lower

InstaForex Analysis InstaForex Analysis 01.12.2022 08:37
Technical outlook: EURUSD rallied through 1.0450 intraday on Thursday after dropping to the 1.0300 lows late during the New York Session on Wednesday. The single currency pair is seen to be trading close to 1.0445 at this point in writing as the bulls prepare to re-test the 1.0500 handle. It could be safe to exit long positions at around the 1.0450-1.0550 area as strong resistance is expected to be offered. EURUSD might have completed its larger-degree counter-trend rally at 1.0500 recently. If the above holds well, the bears might come back in control from here and drag prices lower towards the 1.0000 mark at least. The potential also remains for the larger-degree trend to resume lower from here and drag the price below 0.9535. The overall wave structure from the 0.9535 lows suggests that EURUSD is preparing to turn lower either from here or after pushing through the 1.0550-1.0600 range. Either way, the bears are inclined to come back in control and drag the price towards 0.9500. A break below the 1.0300 immediate price support would confirm that the next move lower has resumed. Trading idea: Potential top in place around 1.0500. Aggressive trade setup might be lower from here, towards 1.0000 against 1.0700. Good luck!   Relevance up to 06:00 2022-12-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/303290
The EUR/USD Pair Is Showing A Potential For Bearish Drop

Steen Jakobsen: ECB strategy is praying, hoping and waiting... not exactly action which gives hope for real economy

Steen Jakobsen Steen Jakobsen 29.11.2022 15:07
Fed interest rate decision isn't only one ahead of us. On December 15th European Central Bank decides on its monetary policy. Although it's widely known that it's arduous task to handle, discussion is on, especially right ahead of European inflation print. Let's find out Saxo's Steen Jakobsen point of view.       Supposing European CPI soars again, could ECB choose escape from recession over fighting inflation?   ECB and its management are extremely dovish, so effectively they are already and always been on this modus operandi. Their problem is inflation CPI is running at close to 11% and PPI above 40% - the price of high inflation is significantly above increase in employment medium and long term, which is why despite all evidence ECB continues to believe inflation will come magically down to 2-2.5% end of 2023. How this will happen in a global economy of deglobalization and high energy prices in yet to answered. ECB strategy is praying, hoping and waiting... not exactly action which gives hope for real economy.   Read next: As more central banks continue to catch up with the FED's policy, we could be seeing a shift in the balance of power in the currency market says XTB's Walid Koudmani| FXMAG.COM
FX: The Gap Versus The FX spot Rate In Poland Is Already The Largest In The CEE Region

FX: The Gap Versus The FX spot Rate In Poland Is Already The Largest In The CEE Region

ING Economics ING Economics 01.12.2022 10:02
The dollar is around 1% lower across the board after what was seen as a less hawkish speech from Fed Chair Powell softened US interest rates. A softening of China’s Covid policy is also helping emerging market currencies today. The relatively large adjustment in US rates and the dollar on Powell’s speech probably says a lot about positioning In this article USD: Overreaction? EUR: 1.05/1.06 is the risk for EUR/USD GBP: 1.22/1.23 for cable CEE: Hard to be positive on the zloty   Federal Reserve Chair Jerome Powell speaking at the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institute, in Washington USD: Overreaction? The dollar came off sharply late yesterday on comments from Federal Reserve Chairman Jerome Powell which signalled that December would probably be the occasion to shift to a slower pace of rate hikes. The market has been expecting the shift to a 50bp versus 75bp rate hike for a while, although it felt the need to price the terminal rate next summer some 10bp lower at 4.90%. Indeed, US yields came off quite a sharp 20bp across the curve. We are tempted to say that looks an overreaction in that while Chair Powell did acknowledge the slowing in the pace of hikes, his core message was one of stubbornly high core inflation, particularly in the core services ex-housing category. This category is largely driven by wages and an area where the Fed struggles to see labour supply improving anytime soon. Inputs into this story will come today and tomorrow in the form of the October core PCE deflator and the November jobs report, respectively. On the former, consensus expects October core PCE to decelerate to 0.3% month-on-month from 0.5%. This basket is different from the national CPI basket, where the 0.3% MoM release on 11 November triggered a huge drop in the dollar and rally in risk assets. Any upside surprise in today’s core PCE reading could see the dollar reverse overnight losses. In the bigger picture, we continue to take the view that a trade-weighted measure like DXY can hold support levels around the 105 area (or at least will not sustain any break under it). One challenge, though, is the EM picture. If we are seeing a sea-change in China’s Covid stance – e.g., a shift to home quarantine from city lockdowns, EM currencies may be due a re-rating. On the day then, the core PCE inflation data is the biggest input, and we prefer DXY to find support near 105.00. Chris Turner EUR: 1.05/1.06 is the risk for EUR/USD EUR/USD weakness in late Europe yesterday looked a function of end-month portfolio rebalancing (European equities had vastly outperformed) and it is no surprise to now see EUR/USD well above 1.04 on the sharp drop in US yields. Resistance is clearly set at the 1.0480/1.0500 area, above which we could see a spike to the 1.0600/0620 area. That is not our preferred view, but thinning December markets and seasonal dollar weakness mean that such a scenario cannot be ruled out. Bigger picture, however, weak global demand (note Korea’s poor November export data overnight) is not a good story for the pro-cyclical euro. Additionally, colder weather coming to northern Europe is starting to push gas prices higher again and keep the eurozone trade balance under pressure. We would like to think that 1.05/1.06 is as good as it gets for EUR/USD in December. Elsewhere, look out for Swiss November CPI today. We have been bearish EUR/CHF on the view that the Swiss National Bank wants a stronger nominal Swiss franc to fight inflation. That view will be challenged, of course, should inflation surprise on the downside.  Please also see Francesco Pesole’s article on the Norwegian krone. Yesterday, Norway’s central bank announced it will trim daily FX purchases from NOK 3.7bn to 1.9bn, which sent NOK rallying across the board. As discussed in the article, we see the two consecutive cuts in FX purchases as an indication of higher appetite for a stronger krone, which would help combat inflation at a time when economic woes and property market fragility may curb the appetite for monetary tightening. Chris Turner GBP: 1.22/1.23 for cable The softer dollar environment is giving cable another lift. This rally could extend to the 1.22/23 area unless either today’s US core PCE data or tomorrow’s US jobs data can put a floor back under US yields. EUR/GBP continues to hold support near 0.86 and that may well be the case into year-end. Both the Bank of England (BoE) and the European Central Bank (ECB) should be hiking by 50bp in December. But we are taking the view that risk assets will come under more pressure over coming months – which will lead to renewed – if mild – sterling underperformance. Chris Turner   CEE: Hard to be positive on the zloty Today, we will see PMI numbers across the region. We expect a rebound from lows in Poland from 42.0 to 42.6 and in the Czech Republic from 41.7 to 42.7, following the trend in Germany. On the other hand, in Hungary we forecast a drop below the 50-point level. As in Poland yesterday, the GDP breakdown for the third quarter will be published today in Hungary, which was the only country in the region to surprise negatively in the flash reading (-0.4% quarter-on-quarter) a few weeks ago. Later today, the Czech Republic's state budget result for November will be published. Given the recent increase in the deficit for this year and the question marks over funding, the number will get more attention than usual. However, the start of pre-funding needs for next year through CZGBs switches in recent days indicates a better-than-expected MinFin situation. On the FX front, two main topics remain on the table in the region: the Polish zloty and the Hungarian forint. Yesterday's downside inflation surprise pushed down the interest rate differential in Poland by around 25bp, further widening the gap versus the FX spot rate, which is already the largest in the CEE region in our view. So, it is hard to be positive on the zloty, but for now, apart from any rally in the US dollar, we don't see a trigger for a correction. Until then, the zloty is likely to remain below 4.70 EUR/PLN. Meanwhile, the market seems to be running out of patience in Hungary and the normalisation of relations with the EU is not progressing as fast as expected. Although yesterday's news did not bring anything really new in our view, the forint returned to the 410 EUR/HUF range, which probably cleared the long positioning built up in recent weeks. Thus, in our view, it is still worth waiting for the final decision of the European Council in December and we expect the forint back to stronger levels. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Challenge to the Dollar: De-dollarisation and Geopolitical Shifts

Fed: The Pace Of Rate Hikes Will Slow Down | Positive Potential Of Crude Oil Is Limited

Swissquote Bank Swissquote Bank 01.12.2022 10:50
Powell said that the Federal Reserve (Fed) will slow down the pace of rate hikes from next month, while insisting that smaller increases are less important than how much further to go and for how long. But all investors heard was ‘the Fed will hike by 50bp next month and bla bla bla…’ US yields and the dollar fell, equities rallied!!! Forex The US dollar’s depreciation is being cheered across the market. The EURUSD pushed above the 200-DMA as the dollar-yen fell to 136.50.And if Japan doesn’t need to spend its FX reserves to strengthen the back of the yen, they could well use it to increase the defense spending, without increasing taxes and without cutting spending. Japan And Japan is not the only country that increases defense spending. Bigger global budget for spending boosts defense stocks! Commodities In commodities, American crude rallied past the $81pb yesterday as US crude oil inventories fell by 12.6 million barrels last week, well above the 3.2 million barrel draw expected by analysts. It is because exports ran hot, and refineries hit their highest capacity since August 2019. But be careful with the rising recession odds, because investors have been cutting their net speculative positions despite the supply concerns, and that’s probably going to limit the topside potential! Watch the full episode to find out more! 0:00 Intro 0:28 Investors don’t want to hear what Powell tries to say! 3:49 FX & data roundup 6:50 Defense stocks to continue outperform 7:56 Crude oil jumps but positive potential is limited Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Powell #speech #USD #economic #data #ADP #JOLTS #GDP #NFP #unemployment #EUR #inflation #TTF #natgas #crudeoil #defense #stocks #Themes #trading #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
EUR/USD Pair May Have A Potential For The Further Rally

Eurozone: Unemployment rate decreases to 6.5%. What may it mean for ECB

ING Economics ING Economics 01.12.2022 11:27
The unemployment rate dropped from 6.6% to 6.5% in October, showing that the labour market remains resilient despite the slowing economy. This will keep the European Central Bank on high alert in its fight against inflation Unemployment in the eurozone is at a record low Another upside surprise from the labour market. Despite an economy moving into recession, unemployment continues to trend down to new records. While German unemployment seems to have bottomed, southern Europe is still experiencing declining unemployment. Spain, Greece and Italy all saw the rate drop in October. The current rate of 6.5% is a new historic low since the series began in 1998 and is consistent with rising nominal wages. From here on, the labour market is set for a slowdown given our expectations of a winter recession. Surveys indeed suggest that the pace of hiring is slowing at the moment, which is set to come with a modest runup in unemployment. Given labour shortages, however, we don’t expect unemployment to increase much. Read next: Poland: Purchasing Managers' Index reached 43.4. The coming months will see a marked slowdown in industrial production growth says ING| FXMAG.COM When we hear ECB president Christine Lagarde say that a mild recession will not be enough to sustainably bring inflation down, this is likely a large part of the mechanism she is referring to. The question is whether that is the case when many supply-side factors are turning disinflationary – but that’s another matter. Expect the ECB to remain on high alert in its fight against inflation, although we do believe that it will opt for a slower pace of rate hikes in the coming months: we're expecting a 50 basis point rise for December. Read this article on THINK TagsGDP Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Chance For The Further Downside Movement

Spain: Manufacturing Purchasing Managers' Index hit 45.7, a point more than in October. Spanish economy will contract in the fourth quarter says ING

ING Economics ING Economics 01.12.2022 12:16
Spain's November manufacturing PMI remains deep in contraction territory. The only positive news is that the rate of deterioration has slowed slightly The manufacturing sector in Spain continues to contract Manufacturing sector shrinks for fifth month in a row The manufacturing PMI slightly improved in November, standing at 45.7, up from 44.7 in October, but remains well below its neutral level of 50. Both current output and new orders fell sharply again. Although inflation fell in November for the fourth consecutive month, the current inflationary environment continues to put pressure on demand. The positive news is that the rise in input costs has been the slowest in two years. Price pressure higher up the production chain is starting to ease. Both commodity prices and freight costs for transport and factory prices are starting to fall sharply from their recent peak levels. Last Friday, Spain's statistics office INE announced that producer prices fell again in October. While producer price inflation was still 42.9% in August, it fell to 26.1% in October, its lowest level since September 2021. Read next: Eurozone: Unemployment rate decreases to 6.5%. What may it mean for ECB| FXMAG.COM Spanish manufacturing PMI remains firmly in negative territory Source: S&P Global Despite the recent fall, inflation continues to weigh on the outlook After a sharp slowdown in Spanish economic growth in the third quarter, these figures confirm our belief that the Spanish economy will contract in the fourth quarter. Also, consumer confidence, published yesterday, is still at a very low level, despite the slight improvement in November. The negative impact of inflation remains in place both for consumers and businesses and we suspect that the government measures will not be enough to prevent a GDP contraction in the fourth quarter of this year. Nevertheless, the slight improvement in figures shows that at least the situation is not deteriorating further. Thanks to the strong first half of the year, GDP growth will still come in at 4.3% in 2022, but for 2023 we expect the Spanish economy to grow by less than 1%. Read this article on THINK TagsSpain PMI Manufacturing PMI GDP Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Has A Potential For Drop

German retails sales don't steal the show from euro which looks quite good versus greenback

Kenny Fisher Kenny Fisher 01.12.2022 23:50
The euro has climbed to its highest level since June 29th, as the US dollar continues to struggle. In the North American session, EUR/USD is trading at 1.0496, up 0.85%. German retail sales slide German consumers are being squeezed by the double-whammy of rising interest rates and double-digit inflation, and the October retail sales report shows that consumer spending was sharply lower. Retail sales dropped 2.8% YoY, versus 1.2% in September and a consensus of -0.6%. On an annualized basis, retail sales plunged 5.0%, much worse than the September read of -0.9% and the consensus of -2.8%. The soft retail sales report couldn’t dampen the shine on the euro, which has climbed sharply as the US dollar can’t find its footing. The dollar found itself in full retreat after Fed Chair Jerome Powell’s speech on Wednesday. Powell’s comments were balanced and didn’t stray from the steady stream of Fedspeak we’ve been hearing for weeks, but investors still treated the speech as dovish, sending equity markets higher and the US dollar lower. The markets were delighted that Powell essentially confirmed that the Fed would ease policy as soon as the December meeting. After four straight rate increases of 75 basis points, the Fed is poised to deliver a milder 50-bp hike, with perhaps smaller hikes in the new year. Read next: Soft German retail sales can't stop EUR/USD - MarketPulseMarketPulse Powell said that smaller rate increases were less important than the question of high to hike and for how long. Powell added that the direction of inflation remains “highly uncertain”, and that more evidence was needed to demonstrate that inflation had peaked. As well, he said that rates will likely rise “somewhat higher” than the September forecast. That certainly sounds like a hawkish stance, but the markets chose to focus on Powell’s broad hint that the Fed would likely begin lowering rates as soon as next week. The Fed may not consider that a dovish pivot, but the fact remains that Powell’s comments have renewed optimism, sending stocks higher and the US dollar lower. EUR/USD Technical EUR/USD is testing resistance at 1.0490. Above, there is resistance at 1.0583 There is support at 1.03537 and 1.0264 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Soft German retail sales can't stop EUR/USD - MarketPulseMarketPulse
The EUR/USD Price May Fall Under 1.0660

The Euro To US Dollar Pair Held Above The Moving Average Line

InstaForex Analysis InstaForex Analysis 02.12.2022 08:01
We have already stated in our daily trading recommendations that the current movements are illogical and torn. This is on the hourly TF or lower. But things still need to be better at the 4H-TF. The current issue is that, despite everything in the information sphere, the dollar continues to decline for some reason. The market perceives any news or report as a new call to abandon the US dollar. For instance, on Wednesday night, the US dollar dropped by 150 points. Such a decline would make sense if Powell abruptly declared that there would be no more rate increases in the US and that fighting inflation was no longer necessary. If today's Nonfarm showed a negative value, such a decline would be expected. However, Powell's speech, which we all heard (or read in its entirety), made it clear that there was no justification for doing away with US currency. The reason the dollar kept declining even on Thursday is typically a mystery. Powell's performance will be discussed in more detail below, but let's discuss the technique. The upward trend has been maintained because the euro/dollar pair held above the moving average line. As we previously stated, a consolidation 20 points below the moving average cannot be regarded as a confident sell signal. Please, we witnessed it firsthand yesterday. In a few hours, the price easily returned to the region above the moving average and reached the Murray level of "6/8" at 1.0498. Even though we have been waiting for a real downward correction for almost two weeks, given how the pair has been moving in recent weeks, we wouldn't be surprised if this unfounded growth continues. But what can you do if investors sell the dollar regardless of the circumstances? Powell's remarks were of no interest to the market. In addition to Powell's speech on Wednesday, the third quarter GDP report was also released. Although we stated that it always comes out in three estimates, allowing market participants to know what to expect from each subsequent publication, the indicator has become much stronger than anticipated this time. What did we see, then? 50 points of US currency growth, then a 150-point decline? Let us go back to the Federal Reserve Chairman's speech. Every single one of Powell's theses was previously known to the market. Any Fed monetary committee member who knew about them did not keep it a secret. James Bullard, Mary Daly, and other committee members consequently raised them. However, the market determined that while Bullard's remarks were uninteresting, Powell's comments on the same topic were worthwhile. As a result, the dollar fell once more in a circumstance where it could have been prevented. What did Powell essentially say? Will December see a decline in the rate? It's not news. Will the Fed require a significant amount of time where rates remain high? Additionally, this is not breaking news, and I believe this thesis to be more of a "hawkish" factor. If so, will the peak rate level — anticipated to be reached in the year's first half — be higher than expected? So, this is another "hawkish" aspect! Additionally, the market has long been aware of it. Because of this, we have two "hawkish" statements and one "dovish" statement (which is a stretch), but the US dollar crashed to the ground like a mowed lawn. Therefore, expecting the market to respond logically to what is happening right now is absurd. The current market is just obligated to operate non-farm as it should. We are considering all the absurdities of the previous two or three weeks. If the value of the labor market report is completely normal today, but the dollar is falling, we will only be able to look at the macroeconomic background sometime soon. Instead, we will only be able to trade on technology every day. Recall that the average number of new jobs is between 200 and 300 thousand. Less - the decline of the dollar will appear reasonable. As of December 2, the euro/dollar currency pair's average volatility over the previous five trading days was 118 points, considered "high." As a result, we anticipate that the pair will fluctuate on Friday between 1.0378 and 1.0612. The Heiken Ashi indicator's turning downward indicates a new phase of the corrective movement. Nearest levels of support S1 – 1.0376 S2 – 1.0254 S3 – 1.0132 Nearest levels of resistance R1 – 1.0498 R2 – 1.0620 R3 – 1.0742 Trading Suggestions: The EUR/USD pair is attempting to resume its uptrend. As a result, until the Heiken Ashi indicator turns down, it is necessary to hold long positions with a target of 1.0620. No earlier than the price fixing below the moving average line with a target of 1.0254 will sales become significant. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.       Relevance up to 02:00 2022-12-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328769
The EUR/AUD Pair May Have The Potential To Continue Its Decline

EUR/USD Pair: A Pause In Growth In Anticipation Of New Important Information Is Expected

InstaForex Analysis InstaForex Analysis 02.12.2022 08:10
In anticipation of today's US jobs data, on the back of Federal Reserve Chairman Jerome Powell's seemingly not obvious dovish speech, the euro rose 119 pips yesterday. The price crossed the target level of 1.0470, the peak of November 28, and is now heading to the target range of 1.0015/42. The range is defined by the highs of June and May. So far, the price is going with our scenario with forming a divergence when the target range is reached. On the four-hour chart, there is a sign that a double divergence is forming with the Marlin oscillator. In the current market sentiment, it may mean a pause in growth in anticipation of new important information. That will be the U.S. employment data for November. Forecast is 200,000 new jobs, compared to 261,000 in October. The improving dynamics of weekly unemployment claims and yesterday's drop of the ISM Manufacturing Employment subindex from 50.0 to 48.4 might be weaker than expected. Traders will be waiting for this situation to become clearer. Relevance up to 04:00 2022-12-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328777
The Collapse Of The Silicon Valley Bank Weakened The Dollar And USD/JPY But Supported EUR/USD, AUD/USD, And GBP/USD

The Demand For US Currency (USD) Significantly Dropped

InstaForex Analysis InstaForex Analysis 02.12.2022 08:27
The demand for US currency significantly dropped on Wednesday night and Thursday during the day. Due to this, the euro/dollar and pound/dollar instruments saw price increases of about 200 and 300 basis points, respectively. In yesterday's reviews, I already conducted a thorough analysis of the news landscape of these days. I concluded that economic data could not have a significant enough impact on market sentiment to cause the US dollar to depreciate significantly against the euro and the pound. The market did not react that way because the news background was not that bad for the dollar. The only thing that has anything to do with the US dollar's decline is Jerome Powell's speech on Wednesday night. Other analysts have written quite a bit about this subject, and most concur that Powell's speech didn't offer anything novel or demoralizing. The Fed President noted that economic growth is below the anticipated trajectory, inflation is still very high, and a slowdown in the rate increase could occur as early as December. However, he added that the interest rate might rise for longer than the Fed had anticipated in September. What qualifies as the "hawkish" element? Why did the market respond to the "dovish" statements rather than him? Other FOMC members have expressed this "dovish" rhetoric numerous, but the market did not retaliate as violently. I don't think explaining how the market reacted to the speech is worthwhile because it initially "aimed" at buying both instruments. Just look at how the US session began on Thursday and how the US dollar immediately began to decline (and both instruments up). Although Powell's speech was given days earlier, the American statistics at the start of the session had yet to be made public. However, the market also identified factors that reduced demand for the dollar. Thus, I conclude that, rather than Powell's speech being full of "dovish" theses, the market decided that the demand for the dollar was declining. It didn't abound, though. What comes next? The wave e peak on the euro currency has been broken once more, and the wave marking may get even more complicated. The British pound believes that everything is the same. Another significant Nonfarm Payrolls report will be released in the USA today, which is expected to send the market into a frenzy. But I think the market won't care what this report is worth. Regardless of how compelling the report is, the value of the US dollar will decline if they decide to keep selling it. Perhaps I need to be more accurate and treat the market fairly. I would be okay if the situation changed the next day completely. But if the market interprets the news background in its convenient manner, what use is it to analyze it at all? I conclude that the upward trend section's construction is complete and has increased complexity to five waves. As a result, I suggest making sales with targets close to the estimated 0.9994 level, or 323.6% Fibonacci. The trend's upward portion could become more complicated and take on a longer form, and the likelihood of this happening is increasing daily. The construction of a new downward trend segment is predicated on the wave pattern of the pound/dollar instrument. I cannot suggest purchasing the instrument immediately because the wave marking already permits the development of a downward trend section. With targets around the 1.1707 mark, or 161.8% Fibonacci, sales are now more accurate. The wave e, however, can evolve into an even longer form.       Relevance up to 05:00 2022-12-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328781
Russia's Weekend Mutiny Raises Concerns About Putin's Power Grip; Market Highlights: Gold Support, FX Intervention, and Fed's Stress Test Results

A Wait-And-See Attitude Towards All US Dollar Pairs Is Advisable

InstaForex Analysis InstaForex Analysis 02.12.2022 08:35
Traders are focused on today's NonFarm Payrolls report. Key US labor market growth data is especially important right now in light of recent events. If the data lets the dollar bulls down as well (in addition to the PCE and ISM manufacturing index), the greenback will bear significant pressure in all major pairs. Also, keep in mind that the NonFarm Payrolls will be released less than two weeks before the Federal Reserve's December meeting. The last speech of Fed Chairman Jerome Powell was not beneficial for the dollar (in my opinion - undeservedly), while a disappointing labor market report will only add fuel to the fire. In that case, the EUR/USD bulls, in particular, can already think about conquering the 6 figure in the medium term. In general, recent events are not unfolding in favor of the U.S. currency. And it is not only because of objective circumstances. For example, the market reacted quite adequately to the decline of the ISM manufacturing index, which collapsed to 49 points, reaching its lowest value since May 2020. Traders also reacted fairly to the slowdown in the core PCE index, although this slowdown was minimal (and predictable). No complaints here, as they say. At the same time, in my opinion, market participants are interpreting too many fundamental factors against the greenback - even in those cases where there is a less favorable aspect of the issue. For example, Powell said during his last speech that the time to reduce the pace of rate hikes "may come as soon as the December meeting." At the same time, he said that the final level of the federal funds rate will likely be higher than the September forecasts. It is noteworthy that Powell had previously voiced both theses, and each time the market reacted differently to his words. Lately, the fundamental environment has not been in favor of the greenback: traders are keenly reacting to negative information for the dollar and are quite skeptical to positive (hawkish) signals. A vivid example of this is the market's reaction to Powell's speech: market participants went with the dovish messages and chose to ignore the statement that the final rate will be at a higher level. All this suggests that today's Nonfarm data will also be treated in a "special" manner. In my opinion, the data can only support the dollar if all components of the report come out in the green. Otherwise it will be interpreted against the greenback. Let me remind you that dollar bulls were not impressed by the last (October) Nonfarm data. Specifically, the unemployment rate climbed to 3.7% (from the previous value of 3.5%) and the average hourly wage growth rate slowed on an annualized basis to 4.7%, whereas it has been consistently above or in line with the 5% level since January. The share of the economically active population in October slightly decreased, but still, to 62.2%. All of the aforementioned indicators came out in the red, much to the disappointment of supporters of the strong dollar. After this report, the odds of a 75-point rate hike at the December meeting dropped to 20% (according to the CME FedWatch Tool). Accordingly, the 50-point scenario became the base case, with an 80% chance of being realized. According to general forecasts, the number of employed people should increase by 200,000 in November. The unemployment rate is likely to remain unchanged at 3.7%. The annualized growth rate of average hourly earnings may slow to 4.5%. In my opinion, the dollar will get no support even if all components of the release come out at projected levels. At the same time, there is definitely an implication that the numbers may not reach the forecasts at all. The alarm bells have already rung on this subject: The day before yesterday, the ADP released a disappointing report which showed an increase of 127,000 new jobs in the non-farm payrolls, contrary to its forecast of 200,000. However, we have to admit that the ADP numbers do not always correlate with the official numbers, so there is still intrigue here. At the moment, it is advisable to take a wait-and-see attitude towards all dollar pairs, and EUR/USD is not an exception here. The Nonfarm data will probably not be able to change the situation: as mentioned before, the fundamental situation is not in favor of the dollar. Nevertheless, opening long positions ahead of such an important release is a very risky action. Taking into account the "Friday factor", it is an unreasonable risk, especially since the pair is in the area of 5-month highs Relevance up to 07:00 2022-12-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328789
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

FX: Today’s US Payrolls With A Strong Bearish Rhetoric On The USD

ING Economics ING Economics 02.12.2022 09:56
While macro factors continue to point at dollar resilience in our view, markets are fully buying into the Fed's pivot story, and have turned more structurally bearish on the dollar. Today's US payrolls may fall short of triggering an inversion of this trend, and USD downside risks persist. Keep an eye on Canadian numbers too ahead of next week's BoC meeting USD: Payrolls may not offer lifeline to the dollar With the DXY index correcting by more than 7% since the early November peak, and trading below 105.00 for the first time since July, it is now evident that markets have operated a structural shift towards a bearish dollar narrative. It’s also evident that such a shift is primarily due to expectations that the Fed is nearing the end of its tightening cycle. As explained by our US economist here, investors have called Fed Chair Jerome Powell’s higher-for-longer “bluff”, applying a larger weight on four indicators (CPI, PPI, import prices and yesterday’s PCE) that are pointing to abating price pressures. Fed Funds futures show peak rate expectations have dropped below 4.90%, after having priced in 5.25% less than a month ago. In our view, this radical shift in the market’s reaction function is premature, and may not be sustainable if the Fed increases the volume of its rate protest by sounding more stubbornly hawkish and the next inflation readings argue against a rapid descent in inflation. Incidentally, the global macro picture remains challenging – especially in Europe (where colder weather may push gas prices higher) and China – which also points to dollar resilience. However, we must acknowledge that markets are approaching today’s US payrolls with a strong bearish rhetoric on the dollar, and would likely jump on more risk-on (USD-negative) bets unless we see a convincingly strong payroll read. The consensus is centred around 200k, and we forecast 220k, with the unemployment rate staying at 3.7%. Those numbers would be quite respectable and indicate that the jobs market has indeed remained extremely tight, but while it may halt the dollar’s trend, it could fail to invert it. All in all, the balance of risks appears slightly tilted to the downside for the dollar today. A contraction in payrolls to 150k could generate a fresh round of large USD selling.    The yen should be exceptionally sensitive to the jobs figures today. The main risk for USD/JPY is that UST 10Y yields fail to find extra support at 3.50%: a further bond rally could force a break below the 134.50 200-d MA and unlock additional downside potential for USD/JPY. Still, markets may struggle to live with sub-3.50% rates for long in the current environment. Francesco Pesole EUR: Ignoring some warning signs EUR/USD moves should only be a function of the market’s reaction to US payrolls today. There is a non-negligible risk we explore 1.0600, with the pair not having any clear resistance levels until the 1.0780 6-month highs. We are, however, getting the feeling that markets are ignoring at least one warning sign for the euro. The recovery in business sentiment in the eurozone has undoubtedly been the result of lower gas prices, which have benefitted from mild weather in Europe. TTF contracts are trading at one-month highs now and may see further upside volatility in the near term as temperatures in northern Europe are expected to fall. A significant recovery in gas prices would likely make the recent rally in EUR/USD unsustainable. On the domestic side, we’ll see PPI numbers in the eurozone today, and hear from ECB president Christine Lagarde again. Yesterday, she sounded quite hawkish, signalling the need to keep inflation expectations anchored and implicitly leaving the door open for a 75bp move in December. Markets currently price in 55bp, and we are calling for a half-point hike. Francesco Pesole GBP: Cable nearing the peak? There are no domestic drivers for the pound today given a light data calendar and no Bank of England speakers. As discussed in the dollar section above, US payrolls may fail to invert the bearish dollar trend and GBP/USD may find a bit more support around 1.2300-1.2350. However, as for EUR/USD, cable is not factoring in the negative implications of rebounding gas prices and weak economic fundamentals. A return to 1.1500 around the turn of the year seems appropriate in our view. Francesco Pesole CAD: Jobs numbers quite key for BoC Payrolls will also be published in Canada today. We must note the employment series has been rather volatile, with the October figures coming in at a very strong 108k, which was entirely driven by full-time hiring. The consensus is centred around a very small 10k increase, and there is a high chance we could see a negative read. This would probably keep markets leaning in favour of a 25bp rate hike by the Bank of Canada next week (currently, 30bp are in the price). However, we see room for some upside surprise today in the jobs numbers and see a higher chance of another 50bp by the BoC. USD/CAD may soon re-test the 1.3290 100-d MA, but would require a more steady rebound in crude prices to keep the bearish momentum going. Francesco Pesole Read this article on THINK TagsPayrolls FX Dollar CAD Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

The European Commission Expects The Eurozone Economy To Decline

Kenny Fisher Kenny Fisher 02.12.2022 12:16
EUR/USD is unchanged on Friday, trading at 1.0524. US nonfarm payrolls expected to drop to 200K The week wraps up with one of most important releases on the calendar, US nonfarm payrolls. The robust labour market is showing signs of cooling down, as rising interest rates have slowed economic activity. Nonfarm payrolls have been falling and the trend is expected to continue, with a consensus of 200,000 for November, down from 261,000 a month earlier. With the Fed holding its policy meeting on December 14th, the NFP report will be closely watched by policy makers, who have relied on a strong job market to press ahead with an aggressive rate cycle. The US dollar has been in retreat since Jerome Powell’s speech on Wednesday. The speech was balanced, with Powell reiterating that inflation remained too high and rates would continue to rise higher. Still, the markets focussed on the fact that Powell strongly hinted the Fed would ease rates at the December meeting with a 50-bp hike, and the optimism sent equities higher and the dollar lower. The euro has made the most of the dollar’s weakness, and EUR/USD posted its best month since 2012, with gains in November of 5.3%. Still, the euro has been on a prolonged decline and started 2022 close to 1.14. The outlook for the euro is weak, as the European Commission expects the eurozone economy to decline in Q4 2022 and Q1 2023. The driver of the expected decline is the huge jump in energy prices caused by the war in Ukraine. The eurozone has been hit hard by double-digit inflation, and the ECB will have to continue raising rates, despite weak economic conditions, until it is convinced that inflation has peaked. Read next: If ECB policymakers should make a decision between fighting inflation and avoiding recession, they will likely choose fighting inflation says Ipek Ozkardeskaya| FXMAG.COM EUR/USD Technical EUR/USD faces resistance at 1.0583, followed by a monthly line at 1.0683 There is support at 1.0490 and 1.03537 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

The EUR/USD Currency Pair Has Been Trading Higher

InstaForex Analysis InstaForex Analysis 04.12.2022 10:21
Long-term perspective. The EUR/USD currency pair has been trading higher again this week, adding approximately 150 points. Given that we have been waiting for the end of the two-year global downward trend for a long time, it does not appear to be too much. But first, let's address all of this week's paradoxes. Almost every day during this time, we discussed how the growth of the European currency was completely illogical and unreasonable. Generally, the pair increased only on Wednesday, Thursday, and Friday. What's all the fuss about these days? On Wednesday evening, Jerome Powell delivered a speech. Powell's speech is not a Nonfarm or a Central Bank meeting, to which the market always reacts. The Fed's chairman speaks frequently, and other members of the monetary committee speak as well, making it difficult to surprise the market with regular monetary policy statements. And, on Wednesday, the Fed's chairman said nothing new to traders that they didn't already know. Nonetheless, the US currency began to fall again, as if Powell had stated that the Fed rate would not be raised further. On Thursday, when the only important report of the day was the US ISM index for the manufacturing sector, the dollar fell steadily throughout the day. However, the index was released late in the afternoon. What happened on Friday, however, best illustrates our statements about groundlessness. Despite the failure of ADP earlier in the week, the most important nonfarm payrolls report came in much stronger than expected, at 263 thousand in November. The US dollar immediately began to rise, but after a few hours, it began to fall, and by the end of the day, it had returned to where it had begun to rise. As a result, the market should have considered it necessary to work out logically, even the Nonfarm report, which was unequivocally in favor of the dollar. As a result, there is only one conclusion to be drawn: we are now witnessing an illogical growth of the pair, and the same illogical fall could occur at any time. There is no relationship between the fundamental (or macroeconomic) background and the pair's movements. COT evaluation. The COT reports on the euro currency in 2022 are contradictory. During the first half of the year, professional players were openly "bullish," but the European currency steadily fell. Then, for several months, they were "bearish," and the euro currency steadily fell. The net position of non-commercial traders is now bullish and strengthening, and the euro is rising. Still, the relatively high value of the "net position" allows for the completion of the upward movement to occur soon. The number of buy contracts from the "non-commercial" group increased by 4.7 thousand during the reporting week, while the number of shorts increased by 4.6 thousand. As a result, the net position increased by approximately 0.1 thousand contracts. The European currency has continued to rise in recent weeks, coinciding with the COT report readings. At the same time, the US currency's growth may resume due to the same geopolitics or the complete absence of factors for further euro currency growth. The first indicator's green and red lines are very far apart, which may indicate the end of the ascending trend (which was not). The number of buy contracts for non-commercial traders is 133 thousand more than the number of sell contracts. As a result, while the net position of the "non-commercial" group may continue to improve, the euro may not follow suit. If you look at the overall indicators of open longs and shorts for all traders, sales are 33 thousand higher (755k vs. 723k). Fundamental event analysis This week in the European Union, there were almost no noteworthy events. And even if there were, they would be difficult to spot on the charts because the market spent most of the week simply selling the dollar, paying no attention to events or publications. Christine Lagarde spoke twice but didn't say anything new to the market, so there was no reaction. The EU published an inflation report for November, which showed a 0.6% decrease in the indicator, and the market did not react in any way. It is impossible to say what the market reacted to and why it did so. The point is that there was news that should have caused the dollar to rise and news that should have caused the euro to fall, but for some reason, we only saw the euro rise, although a technical downward correction has been brewing for more than two weeks. Trading strategy for the week of December 5-9: 1) On the 24-hour timeframe, the pair has broken through all of the Ichimoku lines, indicating that it has a good chance of continuing to rise. Of course, if geopolitics deteriorates again, these opportunities will vanish quickly. Still, for the time being, we can expect an upward movement with a target of 1.0636 (100.0% Fibonacci) and higher and buy (cautiously) the pair. The most important thing is to ignore the fundamental background! 2) The euro/dollar pair sales are no longer relevant. To consider short positions, you must first wait for the price to fall below the key lines of the Ichimoku indicator. So far, no factors indicate the US dollar will resume its global trend. However, in today's world, everything can change in an instant. Explanations of the illustrations: Price levels of support and resistance (resistance and support), Fibonacci levels – targets when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger bands (standard settings), MACD (5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "non-commercial" group.     Relevance up to 07:00 2022-12-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328878
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The NonFarm Payrolls Report Had Negative Impact On The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 04.12.2022 10:30
EURUSD hourly chart. The euro and the US market were falling after the release of the NonFarm Payrolls report. The results were higher than forecast, +264,000. The unemployment rate dropped from 3.8% to 3.7%. The report gives the Federal Reserve room for both a 0.5% and 0.75% rate hike in December. Fed on Dec. 14.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328862
EUR: German IFO Data and Central Bank Hawkishness Impact Euro/USD Range Trade

The Market Has Recently Decreased Demand For US Dollar (USD)

InstaForex Analysis InstaForex Analysis 04.12.2022 10:33
The wave marking on the euro/dollar instrument's 4-hour chart still appears quite accurate. However, the entire upward portion of the trend is starting to get more complicated. It has already assumed a clear corrective and somewhat prolonged form. A-b-c-d-e waves have a complex correction structure that we have discovered. Since wave e is much higher than the peak of wave C, if the wave markings are accurate, construction on this structure may be nearly finished. In this instance, it is anticipated that we will construct at least three waves downward, but if the most recent phase of the trend is corrective, the subsequent phase will probably be impulsive. Therefore, I am preparing for a new, significant decline in the instrument. The market will be ready to sell when a new attempt to breach the 1.0359 level, which corresponds to 261.8% Fibonacci, is successful. On the other hand, the retraction of quotes from reaching lows this week suggests that the entire wave may end up longer and that the instrument's most recent decline is not the first wave of a new descending section. Consequently, the scenario involving the first two waves of a new downward trend segment is rejected. Because there isn't an increase in demand for US currency, the wave pattern is generally starting to become muddled. The demand for the dollar has risen, but only momentarily. On Friday, the euro/dollar instrument increased by ten basis points. This number in no way represents the state of the market on Friday. During the day, the instrument fell by 100 basis points before rising by the same amount. Naturally, the decline was brought on by American statistics. The total number of nonfarm payrolls came in at 263,000, exceeding market expectations by 60,000. Remember that the ADP report, released earlier this week, indicated that only 129 000 jobs would be created outside the agricultural sector. The market has recently decreased demand for US dollars because it anticipated that the Payrolls report would also be weak. But as it turned out on Friday, the release of the Payrolls report didn't affect anything. Its value turned out to be higher than anticipated. Still, the demand for the dollar only rose for a short time (about an hour) before the market started to reduce it again, which caused the instrument's overall value to increase. What is happening with the US currency now cannot be expressed in words. It would be possible to comprehend why the dollar declined on Friday if additional US reports proved weak. Although the unemployment rate remained unchanged in November at 3.7%, average wages increased more than the market anticipated. Therefore, all three American reports exceeded expectations, so a few hours after their release, demand for US currency started to decline. This inquiry is especially pertinent if we remember that the wave markings advocated constructing at least one more downward wave. In other words, almost all of Friday's arguments favored lowering the instrument, but the day ended with a raise, further complicating the overall wave picture. We could now face endless complications from the trend segment already ascending. Conclusions in general I conclude that the upward trend section's construction is complete and has increased complexity to five waves. As a result, given that the MACD is signaling "down," I advise selling with targets close to the estimated 0.9994 level, which corresponds to a 323.6% Fibonacci ratio. The trend's upward portion could become more complicated and take on a longer form, and the likelihood of this happening is increasing daily. The wave marking of the descending trend segment becomes more intricate and lengthens at the higher wave scale. The a-b-c-d-e structure is most likely represented by the five upward waves we observed. After the construction of this section is finished, work on a downward trend section may resume. Relevance up to 12:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328882
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The Euro To US Dollar (EUR/USD) Pair Is Still In An Upward Trend

InstaForex Analysis InstaForex Analysis 05.12.2022 08:01
On Friday, the EUR/USD currency pair was trading higher once more, but this is hardly shocking given that the euro has been increasing almost daily in recent weeks, almost without any real support. The fundamental background occasionally lends support to the euro but does so infrequently while the pair continues to increase. On Friday afternoon, we issued a warning, stating that even if the non-farm payrolls come in strong, we shouldn't prematurely declare the euro's demise because we might experience the opposite trend by day's end. We didn't think it was possible, but that's how it turned out. However, the market only worked out strong non-farms, good unemployment, and well-grown wages for a half hour or an hour before forgetting about them and returning to its recent favorite activity. As a result, we are still attempting to relate the foundation to macroeconomics and market behavior. They are utterly at odds with one another, and the pair is currently moving upward, although this is illogical. Tomorrow, it may also move downward illogically. This is the threat posed by the current circumstance. Technically speaking, the upward trend continues and doesn't raise any concerns or doubts. There is no longer any indication of a correction based on the 4-hour and 24-hour TF indicators, which all point upward. Corrections occur occasionally, but this is a relatively uncommon occurrence, and they are quite weak. Accordingly, the pair may continue moving north this week based on the "technique," even though there will be a few reasons for this, as we will see below. GDP and Christine Lagarde's speeches There would be few macroeconomic statistics this week if there were significant events and reports last week that the market either ignored or misinterpreted. It should be noted that traders acted as if the most recent EU inflation report did not exist by not paying any attention to it. Most likely, this week will bring similar events. But everything is generally in order. The next speech by Christine Lagarde, the head of the ECB, will take place on Monday. Although we don't anticipate her to say anything fundamentally novel on the eve of the regulator's meeting, we still need to be on the lookout for any surprises. The index of service sector business activity and retail sales will also be released on this day. Though not the most crucial indicator, business activity will likely continue to be below the "waterline" of 50.0. The third estimate of the GDP for the third quarter will be released on Wednesday, and, likely, it will be similar to the second estimate. Again, since traders are already very familiar with the value of GDP, they will have little to react to. On Thursday, Christine Lagarde will give two more speeches, and other ECB officials will also speak during the week. Therefore, it is generally possible to receive interesting information, but only in the event of something "loud" will it be possible to wait for the market's response. However, does the market currently require "loud" information? The pair's movement is still extremely volatile and trending. Whether macroeconomics or the foundation are involved, the euro is strengthening. As a result, traders won't even need news and reports to make trading decisions. The market can start selling the euro just as it is currently buying it irrationally. The current situation is like a "trap" designed to raise the pair's rate as high as possible before actively selling. However, since this is only an assumption, it is impossible to know. In any case, the start of a potential downward movement can be identified by fixing the price below the moving average line. Selling the pair is advised at that time. As of December 5, the euro/dollar currency pair's average volatility over the previous five trading days was 127 points, considered "high." So, on Monday, we anticipate the pair to fluctuate between 1.0405 and 1.0661. The Heiken Ashi indicator's turning downward indicates a new phase of the corrective movement. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: The EUR/USD pair is still in an upward trend. As a result, you should continue holding long positions until the Heiken Ashi indicator turns down, with targets of 1.0621 and 1.0620. Sales will become significant only when the price is fixed below the moving average line with a target of 1.0254. Explanations of the illustrations: Linear regression channels help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328906
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

EUR/USD Pair: The Main Scenario Is The Price Reaching Target Range

InstaForex Analysis InstaForex Analysis 05.12.2022 08:13
The EUR/USD still managed to end Friday with a positive even though there was good data on the US labor market, which judging by the market's reaction after its release had initially pulled down the euro by more than 100 pips. In today's Asian session this local uptrend continues. The price still aims to reach the target range at 1.0615/42. The main scenario is the price reaching this range and a divergence following it. In case the price settles above 1.0615/42, the next target range of 1.0758/87 will become available. However, we should be more careful about this target, because the Federal Reserve meeting on the 14th is becoming more and more uncertain. To be exact, there have been more hawkish features lately. On the four-hour chart, Friday's decline was stopped by the balance and MACD indicator lines. Having received support from them, the price reversed to growth. Divergence on this chart is still there, but it is weak and does not prevent the price from reaching the first target range of 1.0615/42 Relevance up to 03:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328914
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The Market Has Never Seized Chance To Halt The Rise In Demand For The Euro (EUR) And The Pound (GBP)

InstaForex Analysis InstaForex Analysis 05.12.2022 08:31
It makes perfect sense to include Friday in trading textbooks. To understand how and when the market might change its direction of movement or when the movement might intensify, all traders carefully study the calendar of economic events. The core of the fundamental analysis is this. But occasionally, as they say, there are exceptions. Additionally, they took too much time this time. Remember that I have frequently questioned whether raising the euro and pound's exchange rates is necessary? The fifth e waves for both trading instruments took on an extended form and were supposed to be finished a long time ago. I have written and am currently writing about this exact subject. Over the last two weeks, the market has had many opportunities to halt the rise in demand for the euro and the pound and create at least a corrective downward set of waves. However, the market has never seized this chance. Or decided not to. The fundamental analysis loses its meaning when the market chooses not to consider the news and trades in a single direction. Furthermore, because the market always trades in one direction, wave analysis is pointless because you can wait for specific waves to form but they never do. The drawback of waves is that they can take on almost any length. Even the current waves e have room to grow. As a result, I've been watching for a decline for the past two weeks, and during that time, the instruments have been rising. The market had anticipated a reading of around 200 thousand for the nonfarm payrolls report on Friday, but it came in at 263,000. The unemployment rate is 3.7% as of today. In November, wages increased by 0.6%, despite the market expecting a rise of just 0.3%. At the same time, the US dollar only briefly appreciated before falling back down. It is impossible to explain why both instruments increased on Friday night, given that the week ended at peak levels. Let me remind you once more that fundamental analysis (at least on Friday) should have led to a decline in both instruments, and wave analysis predicts the formation of a descending set of waves. But once more, neither waves nor fundamental analysis could predict the movement we saw. And all you can do is tolerate it. Now that the trend can become more complex on both ends, the waves e can as well, which will necessitate adjusting the wave markup. It's also unsettling to think about what will occur in December when all three central banks meet for the final time this year. The market's response should vary depending on the meetings attended, the decisions made, and the rhetoric used. But if you can only go in one direction, will the market still want to be so diverse? We'll likely experience several surprises in December. I conclude that the upward trend section's construction is complete and has increased complexity to five waves. As a result, I suggest making sales with targets close to the estimated 0.9994 level, or 323.6% Fibonacci. The trend's upward portion could become more complicated and take on a longer form, and the likelihood of this happening is increasing daily. The construction of a new downward trend segment is predicated on the wave pattern of the pound/dollar instrument. Since the wave marking permits the current construction of a downward trend section, I cannot advise purchasing the instrument. With targets around the 1,1707 mark, or 161.8% Fibonacci, sales are now more accurate. The wave e, however, can evolve into an even longer form Relevance up to 05:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328918
The Euro To US Dollar Instrument Did Not Change In Value

The Downward Movement Of The EUR/USD Pair Did Not Start

InstaForex Analysis InstaForex Analysis 05.12.2022 08:33
M5 chart of EUR/USD On Friday, EUR/USD went upwards again by the end of the day. This time the overall growth was not so strong since important reports were published in America, which were definitely in favor of the US dollar. The greenback grew for a while after the reports, but in the evening the euro started rising again and offset all the losses after the US data. If the dollar grew quite naturally after the Non-farms and the unemployment, then the euro's subsequent growth raised some questions. However, we could get used to this situation. The euro has been growing for quite a long time without any particular reason, so we have only to work out these trends and quite volatile movements. Separately, the macroeconomic statistics from across the ocean was quite strong, so the market should have been selling the pair, not buying it. The pair generated unfortunate signals on Friday. Before the US reports were released the pair was in a flat, and after it EUR/USD plunged so fast that there was no chance to work out this movement. That is why the first signal appeared in the middle of the US trading session, when the price rebounded from 1.0485. After that the pair went down about 35 pips, so traders could place the Stop Loss to Breakeven. The next buy signal was near the same level of 1.0485, but it appeared too late, so traders could not use it. But if some traders opened a long position, they definitely made a profit. COT report COT reports on EUR/USD have puzzled traders through most of 2022. Half of the year, COT reports indicated clear-cut bullish sentiment among large market makers while the single European currency was extending its weakness. For a few months, the reports showed a bearish sentiment and the euro was also trading lower. Now sentiment of non-commercial traders is turning bullish again, and the euro is rising, but it is a rather high net position that allows us to assume that the upward movement will end soon. During the reporting week, the number of Buy contracts for the Non-commercial group increased by 4,700, and the number of short contracts rose by 4,600. Accordingly, the net position grew by about 100 contracts. The European currency has been rising in recent weeks, which is already in line with the readings of the COT reports. At the same time, we believe that the US currency may still regain its footing amid the same geopolitics or due to the lack of fundamentals for further growth of the euro. The green and red lines of the first indicator moved far away from each other, which could mean the end of the uptrend (!!!) (which, in fact, never happened). The number of BUY contracts is higher than the number of SELL contracts for non-commercial traders by 133,000. Thus, the net position of the "non-commercial" group may continue to rise further, but this may not trigger a similar rise in the euro. If we look at the overall numbers of open long and short contracts for all categories of traders, there are 33,000 more sell contracts (755,000 vs. 723,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD continues to show absolutely erratic movements and Friday was just another proof of this. After the ascending trend line was broken, the downward movement did not start. After Federal Reserve Chairman Jerome Powell's speech, the pair returned to its local peaks for absolutely no reason and then it did not even fall after the strong US data. Therefore, movements can only be analyzed using technique. On Monday, the pair may trade at the following levels: 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, and also Senkou Span B (1.0359) and Kijun Sen (1.0414). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 1, the EU will publish retail sales and business activity reports in the service sector. In America, the ISM Services Business Activity Index will be released, which is the most important report of the day. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group Relevance up to 01:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328902
The Euro Will Probably Continue Its Upward Movement In The Near Future

EUR/USD Pair Is Followed The Expected Path Higher

InstaForex Analysis InstaForex Analysis 05.12.2022 08:36
EUR/USD continue to follow the expected path higher. After a break above minor resistance at 1.0481, the upside has been cleared for a rally towards 1.0785 and 1.0926 as the next upside targets. Longer term, we are looking for much higher levels as we regard the entire corrective decline from 1.6038 as complete and the ongoing impulsive rally should ultimately break above the 2011 peak at 1.6038. That said we should as always take the rally higher in baby steps as it of course will not be in a straight line, but the rally will take years to unfold. Relevance up to 06:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/303637
The Data May Keep The British Pound (GBP) From Rising

There are some factors which can help greenback in the remainder of the year. Next week BoE, Fed and ECB decide

ING Economics ING Economics 05.12.2022 09:18
This week will prepare markets for the last key events of the year: policy meetings by the Fed, ECB and BoE on 14-15 December. It looks like the dollar's long positioning has now completely faded, and three factors - the Fed remaining hawkish, China's optimism being misplaced and energy prices rising again - could contribute to a USD re-appreciation   European Central Bank president Christine Lagarde and US Fed chair Jerome Powell USD: Balanced positioning The dollar index is now trading 8% off its early November high, and it can’t be excluded that a busy couple of weeks before the festive period will continue to put some pressure on the greenback, which is incidentally seasonally weak in December. This is, however, not our base case, as we suspect instead that the dollar correction may have run its course, and several factors should allow for some re-appreciation into year-end. First, markets have speculated about a dovish pivot from the Federal Reserve after signs of slowing inflation, but our suspicion is that the Fed will maintain its hawkish narrative for longer, implicitly or explicitly protesting against the recent drop in yields. Strong jobs numbers on Friday should offer a basis for this. After all, endorsing the market’s dovish narrative may be premature and risky for the Fed whose plan should be to let markets do the heavy lifting in tightening - and our rates team is bearish on Treasuries in the near term. A still highly inflationary global environment may struggle to live with sub-3.50% 10-year yields. Secondly, USD/CNY is trading below 7.00 for the first time since September, with the yuan following Chinese risk assets higher after the government announced an easing of Covid rules. The government’s move appears to be a direct consequence of recent demonstrations against its Covid policy, but a further untightening of restrictions may prove complicated. Many parts of the country – including Beijing – are facing a surge in cases, and the vaccination rates (especially booster doses) among the elderly still look insufficient. At the same time, the real estate and export sectors remain a key concern for the medium outlook in China, and one that may prevent the yuan from appreciating much further. Third, with Russia rejecting the cap on oil prices at $60/bbl and threatening output cuts, along with a projected drop in temperatures in many parts of Europe, the energy crisis may return and we see ample room for gas and oil prices to climb back. That would be a positive development for the dollar.   Today, the US calendar includes ISM service figures for November, while PPI and University of Michigan survey numbers are the other major releases to watch this week. There are no Fed speakers as the pre-FOMC blackout period has now started. According to our calculations based on CFTC data, the dollar’s aggregate positioning against G10 currencies is now neutral, and at the lowest levels since August 2021. With more limited room for position-squaring effects to weigh on the dollar, our view for this week is that we could see at least some stabilisation in the greenback. DXY may struggle to extend its drop below 103/103.50, and a rebound to 105.50/106.00 looks more likely in our view. Francesco Pesole EUR: Energy scares coming back? The eurozone’s calendar lacks market-moving data this week, and only includes some final releases (GDP, PMIs). However, we’ll get a chance to hear the last few comments by European Central Bank officials before the 15 December policy meeting. Markets appear to have reinforced their 50bp expectations over 75bp, especially after the latest deceleration in eurozone inflation which makes the hawkish rhetoric harder to defend. However, energy-related news should be more relevant for the euro this week, with falling temperatures in Europe and the price cap on Russian oil coming into effect today. Urals grade crude is trading around $10 below the $60/bbl cap, but Russia has already announced that it would prefer to trim production rather than sell at the embargo price. OPEC+ has held production steady and is only scheduled to meet again in February, but we continue to see risks that a tighter picture in the energy market in 2023 could lead to higher oil and gas sooner rather than later. Given the high sensitivity of EUR/USD to the eurozone’s terms of trade (which is primarily driven by energy prices), further upside risks for energy commodities equal downside risks for the euro. This week, some dollar stabilisation could make the EUR/USD rally run out of steam around the 1.0600/1.0650 area, and possibly lead to a more sustainable drop below 1.0450/1.0500. We remain bearish on the pair into year-end. Francesco Pesole GBP: Cable is still a dollar story Markets have aligned their expectations for the Fed, the ECB and Bank of England’s December rate hikes at 50bp. There is only a residual 7bp of extra tightening in the OIS curve for the 15 December BoE meeting, and our call is also for a half-point move. Rate expectations are unlikely to be stirred this week given the BoE has entered its quiet period and there are no major data releases in the UK. We struggle to see cable extend its rally to 1.25 and beyond, but it will undoubtedly be primarily a dollar/risk sentiment story driving the pair before the BoE meeting. A contraction below 1.20 seems more appropriate given global and UK macro fundamentals.   Francesco Pesole CEE: Ecofin may close the Hungarian saga This week will kick off with the release of wage growth in the Czech Republic, a key number for the Czech National Bank given that a wage-inflation spiral is a major risk for the board. The central bank forecasts 6.1% in nominal terms; we expect a number closer to 8.0% year-on-year. However, we don't believe this will be enough to trigger a hawkish reaction. On Tuesday, EU finance ministers may vote on a European Commission proposal to freeze Hungary's access to EU funds. On Wednesday, we will see industrial production results in the Czech Republic and Hungary where we expect to see slowing but still solid numbers. In Romania, a breakdown of 3Q GDP will be published and later we will see the National Bank of Poland's decision. After the publication of inflation last week, which surprised to the downside, we can expect nothing but a confirmation of the end of the hiking cycle. Then on Thursday, November inflation in Hungary will be published. We expect a further jump in YoY numbers from 21.1% to 22.4% and a similar jump in core inflation, in line with market expectations. In the FX market, the CEE region remains well supported by the external environment, despite our expectations, especially thanks to the weak US dollar, which remains a question mark for this week. At the local level, the main themes remain the same: Hungarian forint and Polish zloty. In Hungary, FX remains mainly driven by the EU story and we should see new headlines this week. However, the markets are visibly losing patience, resulting in high volatility, which we expect this week as well. Positioning in our view became more balanced last week, creating room for a new rally if we hear positive news, which is our baseline. In this case, we expect the forint to return below 405 EUR/HUF. In Poland, the main topic will of course be the NBP's meeting, which will again test the market's willingness to accept the decision to end the hiking cycle. The massive rally in rates and POLGBs last week following the release of inflation data further widened the gap between the zloty and interest rate differential. FX thus remains vulnerable, in our view. We remain bearish with expectations for the zloty to return above 4.72 EUR/PLN. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair: There Are Still No Sell Signals

Investors Began To Buy The Euro With Renewed Vigor After ECB President Christine Lagarde's Speech

InstaForex Analysis InstaForex Analysis 05.12.2022 10:20
Markets prefer to shoot first and then think later. Otherwise, they would miss the moment. When ECB President Christine Lagarde said that central banks should pursue policies that would anchor inflation expectations, investors began to buy the euro with renewed vigor, pushing EURUSD quotes to the highest levels since June. In reality, however, Lagarde's phrase does not guarantee that the deposit rate will rise by 75 bps in December. No matter how this shot turned out to be a blank. The logic of investors selling the U.S. dollar is clear: inflation is slowing and will continue to do so, which means the Fed does not need to take giant steps down the road of tightening monetary policy. The factor of an aggressive federal funds rate hike, along with U.S. exceptionalism and high demand for safe haven assets, was the key driver of the EURUSD rally. If the ECB starts to catch up with the Fed, the dollar has one less trump card to play. Lately, the macrostatistics of the euro area has been pleasantly surprising, which is reflected in the growth of the index of economic surprises. It is quite possible that the currency bloc will either manage to avoid recession or the recession will be quick and insignificant. It looks like the U.S. is not as far from the eurozone as previously thought. A change in investors' outlook on the matter has given EURUSD a helping hand. Dynamics of Economic Surprise Indices In fact, the U.S. dollar has only one trump card left—its status as a safe-haven asset, and even that fails. When the yield of Treasury bonds grew, the competitors of the grenback in the face of gold, yen and franc were in disgrace. However, the decline in interest rates on debt has turned them from outsiders into favorites. As a global recession approaches, investors will no longer park their money in North America, but will prefer Japan, Switzerland, or a perpetual asset. Jerome Powell had a chance to turn things around. Had he voiced his dissatisfaction with financial conditions, the EURUSD pair would hardly have been able to soar above 1.05. The weakening of the latter makes it difficult for the Fed to fight inflation, but the central bank also seems to believe that the PCE will continue to slow. Dynamics of financial conditions in the USA Unlike Lagarde, who believes that the global economy is entering an era of volatile inflation. That is why central banks should anchor inflation expectations at the target level of 2%. Households must trust that their work will lead to price stability. That's the only way to win. Volatile inflation makes it doubtful that EURUSD will continue to go further upward in the same way as in October and early December. Most likely, it will be stormy. In technical terms, the euro approached the target by 161.8% by the Crab pattern within an arm's length. It is located near the $1.061 mark. A rebound may follow from it or from the 1.057 pivot point, which will allow to partially take profits on the longs formed above 1.0395. Subsequently, we use pullbacks to buy EURUSD Relevance up to 06:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328928
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

Saxo Bank Podcast: Key Economic Indicators Point To An Incoming Recession In Europe

Saxo Bank Saxo Bank 05.12.2022 11:31
Summary:  Today we note that the market seems to be in see-no-evil, hear-no-evil mode, as hot earnings data from the US on Friday was unable to sustain a reaction in treasury yields, with financial conditions at their easiest in months. Still, key economic indicators point to an incoming recession in Europe even as the EURUSD manages to pull above 1.0500. We also preview tonight's RBA meeting, interesting earnings reports this week and much more. Today's pod features Peter Garnry on equities, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Financial conditions continue to ease, ease, ease | Saxo Group (home.saxo)  
ECB interest rate hiking is six times faster than in the previous tightening cycles

The reduction of fears related to a possible frosty winter may support the euro exchange rate

Kamila Szypuła Kamila Szypuła 05.12.2022 13:37
The situation of currency pairs is affected by macroeconomic and political events. In the Asian market, developments in China, which has recently been struggling with an increase in coronavirus infections, are of particular importance. December is particularly important because the last decisions regarding interest rates will be made this year, which will affect the forex market.   Decreased winter fears may support the euro. The looming recession in the UK is starting to take its toll on the pound. The Aussie awaiting RBA decision Positive Japan services PMI   EUR/USD The EUR/USD pair is at its highest level in months. The upward trend in recent weeks has been strong. ING FX experts remain bearish on the euro/dollar exchange rate until the end of the year, but there are experts who believe that the exchange rate will continue its upward move. It is worth paying attention to the readings of PMI indices for services that will be released today from many countries and the already mentioned ISM data from the US. Today's readings for the EU were weaker than expected, but it seems that the market is waiting for the release of the US report. The news related to energy issues in the euro zone may be loud this week. The price cap of the G7 is $60. per barrel, and Urals oil is traded at $10. below this ceiling. Moscow has already announced that it prefers to limit production rather than sell at a fixed price. However, the reduction of fears related to a possible frosty winter may support the euro exchange rate.   Read next: If ECB policymakers should make a decision between fighting inflation and avoiding recession, they will likely choose fighting inflation says Ipek Ozkardeskaya| FXMAG.COM   GBP/USD The pound/dollar exchange rate increased its gains in November. The recent rebound in the pound/dollar (GBP/USD) has regained momentum, but Monday morning brings some break to the rally. The final service PMI reading for November published today was in line with expectations (48.8). More and more serious opinions announcing a more significant and prolonged recession in the British economy may start to show up in the pound's quotations. Especially that the market will also price in scenarios regarding the decision of the Bank of England on the level of interest rates. The Bank of England will decide next week's rate on Thursday (December 15), the same day as the ECB and a day later than the Federal Reserve (December 14).   AUD/USD AUD/USD refreshed to a seven-week high above 0.6850. Now turned down, sentiment remains bearish. The AUD/USD exchange rate is susceptible to the economic situation in the US and Australia. The situation in China is of great importance for the strength of the Australian dollar. Announcement of easing covid restrictions in China may support the situation of the Australian dollar. Markets are expecting the Reserve Bank of Australia to keep the cash rate on hold at 2.85% after inflation slowed sharply in October. The RBA will be deciding on rates tomorrow. The market is pretty much 50/50 on a 25 bp bump up.   Read next: Chinese And European Services PMIs Fell| FXMAG.COM   USD/JPY USD/JPY bearish movement developed and the currency pair is moving to its lowest level since August. The USD/JPY pair is very liquid as both currencies are among the top reserve currencies in the world. As with other major currency pairs, USD/JPY can also be sensitive to macroeconomic data from the US and Japan. Today's reading for PMI services in Japan was optimistic.   Source: finance.yahoo.com, investing.com,
Prices Of The Natural Gas Extended The Rebound

Gas: Volatility still remains high and colder weather over January and February could see the natural gas bulls come back into town says Luke Suddards

Luke Suddards Luke Suddards 05.12.2022 14:47
It's going to be a resillent week as they're not many crucial macroeconomic events in the schedule and investors, traders and companies are awaiting the decisions of all of major central banks in the world. Even if volatility isn't dominating today's headlines it's good to dwelve into situation on the markets as gas prices are falling in the US and EUR/USD may be on the verge of a trend reversal. As a week before, we're pleased to ask Finimize's Luke Suddards to speak his mind. Natural Gas (NATGAS) plunges, have markets got calmer at last? Gas prices are falling as storage levels remain high and temperatures have been warmer. It looks as if price wants to test the $5 level. Volatility still remains high and colder weather over January and February could see the natural gas bulls come back into town.    Read next: Investors also seem to have become less sensitive to the Ukraine War, which was a significant driver of crude in the first half of 2022 says Finimize's Luke Suddards | FXMAG.COM   Are you of the opinion that EUR/USD price movement suggests a trend reversal? Yes, in the short term it does seem as if we're seeing EURUSD reverse its downtrend and it is now above its 200-day SMA. The euro is a pro-risk currency and as long as we see equities rallying into year-end we could see EURUSD reach 1.10. The other factor to consider is expectations around the Fed. We saw the jobs data out last Friday coming in hotter than expected, particularly the wage pressures. The next major risk event for FX traders will be US inflation data out on 13 December. If that surprises to the upside then we likely see the terminal rate revised higher and a higher probability of a 75bps hike priced in for the Fed's next meeting. December is far and away the euro's best month. EURUSD has gained in 14 of the past 20 Decembers, and all of the past five. The average gain is around 1.3% with a hit rate of 70%. 
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

Greenback has lost 6% since the late-September. Fed decides next week

Enrique Díaz-Álvarez Enrique Díaz-Álvarez 05.12.2022 15:59
A relatively dovish speech from Fed chair Powell, and the prospect of a pivot away from zero-COVID in China, put some fuel into the risk asset rally last week. The US dollar was once again one of the worst performing currencies in the world, having suffered its worst monthly performance since September 2010 in November, falling against all but one of its G10 peers. The greenback has now retraced 6% from its late-September highs in trade-weighted terms. Traders are now short the dollar on net, and we could see some consolidation of current levels into year-end, but it will all depend on the relative hawkishness of the respective central banks at their upcoming December meetings.   This week will be a quiet one in terms of data releases and policy news, and markets will likely mark time as they wait for the big three central bank meetings that will take place in the span of less than 24 hours next week. The Federal Reserve will kick things off on 14th, followed by the Bank of England and the ECB on 15th. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 05/12/2022 GBP Sterling continued its strong rebound from the depths of the fiscal crisis, as markets become more confident that sane fiscal policies will be followed and the backdrop becomes more friendly to risk taking in general. Macroeconomic data releases also continue to come in slightly better-than-expected, notably the recent PMI prints, further raising hopes that the downturn in UK activity may not be as severe or prolonged as some of the worst-case scenarios. Talk of a Swiss-style model for relations with the EU also soothed nerves last week, and some hawkish comments from MPC members probably mean that sterling will have an easier time going up than down. That is, at least until the Bank of England clarifies (or further muddies!) its position at the December meeting in 10 days hence. A 50 basis point rate hike is widely expected by investors, so attention will likely be largely on the bank’s rhetoric on the pace and extent of additional tightening in 2023. EUR The drought of market moving news out of the Eurozone last week and this one means that the common currency is mostly moving in reaction to news elsewhere, notably the US and China. Both were positive last week, with Powell telegraphing a rate hike of only 50bps in December and Chinese authorities signalling that lockdown measures will be relaxed. Hopes that the zero-COVID policies may soon be a thing of the past has helped risk assets in general in the past week, and allowed the euro to bounce around the top of the 1.00-1.05 range where it has been trading for the past few weeks. Q3 GDP data will be released on Thursday, though this is merely the revised print, so volatility in the euro may be rather low around its release. Expect ECB member speeches to garner far more attention leading into next week’s highly important European Central Bank meeting. USD Markets were desperate for a sign that the Fed is ready to pivot away from massive 75bp hikes, and it got its wish last week. A 50bp rate increase in December is now priced in, and while in previous hiking cycles this would have been considered a jumbo move, this passes for good news on the rate front nowadays. News out last week was positive for the economy, and mixed for inflation. Actual activity numbers are so far strong in the US, and labour markets remain taut. While the PCE inflation report confirmed the good news from the earlier CPI one, wages in October rose considerably more than expected and seem to be trying to catch up with inflation, raising the prospect of second-round inflationary effects. For now, all is forgotten in celebration that 75bp are done with. Bonds rallied in tandem with risk prices and the dollar continued to retrace its 2022 gains. Figure 2: US PCE Inflation Rate (2012 – 2022) JPY The yen has continued its strong recovery in the past few weeks, and was once again one of the better performers in the G10 last week. An improvement in risk sentiment would ordinarily be perceived as bearish for the safe-haven Japanese yen, though the recent sell-off in the currency and intervention efforts from the Bank of Japan has left it prone to recovery rallies. Last week’s move propelled the USD/JPY pair below the 135 level for the first time since August. A slew of economic data releases will be closely watched by currency traders this week. Today’s services PMI came in slightly stronger-than-expected, although printed only modestly in expansionary territory (50.3 vs 50.0 expected). Revised third quarter GDP data on Wednesday could also shift the yen if we see a significant deviation from the initial estimate. CHF Improved risk sentiment meant that the safe-haven franc trailed most of its G10 peers, ending last lower against the euro. News from Switzerland failed to help the currency, with most readings disappointing expectations. Third-quarter GDP growth was unimpressive at +0.2% QoQ, and the Q2 reading was revised down to just +0.1%. Real retail sales dropped sharply in October (-2.5% YoY) and the forward-looking sentiment indices dipped as well, suggesting a slowdown ahead. Figure 3: Switzerland GDP Growth Rate (2012 – 2022) Source: Refinitiv Datastream Date: 05/12/2022 The centre of attention was, however, inflation. As expected, the headline rate stabilised at 3% in November, with core price growth ticking up to 1.9%. The Swiss economy is slowing and the data seems to send some disinflation signals. However, considering that price growth remains far above the central bank’s comfort threshold, we think that the poor economic numbers won’t deter the SNB from hiking interest rates next week – our base case remains for a 50bp hike. AUD Signs of a move towards easing the zero-covid policies in China should be disproportionately bullish news for the Aussie dollar, though the currency lagged behind most of its high-risk G10 peers last week, including the New Zealand dollar. Expectations that the RBA will deliver no more than a 25bp rate hike at its meeting on Tuesday has partly held back the rally in AUD – indeed markets see almost a 30% chance of no hike at all. There will be no policy meeting in January, so Tuesday meeting could lay the groundwork for an end to the tightening cycle. Markets are pricing in 70bps of hikes through to the middle of next year, so any hints that hikes could end in Q1 would be perceived as dovish for AUD. Third-quarter GDP data out on Wednesday, and trade balance figures on Thursday will round out an unusually busy week in Australia. NZD The New Zealand dollar was the best performer in the G10 last week, with the kiwi receiving headwinds from both easing Fed rate hike bets and positive headlines out of China – New Zealand’s largest trading partner. Domestic economic news out of New Zealand last week, notably housing, terms of trade and business confidence data, was actually unambiguously bearish for NZD, although it was largely overlooked by investors. Weaker business confidence, sky-high inflation and ongoing labour shortages do present near-term risks to the economy, and could lead to a correction in the recent dollar rally in the coming week. There will be no real major economic data releases out of New Zealand this week, so NZD could be driven largely by events elsewhere, notably covid news out of China. CAD CAD once again trailed behind its major peers last week, ending roughly unchanged versus the US dollar. Data out of Canada last week was rather mixed, with slightly softer-than-expected GDP figures offset by modest surprises to the upside in the November PMI data and employment reports. High uncertainty heading into this week’s Bank of Canada meeting has partly contributed to this underperformance, with markets torn between a 25bp and 50bp rate hike. While economists are pencilling in a 50bp move, markets only see a one-in-four chance of one, which opens the door to a hawkish surprise. On balance, we think that a 25bp hike is more likely. Excess demand and a lack of a clear peak in core inflation may encourage a larger move, though we think that heightened growth concerns could tip the balance towards less tightening. This would be a bit of a disappointment for investors, but would probably only lead to a small sell-off in CAD given current market pricing. SEK The Swedish Krona ended last week slightly higher against the euro, in line with other risk assets, which rose as investor risk appetite improved. Economic data released last week was rather mixed. GDP data showed that the Swedish economy expanded by 0.6% quarter-on-quarter in Q3, slightly less than expected (+0.7%). Consumer confidence rose to 55.8, up from the lowest level since 1993. While this remains at historically low levels, this improvement makes us marginally more optimistic about the outlook for the Swedish economy. Figure 4: Sweden Consumer Confidence (2012 – 2022) Source: Refinitiv Datastream Date: 05/12/2022 On the other hand, retail sales fell by 1.3% month-on-month in October, the third consecutive monthly drop and the steepest since June. No major data will be published this week, so we suspect that SEK will largely trade in line with other risk assets. NOK In the absence of relevant data last week in Norway, the Norwegian krone traded in line with risk assets, ending the week higher against both the US dollar and the euro. This week’s focus will be on the November inflation data to be released on Friday. Headline inflation is expected to ease slightly from the 35-year high recorded in the previous month, but core inflation is expected to remain unchanged at a very high 5.9%. If confirmed, thi would cement our view that Norges bank will need to keep raising rates in the coming months in order to control inflation. In the event of an upside surprise, there is a possibility that the central bank will again discuss the possibility of raising rates by 50 basis points, which could support the Norwegian currency. CNY The Chinese yuan traded higher against the US dollar last week, with the USD/CNY pair falling below the key psychological threshold of 7.0 for the first time since September. Signs of a move towards a reopening of the Chinese economy has helped CNY. The COVID protests appear to have been largely contained, and have forced authorities to rethink their zero-COVID approach. A number of cities have announced an easing of curbs and Chinese officials appear to be moving towards further easing. Last week, Vice Premier Sun Chunlan, mentioned ‘decreased pathogenicity’ of the omicron variant and stated that the country is entering a ‘new stage’ in its fight against COVID. China has also announced an acceleration of efforts to vaccinate the elderly, targeting one of the main roadblocks to a full reopening. Investors will continue to focus on COVID news this week. Largely disappointing November PMI data suggests that this remains key for the Chinese economy. Aside from COVID policy signals, consumer and producer inflation data for November, out on Friday, will be worth watching. Economic Calendar (05/11/2022 – 09/12/2022) Read the article on Ebury
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

European Commission predicts eurozone economy may shrink in this and next quarter

Kenny Fisher Kenny Fisher 05.12.2022 23:09
EUR/USD is steady at the start of the week. In the North American session, EUR/USD is trading at 1.0534, down 0.06%. The US dollar has been struggling and fell 1.5% against the euro last week. The euro rally fizzled on Friday, as the US employment report was stronger than expected. The economy created 263,000 jobs in November, slightly lower than the October reading of 284,000 but well above the consensus of 200,000. Wage growth impressed, as the reading of 5.1% y/y was up from 4.9% and beat the forecast of 4.6%. The labor market continues to show a surprising resiliency and the increase in wage growth will drive inflationary pressure. The Fed is expected to ease rates to 50 bp in December, but the strong labour market indicates that the economy can absorb further rate hikes in the New Year. Investors were hoping for a weak jobs report which would force the Fed to scale back its hikes and fuel a stock market rally, but the strong data has dashed those hopes. Read next: Vodafone Shares Fell By 45%, Apple May Be Moving Production Outside Of China | FXMAG.COM The eurozone continues to struggle and today’s data didn’t help things. German and Eurozone services PMIs remained in decline, with readings below 50.0. Eurozone retail sales fell by 1.8%, a 10-month low, while Investor Confidence remains deep in negative territory, at -21.0. Despite recent gains, the outlook for the euro is weak, as the European Commission expects the eurozone economy to decline in Q4 2022 and Q1 2023. The driver of the expected decline is the huge jump in energy prices caused by the war in Ukraine. The eurozone is grappling with double-digit inflation, and the ECB will have to continue raising rates, despite weak economic conditions, until there are unmistakable signs that inflation is finally on the way down. EUR/USD Technical There is resistance at 1.0629 and 1.0714 EUR/USD has support at 1.0459 and 1.0374 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro dips lower on weak euro data - MarketPulseMarketPulse
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

The EUR/USD Pair Has All Signs Still Point Upward

InstaForex Analysis InstaForex Analysis 06.12.2022 08:00
On Monday, the EUR/USD currency pair made a small adjustment but is still above the moving average line. As a result, we can only discuss a rollback, not a correction. There were legitimate reasons for the pair to fall on Monday, and all signs still point upward. As a result, it was a justified strengthening of the US dollar rather than a gesture of goodwill. Numerous reports of all kinds were released for the day, most of which had little chance of being noticed by traders. The only things that had an impact were the ISM index in the United States, which unexpectedly increased to 56.7 when everyone expected it to decline, and retail sales in the European Union, which decreased by almost 2%. The US dollar increased in both situations, which makes sense. So, Monday's big question (were traders satisfied with their purchases of the euro currency?) was unanswered. Purchases of the euro currency made without justification have been noted recently. There won't be any significant events in the EU or the USA today, so the pair's growth may already have resumed. We shall see. Also, note that the downward correction is screaming at the top of its lungs; it is no longer just simmering. Small rollbacks occasionally still have a place, but they are very weak. Remember that the pair has already recovered 1,000 points in just two months from 20-year lows. When was the last time the euro fell for two years straight without being able to recover by more than 400 points? Since we understood that the euro currency could not continue to fall indefinitely, we have been waiting for a significant upward movement for a very long time. However, the euro's two-year decline was logical from the standpoint of geopolitics, which serves as its basis. And right now, the value of the euro is rising practically for free. Even though this may only be a technical adjustment on a global scale, we would still like to see some logic behind the movements. The "tough" monetary policy of the Fed will last for a very long time. We already mentioned a little above that the US dollar has increased over the past two years for a reason. And right now, for no apparent reason, the value of the euro is rising. Let's revisit the monetary policy of the Fed. The American Central Bank was the first to raise interest rates, and it did so quickly and aggressively. The rate is now at 4%, is almost certain to increase to 5%, and will stay at its peak level for the entirety of 2023 and the first half of 2024. Many experts whose opinions were sought out by The Financial Times expressed this prediction. They predict that the US economy will experience slower growth rates or a recession in the upcoming year, forcing the Fed to lower interest rates once or twice in 2024. Nevertheless, this will occur in at least 1.5 years. Rates will remain very high throughout, putting pressure on inflation and the economy. The size of the rate and the differences in rates with other central banks are more significant for the dollar, though. In other words, the US currency controls the Fed rate at 5% and the ECB rate at 3%. This factor should already be supporting the US dollar and won't change in the future. The European currency cannot grow even in this scenario because the ECB rate is lower and is likely to stay that way because many experts, including us, have serious doubts about the European regulator's capacity to catch up to the American regulator. The market could have anticipated all future Fed rate hikes. Therefore, the dollar remains in the driver's seat from a fundamental perspective. If what we have observed over the past two months is, in fact, a global technical correction, it should be finished soon, and the pair will start to consolidate in a very small range. As of December 6, the euro/dollar currency pair's average volatility over the previous five trading days was 112 points, considered "high." As a result, we anticipate that the pair will fluctuate on Tuesday between 1.0395 and 1.0620. The Heiken Ashi indicator's upward reversal indicates that the upward movement has resumed. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: The EUR/USD pair is still in an upward trend. In light of this, we should consider opening new long positions with targets of 1.0742 and 1.0620 if the Heiken Ashi indicator reverses its upward trend. Sales will become relevant if the price is fixed below the moving average line with targets of 1.0376 and 1.0254. Explanations of the illustrations: Linear regression channels help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329026
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Euro To US Dollar Situation Becomes More Complicated

InstaForex Analysis InstaForex Analysis 06.12.2022 08:09
Yesterday's strong data on factory orders and business activity in the US was able to stop the development of risk appetite. October Factory Orders were up 1% in October, November ISM Services PMI rose from 54.4 to 56.5. The dollar index was up 0.78%, the S&P 500 -1.79%, and oil -3.66% (WTI). The euro fell a bit short of hitting the target range of 1.0615/42. Consequently, the situation becomes more complicated - will it reach the range once a complex structure of the divergence with the Marlin oscillator is completed, or has the price reversal already taken place yesterday? Let's look at the weekly chart. Here the price is above the MACD indicator line (1.0433). If the current week closes below the MACD line, then it is considered false when it rises above this line, but if it actually closes above the line, then EUR will rise further. The Federal Reserve will hold a meeting next week. There are more signals from the committee regarding the continuation of a longer tight policy than what traders assume. As a consequence, the technical signals may be broken, and the euro may reverse after the price settles above any level. On the four-hour chart, the price reversed from the support of the MACD line. The price can "run away" from this line and work out the range of 1.0615/42. Marlin's oscillator shows the intention to reverse from the zero line upwards. But if the price does intend to reverse into a medium-term decline, it needs to overcome two supports: 1.0470 and 1.0433. Relevance up to 03:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329034
The Price Of EUR/USD Pair Will Develop Sideways Movement

The EUR/USD Pair Will Continue Its Strengthening Up

InstaForex Analysis InstaForex Analysis 06.12.2022 08:13
If we look at the daily chart for the main EUR/USD currency pair, it can be seen that yesterday's PL Dot was right at the close level of this area, making today's Bar under upward pressure from yesterday's low area of 1.0480 where Fiber will be pushed to go above the Projected High level. today at the level of 1.0548 if this level is broken then it is very likely that EUR/USD will continue its strengthening up to the Halo/Sacrosanct level at 1.0595 but due to the formation of deviations between price movements and the Awesome Oscillator indicator and yesterday's bar forming a Bearish Divergent bar (Wiseman.1 ) then Fiber also has the potential to be corrected downwards but as long as it does not close beyond the Block 1.0480 level, the Bull scenario on EUR/USD today will still run   Relevance up to 04:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/115201
Analysis Of The Euro To US Dollar Pair Situation - 30.01.2023

The EUR/USD Pair Tried To Start A Bearish Correction

InstaForex Analysis InstaForex Analysis 06.12.2022 08:22
M5 chart of EUR/USD Trading EUR/USD was quite inconvenient on Monday. Last week we repeatedly mentioned that the euro's movements made no sense and that its inconsistency with the fundamental and macroeconomic background contradicts any logic. On Monday, however, the pair tried to match the published reports, but EUR/USD radically changed its direction several times because of such reports. Nonetheless, it still entered a correction. We can mark out the retail sales in the European Union as well as the ISM service sector index in the US out of all the reports released on Monday. These reports triggered the most apparent market reactions. The retail sales report turned out to be too weak, so the euro was falling. The ISM index was surprisingly strong and so the dollar rose. So all in all, by the end of the day we can say that the dollar grew for the right reasons. We can only hope that from now on the pair would move according to the news. As for trading signals, the situation was not the worst, but it certainly was not the best either. Basically, there were only three trading signals, all three - near the level of 1.0579, and all three turned out to be false. In the first case, the pair passed the sufficient distance to the downside, so traders set the Stop Loss to Breakeven, which was used to close the deal. In the second case, the buy signal was obviously false, and the deal was closed with some loss, when the price was lower than 1.0579. The third signal could not be used, though it could bring some profit to traders. COT report COT reports on EUR/USD have puzzled traders through most of 2022. Half of the year, COT reports indicated clear-cut bullish sentiment among large market makers while the single European currency was extending its weakness. For a few months, the reports showed a bearish sentiment and the euro was also trading lower. Now sentiment of non-commercial traders is turning bullish again, and the euro is rising, but it is a rather high net position that allows us to assume that the upward movement will end soon. During the reporting week, the number of Buy contracts for the Non-commercial group increased by 4,700, and the number of short contracts rose by 4,600. Accordingly, the net position grew by about 100 contracts. The European currency has been rising in recent weeks, which is already in line with the readings of the COT reports. At the same time, we believe that the US currency may still regain its footing amid the same geopolitics or due to the lack of fundamentals for further growth of the euro. The green and red lines of the first indicator moved far away from each other, which could mean the end of the uptrend (!!!) (which, in fact, never happened). The number of BUY contracts is higher than the number of SELL contracts for non-commercial traders by 133,000. Thus, the net position of the "non-commercial" group may continue to rise further, but this may not trigger a similar rise in the euro. If we look at the overall numbers of open long and short contracts for all categories of traders, there are 33,000 more sell contracts (755,000 vs. 723,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD tried to start a bearish correction, which I have been waiting for the past few weeks. However, the price is still above the Ichimoku indicator, so it might end up with a pullback. There will not be much news and reports this week, so traders are left on their own again and their sentiment will not be influenced by macroeconomics or fundamentals. On Tuesday, the pair may trade at the following levels: 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as Senkou Span B (1.0359) and Kijun Sen (1.0441). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 6, there are no important reports or events in the EU and the US. Nevertheless, we expect a correction or at least a trend during the day. As usual, the strongest movement might come during the US trading session. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329022
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

The Pace Of Interest Rate Increases Will Be Slowed Down In The Near Future

InstaForex Analysis InstaForex Analysis 06.12.2022 08:28
After a string of similarly bizarre days, Monday was very strange. Many people are already perplexed as to why the euro and the pound continue to rise even on days without justification. If almost all factors point in this direction, why isn't the creation of a correction set of waves for both instruments started right away? If there is no explanation, why is the demand for US currency decreasing almost daily? Remember that last week, although he said nothing fundamentally novel in his speech, Jerome Powell brought down the dollar's value, demonstrating the validity of these questions. The dollar rose for an hour before falling again, making Friday's payrolls appear paradoxical. Additionally, nonfarm payrolls revealed that everything is fine with the US labor market. There is no need to worry about a recession, and the Fed can keep raising rates to the currently planned level of 5%. What do we ultimately have? The ECB may increase the interest rate by 2% or 2.5%, but there is little difference between those increases. The Fed will increase interest rates by at least 1%, and the Bank of England and ECB will likely do so. All three central banks will increase interest rates to slow inflation, at least for the foreseeable future. The pace of interest rate increases will be slowed down in the near future by all three central banks following the same trend. The situation is unchanged, but demand for US dollars is steadily declining while demand for the euro and the pound is rising. When it was widely believed in the market a few weeks ago that only the Fed would slow the tightening of monetary policy in December, more and more analysts are now inclined to think that the Bank of England and the ECB will do the same. All three banks are now anticipated to increase rates by 50 basis points. In this scenario, there will be even fewer factors supporting the rise of the euro and pound, as one of the few causes of the dollar's decline at the moment could be characterized as the highest likelihood of convergence with the most abrasive PEPP tightening strategy. The euro and the pound will lose this advantage if the ECB and the Bank of England do not raise their rates by 75 basis points. Even without the abovementioned condition, I have long anticipated a quote decline. With the circumstances mentioned above, it ought to be even faster and stronger. The further both instruments go, the more painful and powerful their eventual fall will be. The market may trade in very challenging ways to comprehend, but eventually, everything returns to equilibrium. Additionally, the European and British currencies might not find this balance appealing. I conclude that the upward trend section's construction is complete and has increased complexity to five waves. As a result, I suggest making sales with targets close to the estimated 0.9994 level, or 323.6% Fibonacci. The likelihood of this scenario is increasing, and there is a chance that the upward portion of the trend will become more complicated and take on an extended form. The construction of a new downward trend segment is predicated on the wave pattern of the pound/dollar instrument. Since the wave marking permits the current structure of a downward trend section, I cannot advise purchasing the instrument. With targets around the 1.1707 mark, or 161.8% Fibonacci, sales are now more accurate. The wave e, however, can evolve into an even longer form Relevance up to 06:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329040
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

The US Dollar Strengthened As A Result Of The Hawkish Fed Rectification

Swissquote Bank Swissquote Bank 06.12.2022 10:21
Stocks fell and the US dollar strengthened on Monday on a stronger than expected ISM services read in the US, which came in above expectations, and hinted that the economic activity, at least in the US services sector continues growing, and growing un-ideally faster-than-expected despite the Federal Reserve’s (Fed) efforts to cool it down. The Aussie In the FX, the Aussie was slightly better bid after the Reserve Bank of Australia (RBA) raised its rates by another 25bp today, and took the rates to levels last seen a decade ago. EUR/USD and GBP/USD But elsewhere, the US dollar strengthened as a result of the hawkish Fed rectification. The dollar index first eased to a fresh low since June, then rebounded. It has way to recover above its 200-DMA, which may mean that some majors, including EURUSD and Cable could return below their 200-DMA as well. Yet, even if we see rebounds in the US dollar, the medium to long term direction of the dollar will likely be the south in the coming months. The EURUSD could recover to 1.10, Cable to 1.30. USD/JPY More stretched… Vontobel sees the USDJPY’s fair value at 100, and Standard Chartered predict Bitcoin could fall another 70%, and spur a 30% rally in gold! Watch the full episode to find out more! 0:00 Intro 0:25 Fed hawks are back 3:07 S&P500 could further fall 4:40 Selling USD rallies sounds like a plan 8:22 A 70% fall in Bitcoin could spur a 30% rally in gold?! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #economic #data #Fed #expectations #USD #EUR #GBP #JPY #XAU #Bitcoin #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Foreign exchange - Euro against US dollar - preview

Euro: Is There A Broader Correction To Be Feared? Aussie Got Little Support From The RBA Decision

Kamila Szypuła Kamila Szypuła 06.12.2022 14:10
The financial markets are already starting to slow down, and currently I have no major events on my calendar that could affect the movement of currency pairs. For now, the currency pairs are waiting for next week, where, among others, the Fed and the ECB will decide on interest rates. The EUR/USD, recorded a correction this morning. The British pound had exactly the same background as the euro. The RBA raised the spot rate by 25 basis points to a 10-year high. The yen did not get support from the Governor of the Bank of Japan Kuroda   EUR/USD - The overall picture of pray remains positive The EUR/USD exchange rate strengthened yesterday, recorded a correction this morning. Currently, the pair is trading around 1.0500. The overall picture of pray remains positive. Now the question for EUR/USD as the correction started yesterday is whether this is just a respite or is there a broader correction to be feared. Retail sales in Europe continue to fall. It came down to -2.7% in October, which is far worse than the expected. US Services PMI, Industry Orders and ISM Services PMI exceeded expectations. These reports added support to the US Dollar but contributed to the decline of the Euro/Dollar pair. The macroeconomic calendar is completely empty today, so market players have nothing to watch.     GBP/USD started a correction The GBP/USD pair also fell. It is currently trading around 1.2200. On Monday, the GBP/USD currency pair also started a correction. The British pound had exactly the same background as the euro, except for the retail sales report, which was only for the European Union. In addition, the neutral index of business activity was also published in the UK. There won't be many significant events in either the UK or the US this week. Yesterday, the US ISM services sector published a quite important business activity index, which led to the strengthening of the dollar. Therefore, the correction is justified.   AUD/USD Pair gets a lot of support Currently, the appreciation of AUD/USD is slightly decreasing. The US dollar continued its rebound on Tuesday morning against its main competitors in the foreign exchange market, but not against the Australian Dollar, which was supported by the RBA decision. The Reserve Bank of Australia raised rates for the eighth time as part of the current monetary policy tightening cycle, with an accompanying statement that was slightly less dovish than market participants expected. The Reserve Bank of Australia matched market forecasts by announcing a 25 basis point rate hike to 3.10%. The currency pair is not only supported by events in its economy but also by events in China. Australia and China cooperate economically, therefore its influence is visible and justified. So reports China will soon reduce its strict Zero-COVID policy seemed to support market optimism as well as AUD/USD bulls.   USD/JPY USD/JPY continued its gains in the Asian session, followed by a slight correction. Yesterday, the dollar posted its biggest daily gain against the yen since June. Bank of Japan Governor Kuroda didn't help the yen overnight with dovish comments about aiming for a sustained and stable 2% inflation target. Sources: dailyfx.com, investing.com
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The EUR/USD Price Has A Chance To Break Through The Target Range

InstaForex Analysis InstaForex Analysis 07.12.2022 08:06
Yesterday at the close of the session the euro broke support at 1.0470. Stock and commodity markets closed the day lower and we can assume that the currency market is desynchronizing with the related markets, which has been observed in recent weeks. As a consequence, in the event of a 0.75% Fed rate hike on December 14th, the stock market is most likely to fall, followed by the euro and other counter-dollar currencies. There is still a chance that the price will break through the target range at 1.0615/42. Settling under 1.0433, i.e. under the MACD weekly line, will lower this possibility of the euro's growth, the 1.0205 target will become available. The divergence, marked by the blue solid line, will be confirmed. On the four-hour chart, the price is below the MACD line, the MACD line itself shows signs of a bearish reversal. The Marlin oscillator is in negative territory. The short-term trend is downward.   Relevance up to 03:00 2022-12-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329140
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The EUR/USD Pair May Start Turning Lower Towards The Larger Trend

InstaForex Analysis InstaForex Analysis 07.12.2022 08:28
Technical outlook: EURUSD dropped to the 1.0455 low intraday on Wednesday in line with our projection. Immediate short-term target potential remains in the 1.0400-20 zone before prices could develop a pullback rally. The single currency pair is seen to be trading close to 1.0470 at this point in writing as the bears might be preparing for yet another drag lower soon. EURUSD might have carved a meaningful lower top around 1.0595 or is very close to carving one. Either way, the highly realistic wave count remains bearish towards 1.0000 at least. Short-term support is at 1.0420, followed by 1.0220 and lower; while interim resistance is seen around 1.0595. A break below 1.0420 will confirm that a meaningful top is in place around 1.0595. EURUSD might test the 1.0700-50 zone, which is close to the resistance trend line, before turning lower towards the larger trend. A push through 1.0595 will indicate the possibility of carving another high towards the 1.0700-50 levels before going to the bears. The medium-term projected target remains 1.0000 and only a consistent drop lower will indicate that prices are settled below 0.9535. Trading idea: Potential drop towards 0.9535 against 1.0700 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/303973
The EUR/USD Price May Fall Under 1.0660

Euro Analysis: A Strong Support Is Needed

InstaForex Analysis InstaForex Analysis 07.12.2022 09:29
EUR/USD A correction is seen in the US stock market. A strong support is needed to trigger a rally. With euro, the situation is different as it is moving within a range. To those who did not sell earlier, you may do so from 1.0580. If the price rises, sell from 1.0580-1.0610 and from 1.0680. But if euro goes down, look for good buying points at the bottom.   Relevance up to 19:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329130
Oanda expect next rate hikes as Bundesbank and ECB predicts will accelerate

Nonetheless, the dollar rally looks outdated, having exhausted the fundamental drivers says FxPro Analyst

Alex Kuptsikevich Alex Kuptsikevich 06.12.2022 23:51
Not only does gas price declines in Europe, but also in the USA, but we could say it's not in favour of indices. Euro seems to be in an unclear situation and on the cryptomarket, Porsche is set to launch its NFT collection. FXMAG.COM team once again reaches out to FxPro's Alex Kuptsikevich to have a detailed look at the mentioned threads. Natural Gas (NATGAS) plunges, have markets got calmer at last? It makes sense to estimate that lower energy prices would be good for markets as it mitigates inflation risks while reviving economic growth - the best combination for markets. However, US indices rallied throughout October and November, while the US gas price first dipped from $6.9 to $5.5 by the end of October but then soared to $8, along with increased traction in risky assets by the end of November in the last two months. Over the past two weeks, the gas has returned to $5.5. Half of that time, stocks were rising, and half of that time, they were declining. Germany's DAX40 is up 22% from its lows at the start of October and has retreated 1.8% from its six-month high since early December. The rise has occurred despite the euro's strengthening, and the decline comes along with the fall in oil and gas prices. Read next: To Simplify The Organization, Pepsico Will Lay Off Thousands Of Workers At The Headquarters In The USA | FXMAG.COM Falling gas is not helping the indices right now, as the fear of falling demand due to a weakening economy is behind the decline, which is equally bad news for both stocks and commodities.    Are you of the opinion that EUR/USD price movement suggests a trend reversal? EURUSD has been rising since late September, although it has occasionally stumbled. Important technical signals of a broken trend were the strong strengthening at the upward cross of the 50-day moving average, which is a signal of capitulation for position traders. At the end of November, the EURUSD had lingered near the 200-day MA for a long time, but on November's last trading day, it crossed up this line. Strictly speaking, the EURUSD recovery fits into the Fibonacci retracement pattern, touching 61.8% of the decline from the peak in May 2021 to the bottom in September 2022. Also, 1.05 looks like a nice round where there might be another round of profit taking from the last 10-figure rally.  Read next: Turbulent times on crude oil market. Nasdaq shrank by 2%, Apple and Amazon lost more| FXMAG.COM Nonetheless, the dollar rally looks outdated, having exhausted the fundamental drivers. Europe has begun to catch up with the US regarding rate hikes, and signals from the Fed are getting softer.   Porsche has just announced their own NFTs. It's one of the most prominent brands in the world - would it mean NFT market isn't 'dead' yet and prices may bounce some time in the future?  This market is not dead, but just hibernated during this crypto winter. At some point in the future, the market will change its pessimistic attitude towards NFT. Markets are cyclical, and while we shouldn't expect a repeat or intensification of the NFT euphoria as it was in 2021, the overall capitalisation of this market could almost certainly rewrite its peaks in the next three years. Admittedly, there will be fewer random people in this market as it increasingly takes on the traditional traits of collectables markets. The only difference is that NFTs are collections of unique digital goods.
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

FX: Financial Markets Now Seem To Be Settling Into The View Of A 2023 Recession

ING Economics ING Economics 07.12.2022 11:23
After the broad-based risk rally seen over the last six weeks, financial markets now seem to be settling into the view of a 2023 recession. And as long as the Federal Reserve stays hawkish, the dollar should perform well. For today, look out for policy rate meetings in Canada and Poland, where we expect a 50bp hike and unchanged rates respectively USD: Recessionary fears should keep the dollar in demand After a positioning-led rally in risk assets over the last six weeks, financial markets seem to be settling back into a macro-led environment where the 2023 global slowdown is front and centre. Brent crude is dipping sub $80/bbl despite the OPEC+ supply cut, bonds are rallying and equities are starting to hand back some of their impressive rally from October lows. Importantly, the US yield curve continues to deeply invert. The 2-10 year Treasury curve is now inverted by a staggering 82bp. This is by far the best representation of the macro view that recessionary fears are building, yet the Fed has yet to cave in. We continue to see this as a positive environment for the dollar and a negative one for commodity and pro-cyclical currencies. DXY has found support under 105 and could well make a run to 107 ahead of next week's FOMC meeting, where we think it is too early for the Fed to signal the 'all-clear' on inflation with its influential Dot Plots. The main threat to our bullish dollar view comes from the risk of any softer US November price data (PPI released tomorrow, CPI next Tuesday) or a more positive re-assessment of Chinese growth prospects on the back of relaxed Covid measures. However, poor Chinese trade data released overnight serves as a reminder that the export environment will remain exceptionally challenging for China into 2023.   Chris Turner The Bank of Canada (BoC) will announce monetary policy today. As discussed in our meeting preview, the consensus is split between a 25bp and 50bp hike, but we believe a half-point move looks more appropriate given strong economic activity and a very tight labour market. Still, we admit it is a very close call given that the expected economic slowdown and fragility of the Canadian housing market argue for a smaller rate increase. Markets are pricing in 35bp for this meeting, so slightly leaning in favour of a quarter-point hike: in our base-case 50bp scenario, the Canadian dollar should rally on the back of the hawkish surprise. However, we don’t see the BoC impact on CAD to be very long-lasting, as external factors remain more important. A sustained recovery in CAD from these levels undoubtedly requires a rebound or at least a stabilisation in oil prices. Today, USD/CAD could trade back below 1.3600, but short-term upside risks remain high.  Francesco Pesole EUR: Sideshow It has felt like EUR/USD trading has become more settled over the last week, yet one week and one month realised EUR/USD volatility are still above 13%. This could be a precursor to one of the main themes we outlined in our 2023 FX Outlook, one of less trend and more volatility in FX markets.  There is a case that last week's 1.0595 print was the corrective high in EUR/USD - we should know a lot more by next Wednesday evening after the FOMC meeting - and it will be interesting to see what the European Central Bank has to say on the 15th. Some are speculating that the current calm in European bond markets could prompt the ECB to be slightly more aggressive in its quantitative tightening plans - so let's see. We have a couple of ECB speakers today, Philip Lane at 0810CET, and Fabio Panetta at 1530CET, but neither looks likely to knock the market off its consensus of a 50bp hike next week. For today, EUR/USD could drift down to 1.0400 in quiet markets. Chris Turner GBP: Mildly bearish Trading conditions have certainly settled down for sterling where one-month traded volatility is pretty steady in the 12-13% area having traded above 20% in late September. It looks like the Gilt market has rallied enough for the time being, with spreads to German Bunds now starting to widen again. In other words, the fiscal rectitude rally has run its course and sterling will not find any more positives here. If, as above, we are turning to a more macro-led trading environment, then sterling should underperform. A Fed staying hawkish into a recession should see equity markets come under renewed pressure. Typically, this is a negative environment for sterling, where the UK's large current account deficit is penalised. GBP/USD has turned from a strong resistance level at 1.23 and our bias into next week would be for a return to the 1.19 area. Chris Turner CEE: NBP closing the tightening cycle Top of today's agenda is the monetary policy meeting of the National Bank of Poland (NBP). After last week's surprisingly low inflation, it is hard to expect any outcome other than stable interest rates. Although we think the peak in inflation is still ahead and inflation will slow only very gradually next year, the prospect of a weak economic performance will prevail at the MPC and we expect the same story next year. However, for now, the bigger focus will be on tomorrow's press conference by Governor Adam Glapinski and any potential mention of interest rate cuts, which could be a red rag to a bull for the markets. As we mentioned on Monday, the gap between the zloty and the interest rate differential is the largest in the region at the moment and together with EUR/USD heading lower, this is not good news for FX. EUR/PLN is thus vulnerable, especially to the upside in our view and we could see a move above the 4.720 level which was already tested on Monday. On the EU/Hungary story, as expected yesterday's Ecofin meeting did not bring a resolution to the current saga. The Ecofin was due to discuss both the recovery funds to Hungary and the European Commission's proposal for sanctions under the rule of law mechanism. EU member states have requested a new assessment of Hungary from the EC given that the original version did not include the latest changes on the Hungarian side. According to reports, the new assessment is expected to be discussed at an additional Ecofin meeting on 12 December and formally approved on 19 December. On the one hand, the EU's timing problems play into Hungary's hands, as the rule-of-law procedure will end without sanctions if the European Council does not decide on the issue; on the other, the EU may block the disbursement of cohesion funds after that date. However, after yesterday, it seems that the situation will be tense until almost the final day of the year. On the FX side, the Hungarian forint touched its weakest levels since mid-November yesterday, but the currency erased some of its losses after the Czech finance minister, who is leading the current negotiations, said he believes a deal will be reached in the coming days. Thus, positioning continues to clear and in our view, the trend is tilting more towards the negative side of this story now. Hence, tangible progress should bring a significant rally, while further negative news may result in only slight weakening. Nevertheless, for today we expect a partial calming of the situation after yesterday's headline storm and we expect the forint closer to 410 EUR/HUF. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Oanda Podcast: US Jobs Report, SVB Financial Fallout And More

Much Depends On Whether The Economy Slows Down Early Next Year

InstaForex Analysis InstaForex Analysis 07.12.2022 11:40
Markets are troubled by the growing fears that the Fed will change its mind on interest rates due to the recent positive data on the US economy. They worry that the increase will again be 0.75% instead of the 0.50% announced by Jerome Powell last week. The most affected stock markets, especially in the US. Other financial markets are not so negative, such as the government debt market, which only shows consolidation and nothing more. In the forex market, the dollar has risen slightly for the past two days, but it remains uncertain whether this is a signal of a new trend. The situation indicates that investors in the stock markets took advantage of the positive news to lock in profits before the Fed meeting next week. The dynamics of the three main indices show that their decline is not that deep as they have corrected to strong support levels, but remain in a short-term upward trend. The sell-off in the past two days is also likely because investors want to get into cheaper assets after the meeting as Powell's words have very high chances of coming true. In terms of statistics, layoffs are expected to surge early next year due to the slowdown of the US economy. History shows that abrupt changes in interest rates have a delayed effect for three to six months. And if the US economy slows down in the 1st quarter quite markedly, the cycle of rate increases could end in the 2nd quarter, provided that inflation dips. Forecasts for today: EUR/USD The pair is trading at 1.0460. An increase in buying pressure will push the quote to 1.0585. XAU/USD Gold has a high chance of staying above the level of 1764.00. If market sentiment improves, expect the price to return to 1808.00   Relevance up to 08:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329158
Mexican Rate Spread: Tight vs. Central Bank's Rate Spread and Implications for Dis-inversion

Technical Outlook: The EUR/USD Bear Trend Will Be Confirmed And The GBP/USD Has Not Managed To Close Above

Saxo Bank Saxo Bank 07.12.2022 11:53
EURUSD rejected at 1.06. Uptrend set to reverse with down side potential to 1.01GBPUSD rejected at key level at 1.23. Rising wedge pattern indicates a reversal EURUSD rejected at 0.382 retracement of the entire down trend since 2021. (See weekly chart) a few cents below 1.06.There is divergence on daily time period indicating the short-term rebound/uptrend is weakening and could come to an end. AURUS is currently testing the short-term steep rising trendline and if EURUSD drops back below the daily 200 SMA there is strong indication the trend will reverse. Bear trend will be confirmed by a break below 1.0290. If that scenario plays out there is potential down to support at around 1.01.If EURUSD breaks above 1.06 the uptrend is likely to extend to around 1.08 Source all data and charts: Saxo Group   GBPUSD has been forming a rising wedge like pattern hitting resistance at around 1.23. GBPUSD has not managed to close above.Currently testing both the lower rising trendline and the 200 daily SMA GBPUSD could break lower. If GBPUSD breaks below the trendline followed by a break below 1.19 the uptrend has reversed and GBPUSD could drop to the 0.382 retracement at 1.1566. 100 and 55 SMA’s will also provide some support. A close above 1.23 however, could lead to further upside with potential to 1.2660-1.2745. However, there is no divergence on RSI indicating GBPUSD could move higher but a close above 1.23 is needed.The 1.23 is strong resistance. It is also the 0.50 retracement of the entire down trend since 2021. Weekly RSI is currently being rejected at the 60 threshold.       Source: Technical Update - EURUSD and GBPUSD rejected at key resistance levels. Trend reversal in the cards | Saxo Group (home.saxo)   
US stocks gain on hopes of a softer inflation print released later today

US dollar benefits from the strong data. Aussie weakens amid small RBA rate hike

Jing Ren Jing Ren 07.12.2022 08:42
EURUSD hits resistance The US dollar edges higher as dovish incentives for the Fed fade amid robust data. The pair came under pressure at 1.0600 which is a supply zone from last June’s sell-off. The directional bias remains up in the short-term and the bulls may see a pullback as an opportunity to stake in. 1.0440 near the previous top is the first support. Further down, the previous daily lows of 1.0300 and 1.0220 on the 30-day moving average might counteract a deeper correction. A close back above 1.0600 could lift the euro towards 1.0800. AUDUSD struggles for support The Australian dollar softened after the RBA lifted its cash rate by 25bp as expected. On the daily chart, the pair has been grinding up along the 20-day moving average. September’s high of 0.6900 may prove to be a tough level to crack. A bearish RSI divergence indicates a slowdown in the upward momentum. An initial break below 0.6800 triggered the first round of profit-taking, turning it into a fresh resistance. 0.6670 is the immediate level to gauge follow-up interests and its breach would send the aussie to 0.6580. Read next: Nigeria Bans Cash Withdrawal Higher Than 225$ To Encourage CBDC Use | FXMAG.COM UK 100 consolidates gains The FTSE 100 falters as traders ponder the Fed’s potential stance next week. The bulls are testing the major supply zone from this year’s highs around 7630 where strong downward pressure could be expected. As the daily RSI shot into the overbought area, a combination of profit-taking and fresh selling could weigh on the short-term price action. 7510 is the first support then 7440 next to the moving averages is an important area of confluence. A rally above the psychological level of 7600 could extend gains above 7700.
The Australian Dollar Failed To Hold Its Gains, The Pound Strengthened Against The US Dollar

The Australian Dollar Failed To Hold Its Gains, The Pound Strengthened Against The US Dollar

Kamila Szypuła Kamila Szypuła 07.12.2022 13:14
The darkening economic outlook drove fresh safe-haven demand for the US Dollar on Wednesday. The US dollar changed little after some of America's biggest banks warned of an impending recession The Fed, Bank of England (BoE) and European Central Bank (ECB) will set interest rates next week and central bankers will enter a period of silence before meetings. Positive reports appeared in the euro zone. Policymakers enter a period of calm ahead of key meetings of the Bank of England, the Federal Reserve and the European Central Bank Australian Dollar is facing renewed pressure. BoJ board member Nakamura once again encouraged the JPY bears Read next: Euro: Is There A Broader Correction To Be Feared? Aussie Got Little Support From The RBA Decision | FXMAG.COM EUR/USD may be bearish? The EUR/USD pair trades close to 1,050. Any breakout lower than 1.045 will be considered bearish. Economists at ING note that the pair could move lower to 1.0400. The European currency is expected to closely follow the dynamics of the dollar, the impact of the energy crisis on the region and the divergence between the Fed and the ECB. Additionally, the markets' overestimation of the potential Fed policy reversal remains the sole driver of the pair's price action for now. There were further concerns about the impact of colder winter conditions, especially in the context of the still uncertain energy situation. Positive reports appeared in the euro zone. Employment rose slightly and the GDP Y/Y and GDP Q/Q readings turned out to be higher than expected. GDP Y/Y increased to 2.3% against the expected 2.1%, while GDP Q/Q increased by 0.1% to 0.3%. Speeches by members of the European Central Bank will also take place today, but they are not expected to have a significant impact on the euro exchange rate. GBP/USD holds gains above 1.2150 The GBP/USD pair is trading around 1.2190. The pound strengthened against the dollar on Wednesday to a nearly six-month high as policymakers enter a period of calm ahead of key meetings between the Bank of England, the Federal Reserve and the European Central Bank. There are no significant macroeconomic events for the pound today. The Bank of England raised interest rates from 0.1% to 3.0% in the current monetary policy tightening cycle, with markets pricing in an interest rate peak of around 4.6% next year. Economists predict the Bank of England will decide to raise interest rates by 50 basis points next Thursday. One BoE policymaker said higher interest rates could lead to a deeper and longer recession. Yesterday, the Reserve Bank of Australia recently raised its key interest rate by 25 basis points to 3.1% The Australian dollar failed to hold its gains and it is facing renewed pressure after data showed that the Australian economy expanded less than expected in the third quarter. Annual GDP by the end of July was 5.9% instead of the expected 6.3% and the previous reading of 3.6% was revised down to 3.2%. Overall, national data show a strong economy. Yesterday, the Reserve Bank of Australia recently raised its key interest rate by 25 basis points to 3.1%, taking borrowing costs to a level not seen in a decade, and further tightening is expected to bring down inflation. A board member of the Bank of Japan (BoJ) said that adjusting monetary policy would be premature The currency pair is trading around 137.3590. BoJ board member Nakamura once again encouraged the JPY bears with his statement. A board member of the Bank of Japan (BoJ) said that adjusting monetary policy would be premature. Source: dailyfx.com, investing.com, finance.yahoo.com
Oanda expect next rate hikes as Bundesbank and ECB predicts will accelerate

The European Currency (EUR) Has Already Grown Too Much

InstaForex Analysis InstaForex Analysis 08.12.2022 08:02
On Wednesday, the EUR/USD currency pair kept moving. Since there are no fundamental or macroeconomic backgrounds, such a movement today shouldn't be considered surprising in theory. Yesterday, the pair was able to adjust to the moving average line once more but failed to get past it. As a result, the upward trend is still present, and the US dollar still needs to grow, as we have been hoping for more than two weeks. Despite the technical picture, we do not even see general signs that the pair is ready to start correcting, as all indicators continue to signal an upward movement. Typically, as an impulse approaches completion, each peak moves steadily closer to the previous one. Nothing comparable can be found today. In the absence of significant news or events, the market pauses but does not close long positions. And for that reason, there is no correction. Similar circumstances existed with the US dollar for a protracted period, as the pair could not move higher by more than 400 points. The situation is now reversed. The lack of current growth factors in the euro currency is what I find most intriguing. If they could have been located a week or two ago (and then only with a strong desire), they are now impossible to locate. There were two more or less important reports this week, one on Monday and two on Wednesday. Retail sales in the European Union fell short, and the US ISM index turned out to be stronger than expected. This week's overall score is 2:1 in favor of the dollar as a result of yesterday's report on the third quarter of EU GDP coming in slightly higher than expected. However, the US dollar could not reap any particular benefits from this. It is currently unable to gain a foothold beneath the moving. The market has forgotten the "tough" stance taken by the Fed. The European currency did not increase in value over the past month for unique reasons, as we have recently stated on numerous occasions. Some factors support the US dollar, but you can find individual reports that back the euro, and you can recall the Fed's readiness to start easing up on the pace of tightening monetary policy. The European currency has grown too much compared to the available resources, even though it has grown reasonably. There is now a lull, but the two cannot start adapting. In light of this, it is currently unnecessary to consider and analyze macroeconomics' "foundation." Why would you do this if the market is already buying? This is sarcasm because no one can predict when market participants will realize that you can sell and buy. We need to pay attention to upcoming meetings of the Fed or the ECB in light of recent changes in the foreign exchange market. It is well known that the ECB will most likely increase rates by 0.75% and that the Fed will only increase rates by 0.50%. Even considering this factor, the euro has already grown too much. It may, however, currently support the euro currency. In any case, a correction is overdue at this point. We will wait for a downward correction even if it turns out tomorrow that the ECB tightens monetary policy more than the Fed. However, we also want to remind you that with specific technical indicators and support, it would be a good idea to sell the pair right now. The situation is as follows: you must wait for a correction and be prepared for it, but it is also advised to only open short positions in the presence of signals. The market is currently trading irrationally, and this irrationality might last for a while. Additionally, it brought about the unjustified strengthening of the euro. As of December 8, the euro/dollar currency pair's average volatility over the previous five trading days was 115 points, which is considered "high." So, on Thursday, we anticipate the pair to fluctuate between 1.0378 and 1.0609. The Heiken Ashi indicator's turning downward indicates a new phase of the corrective movement. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: The EUR/USD pair is still in an upward trend. So, until the price is fixed below the moving average, new long positions with targets of 1.0742 and 1.0620 should be taken into consideration. No earlier than fixing the price below the moving average line with targets of 1.0376 and 1.0254 will sales become relevant. Explanations of the illustrations: Linear regression channels help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.       Relevance up to 01:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329243
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The EUR/USD Pair's Price Will Try To Break The Support Level

InstaForex Analysis InstaForex Analysis 08.12.2022 08:13
U.S. government bond yields fell on Wednesday. The 2-year rate shed about 10 points (4.23-4.36%) as it fell from the lower limit of the weekly range that formed since investors started to have expectations on the Federal Reserve meeting. The euro rose 40 pips on this. The price tried to reach the important test level of 1.0433. But this level was not tested (and, as a consequence, a reversal from the support), which provides a chance for the price to go down again. But the attempt at growth looks stronger, so the price's probability of reaching the target range of 1.0615/42 has slightly increased. The signal line of the Marlin oscillator is directed downward, while this weighs on the price, there is a 60% probability that the support at 1.0433 will be tested from the current levels. It is unlikely that the euro will decide to make sharp movements before the Fed meeting, which is due on the 14th, so in case it breaks through 1.0433, EUR might rise again. On the four-hour chart, the Marlin oscillator returned to the negative territory, making yesterday's way to a positive a false move. Therefore, at least the price will try to break the support of the MACD line and try to overcome the support at 1.0470 to reach 1.0433. There are no bright trading signals for today. Growth in the range of 1.0615/42 is possible only if the price crosses yesterday's high at 1.0550.   Relevance up to 03:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329251
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD Prices Could Print One More Shallow High

InstaForex Analysis InstaForex Analysis 08.12.2022 08:26
Technical outlook: EURUSD rallied through 1.0549 highs intraday on Wednesday before easing off. The single currency pair is seen to be trading close to 1.0500 at this point in writing as the bears prepare to come back in control soon. Prices could print one more shallow high above 1.0549 before reversing lower again. Ideally, 1.0595 should hold as interim resistance. EURUSD seems to have carved a potential top at 1.0595 or it could push through the 1.0600-1.0700 area before a top is formed. Either way, the bears might be inclined to come back in control and drag prices below the 0.9535 swing lows. A break below 1.0220 would add further confidence towards the proposed bearish setup. EURUSD is also facing the resistance of its one-year-old resistance trend line since the 1.2266 high as seen on the daily chart. If prices manage to break above 1.0595, the next potential target is seen towards 1.0750 as projected on the chart here. Watch out for intraday resistance towards the 1.0550-60 zone for a bearish reversal. Trading idea: Potential bearish reversal against 1.0700 Good luck! Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/304145
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

EUR/USD Pair: The Long-Term Picture Remains The Same

InstaForex Analysis InstaForex Analysis 08.12.2022 08:29
We continue to look for more upside pressure towards 1.0927 and much higher in the longer term. That said, in the short term, we need a break above minor resistance at 1.0595 to avoid the possibility of an expanded flat correction playing out. If minor resistance at 1.0595 is able to cap the upside for a break below minor support at 1.0290, then we have the expanded flat correction playing out. A dip to 1.0097 should be seen before the next strong rally higher. No matter whether the price breaks directly above minor resistance at 1.0595 or the expanded flat correction playing out, the long-term picture remains the same, calling for a rally to 1.0927 and much higher in the longer term. It will only be a time-matter issue. Relevance up to 07:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/304147
The EUR/AUD Pair May Have The Potential To Continue Its Decline

FX: EUR/USD Remains Reasonably Supported, The Forint Has Stabilised Around 410 EUR/HUF

ING Economics ING Economics 08.12.2022 09:12
December is normally a weak month for the dollar, having declined this month in eight of the last ten years. Market sentiment still feels slightly negative on the dollar, where it falls far more easily than it rises. We cannot see an immediate catalyst for another dollar decline today and would expect more consolidation ahead of event risks next week USD: Holding pattern As above, December is normally a weak month for the dollar. January and February are typically much better months. Thus for dollar bulls like ourselves, December is proving a month of damage limitation. Dollar price action is still soft. Any whiff of softer price data - e.g. yesterday's downward revision to US 3Q unit labour cost data - sees the dollar easily slip. Dollar gains remain hard to come by. Beyond today's US initial claims (remaining remarkably low in the 220-240,000 region) will be November PPI data tomorrow (core expected to fall to 5.9% year-on-year from 6.7%) and then an incredibly busy week into Tuesday's CPI release and Wednesday's FOMC meeting. Preventing an even large dollar correction this month is the fact that Fed expectations have not yet crumbled. The terminal rate is still priced above 4.90% for next spring and this is just about keeping US two-year Treasury yields above the 4.25% area. Short-end yields holding up here and the ongoing inversion of the US curve is key to our call that the dollar can hold gains/bounce back into 1Q23. Clearly, next week's FOMC meeting will have a big say here - we will publish our FOMC preview shortly. DXY looks like it will continue to trade on a soft footing near 105.00, but should meet demand below there. Chris Turner  EUR: ECB focus moves onto QT EUR/USD remains reasonably supported near 1.05 - helped largely by the dollar's soft performance across the board. We may be reading too much into it, but the pricing through the OIS market for next week's European Central Bank rate meeting yesterday edged up to a 67bp hike from 54bp a day earlier. The move may be a function of some more hawkish remarks from ECB Chief Economist Philip Lane and seems to be putting the risk of a 75bp hike back on the agenda. Our house call is for 50bp. Our base case view assumes that this EUR/USD corrective rally stalls in the 1.05/1.06 area this month. The bigger risk of a rally probably comes more from a less hawkish Fed than a more hawkish ECB. Equally, we do see European gas prices edging higher again as a cold snap hits northern Europe. TTF natural gas prices are now back up to EUR150/MWH from 100 earlier this month. This will again pressure the trade balance and higher gas prices are one of the key reasons we are not more bullish on EUR/USD next year. Expect another narrow EUR/USD range today centered around 1.05. The data calendar is quite light and ECB speakers are President Christine Lagarde at 1300CET, Pablo De Cos at 1315CET and Francois Villeroy at 17CET - all seen on the dovish end of the spectrum. Elsewhere, we have the Swiss National Bank's (SNB's) Andrea Maechler speaking at 1530CET. In addition to Fed, ECB and Bank of England rate meetings next week we also have the quarterly SNB policy decision. It looks like market pricing is split between a 25bp and 50bp hike (taking rates to 0.75-1.00%). Let's see what she has to say today. EUR/CHF has been a bit stronger than we had expected, but assuming the SNB stays hawkish, we continue to see downside risks here. Chris Turner  GBP: Housing downturn starting to gain momentum The latest RICS survey on house price expectations shows respondents the most negative on the outlook for UK house prices since May 2020. That is not a surprise given the cost of living crisis and policymakers in the process of tightening, not loosening, fiscal and monetary conditions. Despite seasonal weakness in the dollar, we really struggle to see GBP/USD trading much higher and for those corporates with USD needs or GBP receivables, we see these 1.22/23 levels as perhaps the best GBP/USD levels for the next three to six months. Chris Turner CEE: Zloty will follow the NBP press conference As expected, the National Bank of Poland left rates unchanged at 6.75% yesterday. This is the third meeting in a row when the council did not raise rates. The post-meeting statement did not bring much new. The council's assessment remained unchanged compared to November and given that, as in November, the decision was announced after the close of trading, we have to wait for the market reaction. However, the main event, Governor Adam Glapinski's press conference, will come later today and we can expect another dovish outcome. In Hungary, we will see inflation for November today. We expect the headline number to exceed 22% and core inflation at 23% YoY, slightly above market expectations. We see food prices rising further as domestic producer prices are skyrocketing in the food industry (close to 50% YoY). Still, the strengthening of the forint may ease some pressure on imported inflation, and as aggregate demand retreats, inflation in services could also slow down. On the FX side, the forint has stabilised around 410 EUR/HUF after a barrage of EU headlines in recent days and we expect it to stay there until next week when we should hear new headlines from Brussels. The Polish zloty will be tracking the NBP governor's press conference and thus will hardly see reasons to strengthen. On the other hand, we expect the zloty to retest 4.72 EUR/PLN. The Czech koruna strengthened yesterday to its strongest levels since mid-November, probably in response to the Czech National Bank's confirmation of zero activity in the FX market in October and the erasing of the last hopes for the central bank's exit from this regime, and can be expected to remain in this range of 24.25-35 EUR/CZK. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair: There Are Still No Sell Signals

ECB: According to ING Economics, 75bp rate hike couldn't be fully excluded

ING Economics ING Economics 08.12.2022 11:20
In recent days, the risk that the European Central Bank could hike by another 75bp has clearly increased Remember when politicians and policymakers were talking about how they wanted to 'break the wave'? They hadn’t turned into a bunch of cool surfers; we were in the middle of several Covid waves, which had to be broken prematurely before they could do too much damage to people’s health, life and economic welfare. At the end of 2022, breaking the wave has taken on a different meaning: central bankers first tried to break the inflation wave and markets are now anticipating that the wave of jumbo rate hikes could be broken, both in the US and the eurozone. Another jumbo rate hike has become more likely in recent days The ECB’s meeting next week is one of the few meetings at which the central bank will take a decision after the Federal Reserve and not before it. A slowing of the Fed’s rate hike pace could have an impact on the ECB as well. At least this is how many market participants have looked at the Bank's next decision for a long while. Recent comments by ECB officials, however, have cast doubt on whether the ECB will actually slow its own rate hiking pace. Read next: The Australian Dollar Failed To Hold Its Gains, The Pound Strengthened Against The US Dollar| FXMAG.COM Arguments for a dovish shift came from the minutes of the ECB’s October meeting in which the Bank emphasised the substantial progress that had already been made in withdrawing policy accommodation. Some ECB members had also highlighted the lags involved in the transmission of monetary tightening and in October, suggested a slowdown in the rate hike efforts. Macro data since the ECB October meeting has, on the one hand, shown resilience in the eurozone economy in the third quarter but has also confirmed a further cooling of the economy in the last few months of the year. The drop in headline inflation, as little as it says about the impact of the rate hikes so far, could at least take away some of the urgency to continue with jumbo rate hikes. It’s symbolic. At the same time, the ECB seems to be increasingly concerned that the fiscal stimulus and support measures announced could extend the inflationary pressure. A fresh round of ECB staff projections will obviously have an enormous impact on the ECB’s discussion and decision. However, given the growing scepticism regarding their own forecasts and models, even an official forecast of inflation slowing to 2% by 2025 might no longer be sufficient to calm the more aggressive central bankers at the ECB. In any case, the experience of the last months tells us that decoding the ECB’s reaction function has become very difficult and there is no longer a small set of reliable indicators, or people, from which we can derive the outcome of the next ECB’s decision easily. ECB Executive Board Member Isabel Schnabel has been one of the more influential voices to watch, definitely since the summer with her Jackson Hole speech. Judging from her recent comments that “Incoming data so far suggest that the room for slowing down the pace of interest rate adjustments remains limited, even as we are approaching estimates of the “neutral” rate.”, 75bp is clearly still on the table. Probably even more remarkable was an interview that ECB Chief Economist Philip Lane gave earlier this week. The fact that “the medium term can be longer if the deviation of inflation is not too great, but should be shorter if we have a big inflation gap to fix” suggests that for Lane, a return of inflation to 2% only in 2025 would be insufficient to stop rate hikes. Still, given that the traditional doves have been more vocal in arguing in favour of a smaller rate hike, a 50bp rate hike supported by a hawkish communication could also be a compromise. Breaking the wave - but which one? With all of the above in mind, we think that the risk of a 75bp rate hike at next week’s ECB meeting has clearly increased. Next to the rate hike, the ECB is likely to set out some general principles of how it plans to reduce its bond holdings. We expect the ECB to eventually reduce its reinvestments of bond purchases but to refrain from outright selling of bonds. In any case, next week’s ECB meeting could send us back in time as we witness policymakers still trying to break a wave - a wave of inflation and with it, a wave of speculation around a pivot in monetary policy. What the Bank won't break, is the wave of jumbo rate hikes. Read this article on THINK TagsMonetary policy Inflation Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

The Euro Benefited From The Weakening Of The US Dollar, A Potential Downside Risk For The Australian Dollar Over The Next Few Weeks

Kamila Szypuła Kamila Szypuła 08.12.2022 14:14
The euro stabilized against the US dollar on Thursday and the U.S. dollar clawed back some of the previous day's declines, as the market weighs in on the Fed's rate hike path. The euro benefited from the weakening of the US dollar The Australian dollar against the US currency fell sharply the 10-year Treasury note has fallen almost continuously EUR/USD was unable to overcome its late-June high EUR/USD hit a five-month high earlier this week but was unable to overcome its late-June high of 1.0615. The pair's mood remains bearish today. Compared to the previous day, the EUR/USD pair has fallen and is trading around 1.0469. The euro gained overnight after better-than-expected euro-wide GDP data showed an increase of 0.3% q/q in the third quarter instead of the expected 0.2%. This may indicate that the economic slowdown in Europe may not be as serious as previously feared. The European Central Bank will review its policy on 15 December. The broader weakness of the US dollar also helped strengthen the euro. GBP/USD The pound fell 0.3% against the dollar to $1.2175 and fell 0.35% against the euro. Sterling falls as falling UK house prices add to recession fears. The UK is facing a winter of strikes as rail workers, teachers and nurses demand better wages as the cost of living soared, exacerbated by rising energy costs after the Russian invasion of Ukraine. What's more, the prospects for next year are equally bleak. The UK economy could contract in the coming months. AUD/USD- commodity prices have a negative impact The Australian dollar against the US currency fell sharply this week. Currently, the pair is trading at mid-September levels. From The Australian Dollar (AUD) perspective, commodity prices have a negative impact on the currency coupled with yesterday's weaker GDP data. This morning started positively for the Australian dollar with a better-than-expected trade balance for October, but today the main focus will be on the US labor market data. If the reports turn out to be positive for the dollar, they will bring bears for the AUD/USD pair. Most recently, the Australian dollar got support from the easing of COVID restrictions in China, but that has since dissipated due to the rising number of COVID cases causing concern. The RBA's decision on interest rates also failed to support the Aussie. Overall, the current fundamental headwinds facing the AUD outweigh the US Dollar, which could suggest a potential downside risk for the Australian Dollar over the next few weeks. JPY is weaker The Japanese Yen is slightly weaker so far today despite GDP there narrowly beating forecasts. Annualised GDP was -.08% for the third quarter instead of -1.1% anticipated. The Japanese yen (JPY) which is highly sensitive to shifts in U.S. Treasury yields, fell 0.2% to 136.82. Instead the dollar-yen pair jumped. Currently, the pair is trading around 136.8130. The yield on the 10-year Treasury note has fallen almost continuously since hitting a 15-year high in late October. The Bank of Japan's ultra-loose monetary policy at a time when other central banks around the world are aggressively raising interest rates has made the yen the weakest major currency in the world in recent months. As a result, the USD/JPY exchange rate increased. However, according to some experts, the yen may rise against the US dollar next year. Source: finance.yahoo.com, dailyfx.com, investing.com
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The EUR/USD Price Received A Small Impulse For Growth

InstaForex Analysis InstaForex Analysis 09.12.2022 08:07
The euro continues to move sideways as we expected in previous reviews, in anticipation of the Federal Reserve meeting. There is growth in the current phase of the sideways movement. The Marlin oscillator is directed down, which on the one hand may indicate a change of the sideways phase to a decline, but such a signal on the daily chart looks weak, so the second option still suggests reaching the 1.0615/42 range. This might be done by Wednesday evening, when the Fed will announce its monetary policy decision. On the four-hour chart, the Marlin has already moved into the growth area. The price received a small impulse for growth with a bounce from the MACD indicator line. We do not observe strong growth. Relevance up to 03:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/329364
The EUR/USD Pair Maintains The Bullish Sentiment

The European Currency (EUR) Will Fully Recover Its Losses

InstaForex Analysis InstaForex Analysis 09.12.2022 08:09
The EUR/USD currency pair on Thursday maintained its previous movement pattern. Once more, the price could not surpass the moving average line, which is now giving rise to grave concerns. Recall that the moving average differs from a reinforced concrete line like Senkou Span B or Kijun-sen. Rather, it serves as a guideline for a short-term trend. However, overcoming it has no sacramental truth if the trend movement abruptly stops (there is no regular updating of highs or lows). The pair, however, cannot fall a few dozen points below the moving average line. What does this mean? Are no bears present at all, or is a significant fall anticipated? As strange as it may sound, we are still waiting for the US currency to strengthen after two weeks of anticipating a downward correction. Since there aren't any macroeconomic statistics this week, the euro hasn't had any grounds for growth in the last three to four weeks. Even reports like the GDP are now being worked out by the market, which previously chose to ignore them due to the complete lack of information. As a result, at this point, the pair is unable or unwilling to adjust even a few hundred points. We are sick of stating that traders have already anticipated events like the US midterm elections and changes to the ECB or Fed's monetary policy on numerous occasions. Yes, the Fed will meet next week, but what will the market gain from it if it already knows that rates will increase by 0.5% rather than 0.75% as they did at the previous four meetings? Undoubtedly, a lot of time has been spent working out this factor. Furthermore, since the rate of inflation in the EU has yet to slow down, it is still too early to anticipate a change in the ECB's attitude. As a result, we do not anticipate any modifications to the monetary strategy from the European regulator. If so, why has the value of the euro currency increased in recent weeks if the rate increase of 0.75% hasn't also been planned for a long time? What can the pair be anticipated to do in December? It is reasonable to assume that it will now experience the same downward correction. The only option left for traders is to fix at least some of the long positions because all potential drivers of the growth of the European currency have already been identified. Although we do not rule out the possibility that the euro will continue to rise over the coming years, this growth is occurring too quickly and sharply. It has risen by 1,000 points in just two months. Remember that 2,800 points made up the entire downward trend, which lasted two years. This means that by March or April of the following year, the European currency will fully recover its losses from the previous two years. This is not possible. It is possible to comprehend why strong and long-term growth should be anticipated from the pair if there were good reasons for this, such as a sharp improvement in the global geopolitical situation or a stronger ECB rate hike than the Fed. But which global factors currently support the euro? Threatening to last for many years is the geopolitical conflict in Ukraine. For the parties to the conflict and the entire world, no one can predict when a new escalation will start and how it will end. The Fed's rate will undoubtedly increase to 5%, possibly even higher, and will stay there for at least one and a half to two years. The ECB rate, however, is covered with much less information. Most likely, it will also keep expanding, but as we already mentioned, not all EU nations can bear the burden on their own economies. As a result, the ECB will adopt a less aggressive monetary policy than the Fed. If so, then the dollar, not the euro, is also growing as a result of this. As of December 9, the euro/dollar currency pair's average volatility over the previous five trading days was 115 points, considered "high." As a result, we anticipate that the pair will fluctuate on Friday between 1.0444 and 1.0643. A downward reversal of the Heiken Ashi indicator will indicate a new attempt to correct it. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: The EUR/USD pair is still moving upward. Therefore, before fixing the price below the moving average, we should consider long positions with targets of 1.0623 and 1.0612. No earlier than fixing the price below the moving average line with targets of 1.0376 and 1.0254 will sales become relevant. Explanations of the illustrations: Linear regression channels help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching Relevance up to 01:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329354
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

The Current Information Flow Is Not Able To Provoke A Stable Price Movement Of The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 09.12.2022 08:22
Next week the US Federal Reserve and the European Central Bank will hold their last meetings of the year. These events will be the final chord of the year - at least for euro-dollar traders. The Fed will announce its verdict on December 14 and the ECB the next day. Also, the US core inflation data will be released on December 13, which will also trigger higher volatility amongst the dollar pairs. In other words, the currency market is going to experience a lot of turbulence next week which will be followed by a pre-Christmas, pre-New Year's (and then post-New Year's) calm. As a rule, the market's activity slows down for a few weeks after the December meetings of the key central banks. Although, given the general unstable situation in the world (geopolitical tensions, COVID in China), 2022 may be an exception in this regard. At the moment, the EUR/USD pair is drifting within the 5th figure, just continuing its current movement, reflexively reacting to the current information flow. Recently, bears have repeatedly tried to settle within the 4th figure, while bulls still try to conquer the 6th price level. But both sides are acting quite cautiously ahead of high-profile events in December, which is why the pair is actually winding circles around the 1.0500 mark. If we consider intraday trading, then, as they say, "day to day is not necessary." Bears dominated on Monday and Tuesday, pulling the price to the 1.0460 mark. Then bulls seized the initiative, regaining the lost positions. At the moment, the pair is just trading around 1.0550-1.0560. Looking ahead, the current information flow is not able to provoke a stable price movement of the pair – either down or up. Any trader, who opens short or long positions, will do so while thinking of next week's events. Therefore, at the first opportunity, the trader will lock in the profit and will not "play for a long time". Consequently, any price fluctuation is unreliable. Considering last week's dynamics, we can say that the pair is trading in the range of 1.0450-1.0570. But again, this is a temporary price tier. So far, the bullish/bearish momentum emerges and eventually ends within this range. It is obvious that traders will surpass this range by next week, the only question is in which direction. This will depend primarily on the outcome of the Fed and ECB meetings. And at the moment, traders are forced to make decisions under conditions where they don't have any "relevant" information. The Fed members observe the "blackout period" (a 10-day period prior to the meeting), so now traders are left "on their own" - one-on-one with an army of specialized experts and insiders. Information coming in is quite diverse and most importantly, contradictory, so they cannot decide on the vector of their movement. For example, on Thursday the analysts of Danske Bank published their forecast, which provoked increased volatility while the economic calendar is empty. According to currency strategists of this Danish bank, the Fed and the ECB will raise interest rates by 50 points in December. Experts revised their earlier forecast, according to which the Fed was to raise the rate at the December meeting by 75 points. Now they see the following actions of the US central bank: 50 basis points in December, then 50 points in February and 25 in March. That is the final point, according to Danske Bank, will be at the level of 5.25%, but it will be achieved at a slower pace. As for the ECB, Danske Bank analysts suggest a hawkish bias. According to their forecasts, the ECB will raise rates in December by 50 points and will continue to raise them during the first quarter of 2023 - at least to 2,75%, but with possible "prolongation" towards further hikes. In addition, according to Danske Bank, at the end of the December meeting, the ECB will present key principles of the end to reinvestments under the APP process, in which reinvestments will almost come to a full stop. The Danish bank's forecast was interpreted in favor of the euro, thanks to which the bulls could again get close to the middle of the 5th figure. As you know, ECB representatives are divided into two camps (or voice a neutral position) - some are in favor of continuing aggressive policy, while others are in favor of slowing down the pace of tightening of monetary policy. Therefore, there is still intrigue on this issue. ECB President Christine Lagarde, who made a speech on Thursday, did not add clarity, as her speech was ceremonial in nature. Opening the annual conference of the European Council on systemic risks, she voiced common phrases, saying that the unstable global environment "poses sizable risks for financial stability in Europe", while the deteriorating prospects of the global economy only increase these risks. Therefore, the EUR/USD pair, most likely, will drift further in a conditional price range of 1.0450-1.0570 with possible testing of 1.0600, if the only significant releases on Friday (the index of producer prices in the US and the consumer sentiment index from the University of Michigan) will come out in the red zone. But again - any price fluctuations this week should be treated with a certain amount of skepticism, because the decisive battle of bears and bulls is still ahead.     Relevance up to 01:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329358
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

EUR/USD Pair: It Is Very Likely That The Bears Will Take Control Of The Pair

InstaForex Analysis InstaForex Analysis 09.12.2022 08:29
Technical outlook: EURUSD rallied through the 1.0586 high intraday on Friday, just a few pips shy from its recent swing high at 1.0595. A bearish reversal from here will confirm that a lower top is in place and that the bears are back in control. The single currency pair is seen to be trading around 1.0574 at this point in writing as the bears aim to break below 1.0420 in the near term. On the flip side, if prices break above 1.0595, this price action could open the door to test up to the 1.0700-50 high before giving in to the bears again. Looking at the wave structure, the larger-degree corrective wave, which had begun from 0.9535 earlier, looks mature. It is just a matter of time when the bears enter the market and drag prices lower towards 1.0000 at least. EURUSD is facing immediate resistance at 1.0595, followed by 1.0700-50; while support comes in around 1.0420, followed by 1.0220 and lower respectively. A break below 1.0420 or above 1.0585 will be now required to gauge the next big move. A higher probability remains for the bears to be back in control sooner than later. Trading idea: Potential bearish reversal against 1.0700 Good luck! Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/304296
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

FX: EUR/USD Will Struggle To Trade Sustainably, Price Action In G10 Currencies Has Been Quite Mixed

ING Economics ING Economics 09.12.2022 08:52
The US dollar is still battling December seasonality, which is leading it to weaker levels. However, the market will mainly focus on next week rather than going in one direction. The European Commission may release a new assessment of Hungary USD: Still fighting seasonal trends Global risk sentiment recovered yesterday after a few grim sessions for global equities, and the dollar faced some broad-based depreciation. As highlighted in our recent FX commentaries, the dollar tends to be seasonally weak in December, so this is a month of damage limitation for dollar bulls like ourselves. Price action in G10 currencies has been quite mixed, with the best performers being AUD, CHF and CAD yesterday. Among the pro-cyclical currencies, we continue to think that CAD has a better chance of outperforming next year thanks to limited exposure to China and Europe’s economic woes while being positively correlated to a rise in energy prices, which is our commodity team’s baseline scenario. The US calendar includes PPI and University of Michigan survey numbers today. With markets being focused on various gauges of inflation, expect dollar sensitivity to these data releases. The dollar could stabilise around current levels as markets gear up for the last week of action (Fed, ECB and BoE meetings) of 2022. DXY may stay around 104.50/105.00 today. Francesco Pesole EUR: Rally above 1.06 would be premature Markets are pricing in around 55bp of tightening ahead of the ECB meeting next week, and with no more speakers before the rate announcement and no key data releases except for the ZEW surveys on Tuesday, we doubt that rate expectations will move much in the coming days. Our base case is still that EUR/USD will struggle to trade sustainably above 1.0600, and is mostly facing downside risks into year-end as the dollar could regain some ground on global risk uncertainty and rebounding energy prices. Francesco Pesole GBP: Keeping an eye on key technical levels The only release to highlight in the UK calendar today is the Bank of England’s inflation attitude survey. Still, markets appear to have cemented their expectations around a 50bp rate hike by the BoE next week, and this may not change drastically before the policy announcement. GBP/USD could hover around 1.22 today, but risks are tilted to the 1.2126 200-day Moving Average being tested soon, in our view. EUR/GBP is trading around the 0.8630 100-day MA, and while we have less of a clear directional call on this pair in the short term, we see upside risks in the longer run. Francesco Pesole CEE: European commission may issue new assessment on Hungary Another tough week in the CEE region is behind us, but Friday has a lot to offer. Apart from the global story, we will be watching the market reaction to yesterday's National Bank of Poland press conference, which was not as dovish as expected. Governor Glapinsky said that the end of the hiking cycle has not yet been decided. On the other hand, he also mentioned falling inflation and a return to single digits numbers. That said, we believe the cycle has been closed and we do expect higher inflation than the central bank. Today the economic calendar is thin in the region, but we may hear more headlines from the European Commission regarding Hungary. An updated European Commission assessment could be released today, which should take into account the newly passed laws on the Hungarian side and thus be more in line with EU requirements. This follows the Commission's follow-up to Tuesday's Ecofin meeting and the member countries that made the request. The outcome of the assessment should be positive for Hungary and for the markets, but there've been plenty of surprises so far in this story.  Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EUR/USD Pair May Have A Potential For The Further Rally

EUR/USD Pair May Have A Potential For The Further Rally

InstaForex Analysis InstaForex Analysis 09.12.2022 09:46
Technical analysis: EUR/USD has been trading upside and the previous swing high at the price of 1.0590 is on the test. In case of the upside breakout of swing high, I see potential for the further rally. Trading recommendation: Due to the strong upside pressure in the background and buyers in control, I see potential for the further upside movement. Watch for the potential buying opportunities in case of the upside breakout of the 1.0690. Upside objective is set at the rice of 1.0750 MACD oscillator is showing fresh upside momentum, which is strong sign that buyers are in control. Key support is set at the price of 1.0450 Relevance up to 08:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/304310
China Restricts Gallium and Germanium Exports, Heightening Global Tech War

Major Currency Pairs Have Recently Shown A Slowdown In Their Growth (EUR/USD, GBP/USD, AUD/USD)

Kamila Szypuła Kamila Szypuła 09.12.2022 13:54
The dollar was broadly flat against major currencies on Friday as concerns about the health of the US economy resurfaced, as well as ahead of producer inflation data later in the day and the Federal Reserve's interest rate meeting next week Investors are expecting a series of interest rate decisions from central banks - including the Fed, the European Central Bank and the Bank of England - next week. Markets bet all three will limit pace of rate hikes, with hikes of 0.5bp The dollar index continued its decline yesterday keeping the Euro bulls on the front foot. The GBP/USD pair is rising for the third day in a row. The yen benefiting from growing expectations AUD/USD tried to regain ground today Read next: The FTC Is Trying To Block Microsoft's Merger With Activision| FXMAG.COM EUR/USD EUR/USD continues its grind higher in early European trade as key US data events lie ahead. The euro/dollar pair is trading in a better position than yesterday. This morning the euro rose 0.25% is $1.0581. The pair is currently trading at 1.0513. The dollar has a tendency for weakness in December. The dollar index continued its decline yesterday keeping the Euro bulls on the front foot. There has been comments this week from some ECB members discussing the possibility of further rate hikes. Later in the day attention turns to the US economic calendar as we await the US PPI as well as University of Michigan data. A positive data print could offer some support for the dollar while a weaker print could push EUR/USD lower. As for the US PPI, it is expected to maintain its previous level of -0.2%. A University of Michigan date specifically Michigan Consumer Sentiment is important, it is expected to increase by 0.1 to reach 56.9. GBP/USD GBP/USD Pair is on the buyers radar today. The GBP/USD pair is rising for the third day in a row and steadily climbing to the upper end of its weekly range. The pair points to a well-established short-term uptrend. A combination of factors is bringing the US dollar back to near the multi-month low reached earlier in the week. The Bank of England set to announce its monetary policy decision next week, with another interest rate increase of 50 basis points expected. It also can impact on the pound. Moreover, the gloomy outlook for the UK economy may keep investors from betting aggressively around the British pound and limit the GBP/USD pair, at least for now. Investors are now looking at Friday's US economic breakdown, which will release the Producer Price Index and flash Michigan Consumer Sentiment Index. This, along with US bond yields and broader risk sentiment, could influence USD price dynamics and provide some impulse for the cable market. AUD/USD AUD/USD tried to regain ground today China’s loosening Covid restrictions also lent optimism to the market, though renewed global recession fears and uncertainty around US Federal Reserve policy tightening kept sentiment in check. Meanwhile, latest data showed that Australia’s economy expanded less than expected in the third quarter as persistent inflation and rising interest rates dampened domestic consumption. The Reserve Bank of Australia raised its policy rate by 25 basis points to 3.1% at its December meeting. USD/JPY Currently, the pair is trading at 134.4750. On the daily chart, you can see that the dollar against the Japanese yen is falling. The recent weakness of the dollar affects the pair's advantage. The Japanese yen appreciated to around 136 per dollar, heading back to its highest levels. Also the yen benefiting from growing expectations that the Bank of Japan could end its ultra-easy monetary policy with inflation around 40-year highs. Source: investing.com, dailyfx.com, finance.yahoo.com
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

The EUR/USD Pair Is Likely To Experience The Strongest Price Turbulence

InstaForex Analysis InstaForex Analysis 10.12.2022 15:43
Bulls and bears of the EUR/USD pair impulsively react to the current information flow. The initiative is to change hands, but in fact the price stalls above 1.0500 but below 1.0600. The fifth figure acts as a springboard for a large-scale attack, which will inevitably occur next week. The only question is in which direction, down or up. Obviously, the vector of the EUR/USD price movement will depend on the Federal Reserve and the European Central Bank: next week the central banks will sum up the year results and outline further prospects. In the meantime, traders have to act cautiously, so to speak, "according to the situation". The intraday market sentiment is changing fast, but all the downward and upward price bursts are short-lived. For instance, on Friday morning, EUR approached the limits of the 6th figure, marking 1.0589. Amid a nearly empty economic calendar, the forecast of currency strategists of Danske Bank had a certain influence on the pair. This forecast was interpreted by the market in favor of the single currency (and not in favor of the dollar). Danske Bank economists expect the ECB policy rate to peak at 2.75% in the first half of 2023, but the risks will be shifted towards a further increase. At the same time, they revised their hawkish forecast on the pace of monetary tightening by the Fed. According to them, the Fed will increase the rate twice more by 50 points (in December and February) and once more (in spring) - by 25 points. As a rule, such forecasts have a limited (and short-term) influence on the pair, but under current circumstances, apparently, traders especially pay more attention to this analytical report. But again - in anticipation of the high-profile events that will take place next week, any price spikes are temporary in nature. On Friday afternoon, the bears took the initiative, reacting to the inflation report. The US producer price index was published at the beginning of the US trading session on Friday, which did not disappoint the dollar bulls, contrary to pessimistic expectations. The overall PPI in annual terms came out at 7.4% (with the forecasted slowdown to 7.2%). On the one hand, it was expected to slow down, but, on the other hand, the rate of deceleration was not as fast as previously expected. The core index, excluding food and energy prices, reached the 6.2% target year-on-year, while most analysts predicted a decline to 5.9%. The situation here is similar: the index has been declining consistently for the past 8 months, but the rate of decline slowed in November. The pair then retreated from the daily highs, going down to the base of the 5th figure. The greenback received additional support from another report, which was released in the U.S. We are talking about the consumer sentiment index from the University of Michigan. This index showed positive dynamics contrary to the pessimistic forecasts. Thus, in December the index grew up to 59.1 points while experts expected further decline down to 55 points. However, the downward dynamic of the pair is likely to be of limited nature. It's just that the aforementioned reports turned out to be in favor of the dollar, and so the bulls locked in profit, not risking to leave short positions till Monday. The notorious "Friday factor" played its role here, which weighed on the pair. But taking into account the current fundamental background, we can say with confidence: both short and long positions on the pair are risky. Even within the fifth figure. Next week, the pair is likely to experience the strongest price turbulence, even before the announcement of the Fed verdict. The day before that event, i.e. on December 13, the key report of the Consumer Price Index growth will be published in America. If it reflects further slowing of inflation growth in the US, the market will play a conditionally dovish outcome of the Fed meeting in advance, i.e. the dollar will be under strong pressure. But if the report is contradictory, it is difficult to predict the reaction. So, taking into account the high degree of uncertainty, it is risky to open longs or shorts for the pair. It is better to take a wait-and-see position. Big events of the forthcoming week will completely redraw the current picture - both fundamental and technical. Relevance up to 17:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329439
RBA Minutes Signal Close Decision, US Retail Sales Expected to Rise

FX: Movement Of Major Currency Pairs This Week

Kamila Szypuła Kamila Szypuła 10.12.2022 20:01
Next week we will have another powerful breakthrough in this respect: besides the release of important reports, 4 major world central banks (USA, Switzerland, UK and eurozone) will announce their decisions on monetary policies. The dollar may strengthen again. A strong US economy and aggressive interest rate hikes are strong assets for the US dollar, but not the only ones. The USD index rose as a result of strong demand for safe assets at a time when fear dominated the markets. A deep recession would increase the demand for the US dollar as a safe-haven asset. Read next:The Fed And Slowing Down The Pace Of Rate Hikes On Last Meeting This Year?| FXMAG.COM EUR/USD This week the pair started at 1.0545. This level was followed by a weekly high of 1.0585. On Wednesday, the pair met the expectations of ING economists and moved around 1.0400, thus reaching the lowest levels of the week at 1.0452. The mood was gloomy and the bulls had challenges ahead. The pair gradually recovered from losses and returned to trading above 1.0500. Currently, the pair is trading at 1.0572 There were no economic events during the week that could significantly affect the currency pair. On Wednesday, the euro received support from the eurozone as the domestic gross production reading was higher than expected. Moreover, the weak us dollar during the week added strength to EUR/USD. EUR/USD price movement will depend on the Federal Reserve and the European Central Bank. Next week the central banks will sum up the year results and outline further prospects. EUR/USD Weekly Chart GBP/USD The cable market started the week well at 1.2295. On the same day, GBP/USD hit its highest level of the week, trading at 1.2336. Tuesday and Wednesday were the weakest days for the couple. Just like EUR/USD, the pound/dollar also hit a low on Wednesday, dropping to 1.2107. After that, the pair rose and recorded a correction. Currently, the price of the pair is at 1.2239. This week has been empty in terms of reports. The movement of the pair was influenced mainly by the situation of the dollar. Next week brings a lot of emotions among traders. British reports will open in the coming week with data on industrial production and GDP for October. This report presents aggregated economic data and will have a major impact on the Bank of England's monetary policy decision (Thursday). GBP/USD Weekly Chart AUD/USD The pair of Australian dollar (AUD/USD) started the week at 0.6799. Like the British pound, the Aussie hit a weekly high on Monday. The highest price level was 0.6848. Then the pair began to wane. Following the trend of currencies from the old continent, Wednesday was the lowest level of the pair, 0.6672. And just like the pairs above, AUD/USD tried to recover. The pair closed the week at 0.6772. China's announcement of easing covid restrictions added support to the Australian dollar. On Tuesday, the Reserve Bank of Australia recently raised its key interest rate by 25 basis points to 3.1%, but the bank's decision did not add strong support to the AUD price. AUS/USD Weekly Chart USD/JPY USD/JPY started the week at a low of 134.4900, on the same day it recorded a weekly low of 134.1300. The upward trend continued until Wednesday. On that day, the Japanese yen pair peaked at 137.8010. There were declines after that. The week ended with USD/JPY at 135.0740 Undoubtedly, the weakness of the dollar and the statement of the representative of the Bank of Japan added support to the Yen. USD/JPY Weekly Chart Source: investing.com, finance.yahoo.com
The EUR/USD Pair Has A Potential For The Breakout Mode

EUR/USD Pair: All Trend Tndicators Are Still Pointing Upward

InstaForex Analysis InstaForex Analysis 12.12.2022 08:02
On Friday, as it did all last week, the EUR/USD currency pair displayed relatively slow movements. Although there is no trend movement on the 4-hour TF, and volatility cannot be said to be at a minimum right now, the pair's movement over the previous five trading days was far from ideal. Once more, the US dollar could not adjust or even stop moving. Therefore, there is currently no technical justification to sell the pair, as all trend indicators are still pointing upward. However, there are numerous fundamental and macroeconomic explanations. Many macroeconomic reports from recent weeks have been favorable for the US dollar. The most recent nonfarm payrolls, for instance. But at best, each of them only briefly caused a slight dollar strengthening, which quickly subsided. Reports in favor of the euro had a more lasting impact. For the market, the recent fundamental background has been reduced to the fact that the Fed will start to slow down the pace of tightening monetary policy. The market was uninterested in anything else, which primarily caused the US dollar to decline over the past few weeks or even months. Additionally, given that the downward trend lasted for nearly two years, during which the European currency demonstrated the ability to adjust by a maximum of 400 points, it should be noted that from a technical perspective, the current movement to the north may be a banal correction for a 24-hour TF. It had to end eventually. Possibly right now. As a result, if we examine the "technique," everything makes perfect sense. The development of the European currency raises many questions if we examine its "foundation." Meetings of the central banks and American inflation. This week's Fed and ECB meetings will undoubtedly be the most important events. Everything now comes down to the fact that both regulators will raise their rates by 0.5% after weeks of discussions, declarations, speeches, etc. If the Fed's decision was anticipated by the market for some time due to the monetary committee members' discussions over the past two to three weeks about the need to moderate the aggressive mood, then the ECB's decision does not appear to be as clear-cut and logical at this time. Recall that while inflation in the US has been declining for several months in a row, it is still rising in the European Union. Consequently, the ECB lacks a moral justification for slowing the rate of rate increases at this time. But as we already stated, the issue of high inflation (above the target level of 2%) may persist for a long time. Additionally, not all EU nations can withstand 5% or higher rates. The ECB will have to offer them monetary support through various programs, which it has only recently abandoned in favor of tightening monetary policy. In this scenario, they may begin to experience financial difficulties. The European regulator will, therefore, probably adopt a stance that is "somewhere in the middle." He will try to increase the rate, but he won't chase the Fed. In this scenario, inflation will go down, but it's unlikely that it will reach the desired 2% level. Since the situation in the United States is exactly the opposite – the rate will rise as much as necessary, and inflation will inevitably return to 2% – from our perspective, this situation may start to put pressure on the euro once more. In addition to the ECB meeting, the European Union will publish a report on industrial production for October. On Friday, the business activity indices for manufacturing and services for December will be made public. All three indices are below the "waterline" of 50.0, and the slowing of economic growth results from tightening monetary policy. So there is no point in waiting for these indicators to improve. The euro can continue to rise if the ECB decides to increase the rate by 0.75%. If not, the fall will inevitably occur. It has also been simmering for a while. As of December 12, the euro/dollar currency pair's average volatility over the previous five trading days was 96 points, which is considered "high." So, on Monday, we anticipate the pair to fluctuate between 1.0444 and 1.0643. The Heiken Ashi indicator's upward reversal indicates that the upward movement has resumed. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nerarest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestion: The EUR/USD pair is still moving upward. Therefore, before fixing the price below the moving average, we should consider long positions with targets of 1.0623 and 1.0612. Sales will become relevant if the price is fixed below the moving average line with targets of 1.0444 and 1.0376. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329470
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

EUR/USD Pair Has A High Probability Of A Downward Movement

InstaForex Analysis InstaForex Analysis 12.12.2022 08:14
Last week it nearly closed at the opening level. The price did not approach the MACD line on the weekly chart, and the MACD line moved lower, settling in the area where support is at 1.0410. The price has lost a major thing - momentum. Now it will be harder to overcome the MACD line. Being able to do so will open the target level at 1.0205 (high on September 12). Anyway, the weekly candlestick is already moving above the MACD line, and the only thing that can stop the price from going up is the outcome of the Federal Reserve meeting. On the daily chart, the divergence and its angle are still unclear. Either the divergence has formed, or the price will reach the target range at 1.0615/42, and the divergence will form along the less steep slope. On the four-hour chart, the Marlin oscillator has penetrated into the bears' area. The price has crossed the area under the support of the MACD line and under the balance line (red sliding line). There is a high probability of a downward movement.   Relevance up to 04:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329478
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

EUR/USD Pair Is Still Waiting For A More Serious Bearish Correction

InstaForex Analysis InstaForex Analysis 12.12.2022 08:20
M5 chart of EUR/USD On Friday, EUR/USD tried to rise further, but eventually collapsed near 1.0579, which it failed to surpass earlier. Thus, a new round of local correction began, but its strength and depth still leave much to be desired, we are still waiting for a more serious bearish correction. There were no important reports or events in the eurozone, and in the US - PPI, which helped the dollar to grow a little bit, and Consumer Sentiment Index from the University of Michigan, which was ignored. Basically, last week the pair was moving quite logically according to the macro data, however, the quote's recent movement can hardly be logically explained. I still believe that the euro has grown too much and it is time for it to go down. This week there will be plenty of macro data and fundamental events to implement that plan. Speaking of trading signals, everything was pretty good as well, though not ideal. At the beginning of the European session two sell signals around 1.0579 appeared, afterwards the pair fell to 1.0514, where the Kijun Sen was. The rebound from this line followed, so it was time to close the short positions and try to open the long ones. However longs did not bring any profit, but by the end of the day there were no other signals, so the deal could be closed in zero manually. On the first deal profit was about 25 points. COT report COT reports on EUR/USD have puzzled traders through most of 2022. Half of the year, COT reports indicated clear-cut bullish sentiment among large market makers while the single European currency was extending its weakness. For a few months, the reports showed a bearish sentiment and the euro was also trading lower. Currently, the net position of non-commercial traders is again bullish and increasing. Although the euro is rising, a rather high value of the net position allows us to assume an early completion of the uptrend. During the reporting week, the number of long positions held by non-commercial traders increased by 3,900 and that of short positions grew by 1,300. Accordingly, the net position grew by about 2,600 contracts. The green and red lines of the first indicator moved far away from each other, which could mean the end of the uptrend (!!!) (which, in fact, never happened). The number of long positions exceeds that of short positions by 125,000. Therefore, the net position of non-commercial traders may continue to rise further but without triggering a similar rise in the euro. When it comes to the total number of longs and shorts across all categories of traders, there are now 35,000 more short positions (661,000 vs 626,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD continues to remain near its local highs, but this week traders will have so many events and reports that they can use that it is impossible to say which direction the price may move and where the current week will end. I'm still waiting for a strong bearish correction and I believe it could happen this week. On Monday, the pair may trade at the following levels: 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as Senkou Span B (1.0442) and Kijun Sen (1.0517). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 12, there are no important reports or events in the EU and the US, but the most interesting ones are yet to come. In particular, the Federal Reserve and European Central Bank meetings and the inflation report. The market may well start to process all these data beforehand, starting from Monday, so volatility could be high this week. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329466
The Price Of EUR/USD Pair Will Develop Sideways Movement

EUR/USD Pair: The Bulls Still Need To Complete The Wave

InstaForex Analysis InstaForex Analysis 12.12.2022 08:41
Technical Market Outlook: The EUR/USD pair has hit the level of 1.0589, but the bulls still need to complete the wave v of the wave A to the upside as a part of the ABC-X-ABC complex corrective structure. Nevertheless, it looks like the bulls made a Double Top price pattern at the level of 1.059 and the market reversed lower. Moreover, another bearish pattern is visible on the H4 time frame chart in form of a Rising Wedge. The neutral momentum does not support the bullish outlook yet and the correction lower towards the level of 1.0444 is needed to break below the level of fifty on the RSI indicator. Weekly Pivot Points: WR3 - 1.05486 WR2 - 1.05312 WR1 - 1.0522 Weekly Pivot - 1.05138 WS1 - 1.05046 WS2 - 1.04964 WS3 - 1.04790 Trading Outlook: The EUR had made a new multi-decade low at the level of 0.9538, so as long as the USD is being bought all across the board, the down trend will continue towards the new lows. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Please notice, there is plenty of room to the downside for the EUR to go, all of the potential technical support level are very old and might not be much reliable anymore. Please be aware, that any sustained breakout below the technical support seen at 0.9737 will extend the down move even more and will put the level of 0.9669 in view. In the longer term, the key technical resistance level is located at 1.0789 (swing high from May 30th), so the bulls still have a long road to take before the down trend reversal is confirmed. It looks like the simple corrective ABC cycle might evolve into more complex and time consuming ABC-X-ABC cycle.     Relevance up to 08:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/304491
Monitoring Hungary: Glimmering light at the end of the tunnel

FX: More Pain For The Forint (HUF) Can Be Expected, The Correlation Between US 10-year Yields And G10 Dollar Crosses Has Picked Pp

ING Economics ING Economics 12.12.2022 12:31
A heavy event risk calendar this week stands to define the core themes for 2023. First and foremost is the question of how quickly US inflation decelerates (CPI on Tuesday) and how the Fed will respond (FOMC Wednesday.) A whole host of central bank meetings around the world, including the ECB on Thursday, will provide insights on how long policy stays tight USD: How long does policy need to stay tight? A pivotal week for FX and global asset markets lies ahead of us. The week will play a major role in determining whether central banks (particularly the Federal Reserve) need to keep policy tighter for longer, or can (as the market prices) start to relax a little over inflation and can consider rate cuts in the second half of next year to ensure a soft landing. The two key event risks here are tomorrow's US November CPI reading and Wednesday's FOMC meeting - including the release of a fresh set of dot plots. Going into these event risks the market is pricing the Fed tightening cycle peaking in the 4.90/5.00% area next spring and then 50bp of rate cuts being delivered in the second half. And consensus is for another relatively soft 0.3% month-on-month core CPI release tomorrow, which would tend to support the market's pricing. We look at a range of Fed scenarios in our FOMC preview. As noted previously here, December is typically a soft month for the dollar and probably a more dovish set out of outcomes and a weaker dollar does the most damage to positioning, which is probably still long dollars. However, we do feel that market consensus still underappreciates the risk of inflation staying higher longer and also is dangerously second-guessing the Fed in terms of 2H23 rate cuts. The Fed has said that it feels there is good forward guidance value in its dot plots and it may choose to get across its current message of tight policy staying in place for longer through those dot plots. Our rates team also sees upside risks to US 10-year yields from the 3.50% area, with outside risk to the Fed discussing outright US Treasury sales (rather than just roll-offs) if it does think the long end of the curve is too stimulative. Notably, the correlation between US 10-year yields and G10 dollar crosses has picked up substantially since the soft October CPI release on 10 November. The long end of the curve is therefore going to be a key battleground for the dollar. Event risks this week will therefore determine whether 2023 starts with a focus on the inflation battle being won and the prospect of stimulative, reflationary policy coming through - a dollar negative. Or whether sticky inflation ties the hands of central bankers, the US yield curve remains steeply inverted and the dollar continues to perform well in a challenging risk environment. We do see the latter scenario as more likely, but this week should certainly give one of the scenarios a big lift. There is very little on the US calendar today and we would expect DXY to go into tomorrow's CPI release near its current 105 levels. Chris Turner EUR: A big week for central bank meetings in Europe This week sees central bank meetings in the eurozone, Switzerland and Norway, where 50bp hikes are expected in the former two and a 25bp hike in the latter. Please see our full European Central Bank preview here and our Swiss National Bank preview here. On the former, we note there is still a slight risk of the ECB doing 75bp rather than 50bp - which would probably help the euro. But this of course comes after the US CPI/FOMC risk. Given the 10% EUR/USD correction off the late September lows, our preference would be that EUR/USD struggles to hold any gains over 1.06 this week and could end the week lower should US events oblige.  Chris Turner GBP: BoE to hike 50bp this week This week's highlight will be the Bank of England meeting on Thursday. Please see our full preview here. We expect the BoE to revert to a 50bp hike (55bp hike priced) as it tries to balance high inflation against growing evidence of a prolonged downturn - with little signs of stimulus.  Our game plan assumes that GBP/USD struggles to hold any gains over 1.23, while EUR/GBP should find support in the 0.85/0.86 area. A winter of discontent should see sterling underperform should central bankers need to keep rates tight(er) into a recession.  Chris Turner CEE: Asymmetric response to global developments A busy week at the global level will be accompanied by several data points from the Central and Eastern Europe region. This week's headline number will be November inflation in the Czech Republic. We expect inflation to accelerate from 15.1% to 15.9% year-on-year, slightly above market expectations. The number will have the market's attention not only because of the Czech National Bank meeting next week but also because of the surprising slowdown in inflation in October when government measures against high energy prices came into play. After this number, we can then expect more headlines coming from the CNB given Thursday's start of the blackout period. Also today, Hungary's assessment is expected to be discussed at the European Council level. However, early rumours suggest that the European Commission's conclusion remains unchanged. November inflation in Romania will be published on Tuesday. We expect an increase from 15.3% to 16.6%, above market expectations. Although we have already seen inflation slowing in previous months, this result would thus raise the peak again. We do not expect another rate hike from the National Bank of Romania in January, but either way, it will be a close call, and tomorrow's number could be key. In the second half of the week, we will then see secondary data across the region such as the current account balances in Poland and the Czech Republic and the final inflation estimate in Poland, including the core number. In the FX market, this week we will be watching the impact of global events on the region. Our baseline scenario of a stable EUR/USD should not bring too much change for the region, but risks both ways are significant and higher volatility compared to previous rather quiet weeks in the CEE FX market can be expected. As we mentioned earlier, interest rate differentials have fallen significantly over the past weeks in the region leaving FX vulnerable to global shocks. Also, the gas story is creeping back and with higher gas prices we see growing signs of a renewed relationship with FX. The region's reaction would thus be asymmetric in the direction of weaker FX in our view, if the US dollar ends up as a winner this week. The Hungarian Forint will be following a separate story in addition to the EU developments and the newly lifted fuel caps. Given the negative rumours, more pain for the forint can be expected and the question is whether EUR/HUF will make another march towards the 430 level as it did in October, which led the central bank to an emergency rate hike in the middle of that month. In our view, the long positioning has fully unwound, and the market is leaning towards the short side again, but we don't think that the negative outcome of the EU story is fully priced in, so it is likely that we will test new highs this week. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Oanda expect next rate hikes as Bundesbank and ECB predicts will accelerate

It's going to be an outstanding Thursday as ECB, Bank of England and Swiss National Bank decide on interest rates

Ipek Ozkardeskaya Ipek Ozkardeskaya 12.12.2022 13:24
Friday's US PPI print was soft, but not soft enough to meet market expectations. The US producer prices in November rose 7.4% since a year ago, from 8% printed a month earlier, and more than 11% printed in summer. But still slightly higher than 7.2% that analysts predicted.   The kneejerk reaction was as expected. The US dollar spiked following the data, closed the week on a strong footage in America and opened the week on a strong footage in Asia. Trend and momentum indicators turned positive last week, and the dollar could gain more field before two important events that will mark the trading week: US November CPI on Wednesday, and the FOMC decision on Wednesday.   Another disappointment?  Looking at the expectations, inflation is expected to have slowed to 7.3% in November from 7.7% printed a month earlier. But because the consensus number is relatively low, we may have another Friday's PPI-like disappointment at tomorrow's US CPI release, which could further boost the Federal Reserve (Fed) hawks before Wednesday's FOMC decision, fuel the US dollar, send the US yields higher and the stocks lower.   One good news about inflation, however, is that the 1-year inflation expectation unexpectedly declined to the lowest levels since September 2021. This is excellent news for the Fed, as inflation expectations are self-fulfilling, and have the power to bring inflation down just by changing the way people make their decisions.   But in reality, none of it will matter for the Fed's policy decision this week.   Important note before the FOMC decision  There is a gap between what the Fed says it will do, and what the market thinks, and prices the Fed will do, even a tiny hawkish message could already weigh on the mood before Xmas.   For now, the pricing in the market matches a terminal Fed rate of less than 5%, while the dot plot is expected to reveal a higher median rate forecast for 2023 of around 5.125%. This means that there is room for a hawkish rectification in market pricing both in the US dollar, and in equities.   In the medium-run, while I believe that a hawkish correction should not change the dollar's medium-term outlook - which is bearish, I think that the stock markets could take another dive, as the recession worries should keep appetite limited.   Read next: An incoming cold spell in the US has seen the cost of US gas surge 27% during the past three trading session while (...) Dutch TTF gas contracts remain below €150| FXMAG.COM The S&P500 failed to clear an important ytd resistance last week, and slipped 3% during the course of the week. While Nasdaq tumbled 4%, having flirted with the 100-DMA the week before.   We shall see both indices extend losses this week.  Other than the Fed...  The European Central Bank (ECB), the Bank of England (BoE), the Swiss National Bank (SNB) and Norges Bank are all due to raise interest rates this Thursday.  In the Eurozone, the ECB will probably raise its policy rates by 50bp. But given that inflation advanced to double-digit numbers this year, we can't really rule out the possibility of a third consecutive 75bp hike from the ECB.   The European policymakers are expected downgrade their growth forecasts, and upgrade their inflation projections. If that's the case, a too-fast rate hike may not be ideal, and we shall end up with a 50bp hike, with the hint that the QT in Europe would start by March next year – which is an extra hawkish announcement.   The EURUSD recovered more than 11% since the end of September, thanks to a broadly softer US dollar, and we shall see the single currency aim for a stronger recovery. Although the direction in the short run could be blurred by the Fed decision, and the reaction to a probably hawkish decision.   Across the Channel, the Bank of England (Bo) is also expected to raise its rates by 50bp, to push the lending rate to 3.5%, the highest since 2008. Even though the BoE should keep raising rates to fight its double-digit inflation, the freefall in British home prices and the rapid slowdown in economic growth hint that the BoE cannot push too hard, either.   Cable rebounded almost 20% since the Liz Truss dip back in September, and could extend gains toward 1.30, not because the pound will do great thanks to a flourishing British economy, but because the US dollar is expected to depreciate in the coming months. And as it is the case for the euro, the short-term direction for sterling-dollar is unclear, as the US dollar's move into and posterior to the Fed decision will determine the next short term direction in Cable.  Here in Switzerland, the National Bank is also expected to hike the policy rate by 50bp to 1%. Inflation in Switzerland has been much more moderated compared to Europe or to the US thanks to a strong franc. The dollar-franc lost more than 8% since end of December, and the pair should extend losses to 0.88-0.90 region.
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

Euro Holds Above $1.05, USD/JPY Pair Rose Above 136

Kamila Szypuła Kamila Szypuła 12.12.2022 14:19
This week is one of the most macro-packed so far this year, with four major central banks holding their final policy meetings of the year, plus consumer inflation data from the United States that could be instrumental in determining the outlook for U.S. interest rates and the dollar. The U.S. Federal Reserve, the European Central Bank, the Bank of England and the Swiss National Bank will all release rate decisions. Overall, risk assets came under pressure on Monday despite further signs from China that it may be moving away from its very restrictive Covid-19 policy. Read next: Rivian Break Down Of Joint Venture Negotiations With Mercedes | Amgen Inc. Begins Action to Acquire Pharmaceutical Company Horizon Therapeutics| FXMAG.COM Euro Holds Above $1.05 Ahead of Key Policy Meetings A package of positive readings from Great Britain appeared. Against the yen the dollar rose 0.2% EUR/USD EUR/USD has been rising since reaching a 20-year low of 0.9536 in October. The rate reached the level of 1.0595, but was unable to break the breakout point and the previous high at 1.0615 and 1.0638 respectively. It is currently trading around the 1.0560 level with an upside bias. The euro is weaker today as the US dollar gains ahead of a crucial week of central bank meetings and data. There are no key macro economic events for the EUR/USD pair today. The European Central Bank is expected to deliver a dialed-down 50 bps rate hike on Thursday. Meanwhile, all eyes turn to CPI numbers from the US due on Tuesday GBP/USD The overall look of the cable market looks bearish. The GBP/USD pair is currently trading close to the level it closed last week at 1.2239. On the daily chart, we can see that the price of the cable has increased to this level. Trading on the daily chart shows the price around 1.2280. The British pound was subdued in reaction to the breaking of British GDP this morning, however, after the start of the European session, the reaction may be more positive. Other reports were also positive with only Industrial Production (MoM) (Oct) dropping to 0.0%. Source: investing.com GBP/USD daily chart AUD/USD The Australian dolar was last down 0.4% at $0.6772. Today, the AUD/USD pair reached 0.6795 during the day and then started to fall. On the daily chart, we can see that the pair is trading at 0.6756. USD/JPY USD/JPY started the week with gains. The pair rose from 135.0740 – the last week close level - to 136.8440 - current trade. This means that the Japanese yen is negatively compared to the US dollar. In other words against the yen the dollar rose 0.2% Today there were reports of the Japanese PPI, which was higher than expected. Year on year PPI reached 9.3% and PPI m/m 0.6% However, they did not support the yen. The last statement of the representatives of the Bank of Japan still plays a role. Bank of Japan Governor Haruhiko Kuroda recently said it was too early to discuss the possibility of reviewing the central bank's monetary policy framework. However, an analyst close to policy makers suggested that the BoJ may drop the 10-year bond yield cap as early as next year. Source: investing.com, dailyfx.com, finance.yahoo.com
The EUR/USD Price May Fall Under 1.0660

EUR/USD Pair: This Morning, The Price Is Trying To Rise

InstaForex Analysis InstaForex Analysis 13.12.2022 08:06
Investors raise their expectations this week, in which several central banks meetings (Federal Reserve, European Central Bank, Bank of England) are held, given the ongoing divergence between central banks' monetary policies. The Fed will become softer, while the ECB will be more hawkish. Formally, the forecast for a rate hike by all central banks is the same - 0.50%, but there has been so much talk about a surprise from the ECB that a 0.75% hike has become a forecast rather than a surprise. And that's why the euro closed Monday at the opening level despite the decline of other counter-dollar currencies. This morning, the price is trying to rise. Today's main event will be the US inflation report for November. CPI is expected to decline from 7.7% y/y to 7.3% y/y. The euro has a chance to reach the target range of 1.0615/42. If the divergence in the sentiment of the central banks is really strong, the euro may go higher, to the range of 1.0758/87 (highs in May and June). On the four-hour chart, the price failed to fall under support of the MACD line. The last reversal from it occurred this morning. The Marlin oscillator is shifting to the upside. We expect the price to reach the first target range of 1.0615/42.
The EUR/USD Price Failed To Exhibit A Strong Trending Movement

The EUR/USD Price Failed To Exhibit A Strong Trending Movement

InstaForex Analysis InstaForex Analysis 13.12.2022 08:18
The EUR/USD currency pair's trading remained subdued and undetectable on Monday. Once more, the price failed to exhibit a strong trending movement, initiate a correction, and even surpass the moving average line situated very nearby. In terms of the 4-hour TF, there was no movement at all on Monday. On the one hand, this market behavior is expected, given the lack of any significant news or events in the US or the EU on Monday. Nothing prompted a reaction. On the other hand, this week's calendar is packed with significant events, so the market may already be anticipating them. It could have, but it chose not to this time. As a result, we have continued on an upward trend up to this point, which has long raised many concerns. As we've already mentioned, the pair's growth is completely logical from a technical standpoint because all indicators point upward. Fundamentally speaking, however, the euro currency's downward correction following its rapid and illogical growth should have begun two weeks ago. Important inflation reports and meetings of all three central banks that are relevant to us will take place this week. Since these events frequently overlap, we won't predict how the market will respond to them at this time. In response to such important reports, there may be a delay of several hours or even a day. Most of the time, traders will be forced to respond to the following event without planning. We also want to remind you that trading sessions impact how the market reacts. If the Fed meeting's outcomes are disclosed late evening, European exchanges cannot make any sense of them. As a result, the response of Europeans can be anticipated the following morning, when reports and data will be made public. Will US inflation continue to fall? In theory, there is almost no reason to doubt it will continue. It has already been falling for four consecutive months while the Fed's key rate has been rising. There is, therefore, no justification for anticipating that inflation will suddenly resume its downward trend. We also need to remember that any change in interest rates has a long-term impact (as many Fed members have stated). In other words, if the rate changes, it will take three to four months for key macroeconomic indicators to reflect. Therefore, there is absolutely no reason to anticipate the end of the consumer price index slowdown. The sole issue is how quickly it will deteriorate. According to official predictions, inflation will decrease to 7.3–7.6% y/y by the end of November. The actual value, in our opinion, will be closer to 7.3%, which will support the Fed's decision to begin easing up on the pace at which it tightens monetary policy. On the one hand, this is bad news for the US dollar because the rate at which the market has been actively selling the dollar hasn't slowed down recently. However, it is the ratio of the Fed rate to the ECB rate that matters, not the Fed rate itself. Unexpectedly for many, the European regulator may also increase its rate this week by 0.5%. That is, to slow the rate at which monetary policy is tightening, despite European inflation, which is currently at 10%, only began to decline at the end of November. From our perspective, one decline is too minor to discuss a particular trend. The current key rate of the ECB is 2%, which is not even close to the "neutral level" at which pressure on inflation (and the economy) starts to build. As a result, we are certain that the decrease in inflation in November was coincidental. It's just one slowdown, in any case. The market may therefore view the ECB's decision to start easing up on its apparent aggressive stance, which was intended to curb high inflation. We think that the factors contributing to the euro's decline are increasing daily. As of December 13, the euro/dollar currency pair's average volatility over the previous five trading days was 88 points, considered "average." So, on Tuesday, we anticipate the pair to fluctuate between 1.0453 and 1.0625. An upward turn of the Heiken Ashi indicator will indicate a potential continuation of the upward movement. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestion: The EUR/USD pair is still moving upward. Therefore, until the price is fixed below the moving average, long positions with targets of 1.0625 and 1.0620 should be considered. Only after fixing the price below the moving average line with targets of 1.0453 and 1.0376 will sales become relevant. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     search   g_translate     Relevance up to 01:00 2022-12-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329601
The Euro May Attempt To Resume An Upward Movement

This Week The EUR/USD Pair May Fly From Side To Side

InstaForex Analysis InstaForex Analysis 13.12.2022 08:23
M5 chart of EUR/USD On Monday, EUR/USD moved sideways for the most part. This is perfectly visible in the chart above. Despite the fact that the pair is still near its local highs, it can neither continue to move up, nor start a bearish correction. At the moment, the price is stuck between the critical line and 1.0579. There was no macroeconomic and fundamental background on Monday, but the pair was moving up and down during the day. However, these movements do not clarify where the euro will move in the medium term. Therefore, the only thing we can do is to wait for the central bank meetings and inflation reports. Market reaction could be mixed, but there is nothing else to do. The euro climbed too high (as well as GBP), and there aren't many support factors for it right now (only technical). Nevertheless, the market still refuses to buy the US currency. On the bright side, the trading signals were very good. First, the pair rebounded from the Kijun-Sen line, forming a buy signal. Then it rose to 1.0579, rebounding from it twice (sell signals). Afterwards, it returned to the critical line and bounced from it. Thus, I have managed to open three deals, two of which closed with about 30 pips profit, and one without a loss. The first trading day of the week was profitable, let's hope the other days will be profitable as well. COT report COT reports on EUR/USD have puzzled traders through most of 2022. Half of the year, COT reports indicated clear-cut bullish sentiment among large market makers while the single European currency was extending its weakness. For a few months, the reports showed a bearish sentiment and the euro was also trading lower. Currently, the net position of non-commercial traders is again bullish and increasing. Although the euro is rising, a rather high value of the net position allows us to assume an early completion of the uptrend. During the reporting week, the number of long positions held by non-commercial traders increased by 3,900 and that of short positions grew by 1,300. Accordingly, the net position grew by about 2,600 contracts. The green and red lines of the first indicator moved far away from each other, which could mean the end of the uptrend (!!!) (which, in fact, never happened). The number of long positions exceeds that of short positions by 125,000. Therefore, the net position of non-commercial traders may continue to rise further but without triggering a similar rise in the euro. When it comes to the total number of longs and shorts across all categories of traders, there are now 35,000 more short positions (661,000 vs 626,000). H1 chart of EUR/USD On the hour chart, EUR/USD is still near its local highs and above the Ichimoku indicator lines. At the same time, quotes have been in a limited range for more than a week, which, on the one hand, can be called a horizontal channel, but on the other hand - not. Anyway, this week the pair may "fly" from side to side, so we should be ready for any movements. On Tuesday, the pair may trade at the following levels: 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, and also Senkou Span B (1.0442) and Kijun Sen (1.0514). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 13, there are no important reports or events in the EU, but the US will publish the inflation report for November, which is important because the Federal Reserve's monetary policy depends on it. Therefore, the stronger the actual value deviates from the projections, the stronger the market reaction may be. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group Relevance up to 01:00 2022-12-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329597
Navigating Interconnectedness: Analyzing Banks' Exposures and Funding from Non-Bank Financial Institutions

FX: The EUR/HUF Cross Rate Continues Its Volatile Path, The South African Rand (ZAR) Is The Worst EMEA FX Performer

ING Economics ING Economics 13.12.2022 09:01
FX markets have been becalmed over the last two weeks as participants tidy up positions for year-end and await the next key input into the global macro stay. One such input will be received today in the form of the US November CPI release, where another soft 0.3% MoM core reading is expected. Its a big release and will set the tone for tomorrow's FOMC meeting A scandal involving South African President Cyril Ramaphosa is driving the rand underperformance USD: November CPI front and centre Traded levels of volatility for longer tenors (one month and three months) have been falling sharply over the last two weeks as the FX markets take a breather. Even though shorter-dated tenors price in plenty of volatility over the next week, the view seems to be that into the first quarter of next year, FX markets can continue to settle. That view will be challenged over the next 36 hours with the release of the November US CPI at 1430CET today and the Federal Open Market Committee (FOMC) tomorrow at 20CET. Given that last month's CPI release was a major trigger for the dollar sell-off, all eyes will be on today's figure. Our chief international economist, James Knightley, is forecasting the key core component at 0.3% month-on-month, the same as the consensus and the same as last month. James says the upside risk stems from shelter and Owners' equivalent rent not falling as quickly as consensus expects – it takes time for the decline in asking rents to feed into what is actually being paid. And downside risks come from used car prices again and whether medical costs stay soft after their technical fall last month. James says there will be more focus today on "services ex shelter" inflation, given that Fed Chair Jerome Powell highlighted that in a recent speech.  Today's release will set the dollar tone for tomorrow's FOMC meeting and into the first quarter of 2023. We think the market is being a little early in pricing 50bp of rate cuts for 2H23 and could see the dollar bouncing on any upside surprise in today's CPI data – including upward revisions to last month's reading. The data probably will not be a knock-out blow to the dollar – one way or the other – given tomorrow's big FOMC meeting including a new set of Dot Plots. Therefore plenty to play for over the next 36 hours. A DXY close above its 200-day moving average at 105.80 would be helpful in supporting our view that the dollar will be strengthening through 1Q23. Chris Turner EUR: Make or break As above, CPI and FOMC inputs into the dollar equation will be a key driver of EUR/USD into year-end and early 1Q23. If we were to pick out two levels, we would say the 1.0600/10610 area is key resistance. A close above that on a soft US CPI release would warn of a lot more pain into year-end and EUR/USD drifting up to 1.08 and even 1.0950/1.1000. On the downside, the 200-day moving average is now 1.0350 and would be a level any investors trapped long dollars at higher levels might choose to offload some dollars. Away from EUR/USD, the EUR/HUF cross rate continues its volatile path. News from Brussels last night is that there appears to be progress on the release of EU funds to Hungary. Investors have been here before with many false dawns, but it does indeed seem like progress is being made. As we discuss in our recently released Directional Economics, the Polish zloty, not the Hungarian forint, will probably be the market's target for scrutiny in 2023. Chris Turner GBP: Better jobs data gives the BoE a headache We have just seen the latest UK jobs data, where the November payroll increased more than double what was expected and the weekly earnings rate ex-bonus nudged up to 6.1% 3m/YoY, the highest in a year. This adds to thoughts of a full employment recession and supports some of the more hawkish pricing of the Bank of England (BoE) policy cycle. It is probably not enough to prompt the BoE into another 75bp hike on Thursday (a 57bp hike is priced) but will support sterling.  Today's UK data could light the fuse of a Cable rally, were US CPI data to oblige. Our prior has been that this rally stalls around this 1.2300/2310 area – but a close above here warns of another three to four big figures higher during thin, year-end markets. Chris Turner ZAR: President Ramaphosa faces proxy impeachment vote One might have expected the South African rand to be doing a little better over recent weeks. The dollar is weaker, the China re-opening narrative has prompted a rally in the industrial metals markets and seen South Africa's terms of trade improve markedly. But no, outside of the Russian rouble, the rand is the worst EMEA FX performer since 10 November – the release date of the soft US October CPI data. Driving that rand underperformance seems to be politics. President Cyril Ramaphosa has been caught up in a scandal, whereby an independent panel has concluded he might have violated the constitution in the way he handled the investigation into the theft of cash at his property. The findings of that panel will today be put to a vote in the South African parliament – seen as a proxy impeachment vote for Ramaphosa. The question is how many disgruntled members of the ruling African National Congress (ANC) party will join with the opposition in supporting the panel's finding. As above, we would have thought the rand would be trading a lot stronger were it not for this vote. But equally, if the vote goes through, USD/ZAR could easily be trading over 18.00 in thin December markets. In short, current levels near 17.50 may not last for long. Chris Turner  Read this article on THINK TagsSouth Africa FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
European Markets Face Headwinds Amid Rising Yields and Inflation Concerns

Microsoft (MSFT) rose 2.89% after announcing it will purchase a 4% stake in London Stock Exchange Group

Intertrader Market News Intertrader Market News 13.12.2022 10:42
DAILY MARKET NEWSLETTER December 13, 2022                 Pre-Market Session News Sentiment Technical Views           EUR/USD   Euro Stoxx 50 (Eurex)   Brent (ICE)                 Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.                     Price Movement Analyst Views Target Pivot   Dax (Eurex) 14,324.00 -45.00 (-0.31%) Read the analysis 14,397.00 14,199.00     FTSE 100 (ICE Europe) 0.00 0.00 (0.00%) Read the analysis 7,499.00 7,431.00     S&P 500 (CME) 4,018.25 +50.00 (+1.26%) Read the analysis 4,045.00 3,982.00     Nasdaq 100 (CME) 11,809.50 +126.50 (+1.08%) Read the analysis 11,860.00 11,730.00     Dow Jones (CME) 34,218.00 +477.00 (+1.41%) Read the analysis 34,420.00 34,010.00     Crude Oil (WTI) 73.46 +2.44 (+3.44%) Read the analysis 75.40 72.80     Gold 1,781.22 -16.102 (-0.90%) Read the analysis 1,777.00 1,789.00                     MARKET WRAP           Market Wrap: Stocks, Bonds, CommoditiesOn Monday, major U.S. stock indexes rose over 1%. The Dow Jones Industrial Average advanced 528 points (+1.58%) to 34,005, the S&P 500 rose 56 points (+1.43%) to 3,990, and the Nasdaq 100 was up 143 points (+1.24%) to 11,706.The U.S. 10-year Treasury yield added 3.7 basis points to 3.615%.U.S. inflation data will be released on Tuesday, and the Federal Reserve will set interest rates on Wednesday.Transportation (+2.86%), energy (+2.49%), and software (+2.45%) sectors led the market higher.Microsoft (MSFT) rose 2.89% after announcing it will purchase a 4% stake in London Stock Exchange Group.Coupa Software (COUP) surged 26.67%. The cloud-based business software firm said it has agreed to be taken private by buyout firm Thoma Bravo in a deal that values the company at $8 billion.Amgen (AMGN) agreed to buy Horizon Pharma (HZNP) for $116.50 per share or $27.8 billion in total. Amgen's share price closed 0.67% higher, and Horizon Pharma jumped 15.49%.Rivian Automotive (RIVN) declined 6.16%. The company said it paused discussions with Mercedes-Benz on forming a strategic partnership over electric pickup trucks. European stocks closed lower. The DAX 40 fell 0.45%, the CAC 40 declined 0.41%, and the FTSE 100 was down 0.41%.Oil prices were supported by a prolonged outage of the Canada-to-U.S. Keystone crude-oil pipeline. U.S. WTI crude futures gained $2.40 (+3.38%) to $73.46 a barrel.Gold price slid $16 to $1,781 an ounce.Market Wrap: ForexThe U.S. dollar held up well against other major currencies. The dollar index climbed to 105.02.USD/JPY jumped 115 pips to 137.71.EUR/USD dipped 5 pips to 1.0535. GBP/USD rose 9 pips to 1.2268. U.K. gross domestic product grew 0.5% on month (vs +0.4% expected) and 1.5% on year (vs +1.6% expected) in October. Industrial production showed no growth in October, as expected,AUD/USD dropped 47 pips to 0.6748. This morning, the Westpac consumer confidence index rebounded 3.0% on month in December (vs -6.9% in November).USD/CHF added 23 pips to 0.9365, while USD/CAD was down 14 pips to 1.3631.Bitcoin regained the $17,000 level.Morning TradingIn Asian trading hours, USD/JPY held up well at 137.70, while AUD/USD remained under pressure at 0.6742.EUR/USD was little changed at 1.0533, while GBP/USD traded lower to 1.2256.Gold price was flat at $1,781 an ounce.Bitcoin kept trading at levels around $17,100.Expected TodayIn the U.K., the latest jobless rate is expected to edge up to 3.7%.In Germany, the ZEW economic sentiment index is expected to improve to -27 in December. And the November inflation rate is expected to be finalized at 10.0% on year.In the U.S., the inflation rate is expected to tick down to 7.6% on year in November.           UK MARKET NEWS           Royal Dutch Shell, an oil giant, announced the sale of its stake in two offshore production sharing contracts in Malaysia's Baram Delta to Petroleum Sarawak Exploration & Production Sdn Bhd for $475 million.InterContinental Hotels Group, a hotel operator, announced the appointment of Michael Glover as chief financial officer.Auto & Parts, insurance and travel & leisure shares gained most in London on Friday.From a relative strength vs FTSE 100 point of view, BAE Systems (+0.65% to 831p) crossed above its 50-day moving average.           ECONOMIC CALENDAR           Time Event Forecast Importance   02:00 Unemployment Rate (Oct) 3.7% HIGH     02:00 Claimant Count Change (Nov) 8k HIGH     02:00 Employment Change (Sep) -20k HIGH     02:00 Average Earnings incl. Bonus (3Mo/Yr) (Oct) 6.1% MEDIUM     02:00 Average Earnings excl. Bonus (3Mo/Yr) (Oct) 5.8% LOW     02:00 HMRC Payrolls Change (Nov) 45k LOW     05:00 10-Year Treasury Gilt Auction   LOW     05:30 Financial Stability Report   LOW     05:30 BoE FPC Meeting Minutes   LOW     06:00 NFIB Business Optimism Index (Nov) 89 LOW     08:30 Inflation Rate MoM (Nov) 0.5% HIGH     08:30 Core Inflation Rate MoM (Nov) 0.4% HIGH     08:30 Core Inflation Rate YoY (Nov) 6.2% HIGH     08:30 Inflation Rate YoY (Nov) 7.6% HIGH     08:30 CPI (Nov) 299 MEDIUM     08:55 Redbook YoY (Dec/10)   LOW     10:00 IBD/TIPP Economic Optimism (Dec) 41 MEDIUM     13:00 30-Year Bond Auction   LOW     16:30 API Crude Oil Stock Change (Dec/09)   MEDIUM                                     NEWS SENTIMENT           London Stock Exchange Group PLC LSEG : LSE 7,626.00 GBp -2.85% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Legal & General Group PLC LGEN : LSE 252.00 GBp -1.60% In the last 5 days         NEWS SENTIMENT (24H) Very Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   BHP Group PLC BHP : LSE 2,537.00 GBp -1.67% In the last 5 days         NEWS SENTIMENT (24H) Neutral       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Argo Group Ltd ARGO : LSE 11.00 GBp 0.00% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Bayerische Motoren Werke AG BMW : XETRA 84.43 EUR -0.89% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                           TECHNICAL VIEWS           EUR/USD Intraday: rebound.   Pivot: 1.0530   Our preference: Long positions above 1.0530 with targets at 1.0575 & 1.0590 in extension.   Alternative scenario: Below 1.0530 look for further downside with 1.0505 & 1.0490 as targets.   Comment: The RSI shows upside momentum.                     Euro Stoxx 50 (Eurex)‎ (Z2)‎ Intraday: intraday support around 3902.00.   Pivot: 3902.00   Our preference: Long positions above 3902.00 with targets at 3951.00 & 3970.00 in extension.   Alternative scenario: Below 3902.00 look for further downside with 3879.00 & 3864.00 as targets.   Comment: The RSI lacks downward momentum.                     Brent (ICE)‎ (G3)‎ Intraday: further upside.   Pivot: 77.60   Our preference: Long positions above 77.60 with targets at 80.00 & 80.80 in extension.   Alternative scenario: Below 77.60 look for further downside with 76.80 & 76.10 as targets.   Comment: The RSI is bullish and calls for further advance.        
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

The ECB Will Phase Out Reinvestments Of Its Asset Purchase Programme Portfolio Throughout 2023

ING Economics ING Economics 13.12.2022 12:22
When the ECB meets for the last time this year, it is likely to give markets a stern warning on inflation. This should push yields up as we see limited downside below 1.75% and 2.5% for the 10Y Bund and swap rates, respectively, even in 2023. For now, the impact on EUR/USD should not prove long-lived. Here are our four scenarios with market implications Source: ING A hawkish ECB will push yields up The European Central Bank's job is not yet finished. Far from it. There is still much work to be done on inflation before the central bank can end its hiking cycle, and the drop in market rate expectations in recent weeks means the risk of a 75bp hike has increased. Still, 50bp remains our base case at this meeting although this will likely come with a stern hawkish warning on inflation. This should steer the short-term direction of euro rates. The drop in 10Y Bund yields and 10Y swap rates has stalled above 1.75% and 2.5% respectively, and we think a retracement higher will be triggered by the ECB’s tone. Current valuations don’t leave much space for rates to drop further in 2023 This should also set the tone for rates in 2023. As we wrote in our rates outlook, current valuations don’t leave much space for rates to drop further in 2023, even in the case of a deeper-than-expected recession, as our economics team forecasts. At around 2.5%, 10Y swap rates are already where we see the ECB’s terminal rate in this cycle. This isn’t high enough for markets to price subsequent cuts, and so the case for curve inversion is much weaker than, say, in the US. In fact, we think long-end EUR rates should rise by 2024, as the curve re-steepens thanks to quantitative tightening, and possibly on a greater inflation premium. If there is any downside risk to rates, it is to the front end of the curve. The swap curve implies a terminal rate of 3%, 50bp above our own estimate. This is likely to only affect rates up to the 2Y point, however, as the impact on longer tenors will be dented by the fact that forwards currently price subsequent cuts that aren’t likely to materialise. The Estr swap curve is pricing a 3% terminal rate in 2023, and then cuts in 2024 Source: Refinitiv, ING The QT dog that didn't bite bonds One compromise between the hawks and doves could be that a ‘downshift’ from 75bp to 50bp is accompanied by a faster quantitative tightening timetable. This meeting shouldn’t be about making final decisions on the size or timing of the reduction of its bond portfolio, but about highlighting its guiding principles. Our view is that the ECB will phase out reinvestments of its Asset Purchase Programme portfolio throughout 2023 by gradually removing the reinvestment cap. Perhaps in part because no decision is expected at this meeting, sovereign spreads have failed to react. In fact, they’ve been happy to tighten alongside the improvement in risk appetite on global markets. 200bp seems a more natural home for 10Y Italy-Germany spreads than any level below If we’re right in saying that core rates are headed higher around this ECB meeting, this implies the same is true for sovereign spreads, and this is before accounting for the risk of a hawkish surprise on QT. In a world where the ECB tightens policy, via rate hikes, by draining liquidity, or via QT, 200bp seems a more natural home for 10Y Italy-Germany spreads than any level below. Bear in mind, too, that January will fire the starting gun on a highly seasonal primary market for bonds. We wouldn’t be surprised to see sovereign yields rise relative to swaps in the first quarter before resuming their tightening for the rest of 2024. Faster TLTRO repayments and more bond lending helped narrow swap spreads Source: Refinitiv, ING Balance sheet reduction gaining traction with TLTRO repayments QT is but the next step in the ECB’s plans for reducing its balance sheet. The first steps were already made in October with the revision of the terms for targeted long-term refinancing operations (TLTRO) and giving banks more opportunities to repay these ahead of their final maturities. Taking into account the latest sizeable repayment announcement, the outstanding TLTROs will have declined by €796bn to €1.3tn before the year is out. TLTRO reductions could provide the doves with leverage to press for less aggressive QT That should still pitch the level of excess reserves in the banking system at around 4tn, still sufficiently high to leave spot spreads of 3m Euribor over the risk-free ESTR OIS unimpressed. Yet futures contracts are already implying a decent widening towards 16bp by the end of the first quarter of 2023. Lower excess reserves with further repayments will likely make Euribor fixings more sensitive to credit risk again. The more immediate impact surrounding the TLTRO developments has been the easing of collateral scarcity fears, particularly at year-end. The pricing of German sovereign paper versus swaps has started to ease dramatically with the 2Y Schatz ASW spread now close to 70bp after witnessing levels above 110bp in October. In the overall bargaining between ECB hawks and doves that will take place this week, the TLTRO reduction could provide the dovish camp with leverage to press for a less aggressive approach on QT. But that has to be weighed against the notion that QT may be one of the few levers the ECB has left to steer financial conditions determined by longer-dated rates. FX: The ECB remains a secondary driver for the euro The recent rally in EUR/USD has been driven by a combination of a weak dollar environment and a slight improvement in growth sentiment in the eurozone. But, when looking at EUR/USD moves in the second half of 2022, it’s hard to isolate a clear and direct impact of ECB policy/rate expectations; we have long highlighted how our quantitative tools show a very small beta of the EUR-USD short-term swap-rate differential to EUR/USD. Recently, this relationship has modestly restrengthened, but in our view, this mostly reflects the positive impact of easing Federal Reserve hike expectations on global sentiment (to which EUR/USD is highly sensitive) rather than a direct impact on the pair. All of this means that the implications of this ECB meeting on the euro may not prove very long-lasting, and global market factors - like risk sentiment and energy prices - should move back into the driving seat quite rapidly. Still, while the reaction to the latest ECB announcement has been rather contained in the FX market, we could see stronger volatility in EUR/USD on this occasion as markets could receive some guidance on quantitative tightening and new projections will be released at the same time. Given growing speculation around a 75bp hike, we could see a small negative reaction in EUR/USD should our 50bp call prove correct. However, the downside should be limited if the ECB offers some hawkish guidance on QT. Read this article on THINK TagsInterest Rates Foreign exchange ECB meeting Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The USD/JPY Price Reversed From The Lower Limit

The Japanese Yen Stabilized Below 138 To The US Dollar

Kamila Szypuła Kamila Szypuła 13.12.2022 14:34
The dollar was stable on Tuesday ahead of the release of the US inflation data and the last Federal Reserve meeting this year, and investors waited for an updated interest rate outlook. US stocks rose on Monday as investors gained confidence in experts' forecasts of a 7.3% increase in the US consumer price index in November. If this forecast comes true, it will be the fifth consecutive decline and the lowest level in 11 months. Even if this would still leave inflation well above the Fed's 2% target, it may be enough justification to hold back the pace of monetary policy tightening EUR/USD The rate increased slightly to 1.0543 from 1.0538. The EUR/USD daily range is 1.05281 - 1.06287 Today's data from Germany on CPI met expectations, holding the level of 10%. Source: investing.com The EU ZEW economic sentiment index improved to -23.6 in December from -38.7 in November, data released on Tuesday showed, but it still points to more pessimism than optimism. Thursday's meeting of the European Central Bank remains the focus of the week, at which an interest rate hike of 50 basis points is expected. Read next: The Huge Order Boeing 787 Dreamliners By United Airlines | Former FTX CEO Sam Bankman-Fried Was Arrested| FXMAG.COM GBP/USD The pound was broadly stable on Tuesday as gains from the UK employment data were offset by caution ahead of a key US consumer inflation reading. Also, today's UK data could ignite the cable rally fuse should the US CPI data be bound. The release of employment data showed that unemployment met estimates, while wages and the employment rate improved. The number of employees on the payroll increased by 107,000. to a record level of 29.9 million. The number of job vacancies recorded a fifth straight decline, reflecting the uncertainty stemming from economic pressure on recruitment. Wage growth turned out better than expected, with both total and regular wages increasing by 6.1% y/y, which is the fastest rate in history outside of the pandemic. The forecast for core US inflation YoY is 6.1% while overall inflation YoY is expected to come in at 7.3% compared to October’s print of 7.7%. Sterling recently rose 0.2% to $1.2296 ahead of the Bank of England's (BoE) policy decision on Thursday. Last week it hit a nearly six-month high at $1.2345. The Bank of England meets Dec. 15, when a 50 basis point rate increase is expected. USD/JPY USD/JPY hit a 32-year high of 151.95 in October, the day the Bank of Japan intervened for the second time to prevent the yen from depreciating. From this peak, the price is in a downtrend channel. The general mood of the pair is bullish. The Japanese yen stabilized below 138 to the dollar. Price is now approaching the upper band of the channel but is struggling to break above the breakpoint and recent high of 137.67 and 137.86 respectively. USD/JPY Pair slipped to 137.3270 from 137.6498 In a recent announcement, Mana Nakazor, a potential candidate for Vice Governor of the Bank of Japan next year, said the central bank should change its policy statement to give itself more room to adjust interest rates. She suggested that the Bank of Japan should "admit that interest rates may go up or down depending on economic developments" and that he should signal that "massive monetary easing will be over". The Bank of Japan is expected to maintain its monetary policy stance at its next meeting on December 19-20. Source: investing.com, dailyfx.com, finance.yahoo.com
The Outlook Of EUR/USD Pair Is Downward In The Near Term

EUR/USD Pair: The Upward Trend Is Still In Place

Paolo Greco Paolo Greco 14.12.2022 08:00
Tuesday's trading of the EUR/USD currency pair was quiet for most of the day. However, everything was altered when the US inflation report for November was released. In general, we cautioned that the significance of this report now is comparable to that of the Fed meeting. A stronger movement was sparked by the most recent inflation report than by the Fed meeting. Therefore, we were not surprised by the movement of 110 points in a half-hour. Although we have been anticipating a significant downward correction for several weeks, the fact that the European currency increased once again was not even surprising. We have discussed moving north repeatedly over the past few months, but yesterday everything made perfect sense. More than expected, US inflation has slowed down significantly. The US dollar naturally declined due to the situation because the likelihood of the Fed tightening its monetary policy decreased as inflation rose. Additionally, the domestic currency benefits whenever the Central Bank's monetary policy is tightened. So, based on Tuesday's results, we can only reiterate that the upward trend is still in place. There is still no reason to open short positions since the pair has been unable to move past the moving average line. Of course, this week could see several upside-down turns. Even the ECB and Fed meetings will suffice in this case. However, the reality is that the Fed's "hard" and "hawkish" stance cannot be maintained in light of the inflation report. No one has any doubts about the rate increasing by 0.5% tonight. The question was, "What level will it eventually reach?" Additionally, the Fed has no justification for raising the rate beyond 5.5–5.25%, given that inflation is showing signs of steadily declining. And the market may have long since recovered this level of the wager. The Fed's attitude could change. As we have previously stated, inflation now significantly influences the future of the dollar. On the one hand, the fact that inflation is declining is good for the economy. As a result, the Fed will raise the rate less frequently, hold it there longer, and do less to "cool" the economy as a whole. On the other hand, the dollar benefits from tight monetary policy, and it can be said that it lost one of its trump cards yesterday. The US dollar's potential to strengthen in the near future is most intriguing. It has already fallen far enough to justify this. Still required is a correction to the downside. The European currency has already accounted for every growth factor, so growth cannot last forever, even without declines. The annual rate of US inflation dropped to 7.1%, which is 0.2% lower than the most optimistic forecast. The decline in the dollar value might not have occurred if it had reached 7.3%. But we work with what we've got. Now that statements about the need to keep calming the monetary mood have been made, it is reasonable to expect a 0.5% rate hike tonight. At the upcoming meeting, the Federal Reserve may only increase the rate by 0.25%, which for the market could be another cue to sell US currency. The ECB can save the dollar. The ECB may start to slow down the pace of tightening even before it waits for its inflation to slow down, as we have already stated that the pair must adjust occasionally. This element can support the dollar. Thus, a paradoxical situation arises. On the one hand, a new growth factor has been added to the euro. On the other hand, there is still a high likelihood that it will fall in the near future. Third, selling is not advised because there is only one technical signal. Before considering selling, we must still wait for the pair to consolidate below the moving average line. As of December 14, the euro/dollar currency pair's average volatility over the previous five trading days was 98 points, which is considered "high." So, on Wednesday, we anticipate the pair to fluctuate between 1.0529 and 1.0726 levels. The Heiken Ashi indicator's turning downward indicates a new phase of the corrective movement. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trading Advice: The EUR/USD pair is still moving upward. As a result, until the Heiken Ashi indicator turns down, it is necessary to maintain long positions with targets of 1.0726 and 1.0742. No earlier than the price fixing below the moving average line with a target of 1.0376 will sales become significant. Explanations for the illustrations: Channels for linear regression help identify the current trend. The trend is currently strong if they both move in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.       Relevance up to 01:00 2022-12-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329727
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD Pair Has The Potential For Bearish Reversal

InstaForex Analysis InstaForex Analysis 14.12.2022 08:09
Technical outlook: EURUSD rallied through the 1.0673 highs during the New York session on Tuesday before finding resistance. The single currency pair is seen to be trading close to 1.0630 at this point in writing as the bears remain more inclined to come back in control soon. A break below 1.0500 is now required to confirm that the bears are back in control here to stay for a while. EURUSD has hit the Fibonacci 1.271 extension (Red) as seen on the daily chart here, potentially terminating its larger-degree corrective wave. Furthermore, it is also the Fibonacci 0.382 retracement of the earlier downswing between 1.2266 and 0.9535 respectively. A high probability remains for a bearish turn from the 1.0670-1.0750 zone ahead. EURUSD has also hit its trend line resistance of 18 months as prices tested 1.0673. A bearish candlestick formation here will turn prices towards the larger-degree downtrend and drag below the 0.9535 mark in the next several weeks. Immediate price resistance is now seen at 1.0750 while support comes in around 1.0500. Trading idea: Potential bearish reversal against 1.0790 Good luck! Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/304806
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The Euro (EUR) Did Not Stay In A Horizontal Range

InstaForex Analysis InstaForex Analysis 14.12.2022 08:19
The euro reached the target range of 1.0615/42. Yesterday's important U.S. inflation report contributed to this, and overall, the euro did not stay in a horizontal range. Yesterday's movement added more mystery to today's Federal Reserve meeting. On the technical side, will there be a double divergence from the current levels? In fact, all the conditions for that have been met. Second mystery, if the price reaches the next target range of 1.0758/87, will a divergence occur there? (The dotted line on the daily chart is an option). If not, the price will continue to rise to 1.1000. And another question, also among the new ones, to what extent has the market taken into account the 0.50% rate hike? Will there be a reversal of the euro precisely because of this circumstance – the revaluation of the single currency? Here we come to fundamental uncertainties: how pessimistic are investors about the outlook for the European economy? Yesterday, Italian industrial production for November showed a decline of 1.0% versus a forecast of -0.2%. The eurozone's industrial production will come out today with a forecast of -1.5% but it is likely to be worse. On Friday, the eurozone's trade balance for October will be released with a forecast of -32.5 billion euros compared to -37.7 billion in September. But we also expect a worse figure for this index, as weak trade balance data has already been released this week for the peripheral eurozone countries. And there is another reason why investors may not show a strong desire to buy - even if the rate hike is not 0.75%, but 0.50%, it will still be a 4.50% increase - can the stock market withstand that rate? The stock market withstood the November rate hike with great difficulty. And on the day of the rate hike, the S&P 500 was down 2.5%. On the four-hour chart, the price is waiting in the range of 1.0615/42. Even a divergence with the Marlin oscillator was formed. But it is weak and can hardly be an indicator before such an event like the Fed meeting. We can only wait for the development of events.   Relevance up to 04:00 2022-12-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329735
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

In Theory, The Euro Can Continue Rising Against The US Dollar

Paolo Greco Paolo Greco 14.12.2022 08:23
M5 chart of EUR/USD EUR/USD went up again on Tuesday, although it only grew because of the US inflation report. However, this report was worth a lot. Recall that inflation is the main determinant of the Federal Reserve's monetary policy now, so this report is even more important than the Fed meeting itself. That's why it's no surprise that the dollar fell 110 points in just half an hour when the market learned about a bigger than expected decline in the Consumer Price Index. And there were no other major events or announcements during the day. But there was no need for that. The euro kept the positive mood and in theory can continue rising against the dollar. I still expect a strong bearish correction, but this week (I warned you) the pair's movement could be almost anything. Tuesday's trading signals were bad. Unfortunately, we failed to catch the beginning of the upward movement, so the first signal was formed after the inflation report was released, and also when the upward movement was almost over. Therefore, the buy signal near 1.0637 should not be worked out. As well as all succeeding signals to buy near this level. There were also two sell signals, but both of them were created quite late, so there was no point in taking a risk and trying to gain some tens of points using them. The best option was not to open positions at all on Tuesday. Moreover, all the signals near 1.0637 turned out to be false. COT report COT reports on EUR/USD have puzzled traders through most of 2022. Half of the year, COT reports indicated clear-cut bullish sentiment among large market makers while the single European currency was extending its weakness. For a few months, the reports showed a bearish sentiment and the euro was also trading lower. Currently, the net position of non-commercial traders is again bullish and increasing. Although the euro is rising, a rather high value of the net position allows us to assume an early completion of the uptrend. During the reporting week, the number of long positions held by non-commercial traders increased by 3,900 and that of short positions grew by 1,300. Accordingly, the net position grew by about 2,600 contracts. The green and red lines of the first indicator moved far away from each other, which could mean the end of the uptrend (!!!) (which, in fact, never happened). The number of long positions exceeds that of short positions by 125,000. Therefore, the net position of non-commercial traders may continue to rise further but without triggering a similar rise in the euro. When it comes to the total number of longs and shorts across all categories of traders, there are now 35,000 more short positions (661,000 vs 626,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD is still near its local highs, but this week traders will have so many events and reports that they can use that it is impossible to say which way the price will move further and where the current week will end. The U.S. dollar could still show gains even if Fed Chairman Jerome Powell shows a dovish stance. On Wednesday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0579, 1.0637, 1.0765, 1.0806, and the Senkou Span B (1.0442) and Kijun Sen (1.0573). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 14, the European Union will publish the Industrial Production report and the results of the Fed meeting will be announced in the US. The results will be known late in the evening, when intraday traders should have left the market. You can stay if you put Stop Loss. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group Relevance up to 01:00 2022-12-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329723
The EUR/USD Pair Has A Potential For The Breakout Mode

FX: The Lagarde Effect On EUR/USD Pair Should Be Significantly Smaller And Shorter-Lasting Than The Powell Effect

ING Economics ING Economics 14.12.2022 10:47
The Fed's job today was made harder by yesterday's drop in US inflation, but we still think Chair Powell will try to deliver a credible rate protest and push back against easing financial conditions after delivering a 50bp rate hike. This could take some pressure off the dollar, but downside risks remain - admittedly - quite high Federal Reserve building in Washington, DC USD: In need of some Powell "magic" Yesterday’s US inflation reading made the Federal Reserve's job even harder as it prepares to announce another rate hike at 1900 GMT today. Core CPI dropped to 6.0% year-on-year, and headline to 7.1% in November, prompting a new round of dovish speculation on the Fed’s rate path. As discussed here by James Knightley,  we are not changing our call for a 50bp hike today, but the chances of the peak rate reaching 5.0% have admittedly shrunk. The market’s pricing for today’s announcement has also remained anchored to 50bp, and it’s fair to believe that investors’ reaction will be primarily driven by the forward-looking language of the statement and of Powell’s press conference. Our perception is that the Fed will want to deliver some sort of “rate protest”, essentially pushing back against the recent easing in financial conditions. To do that, Powell will need to downplay the recent abatement in price pressure, stick to the view that the inflation battle is still to be won and ultimately try to re-anchor peak rate expectations to the 5.00% handle. That is easier said than done. The unsuccessful reiteration of “transitory inflation” in 2021 served as a lesson to the Fed, and now warns against abandoning rate hikes too early or sticking too long to the notion that inflation isn’t yet on a reliable downward path. So, Powell will have to walk the fine line between credibility risk and the Fed’s explicit preference to overdeliver rather than underdeliver on policy tightening. While we are in the camp of higher interest rates and a stronger dollar, we have to admit the risk of wanted or unwanted dovish mis-steps is elevated. We knew December would be a challenging month for dollar bulls like ourselves, and downside risks remain significant today. Still, our base case is that the dollar can recover some of the lost ground as Powell works his magic to deliver a broadly hawkish – and above all credible – message. Francesco Pesole EUR: Powell effect larger than the Lagarde effect EUR/USD is consolidating above 1.0600 after the post-US CPI knee-jerk reaction brought it to a 1.0660 high. While positioning data suggests little room for more short-squeezing on the pair, markets appear more comfortable in laying down the basis for a more structural bullish approach. Today’s FOMC announcement will tell us whether the Fed can still offer some support to the dollar, and tomorrow’s European Central Bank announcement may give hints about balance sheet reduction. However – as discussed in our FX and rates preview – the Lagarde effect on EUR/USD should be significantly smaller and shorter-lasting than the Powell effect. A dovish Fed today could open the door for a rally to 1.0800 before Christmas, but we favour a correction to sub-1.05 levels instead, fuelled by a Fed rate protest and higher energy prices.   Francesco Pesole GBP: Inflation slowdown not that relevant now Inflation has also started to decelerate in the UK. The November reading, released this morning, showed a smaller-than-expected month-on-month CPI reading (0.4% vs expected 0.6%), which brings the YoY number to 10.7% from 11.1% in October. Core inflation slowed from 6.5% to 6.3%. The pound’s reaction to the data has been quite muted, which is not surprising given the wait-and-see approach ahead of today’s FOMC risk event and since the inflation figures do not suggest a different outcome for tomorrow’s Bank of England meeting. Consensus and markets are expecting a 50bp hike, and this is also our house call. Today, cable will be primarily moved by the FOMC reaction. We expect a correction below 1.2300, but the risks of a negative dollar reaction are – as discussed above – non-negligible: in that case, 1.2500 may be tested before the Christmas break. Francesco Pesole SEK: Inflation in Sweden going the wrong way While inflation shows signs of abating in some major economies, Sweden’s CPI report showed that – as expected – both core and headline rates kept rising in November. Core CPIF moved from 9.3% to 9.5% YoY, and CPIF, excluding energy, from 7.9% to 8.0% YoY. The krona is slightly stronger after the release, mainly because the rise in inflation was slightly smaller than consensus expectations. Still, this is enough to reinforce our view that Riksbank will have to deliver another 75bp of tightening in the first half of 2023. The next meeting is in February, and a few more data releases should offer markets and policymakers some clearer guidance. Incidentally, we’ll see a change at the helm of Riksbank, with Erik Thedéen taking over as governor from 1 January. EUR/SEK is trading in the 10.85/10.90 range at the moment, and we currently see some upside risks (to 11.00) for the pair in the short term driven by a renewed deterioration in market sentiment, especially in Europe. For 2023, we forecast a moderately bearish scenario for EUR/SEK, targeting 10.40/10.50 in the second half of next year. Francesco Pesole Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
All Eyes On Capitol Hill, Jerome Powell Will Appear Before The Senate Banking Committee

There Was A Strong Rally Ahead Of The Announcement Of The Fed's Decision On Monetary Policy

InstaForex Analysis InstaForex Analysis 14.12.2022 11:11
The latest consumer inflation data in the US indicated a noticeable decline, which caused a strong drop in dollar, an increase in demand for equities and a decline in government bond yields. The report noted that CPI in the US fell from 7.7% to 7.1% y/y in November and decreased from 0.4% to 0.1% m/m. Although this is much lower than expected, the figure really impressed investors, so there was a strong rally ahead of the announcement of the Fed's decision on monetary policy. More importantly, the central bank will also reveal its forecasts for future inflation, GDP and unemployment, which will give investors an indication of how long the rate hike cycle will last and how deep a possible recession could be. In addition, Fed Chairman Jerome Powell has a speech scheduled, in which he is likely to discuss their assessment of the economy and future plans for monetary policy. So far, markets believe that his statements will be hawkish, but some are expecting a softer one where the Fed will say that it will be ready to stop raising rates sooner rather than later. If things go that way, a rally will be seen in all markets, accompanied by a weaker dollar. Forecasts for today: EUR/USD The pair is currently consolidating below 1.0655. If the Fed says positive statements, it could hit 1.0785. USD/CAD The pair is trading above the level of 1.3520. A rise in oil prices and a decline in dollar could take it to 1.3400.   Relevance up to 07:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329751
Jerome Powell wasn't that dovish yesterday, hinting at acceleration of rate hikes and higher rate peak

Fed Jerome Powell is said to switch investors' mood at the press conference later today

Ipek Ozkardeskaya Ipek Ozkardeskaya 14.12.2022 12:21
The softer-than-expected inflation print in the US sent the stocks higher and the US dollar lower, but the S&P500 couldn't clear key resistance levels, as investors know that the Federal Reserve (Fed) Chair Jerome Powell could coldheartedly kill the market joy at his post-FOMC press conference today.  On the right path, but...  Yesterday's inflation report in the US filled investors with joy and further hope that  1. Inflation in the US may have peaked this summer and we will be heading lower from here, and,   2. The Fed will adopt a softer monetary policy stance and hike, yes, by 50bp today, but certainly not more than another 25% in February.   The problem with that is, swap pricing now points at a peak Fed rate of less than 4.90% in Q1, while the Fed will likely carry on pushing the rates at least to and above the 5% mark.   Therefore, the chances are that Jerome Powell will seem satisfied regarding the falling inflation  - because it means that whatever turmoil the Fed has been causing in the markets is at least working through to the end goal of taming inflation.   Read next: $1 Trillion As Part Of Barclays Efforts To Accelerate The Transition To A Low-Carbon Economy | FXMAG.COM But Powell could also stress the fact that inflation remains significantly high compared with the 2% policy target, and that relaxing the tightening measures prematurely is not a good idea.   Therefore, there is no guarantee that the latest fall in US inflation will lead to a softer terminal rate on the dot plot. The Fed officials will likely plot a terminal Fed rate of above 5%, and the gap between where the Fed sees its peak rate next year, and where the market thinks the Fed rate will be a risk for investor appetite.   This is maybe why we saw a great kneejerk reaction to the CPI print yesterday, but the S&P500 didn't rally as much as expected. The S&P500 futures gapped higher at the open, but gently softened to close the day with less than a 1% advance, without being able to clear the 4100 resistance and the ytd bearish trend top.   This means that investors are cautious before Jerome Powell's press conference and the dot plot. They know that the last thing the Fed wants is to reverse slowing inflation by triggering a bullish market euphoria.   And at the end of the day, it's Jerome Powell, and the Fed, who will either give a green light for a modest Santa rally, or tell investors that Santa is stuck in a snow storm this year.  Significance of the dot plot  It's important to note that the dot plot projections give an idea on how the feeling and the expectations change at the heart of the FOMC.   But it's not rocket science.   If you look at the rate projections last year, the Fed funds rate was expected to advance to 0.90% by the end of this year. But the rates advanced far beyond that level. Assuming that the Fed will hike by another 50bp today, the Fed rates will finish the year at 4.25/4.50%. It's more than five times compared to the projections.   The softer-dollar joy   The US dollar index fell following the softer-than-expected CPI print, and hit a fresh low since summer.   The EURUSD spiked to 1.0673, Cable advanced to 1.2444 and the dollar-yen re-tested the 200-DMA to the downside, and gold spiked to $1824 per ounce.   The softer US dollar, and stronger euro sent the European indices to fresh highs since summer. The DAX flirted with the June peak, and the Eurostoxx50 traded at the highest level since February  Crude oil rallied more than 2.50% yesterday, on hope that the Fed could slow down the rate hikes, and not push the US into a deep recession to fight inflation – in which case, the scenario of a soft landing could materialize and prevent demand outlook from becoming too morose.   But the rally in US crude remained capped at around $76pb, and the surprise US inventory build last week, pre-announced by API, may have capped the topside. The more official EIA data is out today and could mark the end of a series of 4 consecutive months of significant decline in US inventories.   Read next: John Hardy (Saxo Bank): I don’t think any single inflation print will unsettle the BoE here, just look at the huge recovery in sterling from the lows | FXMAG.COM Bitcoin can't care less about the FTX, Binance drama  The FTX drama continues with the arrestation of Sam Bankman-Fried in the Bahamas, and news that investors withdrew $3.7 billion worth of funds since last week, the last $1.9 billion being withdrawn over the past 24 hours.   Plus, Binance reportedly stopped the stablecoin USDC withdrawals.   But Bitcoin couldn't care less. The price of a coin advanced more than 3% yesterday, and tested the 50-DMA to the upside, showing that the FTX drama has been priced in and out and further drama should not hit the coin harder.   The same is not true for cryptocurrency exchanges, however, which remain at a hot seat with the drama spilling over to other exchanges. Coinbase shares lost more than 9% yesterday.
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

The Australian Dollar Held Above $0.68, Today The Fed Will Make Its Last Decision Of The Year

Kamila Szypuła Kamila Szypuła 14.12.2022 14:08
Dollar bears have come out of hibernation. After gaining 16% in the first 10 months of the year, the dollar index, which measures the dollar against a basket of currencies, lost 5% in November. It has since fallen another 1%, reflecting a smaller-than-expected increase in consumer prices in November. Fed ahead In currency markets, the dollar fell again after tumbling against a range of major currencies on Tuesday. The dollar is also facing more headwinds. The Federal Reserve is expected to reduce the scale of future interest rate hikes, which would allow other central banks to close the interest rate gap that attracts investment to the United States. US interest rates, which are the lower bound on both government and corporate bond yields, range from 3.75% to 4%, which is well above rates in other major economies such as the Eurozone where the deposit rate is 1.5%, or Japan, where interest rates are actually negative. Today the Fed will make its last decision of the year. Futures pricing shows markets expect the Fed will slow the pace of hikes. The latest rate hike is expected to raise rates by 50 bp this time. Fed officials say interest rates will go up. They want investors to focus on trajectory, not pace, and are signaling that interest rates could peak above market-expected 4.8% and stay there for most of 2023. If the Fed sticks to the "higher for longer" mantra central banks in Europe, the UK and China will struggle to catch up given the volatile state of their economies. EUR/USD The EUR/USD benefited from the release of inflation data, breaking the level above 1.06. The euro rose by 0.9% yesterday, and the pan-European Stoxx 600 index saw gains of 1.29%. However, the European Central Bank is also getting ready for a 50bps rate hike tomorrow. In Europe, the ECB will announce its latest monetary policy decision tomorrow. Both the Fed and the ECB are expected to raise interest rates by 50 basis points, keeping the rate differential between them the same, but central banks may differ in their forecasts for the coming months. Differences in the forecasts of the two central banks for the coming months will determine where EUR/USD will trade in the short to medium term. Read next: "Candid Stories" - Instagram like BeReal? Supermarkets Are Doubling The Number Of Their Own Product Lines | FXMAG.COM GBP/USD Yesterday, GBP/USD opened the prospect of a move towards 1.2750 after breaking 1.2300. The pound rose by 0.82% against the dollar yesterday to reach a 6-month high. The upward price movement was due to newly released inflation data from the US. Today, decisions on monetary policy will be announced by the Fed, and on Thursday, next to the ECB, the Bank of England. The Bank of England will have to contend with the biggest drop in living standards in history as the energy crisis, fiscal austerity and lack of growth eat into British household budgets. After positive GDP data on Monday, UK Chancellor Jeremy Hunt warned that the economy could get worse before it got better. While yesterday's employment figures were largely positive, they indicated a slowdown in employment as firms prepare for a tough start to 2023. The Bank of England released its Financial Stability Report yesterday, warning that 2023 will be a tough year for British households due to a combination of falling real incomes, rising mortgage costs and higher unemployment. AUD/USD The Aussie Pair benefited from lower-than-expected US inflation. Yesterday, the pair was trading low in daily levels in the 0.6733-0.6793 range. Today, the quotes are higher above 0.68, oscillating close to the highest levels in three months The lack of events on the Australian market makes the AUD/USD pair dependent on reports and events from America. USD/JPY The Japanese yen held its recent advance to below 136 per dollar. Yesterday, the USD/JPY traded above 137. The decline will occur after the release of US inflation data. The drop took place from the level of 137.2760 to the level of 135.3800. Currently, the pair is trading at a price of 135.0040.   Source: finance.yahoo.com, investing.com, dailyfx.com
Bank of England raised the interest rate, UK unemployment data go out tomorrow

Euro: 50bp rate hike is on the cards, but ECB decides shortly after Fed...

Jing Ren Jing Ren 14.12.2022 14:27
The consensus among economists is that the ECB will hike by another 50bps. But there is this unusual situation where the ECB has its rate decision right after the Fed (and members will be meeting at the same time as the BOE). As the US is the largest trade partner, it's understandable that the ECB will consider what the Fed does when it decides policy. The main driver of the EURUSD, naturally, is the interest rate spread between the Euro and the Dollar. But not just the interest rate, the inflation rate has to be taken into account, because it's an important factor for investors. Particularly now with interest rates so high, and varied across geographies. What's the real return on investment? Currently, the ECB's interest rate is 2.0% and the Fed is double that at 4.0%. But we have to factor in inflation. Here we don't use core inflation, even though that's the preferred measure by central banks. Investors care how much their money is actually worth, taking into account as many factors as possible. November inflation in the Eurozone was reported at 10% (preliminary, but the final usually doesn't vary much); while in the US it was at 7.1%. So, there is a 2.0% (or 200 basis point) spread in favor of the dollar, given the interest rates. But, on top of that, there is a 2.8% difference in inflation. Meaning that holding Euro debt will lead you to a bigger loss than holding dollar debt. Hence, the strong preference for the dollar. It's about the future, too But, investors aren't investing in the past; they want to know where things will be in the future. If the central bank is aggressively raising rates, then it means they will bring inflation down. That's what the Fed has been doing lately, and inflation in the US is trending downward. But the ECB has been much slower to raise rates, so inflation has been trending higher, with only November's figure (as yet unconfirmed) turning the trend. Read next: Elon Musk is not the richest man in the world anymore| FXMAG.COM The thing is, since the Fed has already pushed rates higher, there is less hiking in the future for the dollar. While the ECB still has over 200bps to catch up, meaning they could keep hiking for longer. Particularly if we consider that inflation is higher now, than the peak for the cycle in the US. Meaning that the Euro could be undervalued for now, and if the Fed signals that it will start slowing rates, while the ECB signals that it will keep aggressively tightening, the EURUSD could catch some tailwinds. There are other factors Europe has managed to reduce energy consumption by around 20%. Energy being the largest driver of inflation in the shared economy. So far, industrial production hasn't faltered, leaving the Euro Area with a still positive GDP, and expectations that Q4 will also show growth. This gives the ECB more room to keep hiking, unlike other central banks. That's why there is a chance of a surprise 75bps hike from the ECB, which could narrow the interest rate gap and give the EURUSD a push. On the other hand, if the ECB matches the Fed's 50bps, there is also a good change that Lagarde will be quite hawkish, which could also support the Euro. Dovish commentary from the ECB at this point would be quite a surprise for the markets.
ECB interest rate hiking is six times faster than in the previous tightening cycles

ECB interest rate hiking is six times faster than in the previous tightening cycles

ING Economics ING Economics 14.12.2022 15:17
The European Central Bank's (ECB's) rate hikes so far have led to a tightening of financing conditions for households and businesses. While mortgage loan growth has already slowed, business borrowing is affected more by recession fears than by higher rates Slow out the gates, but the ECB is now hiking at a record pace The rate of the current hike cycle in the eurozone is the fastest since the ECB came into existence in 1999. It took the ECB just three months to hike interest rates by 200 basis points, while in the previous tightening cycles it took 18 months. And it's not finished; we expect the ECB to hike interest rates by another 100bp before the end of the first quarter of 2023. After a long period of negative rates, this interest rate shock is intended to normalise monetary policy and cool off economic activity, which in turn will tame inflation in the medium term. At this week’s ECB meeting, the discussion on how far to hike interest rates will be more heated and controversial. First officials have started to argue in favour of waiting for the rate hikes recently put in place to unfold their full impact on the economy as the usual delay in monetary transmission is considered to be 12 to 18 months. Others clearly sympathise with further aggressive rate hikes and focus instead on actual inflation and inflation expectations. So the question is: can we already see an impact of this year's rate hikes on the real economy? This is the most aggressive hike cycle from the ECB ever Source: ECB, ING Research Are higher rates already having an impact? The simple answer is yes. In fact, the transmission of monetary policy tightening started well before the hike cycle actually began. The long end of the curve started to increase materially when the ECB announced tapering in December, but also because of anticipation of rate hikes and higher inflation. Average borrowing rates for businesses and households increased significantly, mimicking the ECB’s policy rate hikes. When comparing to previous hike cycles, it’s hard to show exact timings as the anticipation of hikes already increases the long end of the curve, which is an important driver of business and household borrowing rates. So in charts 2 and 3, we measure the increase in rates for businesses and households starting from their trough. This is mostly just before the ECB started hiking. Business and household borrowing rates have adjusted accordingly Source: ECB, ING Research   Interestingly, and despite the fact that both interest rates for business and mortgage loans have increased proportionally, the impact on actual loan growth shows a large divergence. Mortgage loan growth has come down significantly, while business borrowing – although volatile – has seen strong months despite higher nominal rates. The ECB bank lending survey shows, however, that this is not because of investment opportunities, but mostly due to working capital and inventory reasons. With high input costs and businesses now stocking up – with inventories having been depleted amid shortages – this has required extra borrowing. Demand related to business investment has been falling for the past two quarters according to the survey. So non-financial corporate borrowing is currently elevated, but not because of investment plans. That suggests that the impact of higher rates is being felt across the board. Business borrowing remains elevated, but not for investment reasons Source: ECB, ING Research   What we are currently witnessing is a usual pattern in a rate hike cycle: mortgages do adjust more quickly than business borrowing. The volume of lending to non-financial corporates generally only starts trending down at the end of the tightening cycle. That suggests that business borrowing is less interest rate sensitive than mortgage borrowing. However, in the past, hiking cycles also led to economic slowdowns or even recessions. At the current juncture, the recession is already triggered by the energy price crisis and the impact of the hiking cycle will be overlapping. As a result, once business demand for working capital is satisfied, the full impact of higher rates on business borrowing looks likely. Households usually adjust borrowing to higher rates more quickly than businesses Source: ECB, ING Research No evidence of unwarranted differences in tightening between large economies so far Turning to the transmission of the ECB’s tightening of monetary policy in the three largest economies up to now, we see that mortgage interest rates and business borrowing interest rates have increased the most in Germany since the beginning of the year and the least in France. At the same time, however, the spread between French and Italian government bond yields with Germany has widened this year (although spreads have fallen again since mid-October). That wider spread in government bonds is also reflected in longer-term interest rates for businesses, but remains far from unwarranted tightening in these countries either. Loans with a maturity of more than five years have seen an increase in rates to just over 2.5% in Italy in October, while they stood at 1.7% and 1.9% in France and Germany, respectively. So for now, there is no evidence of extreme transmission of policy in countries with higher government bond yields. The transmission of the ECB’s policy rate hikes so far will definitely be a hot topic at this week’s meeting. For both households and corporates, there has already been a clear tightening of financing conditions. A tightening that is already reflected in weaker mortgage growth but not yet in business borrowing. Interestingly, the tightening of financing conditions is not showing unwarranted tightening in peripheral markets, and government bond spreads have even fallen over the past two months. While tighter financing conditions should support calls for a slowing of the rate hike pace, there currently doesn’t seem to be a need to protect the transmission of monetary policy. Read this article on THINK TagsMonetary policy Inflation GDP Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Euro May Gradually Climb To The Target Level

The Technical Picture Of The EUR/USD Pair Has Changed

InstaForex Analysis InstaForex Analysis 15.12.2022 08:15
The euro bulls' optimism about yesterday's Federal Reserve meeting turned out to be in vain. The U.S. central bank raised the rate by the expected 0.50%, but retained the sentiment for a longer period of the tightening cycle, raising the average expectation for the final rate of the FOMC committee members from the previous 4.6% to 5.1%. Apparently this is what Fed Chairman Jerome Powell had in mind when he warned the market about a likely longer period of tightening than expected. As we expected in yesterday's review, the stock market did not survive the 0.50% rate hike and was down 0.61% (S&P 500). Yesterday's events marked the beginning of a mid-term stock market decline. Also as we expected, eurozone industrial production in October came in worse than expected: -2.0% versus expectations of -1.5% and versus a downward revision from 0.9% to 0.8% for September. The European Central Bank will announce its decision on monetary policy today. This is probably the only reason why investors did not sell off the euro, expecting support from the ECB. The European economy needs support. Germany has planned to raise its debt issuance by 540 billion euros to fight the energy crisis (in the pandemic year of 2021, Germany borrowed about 490 billion). As a consequence, the ECB will be pessimistic. The technical picture has changed. On the daily chart, the divergence acquires a more classic appearance, though for a traditional appearance it needs to form closer to the dashed pink line, which will be another growth wave to the target range of 1.0758/87. But the price can also go down now, settling under the 1.0615/42 range, and then yesterday's exit above it will turn out to be false. On the four-hour chart, the divergence, which was extremely weak yesterday because of the Fed meeting, remained and became stronger. Now it is in force, pushing the price down. The reversal option from the current levels becomes the main scenario. If the ECB and the market "correctly understand" the mutual goals and objectives, then after settling under 1.0615 we expect the price to fall to 1.0470 Relevance up to 04:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329858
The EUR/USD Price May Fall Under 1.0660

The EUR/USD Pair Moved Very Calmly Yesterday

Paolo Greco Paolo Greco 15.12.2022 08:18
For most of the day on Wednesday, the EUR/USD currency pair maintained a calm pace of movement. In general, there have been a few significant movements this week. The market experienced a spike in emotions following the release of the US inflation report, which was highly anticipated, and following the release of the minutes from the Fed meeting last night. Tradition dictates that we wait to discuss the Fed meeting's outcomes. At the very least, this is true: only a few hours have passed since they made their announcement, and even this evening, as they have done numerous times, the pair can alter their course drastically. We also want to remind you that the market's response to such a significant event can last up to 24 hours. The European markets can begin analyzing the meeting's outcomes this morning since they didn't have time to do so last night. One significant event will coincide with another today during lunch when the ECB publishes the meeting's outcomes. Furthermore, determining what traders respond to will take a lot of work. We prefer to hold off on concluding until all relevant events have passed. We still anticipate a significant downward correction, but it has yet to occur. It is noteworthy that the euro did not fall even during those times when there were no supportive factors. There are no longer any corrections of 100-200 points, whereas there were a few months ago. Although it is impossible to predict when strong sales will start, the market is ready for them. As a result, we continue to advise clients to prepare for a significant move south while also opening short positions only in response to the proper sell signals. The US dollar can benefit from the ECB. It will be very difficult to predict what could cause the European currency to fall today if the European Central Bank does not initiate it. The market may sell the pair on a day with no macroeconomic or fundamental background. However, it would be pointless to foresee such a turn of events. Today, the ECB plans to increase the key rate by 0.5%. In the context of the struggle against inflation, a slowdown in the pace of monetary policy tightening is ineffective. As we previously stated, some EU nations might not be able to bear the high cost of borrowing, so the ECB will need to give them financial assistance later. And this is a new QE program or something similar. As a result, the European regulator must strike a balance between two competing fires: high inflation and the potential to plunge the economies of some nations into a serious crisis. Because of this, the euro has already appreciated too much about the dollar and will continue to do so without any justification. Only after one decline in inflation could the ECB decide to slow the pace of tightening. For instance, the Fed made this choice in response to five reports on inflation that revealed a slowdown in the price growth rate in the United States. Given that the Fed rate is already twice as high as the ECB rate and that this gap will continue to grow slowly or not at all in the future, the European currency should lose market support. The ECB may increase its rate several times if the Fed refuses to raise it any further at some point, but this is unlikely to occur before three months. The likelihood of the pair continuing to grow for an additional three months is low. It is preferable to use this time for correction before moving on to growth. Thus, the European currency is still trading at a very high level, and there is currently no selling signal, even after excluding the movements from yesterday evening (which can be easily leveled today). Every trend indicator points upward. As of December 15, the euro/dollar currency pair's average volatility over the previous five trading days was 92 points, which is considered "high." So, on Thursday, we anticipate the pair to fluctuate between 1.0593 and 1.0777 levels. A round of corrective movement begins when the Heiken Ashi indicator reverses its direction downward. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trading Suggestions: The EUR/USD pair is still moving upward. As a result, until the Heiken Ashi indicator turns down, it is necessary to maintain long positions with targets of 1.0742 and 1.0777. Sales will become significant if the price is fixed below the moving average line with a target of 1.0498. Explanations for the illustrations: Determine the present trend with the aid of linear regression channels. The trend is currently strong if they both move in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones Relevance up to 01:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329850
Analysis Of The Euro To US Dollar Pair Situation - 30.01.2023

Euro: according to ING, the risk of 75bp rate hike has increased

ING Economics ING Economics 15.12.2022 08:42
A hawkish hike from the Fed. The 5% handle is the big one for the markets to reconsider ahead. The entire curve is well under this. Something must give, with likely some upwards pressure on market rates for starters. ECB and BoE hawkishness today may have more impact, given lower conviction surrounding peak inflation.  Market rates under pressure to back off now and test higher in the months ahead Markets need to re-think the sustainability of the bond rally seen in the past month. Nominal and real rates are seen up. But not by very much. With no sense as of yet that the Fed is done, we continue to call for market rates to move higher from here. We likely have seen the highs at 4.25%, although our models in fact call for a peak with a 5% handle, and the anomaly here is how big the discount is between the 10yr yield and the likely peak in the funds rate. The 50bp fall in the US 2yr yield between this FOMC and the previous one correlated with a steady ratchet lower in the market discount for the terminal Fed funds rate. At the peak, the market was discounting 5-5.25%. It’s now discounting 4.5-4.75% as a terminal range. This also ratchets lower the upward pressure on the 10yr yield, which tends to be influenced by where the funds rate peaks. It still leaves us with a conundrum where the current 10yr yield looks quite low relative to a terminal funds rate set to be a bit hit in mid-to-late-Q1 of 2023. If the 10yr stays here, the discount would be in excess of 100bp, which is quite large relative to the past few decades. We think the 10yr can narrow that discount in the coming month or so. 2Y and 10Y Treasuries yields have peaked well below the Fed's signaled terminal rate of 5% Source: Refinitiv, ING And no change in balance sheet policy Chair Powell had little to say of any materiality on the bond buying unwind. There had been a small probability attached to the possibility that the Fed could have considered outright bond selling (as opposed to the less impactful ongoing bond roll-off). The rationale could have been to mute, or even reverse, the significant fall in long end yields seen in the past month; done with a view to re-tightening financial conditions. In the event, the committee is not looking into this just yet. It remains an option, however, especially should the Fed require an overall tightening in liquidity circumstances to push in the same direction as the higher rates policy does. Chair Powell had little to say of any materiality on the bond buying unwind The Fed also remains relaxed with the ongoing volumes going back to them on their reverse repo facility. Recently this has ticked back up again towards the US$ 2.2trn area, partly as the US Treasury curbs bills issuance in an effort to smooth the rise into potentially hitting the debt ceiling by mid-2023. That aside, the bond roll-off programme has done more than cause the volume of cash going back to the Fed to plateau. The repo market would like to see this fall. From the Fed’s perspective this is a facility that’s doing its job; mopping up liquidity at 5bp above the funds rate floor. So, no change in the Fed’s tune on this. 2023 should see these volumes ultimately wind lower, albeit slowly over the course of the year. As for today’s session, the focus will shift to the ECB and BoE policy decisions. Both may be seen moving closer to the end of their respective hiking cycles, but the data backdrop provides for less conviction that the central banks have gained the upper hand over inflation just yet. That leaves still more tightening to do and less to discount in terms of subsequent cutting cycles. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM ECB: Key QT principles and still risk of 75bp Interest rates: A 50bp hike is our base case, and also the markets', with the forward discounting 53bp. However, we think that the risk of a larger 75bp has increased of late. Probably only afterwards will we learn of any reluctance within the Council to shift to a slower pace. New forecasts and outlook: A slower pace of rate increases will likely be offset by a strongly worded warning that the fight against inflation is not over. The ECB may well project inflation falling back towards its 2% target only in 2025, and keep in mind that some officials have become more sceptical of forecasts in the current unprecedented times. We do not anticipate the ECB to stress downside risks to growth more than before, as this would dampen any hawkish impetus from the meeting that the Council likely still desires, given how financial conditions have evolved. Quantitative tightening: The ECB has said it would announce the “key principles” of reducing the ECB’s APP portfolio at today’s meeting. “Measured”, “gradual”, and “predictable” have been the adjectives commonly used by officials, which suggests a phased-in approach to QT, using caps initially. A hawkish twist would be to simply let the portfolio run off, as Bundesbank’s Nagel has suggested, with a view to the resilience of bond spreads this far. The ECB could also already hint at a start date to underscore its hawkishness. The consensus is already eying a beginning of QT at the end of Q1 or early Q2 2023. Swap curves are increasingly pricing rate cuts cuts in 2024 Source: Refinitiv, ING BoE: Shifting to back to 50bp Interest rates: We expect a 50bp hike and forwards discount slightly more than 53bp, suggesting only a small chance for a larger 75bp hike. MPC voting split: More relevant this time around for judging the “dovishness” of the hike will be how the MPC has split its votes. A three way split is likely according to our economist, so we will be looking for either a low number of votes for higher 75bp, or more than the likely two votes again from the known doves for a smaller move in the case of a dovish hike. Press statement: We will not get new forecasts nor press conference this time around, merely the press statement and the minutes. Data since the last meeting has been stronger, with wages rising near a record pace. While headline inflation has eased, the more relevant core services inflation has been higher than what the Bank anticipated in November. On the other end, the Sterling recovery will have alleviated currency concerns of the MPC hawks. All in all we think it likely that the Bank will stick to its current guidance of being able to act forcefully if necessary. Another comment directed at market pricing being too high does not look warranted, given it has already eased back. Today's events and market view As noted before, hawkish surprises from the central banks this side of the Atlantic have greater chance of proving market-moving and lasting given that it is less clear here that inflation has seen its peak yet. In EUR rates the impact of upcoming supply surge as announced by the German debt agency yesterday could be compounded by the ECB’s quantitative tightening taking on more of a concrete shape. In data we will get US retail sales as well as initial jobless claims as highlights. Also on the cards are the Empire Manufacturing survey and Philadelphia Fed index. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EUR/USD Pair May Have A Potential For The Further Rally

Forex: Euro and Sterling stay quite calm ahead of meetings, dollar decreased as Fed hikes in-line with expectations

Jing Ren Jing Ren 15.12.2022 08:43
EURUSD rallies along trend line The euro steadies ahead of the ECB interest decision today. On the daily chart, the pair is heading to last May’s high of 1.0800 after bouncing off 1.0300 on the 20-day moving average. Zooming into the hourly time frame, the euro has been climbing along a rising trend line, with a fresh support at the base (1.0530) of the latest momentum. The bullish mood may continue to carry the price action, but selling pressure could grow as the pair approaches the supply zone where short-term buyers might start to take profit. GBPUSD to test resistance The pound holds firm as the BoE meets amid softer CPI from last month. Sterling is grinding its way up along a rising trend line and past last summer’s high of 1.2250 which has turned into a support. A break above 1.2340 indicates that the bulls are still in control. A pullback could be absorbed by eager trend followers. The psychological level of 1.2500 is the next step and its breach would open the door to last May’s high around 1.2660. On the downside, 1.2110 is the bulls’ second layer of defence in case of a correction. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM AUDUSD tests major resistance The US dollar softened after the Fed raised interest rates by 50 basis points as expected. The bulls have been probing resistance under September’s high of 0.6900 for a couple of weeks. Profit-taking was not enough to trigger a broader sell-off, which suggests that sentiment has stayed rather upbeat. The latest surge shows strong commitment from the long side and a bullish breakout could extend gains above the psychological level of 0.7000. The demand zone around 0.6780 is key in keeping the momentum in play. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM
RBI's Strategic INR Support: Factors Behind India's Stable Currency Amidst Global Challenges

Markets Stay Relatively Quiet Early Thursday

TeleTrade Comments TeleTrade Comments 15.12.2022 09:44
Following the highly volatile action witnessed during the American trading hours on Wednesday, markets stay relatively quiet early Thursday with investors gearing up for the Bank of England and the European Central Bank policy announcements. The Swiss National Bank will also unveil its interest rate decision and the US economic docket will feature Retail Sales and Industrial Production data for November alongside the weekly Initial Jobless Claims and the NY Fed's Empire State Manufacturing Survey. As expected, the Federal Reserve hiked its policy rate by 50 basis points to the range of 4.25-4.5% following its December policy meeting. The revised Summary of Economic Projections (SEP) showed that the median terminal rate projection rose to 5.1% from 4.6% in September's SEP. Although the initial market reaction to the hawkish dot plot provided a boost to the US Dollar, the currency lost its strength during FOMC Chairman Jerome Powell's press conference. Powell said no one knew if the US economy would tilt into a recession next year or not and added that they could revise the peak rate projection lower if they continued to see soft inflation data. The US Dollar Index (DXY) fell to its weakest level in six months at 103.44 late Wednesday and the 10-year US Treasury bond yield retreated below 3.5%. The risk-averse market environment helps the US Dollar stay resilient against its rivals in the European session on Thursday with the DXY clinging to modest recovery gains slightly below 104.00. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM Earlier in the day, the data from China showed that Retail Sales contracted at an annual rate of 5.9% in November, missing the market expectation for a decrease of 3.6%. Additionally, Industrial Production expanded by 2.2% in the same period, compared to analysts' estimate of +3.6%: Australian Bureau of Statistics announced on Thursday that the Unemployment Rate stayed unchanged at 3.4% in November with the Employment Changed coming in at +64K. Nevertheless, AUD/USD struggled to capitalize on the upbeat data and declined toward 0.6800, pressured by the risk-averse market environment and dismal macroeconomic figures from China. Similarly, NZD/USD stays on the back foot and trades in negative territory below 0.6450. The data from New Zealand revealed that the Gross Domestic Product expanded at an annual rate of 6.4% in the third quarter, beating analysts' projections of 5.5%. EUR/USD came within a touching distance of 1.0700 late Wednesday before retreating toward 1.0650 on Thursday. The ECB is widely expected to raise its policy rate by 50 bps. Hence, investors will pay close attention to revised quarterly projections and President Christine Lagarde's comments on QT and the policy outlook.  ECB Preview: Five reasons to expect Lagarde to lift the Euro with a hawkish hike. GBP/USD touched its highest level since early June near 1.2450 on Wednesday but lost its traction. As market participants gear up for the BOE rate announcements, the pair trades in negative territory slightly below 1.2400. BoE Interest Rate Decision Preview: Focus on vote split amid high inflation and economic gloom. USD/JPY struggled to make a decisive move in either direction on Wednesday and closed the day flat. The pair clings to modest daily gains above 135.70 in the European morning. USD/CHF slumped to its lowest level since late March at 0.9216 late Wednesday but managed to stage a rebound. The pair holds above 0.9250 so far on Thursday. The SNB is expected to raise the policy rate by 50 bps to 1% but some experts think that the bank could opt for a 75 bps hike instead. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM Bitcoin rose to its highest level in over a month near $18,400 on Wednesday but erased its daily gains before closing flat below $18,000. BTC/USD edges lower early Thursday and trades near $17,700. Ethereum lost nearly 1% on Wednesday and is already down more than 1% on Thursday, trading slightly below $1,300.
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

The Fed Has Slowed The Rate Of Rate Hikes, But Don't Expect The Fed To Change Its Policy Immediately

InstaForex Analysis InstaForex Analysis 15.12.2022 11:04
The euro and the British pound declined after yesterday's statements by Fed Chairman Jerome Powell that the central bank had yet to complete its anti-inflationary campaign to raise interest rates. Borrowing costs are now expected to be slightly higher than economists predict next year. "We still have some ways to go," Powell said at a news conference on Wednesday in Washington after the Federal Open Market Committee raised the key interest rate by 50 basis points from the range of 4.25%-4.5%. According to new projections from policymakers, rates will hit their highs at 5.1% next year and then fall to 4.1% in 2024, a higher level than previously thought. Powell claims that the size of the rate hike at the next meeting in February 2023 will depend on incoming data - leaving the door open for another move of half a percentage point or a step down to a quarter point. More importantly, Powell spoke out against the Fed changing its policy next year - bearing in mind the fact that rates could be lowered in the second half of 2023. "It will become appropriate to slow the pace of increases as we approach the level of interest rates that will be sufficiently restrictive to bring inflation down to our 2% goal," Powell said during the press conference. Against this backdrop, demand for risky assets waned and stock indices sagged as investors speculated that the Fed would halt rate hikes after the latest inflation data, which continued to decline for the third month in a row. Traders were also betting that borrowing costs would reach around 4.8% in May, followed by a 50 basis point cut in the second half of 2023. A couple of weeks ago, Powell signaled plans to moderate the pace of rate hikes and delivered on that promise, but one would not expect the Fed to immediately reverse its policy after several declines in the annual rate of inflation. The central bank cut the pace of rate hikes after four consecutive hikes by 75 basis points, the sharpest increase since Paul Volcker led the central bank in the 1980s. It will take time for the regulator to achieve its goals and it does not intend to retreat from them. Given that the economy has so far coped very well even with such a high cost of borrowing, we do not have to worry about a recession. With the inflation rate going down like that, we can probably avoid a serious problem. Yesterday, Powell made it clear that higher rates would affect the economy. The Fed's growth projections for 2023 were revised up by 0.5%. The 2022 GDP estimate was also raised slightly to 0.5%. As for the unemployment rate, the central bank raised its forecast to 4.6% next year from 3.7% in November. EUR/USD As the EUR/USD pair, demand for the euro has weakened and now everything will depend on the US retail sales data and the EuropeanCentral Bank's decision on monetary policy. To continue rising, the euro needs to break above 1.0670, which will spur the trading instrument to break through the new December high at 1.0720. Above this level, it would be easy to climb to 1.0740. In case of a decline in the trading instrument, only a drop below the support of 1.0625 may increase the pressure on the pair and push it to 1.0580, opening the way to the low of 1.0540. GBP/USD As for the GBP/USD pair, it is moving within the sideways channel. After yesterday's upward spurt, bulls reduced their appetite because of the statements of Jerome Powell and now everything depends on the Bank of England and its decisions. Now bulls need to break through 1.2395 to continue the uptrend. Settling above this level, the price may return to the area of 1.2440. After that, the British pound may soar to the area of 1.2490. The pressure on the trading instrument may return if bears take control over 1.2340. This is likely to push the pound/dollar pair back to 1.2290 and 1.2240 Relevance up to 08:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329911
The Price Of Gold Depends On The US Dollar, Better Than Expected Pending Home Sales Data From The US May Raise The US Dollar And Affect The Gold

The Decline Of Gold Quotes Looks Quite Logical In Response To The Hawkish Fed

InstaForex Analysis InstaForex Analysis 15.12.2022 11:18
You can disbelieve the Fed as much as you like, but going against it is like death. Gold perfectly understands this, reacting sensitively to monetary policy. And if the lion's share of FOMC officials predicts that the federal funds rate will rise by 75 bps in 2023, to 5.25%, and not by 50 bps, as the futures market expected before, then it would be nice for the bulls on XAUUSD to fix part of the profit on longs. Inflation is still very high by historical standards, the Fed's work is not yet done, and all this means that a stable upward trend in precious metals should not be expected. There will be serious pullbacks. Fed forecasts for the federal funds rate In fact, FOMC members are human beings first and foremost, and human beings make mistakes. At the end of 2021, the Committee predicted an increase in the cost of borrowing by 75 bps, to 1%, but in fact the rate rose to 4.5%. Twelve months ago, there was hope that inflation would slow down on its own without much intervention from the central bank. Now the dominant idea is that prices can be reduced to 3%–4%, but further movement towards the target looks very problematic. If not impossible. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM In any case, the current 7% CPI is still very high, and it is inappropriate to say that the Fed's job is done. The further trajectory of the federal funds rate will depend on new data. Its 50 bps hike in February is not out of the question, which brings back investor interest in the disgraced U.S. dollar. Gold is anti-dollar and usually goes down when the American currency goes up, so the decline of the XAUUSD quotes looks quite logical in response to the hawkish rhetoric of the Fed. Dynamics of the U.S. dollar and gold What's next? In my opinion, the fall of the USD index has gone too far, and it would be nice for the precious metal to go for a correction amid profit-taking on longs by speculators. If the nearest U.S. macro statistics convince of the strength of the economy, the chances for the federal funds rate to rise to 5% in early February will increase, and the U.S. dollar will strengthen. On the contrary, worsening data will benefit Treasury bonds. Rising prices for these papers leads to a decrease in yields and turns on the green light before EURUSD and gold. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM A lot depends on the main currency pair. The share of the euro in the structure of the USD index is 57%. At the moment, EURUSD remains stable due to the expectations of the ECB's "hawkish" rhetoric at the December 15 meeting. If the market is disappointed, the pair will collapse, dragging XAUUSD with it. Technically, on gold's daily chart, the "bears" are trying to implement the Anti-Turtles reversal pattern and the inside bar. If their opponents fail to catch the lower boundary of the latter at $1,796 per ounce, it will be an evidence of their weakness and a reason to form short positions. They can be increased later on a breakout of supports at $1,789, $1,783 and $1,777. At the same time, I wouldn't be too keen on selling. As the precious metal quotes move down, we're looking for an opportunity to fix profits and reverse. Relevance up to 08:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329899
The EUR/USD Pair Has A Potential For The Breakout Mode

European Central Bank is expected to go for a less hawkish hike, but economic projections may be worth even more attention

Craig Erlam Craig Erlam 15.12.2022 13:15
Equity markets are back in the red on Thursday as investors reel from the nasty shock delivered by the Fed and look ahead to the plethora of central bank rate decisions on the agenda today. Safe to say, investors simply didn’t see that coming. Two months of better-than-expected inflation data were enough to convince them that the Fed would not only ease off the brake but signal it would do so more in the coming months. Whether through complacency or a desperate desire to see value in equity markets, investors overlooked the concerns that have plagued policymakers for months. The fear of entrenched inflation has been a much greater concern and it’s been better encapsulated in the jobs and wage figures than the headline inflation numbers that have spurred investors on recently. Of course, that isn’t to say the Fed will simply ignore the progress we’ve seen in the inflation data. But perhaps that investors should give more consideration to the upside risks to it. While I still believe the Fed won’t raise rates as far as the dot plot indicates, the next hike may be another 50 basis points unless we see something more sustainable in the labour market and wage numbers. Of course, markets have been ahead of the Fed a number of times this year and the central bank may simply be pushing back as a means of preventing complacency from appearing in the markets, undermining its own tightening efforts. But the case remains that the path back to 2% will likely be far less smooth than that to 7.1% and potentially just as disappointing at times. We should probably accept that now. BoE to continue pushing back, ECB projections key The question now becomes whether other central banks will take a similarly hawkish position against the markets and ruin any hope of a Santa rally this year. Of course, that very much depends on the individual circumstances. Take the BoE for example; it has already been pushing back against market expectations but in a very different way, with the message from the MPC being that it doesn’t expect to tighten as aggressively as the economy falters. The ECB faces other challenges, most notably the fact that inflation is still 10% and it was very late to the party when it comes to raising interest rates. At the same time, the bloc faces a period of huge economic and energy uncertainty and probably recession. The central bank is expected to slow the pace of tightening today following two consecutive 75 basis point hikes but the economic projections are what will likely get the most attention as traders try to determine just how far the central bank plans to push rates. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. More shocks coming? - MarketPulseMarketPulse
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The BoE And The ECB Raised Rate By 0.50% To 3.50% Today, Australian Dollar Falls After Disappointing Data From China

Kamila Szypuła Kamila Szypuła 15.12.2022 14:29
Post-Fed volatility risk is not over yet. All eyes are on the ECB's approach to quantitative monetary tightening and economic updates from the BoE. The US Federal Reserve has also delivered a 50bps interest rate hike, pushing borrowing costs to the highest level since 2007 and hinting at a rate peak of 5.1% next year, above previous projections The Federal Reserve's decision was as provocative as expected for policy decisions - at least in relation to market expectations. The observation of volatility from risk assets and the dollar was noticeably more limited than one might expect Despite Chairman Powell's hawkish tone, the US dollar fell to a new low. The dollar has since fallen to a new five-month low. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM EUR/USD The EUR/USD Pair is trading soft on the session and drops just before the ECB meeting. The euro fell 0.67% to $1.0611 The European Central Bank was set to raise interest rates for the fourth time in a row, although by less than at its last two meetings. The decision was as expected, ie a 50bp hike. Thus, interest rates in the euro zone reached the level of 2.50% Supply chain crisis in the Eurozone economy have not calmed yet as war tensions between Russia and Ukraine are still solid. This is expected to keep Eurozone inflation expectations solid ahead. The European Central Bank expects the inflation rate to remain above 2% for the next three years. This will force the president of the European Central Bank, Christine Lagarde, to further tighten interest rate policy in order to tame rampant inflation. GBP/USD There is an interest rate decision by the Bank of England, and the big fear is the same as the ECB's: recession fears that could stop the Central Bank from raising interest rates further next year. This could result in discrepancies in interest rate expectations between the US and the UK. The Bank of England (BoE) has raised interest rates for the 9th consecutive meeting as the UK central bank continues to battle with inflation. The BoE raised the bank rate by 0.50% to 3.50% today After the expected half-point increase by the Bank of England, the British pound continued to fall. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM AUD/USD The Australian dollar weakens slightly following disappointing rounds of key Chinese economic data. The Australian dollar is moving within a bearish trend China's slowdown has negative consequences for Australia. China is Australia's largest trading partner. Thus, economic performance in the former often has knock-on effects on the latter. If this is the case, a slowdown in China could hurt Australian production in the future, perhaps inspiring the Reserve Bank of Australia to change its policy course USD/JPY USD/JPY Pair rose to 136.6907 from 135.4721 getting a lift from the Fed decision. The Japan trade deficit narrowed modestly in November according to data released overnight, with brisk growth for both imports and exports. Source: finance.yahoo.com, investing.com
FX Daily: Testing the easing pushback

The Euro May Complete Its Preparation For The Downward Movement

InstaForex Analysis InstaForex Analysis 16.12.2022 08:06
The European Central Bank meeting was held yesterday. The rate was raised by 0.50%, and the ECB decided to reduce its holdings in the APP program. The decline will amount to €15 billion per month on average until the second quarter of 2023. The Committee expects at least two more raises of 0.50%. The euro jumped more than 100 points on such news. But then active investors saw oil falling, the U.S. stock market going down a bit late for the previous Federal Reserve meeting, and the euro closed the day with a loss of 53 points. The market went with our scenario, as the stock market fell and the euro along with it. The S&P 500 is down 2.49%. Take note that the European stock indices started falling right from the opening, which means that they showed even more weakness for the rate hike (as representatives of the weaker economy) than the U.S. market. The European Euro Stoxx 50 collapsed by 3.51%. The reversal of the single currency is coming hard. It has not reached the target range of 1.0758/87, but the readings of the Marlin oscillator, which is persistently declining, confirming the divergence, suggests a new historical extreme of 1.0736. The price is now pondering in the range of 1.0615/42. A consolidation under it opens the way to 1.0470, the low of April 28. On the four-hour chart, the price is settling in the range of 1.0615/42. A reverse consolidation above the range will complicate and slow down the reversal. The MACD line, which is just below this range (1.0567), is also slowing the decline. The Marlin oscillator did not get ahead of events this time and returned to the positive area. We are waiting for the euro to complete its preparation for the downward movement. Relevance up to 03:00 2022-12-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329993
The Price Of EUR/USD Pair Will Develop Sideways Movement

A Bearish Correction Of The EUR/USD Pair Keeps Forming

Paolo Greco Paolo Greco 16.12.2022 08:14
Analyzing Thursday's trades: EUR/USD on 30M chart EUR/USD flew from side to side on Wednesday and Thursday. This is exactly what I predicted at the beginning of the week and during the weekend. It was obvious that the results of the meetings of the European Central Bank and the Federal Reserve would not be discouraging or shocking, so there won't be a trend. Nonetheless, volatility should have increased, which we saw. Now that the inflation reports have been released and the meetings are behind us, we can say that the U.S. dollar never found any reason to rise. Yes, we did see a nice growth from the dollar last night, but it still didn't go far from its local highs. The euro has grown by 1200 points for two months, and the current pullback doesn't go over 150 points, so from a technical point of view, there is no reason to talk about the beginning of a downtrend. There are no signs of a possible downward movement on the higher charts. The results of ECB and Fed meetings were quite flat - both of them raised the rates by 0.5%, and both of them indicated that the rates will keep rising. There was no good reason to favor any currency over the other. EUR/USD on M5 chart Trading signals found in the European trading session were quite good. In the very beginning, there was a sell signal near 1.0663, afterwards the pair fell to 1.0607, which made it possible for beginners to earn about 35 pips. There was a double buy signal near 1.0607, but it was also worth working out. Approaching the time when the ECB was about to announce the results of its meeting, the pair moved away from 1.0607 so traders were able to set the Stop Loss to Breakeven and stay in the market. Therefore, newcomers could continue to support long positions without much risk. As it turned out, this was the right decision, as the pair continued to rise and even surpassed 1.0697. You could only close the longs when EUR fell below this level. It was possible to get 60-70 points of profit here as well. But all the subsequent signals should not be filled. The sell signal at 1.0697 was formed at a "dangerous time" (although it was profitable), while the rest of the signals were formed too late in time. Trading tips on Friday: The pair moves high on the 30-minute chart even after the two central bank meetings. Thus, there was no drastic change in the technical picture this week. There is still no trend line or channel. A bearish correction keeps forming, but it refuses to start. On the 5-minutes chart on Friday, it is recommended to trade on the levels 1.0465-1.0483, 1.0536, 1.0582-1.0607, 1.0663, 1.0697, 1.0736, 1.0787, 1.0806. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. On Friday, the EU and the US will release business activity indexes for services and manufacturing for December. Although they are less important than the other events this week, investors might react. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time. Relevance up to 02:00 2022-12-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329985
The EUR/USD Pair: There Are Still No Sell Signals

The EUR/USD Pair Has The Potential For Bearish Decline

InstaForex Analysis InstaForex Analysis 16.12.2022 08:21
Technical outlook: EURUSD rallied through 1.0736 sharply during the New York session on Thursday only to find resistance and reverse. Prices dropped below 1.0600 thereafter giving up over 130 pips in no time. A potential top seems to be in place at 1.0736 as the bears target lower towards the 1.0000-50 area at least. The single currency pair is seen to be trading close to 1.0640 at this point in writing as the bears prepare to resume lower again. EURUSD has also produced an Engulfing Bearish candlestick pattern right at the trend line resistance of over 18 months as seen on the daily chart. A high probability remains for the larger-degree downtrend to resume lower towards 0.9400 levels in the next several weeks. Also, note that the Fibonacci 1.618 extension of the counter-trend rally was almost tested at 1.0740. If not a trend reversal, which is too early to confirm, EURUSD is setting up for a corrective decline towards 1.0000 before finding support. The recent upswing is now seen between 0.9740 and 1.0736 levels and the Fibonacci 0.618 retracement is seen close to the 1.0000 mark (not projected here today). The price is looking lower in the near term. Trading idea: Potential bearish decline against 1.0750 Good luck! Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305187
China Restricts Gallium and Germanium Exports, Heightening Global Tech War

Forex: Buying And Selling Currency Options

Saxo Bank Saxo Bank 16.12.2022 09:46
What are Forex (FX) Options?Forex options are just like equity options which gives the buyer of the options the right but not the obligation to buy or sell a currency pair on a specific date (expiry) at a specific price (strike price). In exchange for this right, the option buyer typically pays a premium to the seller/writer of the option.The key point of difference between FX options and Equity options is that a call option on one currency is necessarily a put option on the other currency. If you are buy EURUSD call – you are essentially buying EUR call and USD put. Basic Terms Types of FX OptionsThere are two types of FX options – calls and puts. Buying a call option gives you the right to buy a currency pair while buying a put option gives you the right to sell a currency pair on the expiry date. Selling a call option involves taking on an obligation to sell at a pre-agreed price on the expiry date while selling a put option involves taking on an obligation to buy at a pre-agreed price on the expiry date in exchange for receiving a premium.We shall use an example involving EURUSD call and put options below to illustrate this:Scenario Analysis for EURUSD option at expiry vs Owning an outright 2 mth EURUSD forward Assumption: Buy/Sell 100,000 EURUSD Call/Put option at strike 1.07 with 2 month tenor for 0.0150 (150 pips), P&L in USD Buying FX OptionsTypically, traders who wish to place a directional bet on a currency pair would buy OTM calls or puts. As OTM options are much cheaper and as a result offer the most leverage, it gives the most bang for buck especially when one is trying to trade strategies that offer asymmetrical returns. OTM options however are most prone to time decay (meaning the more time passes without the spot prices moving in favour of the option the more acute the loss of value of the option). At times, traders might wish to buy ATM options due to their sensitivity to volatility and price changes in the underlying. Due to their higher deltas (sensitivity to spot price move), they are also relatively more likely to expire in-the money. The flip side is that ATM options cost more than OTM options and therefore can lead to higher loss of premium if the option expires worthless. ITM options have high intrinsic value (forward price - strike for calls and strike – forward price for puts) and often work like a proxy spot position. These options are usually much more expensive and thus offer little leverage. In addition, the total premium loss would be much larger should the option expire worthless. In short, the optionality in an ITM option is limited and hence it tends to be less popular. Another way good traders would try to reduce the premium paid is via trading option strategies to implement their views. Some common strategies include call spreads (Buy call, Sell call), put spreads (Buy put, Sell put), collar strategies (Long stock, Buy put, Sell call) and risk reversals (Sell put/Buy call or Sell call/Buy put) Selling FX OptionsTraders can generate income by selling FX options in exchange for a premium. As an option seller, you are receiving the premium to protect the option buyer from market moves. The maximum gain from selling options is the premium received while the losses can be unlimited. Why do traders sell FX Options?If selling FX options can lead to unlimited losses, why would anyone sell them? As the value of options comprise of volatility, time decay and moneyness of the option, traders can take advantage of temporary spikes in volatility to sell FX options to express their view on the market. Premium received can be measured in basis points to give you a fairer indication of the amount of premium you receive during different time periods. Selling putsIf you are bullish on USDJPY and think that the pair is unlikely to fall below 136 in the next month (and you are prepared to buy it at 136 even if it gets there), one way to express this view is to sell 1 month puts at the strike of 136 for some premium. If USDPY stays above 136, you do not have any obligations at expiry but if USDJPY falls below 136, you would be long USDJPY from 136. Selling callsOn the contrary, if you are bearish on USDJPY and think the pair is unlikely to rise above 140 in the next month (and you are prepared to sell at 140 even if it gets there), you can sell 1 month calls at strike 140 for some premium. If USDJPY stays below 140, you do not have any obligations but if USDJPY rises above 140, you will be short USDJPY from 140. Key differences between FX options and Equity options1. FX options are traded over-the-counter (OTC) instead of an exchange. As these products are traded OTC, the variables like the size, strike price, and tenor are customizable. You can choose your own size, expiry date and strike price instead of adhering to standardized ones you would typically find in an exchange traded option like equity options. 2. FX options are European style options. This means that these options can only be exercised on the expiry date as compared to any time before expiry in American options.3. When you exercise an FX option, the resulting position is a FX margin position instead of a position required to be fully funded by cash. For example, a 100,000 USDJPY call option expiring in-the-money (ITM) will result in a long 100,000 USDJPY position that utilizes way less margin than 100,000 USD. If initial margin is 5%, then 5,000 USD is required to receive this position at the strike price in addition to the position P&L. Key advantages of trading FX options1. The maximum loss from buying FX options is the premium paid. Buying FX options to express your view will not lead to margin calls due to mark-to-market losses. 2. Selling FX options in the right conditions can lead to a steady income (premium) stream to supplement your portfolio returns. Typically traders can take advantage of a interim spike in volatility in a deeply liquid market that trades 24 hours a day for 5 days a week to sell FX options to maximize their returns. 3. Options are often used by FX traders as proxy take profit (Sell call against long/Sell put against short) or stop loss orders (Buy put against long/Sell call against short) for their spot tradingKey risks of trading FX options1. There is a potential of unlimited loss when selling FX options due to the high leverage factor. 2. There is a risk of using FX options as a means to take profit or enter into a position as the option might be in-the-money before expiry and turn out-of-the-money at expiry. Without the option, you might have taken profit or entered into a position via a spot order otherwise. 3. Buying far OTM FX options frequently can lead to a low probability of success and too much premium loss due to time decay.   Source: Primer on FX Options | Saxo Group (home.saxo)
"Global Steel Output Rises as Chinese Production Surges, Copper Market Remains in Deficit

There Will Probably A Rally Today And For The Remaining Two Weeks Until The End Of The Year

8 eightcap 8 eightcap 16.12.2022 09:55
Pressure returned on markets due to negative sentiment that followed the Fed's decision on interest rates. Most likely, players wanted to lock in gains on assets at more interesting prices, so even though the rate hike and latest economic statistics in the US were not surprising, they did their best to trigger a collapse, using recession fears as an excuse. Of course, it could also be because the Fed said they expected a slightly higher average interest rate level, but that was not new, as is the economic data that was lower than expected. Nevertheless, it is unlikely that yesterday's decline is a sign of a global reversal as an important leading indicator, which is US treasuries, did not show a strong increase. Stock markets are also beginning to grow since today's European session, and this may continue until the US trading session. It seems that the gold market is climbing as well, while dollar is declining smoothly. There will probably a rally today and for the remaining two weeks until the end of the year, which will not only recover yesterday's losses, but will also lead to a noticeable increase in risk appetite, accompanied by a weaker dollar. Forecasts for today: EUR/USD The pair halted at 1.0655, but stabilization in markets and increased drisk appetite could push it towards 1.0785. USD/CAD The pair is trading within the range of 1.3525-1.3700. If market sentiment improves, it could stay at 1.3525.   Relevance up to 08:00 2022-12-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330015
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

There Was A Rally Of Hawks This Week, Statement Of The President Of The European Central Bank Supported The Euro

Conotoxia Comments Conotoxia Comments 16.12.2022 12:35
Hawks are defined as those members of committees deciding on interest rates who are in favor of raising those rates. So there was a rally of hawks this week, as both the Fed and the ECB and the Bank of England and the Bank of Switzerland, among others, decided to raise the price of money and, moreover, are unlikely to change that for the time being. The king, or rather queen of the hawks, became the president of the European Central Bank, Christine Lagarde, and her statement supported the euro exchange rate. The European Central Bank yesterday raised interest rates by 50 basis points as expected, reiterated that there would be further increases and outlined plans for quantitative tightening. The common currency initially strengthened after the decision and reached a six-month high of $1.07. In the afternoon, however, it gave back some of the earlier gains, with market participants trying to assess how much additional rate hikes would hurt the already fragile economy. The ECB raised its inflation forecasts, while economic growth forecasts were sharply lowered. According to the latest forecasts by ECB economists, inflation is expected to reach 8.4 percent in 2022, only to fall to 6.3 and 3.4 percent in the next two years, respectively. Meanwhile, GDP is expected to grow by 3.4 percent in 2022, only to fall to 0.5 percent in 2023 and rise to 1.9 percent in 2024. However, that was not what seemed to be the most important statement. It was probably that the ECB needs to raise rates more than the market is currently pricing in. Christine Lagarde assumes that rates in the Eurozone can be raised at 50 bps for a longer period of time. Thus, the market has begun to expect the peak in eurozone rates to fall above 3 percent. Source: Conotoxia MT5, EURUSD, H1 As a result, the euro was above $1.07 at one point, and what's more, the eurozone may be coming out on top in terms of the pace of rate hikes in the future. Nevertheless, high interest rates and a weaker outlook for economic growth may leave their mark on other markets like the stock market. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

Rates For The Eurozone Will Remain Increasing Just As Recession Begins

InstaForex Analysis InstaForex Analysis 16.12.2022 13:01
The ECB has warned that aggressive interest rate hikes are far from over, suggesting that rates for the eurozone will remain increasing just as recession begins. This statement is quite striking because even though each rise in borrowing costs helps contain inflation, it risks a more severe damage to the economy. And now that inflation is in double digits and officials predict it will remain above the 2% target in the coming years, this week's meeting set the tone for further tightening of monetary policy. Unsurprisingly, EUR/USD surged by 1,200 pips after the ECB press conference. Although the accompanying rate hike is slower than the previous ones, ECB President Christine Lagarde insisted that there are still a few half-point moves ahead. This is despite an economic slowdown that is probably taking place already. Officials are now expecting a 0.5% increase in GDP next year, following the contraction in the current quarter and another in the next three months. It could recover, but it will not go beyond 2%. Even so, the ECB did not let such a weak outlook to discourage itself from achieving price stability. The ECB plans to raise the rate by another 75 basis points, but there may be disagreements among officials next year, which will make the task of reaching consensus in the Governing Council more difficult. Relevance up to 08:00 2022-12-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330019
Mexican Rate Spread: Tight vs. Central Bank's Rate Spread and Implications for Dis-inversion

The Cable Market (GBP/USD) Held Back Bearish Enthusiasm, The ECB President Christine Lagarde Gave Support To The Euro

Kamila Szypuła Kamila Szypuła 16.12.2022 13:51
The dollar was little changed on Friday after jumping in the previous session as traders analyzed a string of central bank rate hikes and grappled with the prospect that borrowing costs could still rise. This week has been hot in central bank events. The Fed raised its key interest rate by 50 basis points on Tuesday. Jerome Powell's speech at the press conference sparked volatility in the market.Further tightening is excellent news for the US dollar. Yesterday, the ECB and the BoE also followed the Fed and raised rates by 50 bp. GBP/USD Thursday's Bank of England rate hike of 0.5 percentage point pushed base rates to highs not seen since 2008 (3.5%). But even that wasn't enough to prevent GBP/USD from its biggest daily drop in six weeks The markets interpreted the move as a "dovish" increase in interest rates, even though six of the nine members of the Monetary Policy Committee in London voted for it, and another member wanted stricter action. This division does not suggest that the Bank is willing to refrain from further rate hikes. Thursday's close of the day showed that GBP/USD fell convincingly below the uptrend line that had previously held back bearish enthusiasm for five weeks. This puts clear downward pressure on the pair. The pound fell on Friday against the euro and the U.S. dolar. Sterling fell 0.2% to $1.2160 against the dolar, versus the euro , the pound exchanged hands at 87.39 pence, 0.2% lower on the day. EUR/USD EUR/USD touched a post-ECB high of 1.0736 yesterday before consolidating gains around the 1.0650 area. The technical set-up for the pair remains positive. Yesterday the European Central Bank raised interest rates by 50 bp as expected. Thus, the rate level reached 2.50%. This level was last seen in 2008. The ECB expects it to increase further. The European Central Bank (ECB) will raise interest rates "significantly" in the coming months to fight entrenched inflation, The ECB President Christine Lagarde said yesterday, sending a hawkish signal to the market. This signal turned out to be crucial for the strength of the euro. The ECB's hawkish stance, if fully realized, suggests that the single currency has room to grow in the coming weeks. Read next: Knorr-Bremse Strengthens Its ESG Measures In Partnership With Deutsche Bank | Arizona Is Attractive For The EV Market | FXMAG.COM USD/JPY Against the Japanese yen, the dollar fell 0.54% to 137.01 on Friday. The Japanese yen held above 137 per dollar, facing renewed pressure after the US Federal Reserve offered a more hawkish outlook on its policy. The yen clearly depreciated after the Fed meeting. However, it may fall as the Bank of Japan meeting approaches early next week (19-20/12) AUD/USD The Australian dollar fell sharply to around $0.67, facing renewed pressure as major central banks presented a more hawkish monetary policy outlook than markets anticipated, adding to fears of a potential recession next year. In the European session, it will fall even more and is below $0.67. Moreover, the latest data showed that consumer inflation expectations in Australia hit a seven-month low in December, while the country's unemployment rate remained at 3.4% in November. Investors also reacted to data showing that Australian private sector activity contracted for the third straight month in December. Source: investing.com The RBA has now raised the cash rate for eight consecutive months and said it expects further tightening to bring down inflation. Source: finance.yahoo.com, investing.com, dailyfx.com
The EUR/USD Pair Chance For The Further Downside Movement

German and Eurozone manufacturing rise above expectations of 46.1 and 47.1 respectively

Kenny Fisher Kenny Fisher 16.12.2022 16:52
German, eurozone PMIs show improvement EUR/USD is showing limited movement on Friday, with a muted response to today’s German and eurozone PMIs for December. German manufacturing improved to 47.4, up from 46.1 and above the consensus of 46.1. Eurozone manufacturing rose to 47.8, up from 47.1 which was also the consensus. There was also an improvement in the services PMIs, although these remain under 50.0, which indicates contraction. The PMIs indicated a shallower downturn in both manufacturing and services, with an easing in inflation driving improvement in both sectors. ECB talks hawkish Taking a page straight out of the Fed’s book, the ECB eased up at the final meeting of the year with a 50-bp increase. This follows two successive 75-bp hikes and brings its key rate to 2.0%. President Lagarde had a hawkish message for the markets, stating that as many as three more rate increases could be coming. This apparent return to forward guidance is puzzling, as the ECB had previously said rate decisions would be made “meeting-by-meeting” and would be data-dependent. The ECB remains fixated on inflation. The rate statement said that rates would have to “rise significantly” in order to tame inflation. The Bank revised its inflation forecasts upwards and currently sees inflation remaining above its 2% target until 2025, with Lagarde warning that inflation could stay high if wage growth is higher than expected. Lagarde echoed the Fed’s Jerome Powell when she said that the lower rate hike was not a pivot and that the ECB was not slowing down. Read next: The Cable Market (GBP/USD) Held Back Bearish Enthusiasm, The ECB President Christine Lagarde Gave Support To The Euro| FXMAG.COM Eurozone inflation eased to 10.0% in November, down from 10.6% a month earlier, but that was clearly not enough to soften the ECB’s hawkish message. Despite the ECB rate hike and promise of more to come, EUR/USD fell by 0.50% on Thursday, as the hawkish Fed meeting soured risk appetite and gave a boost to the US dollar. EUR/USD Technical There is resistance at 1.0605 and 1.0694 EUR/USD has support at 1.0524 and 1.0453 . This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro steady as PMIs edge higher - MarketPulseMarketPulse
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Forex Market Week Sum Up:The Overall Picture Of Major Currency Pairs Is Bearish

Kamila Szypuła Kamila Szypuła 17.12.2022 19:51
It was the most important week in 2022. Fed President Jerome Powell and ECB President Christine Lagarde reminded the markets that they are still committed to fighting inflation, rather than focusing on promoting economic growth. EUR/USD The pair ended the week at 1.0574, thus trading below $1.06. The close is similar to earlier this week, with the pair also trading above $1.05. Also on Monday it recorded a low of 1.0511. This week the most important event in the euro zone was the ECB's decision on interest rates. The central bank of the European Union made the same decision as the Fed and the Bank of England, i.e. it raised interest rates by 50 bp. But it was the president of the ECB who gave the euro strength. And on Thursday, after a hawkish statement, it reached its highest level of the week, hadel was close to 1.07 (1.0691 to be exact). A number of significant events took place in the European Union this week. The ECB meeting was adjourned; the remaining data must be resolved. Despite traders' expectations for a fall of 1.5-2.5%, industrial production fell by 2% in October. Instead of an increase of 10%, exactly as indicated by the first estimates of the index, inflation rose in November by 10.1%. The economic activity index in the manufacturing sector increased to 47.8, and in the services sector to 49.1. However, both indicators are still below the 50.0 threshold, so they cannot be considered positive at the same time. This week's macroeconomic reports from the EU seem to be disappointing. This problem has been around for a long time. In general, the euro continues to grow unreasonably, although it has already reached its peak. GBP/USD The GBP/USD pair started the week of December 12-16 at 1.2266. Then after the US data inflation traded between 1.2243-1.2300. The lowest level, similarly to the euro, was recorded by the cable pair at the beginning of the week, the lowest traded at 1.2217, and the highest at 1.2248 this week. The pair ended the week below $1.22 as fears of a recession increase. Overall, the British pound looks set to end the week under strong pressure against the US dollar, with weak economic data on Friday fueling fears of a recession in the national economy. Thursday's Bank of England rate hike of 0.5 percentage point pushed base rates to highs not seen since 2008 (3.5%).Markets interpreted the move as a dovish interest rate hike. The recent decision of the Bank of England revealed a three-way split of votes: six out of nine MPC members voted for a 50 bp rate hike, two members voted for no change, and the last member voted for another 75 bp rate hike. Recession fears are intensifying with prospects for the UK to be in recession for "an extended period" while inflation is expected to remain very high in the short term before falling sharply from mid-2023. Overall, the short-term outlook for the economy in the UK remain negative, which is starting to show in sterling now. AUD/USD The Aussie Pair started the week at 0.6780. The movements of the pair were similar to EUR/USD and GBP/USD. The pair recorded the lowest trade at 0.6678 and the highest at 0.6892. Ending the week at 0.6686. The Australian dollar was weakened last week after the US dollar posted an incredible rally amid growing fears of a recession. The Federal Reserve raised the interest rate by 50 basis points to a target of 4.25% - 4.50% on Wednesday. Read next: Assistance In Making Investment Decisions - Technical Analysis| FXMAG.COM Australia's unemployment rate remains at a multi-generational low of 3.4% after adding 64,000 jobs. jobs in November. This is in addition to the growing trade surplus from the previous week. The rest of the fundamental picture is a little mixed towards the end of the year, when building permits and retail sales data are disappointing. These figures appear to have been influenced by RBA interest rate hikes. USD/JPY USD/JPY started the week trading at 136.6790. The week's high is 138.15 and the low is 134.71. As you can see, the trade was very diverse and the price fluctuated rapidly. The pair ended the week at 136.69 Source: finance.yahoo.com, dailyfx.com, investing.com
The Euro May Gradually Climb To The Target Level

The EUR/USD Price May Settle Under Friday's Low

InstaForex Analysis InstaForex Analysis 19.12.2022 08:10
Last Friday, the euro lost 38 pips, leaving the target range of 1.0615/42. The euro was pulled down by the stock markets (S&P 500 -1.11%, Euro Stoxx 50 -0.83%) and rising European bond yields with the Greek (4.32% 10-year) and Italian (4.28% 10-year) government bonds leading the way. Of the peripheral eurozone countries, the highest yields are Polish bonds at 6.66%, but their yields have been consistently high since March, and in October they were over 8.5%. If things continue like this, and the European Central Bank plans to raise the policy interest rate by 0.50% at the next two meetings, then Italy and the peripheral eurozone can start a debt crisis again. The media is not yet sounding the alarm on this issue, but there are already discussions about it. After the Federal Reserve and the ECB meetings, the probability of the euro reaching the 1.0758/87 range, with a milder divergence (the pink dashed line on the daily chart), has fallen considerably. The euro is now aiming for 1.0470. The price will have to struggle with the MACD line on the weekly chart at 1.0385. The victory over it will confirm the euro's development according to the medium-term descending scenario and the next step under parity. On the four-hour chart, the price reached the MACD line and it is accumulating strength to overcome it. The Marlin oscillator is in the negative territory, it helps the price in this struggle with support. We wait for the price to settle under Friday's low at 1.0585 Relevance up to 03:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330113
The Euro May Attempt To Resume An Upward Movement

The Euro Will Soon Reverse The Two-Year Downward Trend

Paolo Greco Paolo Greco 19.12.2022 08:16
On Friday, the EUR/USD currency pair attempted to initiate a downward correction but was unsuccessful. The euro currency quotes continued to trade above the moving average line through the end of the day and the following week. Remember how, despite being ordinarily close by in recent weeks, the price could not even beat the moving in the strictest sense of the word. According to our assessment, this is already pushing the bounds of reality because, if things continue, the euro will soon reverse the two-year downward trend. The only option now is to hold out hope that the market will wake up and remember the pair's sales since this is impossible. If not corrective. Of course, there are such illogical periods as this one. All they need is experience. You'll recall that the pair was in a flat for about four months, which is also not the best choice. You have to accept that there is no logic to the current movements and that any fundamental or macroeconomic background is seen as favoring the euro. Technically speaking, there aren't any issues at all. It needs to be the right time to open long positions because a clear upward trend is at play. Since only the euro currency is increasing, you can only pay attention to statistics or current affairs at different times. Therefore, it is not advised to consider short positions even though the price is above the moving average. Keep in mind that particular technical signals must support any fundamental premise. If there are none, there is no need to attempt to "in advance" formulate the hypothesis. It is possible to skip the new week's preview. We review the first article's upcoming fundamental and macroeconomic events every week. However, there is little to say or write about at the moment. The only event on the EU calendar for the following five working days is a speech by ECB Vice-Chairman Luis de Guindos as of Monday. This one incident is unlikely to impact the market's mood. Moreover, the technical situation had stayed the same since last week, when there were more than enough significant events. Of course, there is always the possibility that after the weekend, the market will resume trading more logically after it has had a chance to process all the new information. Specifically, it will start the significant downward correction we have been anticipating for the past three weeks. Nevertheless, there is no point in considering the fundamental background because, in the first place, it does not exist, and, in the second, it will still have no bearing on how the pair moves. On the eve of a new week, we can only say that the outcomes of the meetings between the ECB and the Fed did not favor the euro. Formally, only the ECB announced the start of the QT program at the beginning of the following year, which was an unexpected "knight move." But if the BA and the Fed have already started similar programs for a long time, what about this decision is "hawkish"? We are interested in the relationship between the ECB and the Fed's decisions and the ECB's actions. The movement of the pair (whether the dollar or the euro is currently rising) is determined by this ratio. Even Christine Lagarde's comments about multiple 0.5% rate increases in the future have no special significance. Additionally, the Fed will keep raising the rate for several additional meetings. Additionally, for a considerable period, the Fed rate will be higher than the ECB rate, which should again favor the dollar rather than the euro. Therefore, the US dollar should increase no matter how you view it. It should be increased, even if only by 400–500 points. As of December 19, the euro/dollar currency pair's average volatility over the previous five trading days was 104 points, considered "high." So, on Monday, we anticipate the pair to fluctuate between levels of 1.0480 and 1.0687. An upward turn of the Heiken Ashi indicator will indicate a potential continuation of the upward movement. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: The EUR/USD pair is continuing its upward trend. With targets of 1.0687 and 1.0742 in the event of a price reversal from the moving average, we are now considering opening new long positions. Only after fixing the price below the moving average line with targets of 1.0498 and 1.0480 will sales become significant. Explanations for the illustrations: Determine the present trend with the aid of linear regression channels. The trend is currently strong if they both move in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day Relevance up to 01:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330105
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

EUR/USD Pair: The Probability Of Falling Down Is High

Paolo Greco Paolo Greco 19.12.2022 08:23
M5 chart of EUR/USD EUR/USD continued its sluggish decline on Friday. At the end of the day, it was still below the critical line, which provides grounds to expect that the euro will continue to fall to the target Senkou Span B line. So far, there are no grounds to assert that a new downtrend has begun. Some relatively important reports were released on Friday, but the market did not even work them out in a logical sense. For instance, the US services business activity indexes were much weaker than the previous month, falling far below the 50.0 level. But the US dollar was strengthening against the euro at that time. So the reports influenced the market sentiment, but they did it in a peculiar way. Generally speaking, if in the last weeks, we observed an unreasonable growth, now we may observe an unreasonable decline. Fortunately, there will be almost no news this week, so there should not be a conflict between the macroeconomic background and the pair's movement. At the same time, there is no guarantee that traders will not start buying again. There were enough trading signals on Friday and all of them were formed near the Kijun Sen line. Since none of these signals were correct, traders could work out only the first two. First, the pair bounced very crookedly from the critical line, so it bounced a bit more accurately. In the first case, it went up about 10 pips, in the second case it went up about 15 pips. Therefore, most likely, traders either closed both trades at zero, or received a minimal loss. However, a 10-15 point loss is obviously not a reason to get upset. COT report In 2022, the COT reports for the euro are becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now the net position of non-commercial traders is again bullish and strengthens almost every week. The euro is growing but a fairly high value of the net position may point to the end of the upward movement or at least, to a correction. During the given period, non-commercial traders opened 8,600 long positions, whereas the number of short positions rose by 8,500. Thus, the net positions fell by 100. Notably, the green and red lines of the first indicator have moved far apart from each other, which may mean the end of the ascending trend (which wasn't actually an uptrend because the upward movement of the last two and a half months fits under the "correction" category against the global downtrend). The number of long positions is 125,000 higher than the number of sell positions opened by non-commercial traders. Thus, the net position of the non-commercial group may continue to grow. However, the euro may remain unchanged. The overall number of short orders exceeds the number of long orders by 33,000 (711k,000 vs. 678,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD is still very high, though it is stuck below the critical line. So far, there is no certainty that it will continue to move down, though we have been waiting for it for several weeks. We think that the probability of falling down is high, but the market may well decide otherwise. This should be taken into account. On Monday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0592, 1.0736, 1.0806, as well as Senkou Span B lines (1.0442) and Kijun Sen (1.0623). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are no important reports or events scheduled for today in the EU and the US. And the pattern will remain the same all through this week. We believe this is a good opportunity for a bearish correction. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330101
Credit squeezing into central banks – what next?

Today, The Euro (EUR) Is Expected That Volatility Will Be Lower

InstaForex Analysis InstaForex Analysis 19.12.2022 08:36
Analysis of transactions in the EUR / USD pair The recently released data on activity in the eurozone disappointed traders as it hinted at the possibility of recession next year. In addition, inflation rose to 10.1% in November, further strengthening the belief that the ECB will continue to raise rates, no matter what it takes. This put euro under pressure. There is a chance for a rebound today, but it is only after the IFO's report on business expectations, present situation and business climate in Germany. The three indices are projected to rise, which should restore bullish sentiment in the market. However, if the reports turn out weaker than expected, euro will slide further. Wage levels in the eurozone will not be of much importance in determining the market's direction. There are also no statistics in the afternoon, so expect volatility to be lower and for euro to trade within the channel. For long positions: Buy euro when the quote reaches 1.0615 (green line on the chart) and take profit at the price of 1.0661. Growth could occur after a strong report from the IFO. But remember that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0582, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0615 and 1.0661. For short positions: Sell euro when the quote reaches 1.0582 (red line on the chart) and take profit at the price of 1.0545. Pressure will increase if Germany reports weak economic statistics. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0615, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0582 and 1.0545. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader Relevance up to 07:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330139
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

FX Volatility Remains Subdued, The Investor Mood Seems To Be Leaning Towards A 2023 Slowdown

ING Economics ING Economics 19.12.2022 08:54
FX volatility remains subdued as financial markets lick their wounds ahead of year-end. This week's data calendar is relatively light in the G10 space, with a focus on the Bank of Japan (BoJ) meeting, US housing data and confidence readings on both sides of the Atlantic. We'll also see central bank meetings in Hungary and the Czech Republic, too   USD: Risk rolls over Looking across asset markets the investor mood seems to be leaning towards a 2023 slowdown. Bond markets remain bid, while both equity and commodity markets are rolling lower after a decent rally in October and November. Investors will continue to focus on China as a potential engine of growth in 2023, but for the time being, we have yet to see any material outperformance of the Chinese renminbi or local equity markets. This suggests that the risk of a disorderly exit from zero-Covid policies for the time being trumps the reopening story and perhaps Beijing's re-orientation to growth policies. That leaves the market to focus on the tight(er) monetary policy being implemented around the world. Last week's hawkish shift from the European Central Bank has dented eurozone and global growth prospects for 2023 and leaves the dollar in a rather mixed position. On the one hand, the ECB wants tighter monetary conditions - including a stronger euro. On the other, the Federal Reserve is not done with its tightening cycle and a global slowdown typically is not a good story for a pro-cyclical currency like the euro. Events this week look unlikely to break new ground on this story. In the US, we will see a variety of housing data (all expected to be soft), some consumer confidence data and on Friday the PCE personal income, spending and price data. The November core PCE deflator is expected at a subdued 0.2% month-on-month - in line with the softer CPI prints of October and November. None of this looks likely to provide much support to US bond yields, where the 10-year Treasury is hanging onto the 3.50% area by its fingernails. This all tends to suggest that DXY risks sinking back to the 104.00/104.10 area this week. Chris Turner EUR: Expect comparisons to 2007 Last week's hawkish tilt from the ECB wll invariably draw comparisons to the 2007 period, where EUR/USD enjoyed a strong rally. The Fed had concluded its tightening cycle at 5.25% in the summer of 2006 and the ECB was playing catch-up - a catch-up which resulted in former ECB President Jean-Claude Trichet's final and ill-fated rate hike to 3.25% in July 2008. Coincidentally, expectations now are that the ECB will also be taking the policy rate to 3.25% next summer. The difference this time is that global growth is much weaker now than in 2007 (5-6%) and we suspect high energy prices will continue eating into the eurozone's external position. On the agenda today is the Germany Ifo business confidence index for  December. Last week's release of the German PMI data showed a modest pick-up in business confidence - albeit still in recessionary territory. Today's Ifo data is expected to see the expectations component bounce up to 82 from 80 - still very low. Any upside surprise could give EUR/USD a modest boost in thin markets.  We doubt EUR/USD will break new ground this week, although it is hard to rule out a move back up the 1.0700 area. Chris Turner CEE: Last NBH and CNB meetings of the year  The CEE region will remain interesting until the last moment of the year. On Tuesday, the Hungarian National Bank (NBH) will hold its last meeting. The NBH has made it clear on several occasions that the temporary and targeted measures, introduced in mid-October, will remain in place until there is a material and permanent improvement in general risk sentiment. Although we've seen some progress here, we don't think enough has changed to trigger an adjustment in the monetary policy's hawkish "whatever it takes" setup. Nevertheless, Hungary will also be in the spotlight because of other milestones in the EU story. The European Council approved Hungary's recovery plan and suspended cohesion funds for 2021-2027 under the rule of law mechanism. The next step should be the signing of a partnership agreement between Hungary and the EC on the absorption of the cohesion funds. However, it is not clear how and when this will take place. The Czech National Bank (CNB) will hold its last meeting of the year on Wednesday. We expect it to be a non-event, with rates and FX regimes unchanged. The new forecast will not be released until February. Board members have been very open in recent days and hence there is minimal room for any surprises. The traditional dovish majority has publicly declared that interest rates are high enough and continue to choose the "wait and see" path. The governor also confirmed this week that the central bank will continue to defend the koruna. At the same time, another board member confirmed that the CNB has not been active in the market for some time. So it is hard to look for anything new here either.  In the FX market, as we mentioned last week, we believe that the global story has little positive to offer to the region this year. On the other hand, the deterioration in equity market sentiment late last week should have a delayed impact on CEE FX this week. Moreover, domestic rates with the exception of Hungary cannot support FX, so we should see some correction of previous gains in the region this week. We do not think central bank meetings will impact FX much and so the main story will be the Fed and ECB effect from last week. We see the Czech koruna as the most vulnerable as it hit new lows against the euro on Friday. A correction back to 24.250 EUR/CZK should thus not be a problem. On the other hand, we think the Hungarian forint can still benefit from the progress in the EU story for a while and get below 405 EUR/HUF. The Polish zloty remains trapped in the 4.680-700 EUR/PLN band, and we see it rather on the upper side for this week.  Frantisek Taborsky GBP: Sterling will be the main victim of euro strength The ECB would clearly like a stronger euro to help out with its battle against inflation and it was telling at last week's ECB press conference that President Christine Lagarde was keen to highlight that the ECB would be tightening longer than the Fed. If the ECB is to be successful in getting the euro higher, then the euro will need to rally against those currencies with major weights in the trade-weighted euro index. The biggest weights in this index are the US dollar (16%), the Chinese renminbi (14%) and then the British pound (12%). Of the three, we would say that sterling is the most vulnerable given that the Bank of England (BoE) is closer to ending its tightening cycle than the Fed and that the UK's large current account deficit leaves sterling vulnerable in a global slowdown. We suspect EUR/GBP finds good demand under 0.87 now and we remain happy with a 0.89 target for 1Q23. Chris Turner Read this article on THINK
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

Demand For The Euro Is Still Weak, But There Is A Chance For A Return To December Highs

InstaForex Analysis InstaForex Analysis 19.12.2022 10:10
Euro has every chance of rising as recent data from the US hints at a possible recession in the country by next year. Activity indices in the US remained in negative territory, below 50 points, which is very bad. The first one that was hurt was the real estate market, followed by the service sector and the manufacturing sector. The only one that is still holding on is the labor market, but last week Fed Chairman Jerome Powell said he will make use of wages to fight inflation. Wages have a very large impact on inflation as they are a particularly large item of expenditure. According to Powell, the labor market will be the key to a further rise in inflation, so something must be done about it. Right now, wages are rising much higher, which is not in line with the Fed's policy of returning to 2% inflation. The key question for Fed officials is whether the sharp rise in US wages over the past 18 months is a one-off action, or whether, after companies have adjusted to labor shortages, higher cash wages will be the norm. If this is the case, Powell can maintain a tight monetary policy. Forecasts published by the Fed last week already suggested that the key rate for next year could hit 5.1%, which is higher than the expected value. This led to the stock market crashing down. Labor shortages, which were caused by coronavirus-related constraints, have provided more opportunities for employers and workers to raise wages as competition for hiring intensified. But in most cases, households have barely kept up with the rising cost of living. As the figures show, total employer payroll spending increased by 5% in the 12 months to September, up from 3.7% a year earlier. Although earlier wages were not a big part of the story, now that companies are trying their best to retain employees, it is likely that the central bank will take a closer look at what is happening in the labor market and not just regulate its level. Talking about the forex market, demand for euro is still weak, but there is a chance for a return to December highs if the European Central Bank retains its hawkish monetary policy. However, traders need to keep the quote above 1.0660 because only by that will euro hit 1.0700 and 1.0740. In case of a decline below 1.0580, pressure will surge, which will push the quote to 1.0540 and 1.0490. In GBP/USD, trading is taking place within the sideways channel, so buyers need to break above 1.2200 in order for the quote to rise to 1.2250 and 1.2301. But if sellers take control of 1.2130, pound will fall to 1.2070 and 1.2000.
Bank of England raised the interest rate, UK unemployment data go out tomorrow

EUR/USD Pair Looks Reasonably Well Supported | The Japanese Yen Galloped Higher In The Morning

Kamila Szypuła Kamila Szypuła 19.12.2022 14:04
The US dollar fell on Monday as improved market sentiment pushed stocks and riskier currencies up. The US Dollar Index (DXY) - which tracks the dollar against a basket of six major currencies - fell 0.2% to 104.580 The euro gained 0.4% to $1.06260 , while sterling strengthened 0.7% to $1.22195. However, both remained lower than their levels before last week's central bank moves. EUR/USD The EUR/USD pair started trading above $1.06 this week. The technical outlook for the euro remains positive and reasonably well supported. The single currency appreciated against the US dollar The latest publication of the German Ifo shows that the sentiment in Europe's largest economy "improved significantly" at the end of the year. The business climate rose to 88.6 from 86.4 in November, breaking the index's six consecutive declines, while the expectations reading hit 83.2, up from 80.2 the previous month. GBP/USD And EUR/GBP GBP/USD generally trades in the range of 1.2170 - 1.2200 during the day. The intraday high was above 1.2240. Currently, the cable pair is trading in the range of 1.2170- 1.2180 The British pound crept back toward the previous week's six-month high against the US dollar on Monday, days after the Bank of England (BoE) raised its benchmark interest rate to its highest level since 2008. The Bank of England made its ninth consecutive interest rate hike on Thursday, raising interest rates by 50 basis points (bps) to 3.5% as the central bank battled double-digit inflation. Read next: Russian Drones Attacked Kyiv Again | Most respondents do not want Musk| FXMAG.COM The euro fell 0.1% against the pound to 86.94 pence. The single currency hit a month-high against the pound sterling on Thursday after decisions by the BoE and the European Central Bank (ECB). ING analysts believe the pound sterling could be vulnerable against the euro, and their target is to move to 89p in the first quarter of 2023. USD/JPY The Japanese yen galloped higher amid illiquid trading conditions on Monday morning on news of a possible change in the Bank of Japan's (BoJ) monetary policy targets. The Bank of Japan currently has a prime interest rate of -0.10% and maintains yield curve control (YCC), setting a range of +/- 0.25% around zero for Japanese government bonds (JGB) for up to 10 years. The BoJ and the People's Bank of China are the only two major central banks with loose monetary policies. Much of the rest of the world is tightening financial conditions to deal with uncomfortably high and volatile inflationary pressures. The BoJ meeting will take place tomorrow, but at this stage the market does not expect any changes. USD/JPY has been in a downtrend since it peaked at 151.95 on the day of the BoJ intervention. At the end of last week, the price moved towards the upper band of the channel but was unable to sustain the move above it. The downtrend may continue to resist, currently at 137.45. Looking at the chart of the pair, you can see the strengthening of the yen against the us dollar. The pair returned to trading around $135 but is now trading above $136, meaning the yen's strength was short. AUD/USD The uplifting Australian dollar is trading slightly higher against the US dollar this Monday. This comes after China announced its intention to stimulate the economy with loose monetary policy and fiscal support. Looking at the chart, it is clear that the beginning of the week for Aussie is strong. Comparing to the close, the can pray increased significantly and is now trading above $0.67. Source: investing.com, dailyfx.com, finance.yahoo.com
The Euro To US Dollar Instrument Did Not Change In Value

The EUR/USD Pair's Price Will Move To The Target Level

InstaForex Analysis InstaForex Analysis 20.12.2022 08:13
Yesterday, EUR/USD tried to move past the upper limit of the 1.0615/42 range, but as a result, the price closed the day below the lower limit of the range, which confirmed that the euro settled below 1.0615. It is still necessary to wait for the Marlin oscillator's transition into the negative area, and then the price will move to the target level of 1.0470. On the four-hour chart, the price is held by the MACD indicator line. Yesterday, there was an attempt to go past it. This was marked by the price testing 1.0576 (low of the day), when the euro crosses this level, it will start to move to the target level of 1.0470 (low of April 28). The Marlin oscillator is developing on the lower half of the four-hour chart, in the area of the downtrend.   Relevance up to 03:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330234
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

EUR/USD Pair: The Only Option Is To Wait For The Correction

Paolo Greco Paolo Greco 20.12.2022 08:16
On Monday, the EUR/USD currency pair resumed trading. This is not at all surprising considering that the entire first trading day of the week was devoid of any significant fundamental developments or macroeconomic publications. The odd thing was that, in contrast to last week, when there was simply something to pay attention to, the pair displayed only moderate volatility and no discernible trend movement. Additionally, there is nothing of note this week, so it won't surprise us if the euro/dollar pair moves slowly and completely ineffectively throughout the week. Here, it's important to keep in mind that it's December 20. In other words, the New Year and the entire "set of holidays" are still less than two weeks away. Although the market doesn't always go on vacation two weeks before the New Year's holidays, volatility can significantly drop simply because many traders will leave the market. The graphic below demonstrates how volatility has decreased over the last few weeks. If we ignore the two days last week when the pair gained 145 points, then the pair now gains, on average, 70–80 points per day. And the graph unmistakably demonstrates how volatility is decreasing as the New Year's holiday draws near. There was no fundamental background going back to Monday. Given that it was delivered a few days after the ECB meeting, we do not consider Luis de Guindos' speech to be significant. Later on, we'll discuss it, but only within the parameters of the form. Technically speaking, the pair is currently close to the moving average. At the very least, this movement must be overcome to determine the start of a potential strong downward correction, which we have been watching for several weeks. But not just any victory, but self-assurance. In theory, the pair had overcome significant challenges in recent weeks, "if only by some kind of." We keep emphasizing that the most recent round of the euro's growth can be deemed 70% unjustified. The price was only able to fluctuate by 100–150 points in the previous month. As a result, the only option is to wait for the correction. The stakes will go up, says Luis de Guindos. In theory, the message of the ECB Vice-Chairman's speech is already clear. He only reported "unreal" news to the market. Of course, Christine Lagarde and her "deputy" speak frequently, and their rhetoric is consistent throughout each speech. As a result, we cannot claim that de Guindos' speech was significant or had an impact on the market's mood. Mr. de Guindos added that he was unable to predict how high the ECB rate would ultimately rise. In other words, de Guindos omitted to respond to the current currency's most crucial query. Let's discuss why this query is the most crucial. Since one decline does not constitute a trend, the ECB started to slow down the pace of monetary policy tightening even though inflation had not yet started to decline. As a result, it has already taken a backward step in the battle against inflation. Everything is fine if we are referring to the fact that the European regulator will simply increase the rate "to the bitter end" at a slower rate. We have bad news for the euro currency if it raises the rate with an eye toward the problematic EU nations. Consequently, if de Guindos had stated the target clearly, it would have been possible to deduce certain information from which to base a trading plan for the upcoming weeks. However, he remained silent, so nobody knows if the rate will increase after one more meeting or after 21. We continue to think that given the current situation, the euro must simply begin adjusting, so we are watching for the moving average line to cross and the euro to decline. As of December 20, the euro/dollar currency pair's average volatility over the previous five trading days was 105 points, which is considered "high." So, on Tuesday, we anticipate the pair to fluctuate between 1.0515 and 1.0725 levels. A potential continuation of the upward movement will be indicated by an upward turn of the Heiken Ashi indicator. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance levels R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: The EUR/USD pair is continuing its upward trend. With targets of 1.0725 and 1.0742 in the event of a price reversal from the moving average, we are currently thinking about new long positions. No earlier than fixing the price below the moving average line with targets of 1.0515 and 1.0498 will sales become relevant. Explanations for the illustrations: Determine the present trend with the aid of linear regression channels. The trend is currently strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones Relevance up to 05:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330240
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Trend Ot The EUR/USD Pair May Change To A Flat

Paolo Greco Paolo Greco 20.12.2022 08:23
M5 chart of EUR/USD EUR/USD continued its sluggish decline on Monday. It is particularly visible on the one-hour chart. The pair reversed several times, which made it inconvenient to trade. But now we are close to the Christmas and New Year's holidays, so the trend may change to a flat. Basically, there was no fundamental or macroeconomic reason for the pair to show the movements it did. Calendars of events of the European Union and the US were empty. So I conclude that the correction continues, but the very nature of the current movement may be quite unfavorable for us. I don't know if the flat will begin today, but at the same time, volatility has significantly decreased lately. Consequently, traders will also become less active and will start to leave the market quietly before the holidays. Speaking of trading signals, yesterday was quite unfavorable for obvious reasons. The first buy signal, breaking through the 1.0623-1.0637 area, turned out to be false, and the price was up by 15 points, which gave traders a chance to place the Stop Loss to breakeven. This was followed by a sell signal around the same area, after which the pair reached the nearest target level of 1.0581, which made it possible to earn about 20 pips. You could also use the buy signal near 1.0581, the price went back to the critical line, so traders could gain 20 pips more. In general, the day was not that bad, but at the same time the pair can go flat, which is fraught with false signals and losing trades. COT report In 2022, the COT reports for the euro are becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now the net position of non-commercial traders is again bullish and strengthens almost every week. The euro is growing but a fairly high value of the net position may point to the end of the upward movement or at least, to a correction. During the given period, non-commercial traders opened 8,600 long positions, whereas the number of short positions rose by 8,500. Thus, the net positions fell by 100. Notably, the green and red lines of the first indicator have moved far apart from each other, which may mean the end of the ascending trend (which wasn't actually an uptrend because the upward movement of the last two and a half months fits under the "correction" category against the global downtrend). The number of long positions is 125,000 higher than the number of sell positions opened by non-commercial traders. Thus, the net position of the non-commercial group may continue to grow. However, the euro may remain unchanged. The overall number of short orders exceeds the number of long orders by 33,000 (711k,000 vs. 678,000). H1 chart of EUR/USD EUR/USD is still in a high position on the one-hour chart, and it has hardly settled below the critical line. So far, we're not sure whether it will continue to move down, though I have been waiting for it to do so for several weeks now. I believe that there is a high probability that it will fall, but the market may think otherwise. Also, keep in mind that the New Year is less than 2 weeks from now, and volatility may drop significantly and the movement may turn into a flat. On Tuesday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0736, 1.0806, as well as Senkou Span B (1.0550) and Kijun Sen (1.0630). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are no important reports or events scheduled for today in the EU and the US. And the pattern will remain the same all through this week. I believe that this is a good opportunity for a bearish correction, but the market may think otherwise... What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate     Relevance up to 05:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330236
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

FX: The BOJ's Role As An Ultra-Dovish Outlier Among Global Central Banks

ING Economics ING Economics 20.12.2022 11:02
The Bank of Japan announced a surprise change in its yield curve control policy, and will now allow JGBs to trade to an upper bound of 0.50%. While Governor Kuroda has explicitly warned this is not a rate hike, taming speculation of further BoJ normalisation in 2023 won't be easy. USD/JPY may break below 130.00. Elsewhere, expect no fireworks from Hungary The Bank of Japan in Tokyo USD: BoJ hawkish shift may have broad implications Markets have been shaken from their pre-festive low volatility torpor this morning, as the Bank of Japan announced a surprising change in its yield curve control (YCC) policy. The target band for the 10-year JGB has been widened to +/- 0.50% from the previous 0.25%, essentially allowing higher interest rates in the current inflationary environment despite still officially targeting 0.00% as the outright target. The move was accompanied by an increase in the amount of JGB purchases, from JPY 7.3tn per month to 9tn. The immediate impact on the yen has been sizeable, with USD/JPY dropping by around 3.0%, and currently trading around 133.00. The BOJ's role as an ultra-dovish outlier among global central banks had been a key driver of JPY weakness in 2022, and markets are now assessing whether today’s announcement is effectively a first step towards a broader policy normalisation process in Japan, which would quite radically change the outlook for the yen in 2023. Incidentally, there is a risk that speculation of even higher JGB rates in 2023 could spill over into global bonds and equities (like it did today). Governor Haruhiko Kuroda’s press conference has been all about pushing back against such speculation: he explicitly warned markets not to interpret this as a rate hike and said that he doesn’t think a further widening of the yield band is needed. Our suspicion is that markets may need more reassurance with this, especially considering that Kuroda is due to be replaced in April 2023 and the timing may suggest the BoJ may be laying the groundwork for normalisation under a new governor. For now, we think risks remain skewed to the downside for USD/JPY into the festive break, and we cannot exclude a break below 130.00 - also given the generally soft dollar environment. For now, the negative reaction in global equities is capping pro-cyclical currencies, and offering some USD support on balance, but broader dollar weakness is surely a possibility in the near term. DXY could press 103.50 by the end of this week. In the US, housing data will be in focus today, with housing starts expected to have dropped further in November as high mortgage rates continue to weigh on the property sector. Francesco Pesole EUR: Sidelined, for now EUR/USD has been on the sidelines of the post-BoJ market reaction, holding marginally above 1.0600. It’s likely that the downward pressure on the dollar from the BoJ's hawkish shift has been fully offset by the deterioration in risk sentiment, which negatively impacts the pro-cyclical euro. As discussed in the USD section above, there are lingering downside risks to the dollar and we could see EUR/USD test 1.0700 before Christmas. Anyway, volatility should become significantly thinner from Wednesday/Thursday, with today’s BoJ announcement having been the last major event in markets. The eurozone calendar includes consumer confidence data – which is expected to have slightly improved in December – and speeches by ECB’s Peter Kazimir and Madis Muller. Francesco Pesole GBP: No domestic drivers There is nothing to highlight in the UK calendar today, and the pound should continue to be driven by dollar dynamics. EUR/GBP initially had a positive reaction to the BoJ announcement, likely due to GBP’s higher sensitivity to the adverse response in global equities, but is now back at yesterday’s close. Still, GBP downside risks should be larger than for the euro if risk sentiment remains pressured today, and EUR/GBP may move to the upper half of the 0.87-0.88 band. Francesco Pesole CEE: NBH ends a dramatic year with a quiet meeting The economic calendar for today offers several macro numbers from Poland, led by industrial production. We expect November's output to have slowed significantly in year-on-year terms, from 6.8% to 0.7%, well below market expectations. Also, today we will see data from the labour market and industrial producer prices in Poland. Then in Hungary, the State Debt Management Agency (AKK) will present its financing strategy for next year. The government is currently in the process of revising the budget, but the main question will be what the government's assumption will be for the absorption of EU money. Later, we will see a decision by the National Bank of Hungary (NBH) at its last meeting of the year. The NBH has made it clear on several occasions that the temporary and targeted measures, introduced in mid-October, will remain in place until there is a material and permanent improvement in the general risk sentiment. Although we’ve seen some progress here, we don't think enough has changed to trigger an adjustment in the monetary policy’s hawkish “whatever it takes” setup. Although the EU story is still not over, tangible progress should keep the forint on the stronger side and limit potential losses. Moreover, the NBH liquidity measures have worked, and implied FX yields once again soared to record highs during December; on average, they are double that of regional peers, protecting the forint from a further sell-off in our view. Overall, we expect the forint to move towards 400 EUR/HUF and below that level next year. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Results Of The March Meeting Of The Bank Of Japan Are Rather Symbolic

The Bank Of Japan's Decision To Allow 10-Year Government Bonds Caused Turmoil In The Financial Markets, USD/JPY Trading Below 133

Kamila Szypuła Kamila Szypuła 20.12.2022 13:30
The US Dollar index retreated following the BoJ policy announcement helping EUR/USD edge higher. Later in the day we have US building permit data which could reignite some bullish behavior in the US dollar. Moreover, forex traders focused on the Japanese yen today, which jumped on key Bank of Japan (BoJ) policy. EUR/USD The EUR/USD pair also gains today, receiving a trade above $1.06. Currently, trading is in the range of 1.0630-1.0640. This morning we heard comments from ECB policymaker Nagel who stated the Central Bank is still a long way from hitting its inflation goal reiterating that the ECB likewise need to be persistent on rates. Yesterday’s upbeat German IFO survey on Business Climate and this morning drop in German PPI, which hit a 9-month low. Improving data coupled with a slightly hawkish ECB turn last week may speak in favor of a continuation of the current EUR/USD rate. At present, the mood remains bullish. Read next: Voluntary Extradition Of Sam Bankman-Fried | The Inflation Reduction Act (IRA) Is A Path To Net Zero| FXMAG.COM USD/JPY USD/JPY dropped sharply today from trading above 137 to below 134. The pair is now trading below 133, 132.6420 to be precise The Japanese Yen launched higher after the Bank of Japan tilted monetary policy at its meeting today. The USD/JPY Pair has raced to a four-month low. The pair tried to break above the upper band of a descending trend last week but was unable to do so. Today’s attempt was also unsuccessful and the BoJ’s announcement aided maintenance of the trend channel. All of this contributed to the couple's sentiment, which is currently bearish. Most BOJ watchers had expected no changes until the current governor Haruhiko Kuroda's 10-year term ends at the end of March. While it kept broad policy settings unchanged he BOJ decided to let long-term yields to move 50 basis points either side of its 0% target, wider than the 25 basis point band previously. The move has had a negative impact on the US dollar and could boost the Yen as Japanese investors are given an incentive to bring money home while increasing the Yens haven appeal. AUD/USD The price of the Aussie pair was above the 0.6725 level at the beginning of the day, but then fell below $0.67. Trading is currently in the range 0.6665- 0.6670 The Australian dollar fell above $0.67 to its lowest level in a month after the Bank of Japan's surprise decision. The Australian was also under pressure as other major central banks offered a more hawkish outlook on policy than markets anticipated, adding to fears of a potential recession next year. Meanwhile, recent minutes from the Reserve Bank of Australia's meeting revealed that policymakers were considering a bigger rate hike of 50 basis points. GBP/USD At the beginning of the day, cable trading was very mixed. The price of the pair traded above $1.22 and then fell all the way down to $1.2088. Currently, the price is stabilizing in the range of 1.2150-1.2175. The overall picture of the pair looks bearish and the price trades mostly above $1.21. The pound posted a slight gain on Tuesday in weak trading ahead of Christmas, but was on track for its biggest quarterly gain against the dollar since 2009. The pound is up 8.8% against the dollar in the last three months of the year, putting it on track for its best quarter in more than 13 years. Goldman Sachs expects the pound to fall to $1.07 in three months and hold at $1.11 in six months. Source: investing.com, dailyfx.com, finance.yahoo.com
The EUR/USD Pair Maintains The Bullish Sentiment

The EUR/USD Pair Is Still Moving In The Right Direction

Paolo Greco Paolo Greco 21.12.2022 08:00
On Tuesday, the EUR/USD currency pair continued to trade with low volatility and virtually no trend change. A week and a half before the New Year and a few days before Christmas, as we already stated in yesterday's article, it is very challenging to anticipate that the market will trade normally. In theory, the first indications of "vacationing" were seen last week, when the pair's movements were only moderately prompted by the background's crazy volume and significance. No, the volatility varied greatly from day to day, but the illustration below amply demonstrates how this indicator has been declining over the past few weeks. Even a few weeks out from the holidays, it appears that traders have already begun to take their Christmas vacations. Of course, we have no control over how the majority of market participants feel or what they want. No publications or events will compel the market to trade if it chooses not to. Furthermore, no publications-related events are currently scheduled. The first thing to remember is that the pair can stay in a flat or on a "swing" for several weeks. Due to the lack of trend movements, trading the pair will be very challenging in both scenarios. We also anticipate a downward correction, which we have been anticipating for three weeks, to start in the near future. Even inexperienced investors can see that the European currency is unjustly positioned so high and cannot even slightly adjust downward. In terms of the dollar, this situation is utterly unfair. The ECB's signals are being awaited by the market. We have brought up the issue of whether it is necessary to strengthen the euro several times in recent weeks. The dollar fell due to market expectations of a slowdown in the pace of monetary policy tightening, though there are always possible explanations for why the pair moves in one direction or the other. When we contrast the beginning of the dollar's decline with when these rumors first started to circulate, we find that the timing is almost exact. Therefore, the market has most likely already determined the Fed rate of 5.25%. So the current query is: when will the ECB start to tell the market that the rate is not going to rise indefinitely? Although they haven't announced it, they have already slowed down the tightening pace, and the EU's inflation rate is still very high, clearly indicating that the rate hike will not be slowed down. Then, in the upcoming months, they might lower the step to 0.25% or even declare that the tightening cycle in monetary policy is coming to an end. Who claimed that the rate would be increased to 5% or more by the European regulator? And the market might start to stop making more purchases of the euro once it realizes that the ECB is not chasing the Fed. In addition to this, a downward correction has been developing for a few weeks. On the eve of the New Year, we can only come to the same conclusion as before: you should buy since the technique continues to indicate that the upward trend will continue, but at any time the euro currency could begin to fall, which could be both strong and prolonged. As of December 21, the euro/dollar currency pair's average volatility over the previous five trading days was 92 points, which is considered to be "high." So, on Wednesday, we anticipate the pair to fluctuate between 1.0518 and 1.0703 levels. A potential continuation of the upward movement will be indicated by an upward turn of the Heiken Ashi indicator. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: The EUR/USD pair is still moving in the right direction. With targets of 1.0703 and 1.0742 in the event of a price reversal from the moving average, we are currently thinking about new long positions. No earlier than the price being fixed below the moving average line with targets of 1.0518 and 1.0498 will sales become relevant. There is currently a very good chance that it will be flat. Explanations for the illustrations: Determine the present trend with the aid of linear regression channels. The trend is currently strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. The CCI indicator's entry into the oversold (below -250) or overbought (above +250) areas indicates that the trend is about to reverse Relevance up to 01:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330348
The EUR/USD Price May Fall Under 1.0660

The EUR/USD Pair's Price May Cross The Lower Limit

InstaForex Analysis InstaForex Analysis 21.12.2022 08:09
The euro decided to stay in the 1.0595-1.0645 range for the fourth day. The previous target range of 1.0615/42 has been expanded. On the daily chart, the Marlin oscillator doesn't dare to move into the area of the downtrend, it is declining slowly. There is a high probability that with the price crossing the lower limit of the range at 1.0595, the Marlin will also be in negative territory. In this case, the downtrend will get the momentum it needs. The first target is 1.0470. On the four-hour chart, the price can settle in the 1.0595-1.0645 range once the oscillator develops in the negative territory. This is a sign of interest in the entire movement and developing the momentum that occurred on December 15-16. The MACD line is a support for the flat. Moving past 1.0595 will mean the price has crossed this support. Relevance up to 04:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330358
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

EUR/USD Pair: Germany Reports Can Increase Pressure

InstaForex Analysis InstaForex Analysis 21.12.2022 08:12
Analysis of transactions in the EUR / USD pair The pair tested 1.0582 when the MACD line was already far from zero, so the downside potential was limited. Sometime later, another test took place, but this time the MACD line was in the oversold area, which was a good reason to buy. This led to a price increase of about 30 pips. Selling at 1.0617 was not successful, resulting in losses. Although the decline in Germany's PPI was stronger than expected, it had little impact on euro because the weak US real estate market data led to a larger rise in the pair. Today, there is another report from Germany which could, to some extent, have a positive effect on euro. This is the leading consumer climate index for January. There is also the consumer confidence index in the US and secondary market housing sales that could weaken dollar and further strengthen euro, however, the former's figures should show a decline. If the data is the same as expected, the pair will continue to trade sideways. For long positions: Buy euro when the quote reaches 1.0629 (green line on the chart) and take profit at the price of 1.0680. Growth could occur after strong reports in Germany. But remember that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0597, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0629 and 1.0680. For short positions: Sell euro when the quote reaches 1.0597 (red line on the chart) and take profit at the price of 1.0545. Pressure will increase if Germany reports weak economic statistics. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0629, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0597 and 1.0545. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader Relevance up to 04:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330364
The EUR/AUD Pair May Have The Potential To Continue Its Decline

EUR/USD Pair Is Looking For A Bit More Corrective Downside Pressure

InstaForex Analysis InstaForex Analysis 21.12.2022 08:30
We continue to look for a bit more corrective downside pressure toward 1.0469 before the next impulsive rally higher towards 1.0927 which will likely complete wave 3. In the short term, a break below minor resistance at 1.0569 will confirm the final decline towards 1.0469 will complete the correction and will set the stage for the next impulsive rally higher to 1.0927 and ultimately higher too. For now, look for a break below 1.0569 to trigger the next decline toward 1.0469. Relevance up to 06:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305707
The Outlook Of EUR/USD Pair Is Downward In The Near Term

The Outlook Of EUR/USD Pair Is Downward In The Near Term

InstaForex Analysis InstaForex Analysis 21.12.2022 08:36
Technical outlook: EURUSD has been oscillating sideways within a tight range of 1.0580 to 1.0650 over the last few trading sessions. The single currency pair is seen to be trading close to 1.0610 at this point in writing, closer to the lower border of consolidation. A breakout can be expected this week since the triangle consolidation range is around 70 pips. EURUSD had surpassed the 1.0736 high over the last week before finding resistance. The currency pair turned lower from its 18-month resistance trend line and produced an Engulfing Bearish candlestick pattern as seen on the daily chart. A high probability remains for a turn lower towards the 1.0100-50 area at least in the next several trading sessions. EURUSD is facing stiff resistance around the 1.0640-50 zone and might have terminated its triangle consolidation. A break below 1.0570-80 is now awaited to confirm a bearish breakout, which could accelerate a move lower towards the 1.0100-50 area. Also, note that the Fibonacci 0.618 retracement of the recent upswing between 0.9740 and 1.0736 is seen passing close to the above range. The outlook is downward in the near term. Trading idea: Potential bearish turn against 1.0750 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305717
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

There Is Already Signs That The EUR/USD Market Is Flat

Paolo Greco Paolo Greco 21.12.2022 08:41
M5 chart of EUR/USD EUR/USD was tightly stuck between 1.0581 and 1.0658 on Tuesday. In addition, it is also located between the lines of the Ichimoku Senkou Span B and Kijun-Sen. Therefore, it's a total flat, which may persist for a few weeks. Recall that the key moment in the currency market now is how close we are to the Christmas and New Year holidays. Firstly, it affects the calendar of events, which is simply empty. Secondly, traders are slowly leaving the market in anticipation of the holidays. All this leads to a decline in volatility and absence of trend movement. Needless to say, there were no interesting events yesterday, neither in the US, nor in the EU... The Ichimoku lines may soon cease to be strong and important. This is their normal reaction to a flat. Speaking of trading signals, I have to say that we were lucky again. The first buy signal near 1.0581 turned out to be strong and accurate. The price rebounded from it, and traders had to open long positions. By the middle of the US trading session, the price climbed up to the Kijun-Sen line, from which it also bounced. Here it was necessary to close the longs with about 55 points of profit and open new shorts. It was possible to get about 30 pips more profit on the short positions, as the pair went on to move down for the rest of the day. COT report In 2022, the COT reports for the euro are becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now the net position of non-commercial traders is again bullish and strengthens almost every week. The euro is growing but a fairly high value of the net position may point to the end of the upward movement or at least, to a correction. During the given period, non-commercial traders opened 8,600 long positions, whereas the number of short positions rose by 8,500. Thus, the net positions fell by 100. Notably, the green and red lines of the first indicator have moved far apart from each other, which may mean the end of the ascending trend (which wasn't actually an uptrend because the upward movement of the last two and a half months fits under the "correction" category against the global downtrend). The number of long positions is 125,000 higher than the number of sell positions opened by non-commercial traders. Thus, the net position of the non-commercial group may continue to grow. However, the euro may remain unchanged. The overall number of short orders exceeds the number of long orders by 33,000 (711,000 vs. 678,000). H1 chart of EUR/USD EUR/USD is still in a high position on the one-hour chart, although it has hardly settled below the critical line. So far, we're not sure whether it will continue to move down since there's already signs that the market is flat. Lines of the Ichimoku indicator may soon merge with each other and lose all meaning. We should now rely on the 1.0581-1.0658 horizontal channel. On Wednesday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658, 1.0736, 1.0806, as well as Senkou Span B (1.0589) and Kijun Sen (1.0656). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are no important reports or events scheduled for today in the EU and the US. And the pattern will remain the same all throughout this week. So far, all this leads to a flat... What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group. Relevance up to 05:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330372
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

FX: The Last Czech National Bank Meeting Of The Year, Downside Risks For The Pound In The New Year

ING Economics ING Economics 21.12.2022 09:18
Markets are unlikely to be moved by any data release over the Christmas period, but a bumpy exit from the zero-Covid policy in China and developments in the energy market might cause a deterioration in global risk sentiment. We remain bullish on the dollar in early 2023. The Czech National Bank will close this year's meetings of central banks in the region.   This is the last FX Daily of 2022. We'll resume publication on Wednesday, 4 January 2023. We wish all our readers a happy holiday season! USD: No key data in the next two weeks Markets are still digesting yesterday’s hawkish surprise by the Bank of Japan as we approach the quietest period of the year. The market reaction to the BoJ shock has seen a widespread sell-off in bonds, but no negative spillover into Western equities. USD/JPY is trading around 131.80 at the time of writing: closing the year above 130.00 may be a welcome development at the BoJ as it could signal that speculation on further policy normalisation has – for now – been kept in check. Today, markets will look at the Conference Board consumer confidence as well as home sales data. Yesterday, housing starts came in above consensus while building permits plunged much more than expected. In neighbouring Canada, expect CPI data to impact the Canadian dollar this afternoon. Since this is the last FX Daily of the year, we should also look at potential FX drivers in the two weeks ahead. On the data side, the US calendar includes personal income, PCE and durable goods orders for November (on 23 December) as well as Dallas and Richmond Fed manufacturing indices on 27-28 December. For the time being, there are no scheduled Fed speakers until the Fed minutes release on 4 January. We doubt data will be able to shake markets in the low-volatility environment of the festive period. News from China and on the energy crisis is more likely to drive any significant move if anything. In China, an increasing number of unofficial reports suggest that the actual death toll may be considerably larger than the reported one: should this be backed by more evidence, markets may increasingly doubt the sustainability of China’s zero-Covid exit path, with negative implications for the yuan, Asian EMFX, and high-beta currencies. On the energy side, Russia’s potential retaliation to the EU cap on gas prices, a possible re-escalation in the conflict in Ukraine and weather-related news (which has been a key driver of gas prices lately) may all have repercussions on the FX market. European currencies continue to look quite vulnerable from this point of view. We think DXY could close the year around the current levels. In line with its seasonal trend, December has been a soft month for the greenback. It’s worth remembering that the dollar rose in each of the past four years in January. Our view for early 2023 is still one of dollar recovery. Francesco Pesole EUR: Keeping an eye on energy market volatility We think EUR/USD may find some stabilisation around 1.0600 into year-end as volatility starts to drop. A drop to sub-1.0500 levels is, however, possible should market sentiment deteriorate, especially on the energy side. There are no major data releases to highlight in the next two weeks for the euro, at least until the German CPI figures for December are released (3 January). No European Central Bank speakers are scheduled. Elsewhere in developed Europe, keep an eye on today’s release of the Swedish Economic tendency survey. In Norway, it will be worth keeping monitoring daily FX purchases published by Norges Bank on 30 December. The Bank has scaled down krone sales in the past two months, and – as discussed here – this may signal appetite for a stronger currency. Expect some NOK volatility around the release. We see EUR/SEK and EUR/NOK enter the new year from the 11.00-11.10 and the 10.45-10.55 ranges, respectively. Francesco Pesole GBP: Outlook for 2023 still looks challenging While dealing with multiple strikes, the UK will not see a lot of data releases in the coming two weeks, with tomorrow’s first GDP data unlikely to move the market. There are no scheduled Bank of England speakers until the first week of January. We continue to see mostly downside risks for the pound in the new year, as a recessionary environment and sensitivity to market instability may cause a return to the 1.15-1.18 range in cable. For this festive season, GBP/USD may hold around 1.2100-1.2250. Francesco Pesole CEE: CNB in a comfortable situation Yesterday's meeting of the National Bank of Hungary brought a surprisingly hawkish market reaction. The NBH managed to maintain its "higher rates for longer" stance while announcing that the programme of providing hard currency to energy importers will be extended for the coming months. Both represent positive news for the forint. Implied yields have risen again to near-record levels, providing a shield against potential sell-offs. In addition, falling gas prices have once again driven FX in the CEE region in recent days, and given that Hungary is the most energy-dependent country in the region, this is translating positively into a strengthening forint. Thus, all in all, everything speaks in favour of further strengthening of the forint, strengthening our view and we expect 400 EUR/HUF levels in coming days. Today, we will see the last Czech National Bank meeting of the year. In line with the market, we expect rates and the FX regime to remain unchanged. The board members have been very open in their talks over the past few days, so we are unlikely to see any surprises. Although inflation rose more than the market expected in November, it is still below the CNB's forecast due to government measures. Moreover, the koruna has been below the CNB's intervention level for a long time and in fact yesterday it reached its strongest level against the euro in 11 years. Thus, according to the new reaction function, the central bank is in a comfortable situation. For now, we believe the koruna is mainly supported by global conditions, falling gas prices and a weaker US dollar. In both cases, we believe this is temporary and moreover, the positioning seems mostly long within the region in the case of the koruna. Thus, we think koruna will hit its limit soon.  Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Analysis Of The EUR/JPY Pair Movement

Higher Yields Will Mean Unrealized Losses On Japanese Government Bonds

InstaForex Analysis InstaForex Analysis 21.12.2022 09:51
Yen shot up on Tuesday after the Bank of Japan made a very bold decision on monetary policy. However, what is more important is the statements of Governor Haruhiko Kuroda, which gave investors an indication of what to expect when the policy ends. Yesterday, Kuroda shocked markets by announcing that he will allow 10-year bond yields to rise to around 0.5%. This is obviously a strategic adjustment to buy time in determining the yield curve next year following the changes in central bank policy, when interest rates are forecast to rise. Currently, the yield on 10-year Japanese securities is at 0.46%. This has led to a rise in Japanese bank stocks as investors are waiting for higher returns from financial institutions. Kuroda said all decisions taken were in order to increase the effectiveness of monetary policy. Given that his term ends next year, there will be at least two more meetings under his leadership, which means that his successor will complete the path to policy normalization. But there are those who point out that higher yields will mean unrealized losses on Japanese government bonds, including those held by the Bank of Japan. A sustained policy change could also hit Japanese stocks, as well as break the latest bond yield peg and trigger a sell-off in dollar in favor of yen. That will lead to Japanese investors divesting from overseas investments, which could result in a sell-off in emerging markets. As mentioned earlier, the forex market reacted to this by moving quite strongly. In USD/JPY, there is a strong support around 130.20, and its breakdown will lead to another sell-off around 126.20 to 121.10. In EUR/USD, demand remains quite weak, but there is a chance to return to December highs if the European Central Bank retains its hawkish monetary policy. However, traders need to keep the quote above 1.0660 because only by that will euro hit 1.0700 and 1.0740. In case of a decline below 1.0580, pressure will surge, which will push the quote to 1.0540 and 1.0490. Relevance up to 05:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330368
Mixed US Activity Picture: July Rate Hike Likely, Followed by a Pause

The EUR/USD Pair Keeps Trading Above $1.06, The USD/JPY Is Below 132

Kamila Szypuła Kamila Szypuła 21.12.2022 12:10
The USD gets some support from a slight increase in US Treasury yields, supported by the Fed's hawkish outlook. In fact, the US central bank has announced that it will continue to raise interest rates to suppress inflation. Moreover, the Bank of Japan's policy modification that sparked a sell-off in bond markets on Tuesday is acting as wind in the sails for US bond yields. Market participants are now awaiting economic data from the United States, including the release of the Consumer Confidence Index. EUR/USD The euro holds its level above $1.06, and today the mood is bearish. The current pair is trading below 1.0620. The US dollar is regaining some positive traction and reversing some of the overnight sharp decline which is seen as a headwind for the EUR/USD pair. Wednesday morning kicked off with German GfK consumer confidence data (see economic calendar below) for January which beat expectations suggestive of a more upbeat outlook for the third consecutive print. With the dollar trading higher today, EUR/USD has managed to utilize this economic data to keep in the green this morning. Read next: Indonesia Has Potential In The Development Of Solar Energy| FXMAG.COM GBP/USD Cable Market price is down today. At the start of the day, GBP/USD traded above 1.2190 and is currently trading at 1.2130. The US Dollar regains some positive traction and turns out to be a key factor acting as a headwind for the GBP/USD pair. On the other hand, the British pound is weakened by the dovish outcome of last week's Bank of England (BoE) meeting. The US Economic Report includes the Conference Board's Consumer Confidence Index, due to be released later during the early North American session. This, along with US bond yields and broader market sentiment for risk, will weigh on USD price dynamics and provide some impetus to GBP/USD. After that, the focus will shift to the publication of final UK GDP figures for Q3. AUD/USD The Aussie Pair trading rebounds below $0.67 today. It is currently above 0.6675. The Aussie and The Kiwi (NZD) are among the most liquid of these carry trades and took the biggest hit when the BOJ badly wrong-footed a very thin market in the week before Christmas. A good recovery in global risk attitudes – indicated by the optimistic tone in equity markets – is seen as a key factor supporting the perception of riskier Australians. That said, the appearance of some US dollar purchases limits any significant gains for the AUD/USD pair. USD/JPY The USD/JPY Pair is currently trading at June levels. Latest data helped Yen with effect on USD/JPY trading level in range 131.73-131.76 The bears of the pair are waiting for a return to the downtrend The currency pair remains vulnerable amid mixed comments from Japanese authorities about the Bank of Japan's surprising policy move The Bank of Japan kept the policy equilibrium rate at -0.10% but adjusted its Yield Curve Control (YCC) by setting a range of +/- 0.50% around zero for Japanese government bonds (JGB) for up to 10 years. Previously, the YCC target was +/- 0.25% around zero. The bond market had been moving into the upper 0.25% band for some time amid speculation that the bank would have to step down at some point in the face of accelerating inflation. BoJ Governor Haruhiko Kuroda remained steadfast in preparations for yesterday's meeting that the policy would be resolutely upheld. Source: investing.com, dailyfx.com, finance.yahoo.com
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

EUR/USD Pair Is Expectes Downward Movement

InstaForex Analysis InstaForex Analysis 22.12.2022 08:05
There is no way the euro can leave the range of 1.0595-1.0645. Last week's trading volumes were high, but now investors are obviously leaving the market for the Christmas weekend till the 27th, therefore, the market can thin out by today or tomorrow, and EUR can leave the current range. The oscillator signal line lies on the zero line; this is a dangerous symptom of an upward reversal from it, followed by the price leaving this range and moving upwards, where the target is the 1.0758/87 range. According to the main scenario, we expect downward movement, the nearest target is 1.0470. On the four-hour chart, there is nothing more to add to the basic ideas. In order to develop the main scenario, the price needs to settle under 1.0595, which means that EUR will automatically settle under the MACD line. Marlin is trying to enter the positive area, but so far it is within the framework of consolidation. A sign of growth is when the price settles above the upper limit of the range at 1.0645. Relevance up to 03:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330474
The Upside Of The EUR/USD Pair Remains Limited

EUR/USD Pair: There Is No Bearish Correction Even After Weeks Of Strong Growth

Paolo Greco Paolo Greco 22.12.2022 08:26
M5 chart of EUR/USD EUR/USD is still trading within the 1.0581-1.0658 horizontal channel. In fact, this is a very good moment, as we have clear guidelines for the pair's movement, despite the fact that a flat was formed in the market. At least the pair does not form false signals, which leads to losses. However, there is nothing more to say about the technical pattern. The pair, ignoring the flat, is still in a high position and there is no bearish correction even after weeks of strong growth. However, the coming Christmas and New Year's holidays will cancel the desire to trade, so the flat might last for another week or two, or maybe even more. There were no important events or reports in the EU and the US on Wednesday. I still expect a bearish correction in the medium term, but at this time, a flat. On Wednesday, EUR only approached the important line just once. It happened during the US trading session. It reached the Senkou Span B line with minimal error, so this rebound could be regarded as a buy signal. However, it was formed quite late, so it was not necessary to open a long position. Also, take note that the Senkou Span B line might converge with the Kijun-Sen in the near future, so I won't adjust just yet. These lines lose their strength in a flat. COT report In 2022, the COT reports for the euro are becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now the net position of non-commercial traders is again bullish and strengthens almost every week. The euro is growing but a fairly high value of the net position may point to the end of the upward movement or at least, to a correction. During the given period, non-commercial traders opened 8,600 long positions, whereas the number of short positions rose by 8,500. Thus, the net positions fell by 100. Notably, the green and red lines of the first indicator have moved far apart from each other, which may mean the end of the ascending trend (which wasn't actually an uptrend because the upward movement of the last two and a half months fits under the "correction" category against the global downtrend). The number of long positions is 125,000 higher than the number of sell positions opened by non-commercial traders. Thus, the net position of the non-commercial group may continue to grow. However, the euro may remain unchanged. The overall number of short orders exceeds the number of long orders by 33,000 (711,000 vs. 678,000). H1 chart of EUR/USD EUR/USD is still in a high position on the one-hour chart, although it has hardly settled below the critical line. So far, we're not sure whether it will continue to move down since there's already signs that the market is flat. Lines of the Ichimoku indicator may soon merge with each other and lose all meaning. We should now rely on the 1.0581-1.0658 horizontal channel. If EUR manages to go beyond it, then we can count on some trend movement. On Thursday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658, 1.0736, 1.0806, as well as Senkou Span B (1.0589) and Kijun Sen (1.0656). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are no important reports or events scheduled for today in the EU. A not so important GDP report for the third quarter will be published in the US. But "every cloud has a silver lining", so let's not miss it. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 05:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330480
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

The ECB Vice-President Luis De Guindos:" We Have No Choice But To Act"

TeleTrade Comments TeleTrade Comments 22.12.2022 09:33
European Central Bank (ECB) Vice-President Luis de Guindos said on Thursday that “we should expect to raise interest rates at this pace for a period of time.” Additional quotes   Indication for Q4 2022 is that we are perhaps in negative territory, but not very deep, with GDP expected to contract by 0.2%. Over the course of the next two or three months inflation will be somewhere around its current level, in q2 2023 it will see a drop to hover around 7% by the middle of the year. We have no choice but to act. If we do nothing, the situation would be worse because inflation is one of the factors behind the current recession. Increases of 50 basis points may become the new norm in the near term. Our interest rates will then enter into restrictive territory. I am concerned that markets could underestimate the persistence of inflation. I am concerned that markets might consider fiscal policy to be incompatible with monetary policy, that there is a potential conflict. Banks have a solid capital position and can withstand a shock, but i have a lot more doubts about non-banks, notably hedge funds.   Market reaction In reaction to the above hawkish comments, EUR/USD keeps its upbeat momentum intact at near-daily highs of 1.0650, up 0.43% so far.
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

Technical Analysis Of The Euro To US Dollar Pair By Expert Of InstaForex

InstaForex Analysis InstaForex Analysis 22.12.2022 09:51
EUR/USD Euro has been consolidating under 1.0700 for more than a week. Most likely, this is due to the market's sentiment with the end of the year, as well as the uncertain outlook for economies in both the US and the EU in early 2023. In technical aspects, this horizontal consolidation below the resistance level suggests a breakout and a potential rise. However, it is unlikely to be very strong, so it is best to continue selling euro from 1.0720, especially in the case of growth to 1.0800 - 1.0900. Read more: https://www.instaforex.eu/forex_analysis/330500 Relevance up to 07:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330500
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The GBP/USD Pair Is Trading Just Above 1.20, The Australian Dollar Is The Strongest Today

Kamila Szypuła Kamila Szypuła 22.12.2022 13:49
The US Dollar is weaker today as markets appear to be restoring their signal ahead of next week's holiday. Chinese words about stimulating economic growth strengthened risk sentyment. The Australian Dollar is the biggest gainer today as the generally more optimistic sentiment towards risky assets helped to bolster it. Later in the day, the focus will be on US GDP, which is expected to improve for the third time in a row, revealing a downside risk for the EUR/USD pair. In addition, central banks must balance the need to fight inflation with the risk of further deepening of the economic slowdown. EUR/USD EUR/USD keeps trading above 1.06 for another day. For a significant part of the day, the pair traded in the range of 1.0630-1.0660. It is currently trading below 1.0630, 1.0622 to be precise The euro has a strong start to Thursday's European session with the dollar weakening. In addition, de Guindos of the European Central Bank (ECB) upheld the hawkish narrative, stating that "50 basis points may soon become the new standard" to quell rising inflationary pressures in the eurozone. GBP/USD The cable pair dropped to 1.2040. The British pound traded around $1.21, down slightly from its recent six-month high of $1.2446 as investors weighed less hawkish BoE and economic outlook. Analysts mainly see the risk of the pound falling between now and the end of the year as the UK economy is stuck in stagflation conditions. The outlook for the UK is still pretty bleak. The UK economy contracted slightly more than originally estimated in the third quarter and business investment performed poorly, the Office for National Statistics said on Thursday. Household spending and business investment fell significantly, boosting expectations that the British economy was heading into recession. Most services sub-sectors experienced a slowdown, however, services output increased by 0.1% in Q3 2022, revised upwards from the first estimate of solid output. Compared to pre-coronavirus (COVID-19) levels, service output is now 1.3% lower than in Q4 (October-December) 2019. Read next: Credit Suisse Sold Building In Geneva | Visa Is Building Success At The Expense Of Small Retailers| FXMAG.COM USD/JPY USD/JPY dropped from 137.50 to 130.50 in no time. It has since stabilized. USD/JPY in the Asian session fell to around 131.70, in the European session the pair rose above 132.10. The yen firmed on Thursday, returning towards a four-month peak against the dollar hit this week after an unexpected tweak to the Bank of Japan's bond yield controls spurred bullish yen bets. Japan is the largest holder of government bonds and once again, if domestic yields move north, the world's largest debt market could be affected. The bank's new CEO is due to be appointed in April 2023, and there is a perception that he could pave the way for the new leader to tighten policy in the face of accelerating inflation. The yen is used as a funding currency by some investors, and the rise in Japanese yields changes the price dynamics for these participants. AUD/USD Yesterday, at the end of the day, the exchange rate was below $0.67, but closer to midnight it started to increase. The new day will start with an increase in the Aussie pair. It peaked at 0.6769, then you start to fall. Trading is at 0.6726 The sentiment-linked Australian dollar outperformed its major counterparts on Wednesday, benefiting from a cautious improvement in risk appetite. The aussie also benefited from a general weakness in the US dollar, as well as hopes for more pro-growth policy measures in China. Earlier in December, the Reserve Bank of Australia raised its policy rate by 25 basis points to 3.1%, taking borrowing costs to a level not seen in a decade. Source: dailyfx.com, investing.com, finance.yahoo.com
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Euro To US Dollar Pair's Market Is Currently Completely Flat

Paolo Greco Paolo Greco 23.12.2022 08:10
On Thursday, the EUR/USD currency pair kept its position above the moving average line while making gentle progress along it. Of course, the best way to describe the entire current movement is as totally flat and not as a movement along the moving average. Remember that the price cannot move sideways and along the moving average at the same time. The moving average line will eventually begin to point in the direction of the east, at which point the price will cross it ten times per day. As a result, the euro/dollar pair's market is currently completely flat. Volatility has decreased, as we have already stated, if not to the lowest values, then at least to quite low levels, such as those for 2022. Consequently, it is currently very challenging to trade a pair. Given that nothing noteworthy is occurring at the moment in either the world or the market, there may not be anything else to say about the technical situation. Everybody is gradually preparing for Christmas and the New Year. No significant publications, speeches, or statements have been made recently. There is nothing to analyze; all that is left to consider is how the upcoming year will go and how the pair will behave in January. However, in our opinion, the euro currency can now remain flat for a considerable amount of time. Keep in mind that a flat is not uncommon in the foreign exchange market. And it isn't required to continue for a week or two. When a minimal number of new positions are created, the market is flat. Traders now merely see no reason to open the deals because they do not open, or they are waiting for a more favorable environment. In any case, there are no discounts, and there might not be any for several months. Of course, we hope that no such extreme scenarios will arise, but in reality, anything is possible. Naturally, the moving-overcoming signals have no relevance at this point. We must now either wait for the flat to be finished or try to trade within the side channel's borders on the lower TF. In the third quarter, the American economy expanded. The US GDP for the third quarter in the third and final assessment was this week's only significant report. In theory, we stated yesterday that we did not anticipate a response to this report. It might still be, given that the third quarter's actual value was 0.3% higher than expected. The result was a 3.2% increase in the American economy, which more than offset the losses from the first two. Therefore, it cannot be said that a recession in the United States has started as of the third quarter. Although the vast majority of economists predict a recession for the coming year, it is always preferable for it to begin later or for the fall to be as small as possible. The US economy appears to be doing well right now. As a result, we believe it is premature to discuss a recession. It might be very fleeting and shallow. The Fed has already increased its rate nearly to the desired level in the interim. Five months in a row have seen a decrease in inflation. The states have a great chance to exit the high inflationary period quickly and with minimal losses. However, predicting how the EU's battle against inflation will turn out is still quite challenging. As you may recall, many experts question the ECB's ability to raise the rate "as long as it takes." This indicates that even if the battle lasts for years, the rate won't rise above the Fed rate. This is unfortunate for the value of the euro. It is impossible to predict the rate's potential value because ECB representatives are silent about the rate's eventual level. As of December 23, the euro/dollar currency pair's average volatility over the previous five trading days was 73 points, which is considered "average." So, on Friday, we anticipate the pair to fluctuate between 1.0531 and 1.0677 levels. The Heiken Ashi indicator's reversal means nothing because the pair is completely flat. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: Although the EUR/USD pair has been flattening out for several days, it is still maintaining an upward trend. Trading can only be done on the lower TF inside the side channel because the 4-hour TF hardly ever moves. Explanations for the illustrations: Channels for linear regression help identify the current trend. The trend is currently strong if they are both moving in the same direction. The short-term trend and the direction in which to trade right now are determined by the moving average line (settings 20.0, smoothed). Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 04:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330598
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The Decline Of Euro To US Dollar (EUR/USD) Pair Has Begun

InstaForex Analysis InstaForex Analysis 23.12.2022 08:29
EUR/USD has begun the final part of its decline to the corrective target at 1.0469 from where the next impulsive rally towards 1.0927 and likely 1.1384 is expected. In the short term, a break below minor support at 1.0573 will confirm the descent towards 1.0469 to complete the correction in wave 4/. In the longer term, we are looking for EUR/USD to move much higher and ultimately break above the 2011 peak at 1.6038.   Relevance up to 06:00 2022-12-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306086
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

Oscar Ton's Technical Outlook Of The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 23.12.2022 08:31
Technical outlook: EURUSD dropped to the 1.0573 low during the New York session on Thursday before finding bids again. The single currency pair is seen to be trading around 1.0605 at this point in writing as the bears prepare for a breakout. The currency pair has remained sideways for the most part of the week and a clear break below 1.0560 would confirm a breakout. Interim resistance stays at 1.0736 keeping the bearish outlook intact for now. EURUSD turned lower from 1.0736 over the last week carving an Engulfing Bearish candlestick pattern right at the trend line resistance as seen on the daily chart. Prices might rally through the 1.0670-80 zone, which is the near-term resistance, before turning lower towards the larger-degree trend. The bears are keen to take advantage until prices stay below 1.0736. EURUSD might have terminated its counter-trend rally, which began from 0.9535 around the 1.0736 highs last week. If the above holds well, prices would stay below 1.0736 and reverse lower towards 0.9535 and further in the next few weeks. On the flip side, if 0.9535 is a major bottom carved, prices should find support around the 1.0100-50 area. The bias is looking lower in the near term. Trading idea: A potential drop against 1.0750 Good luck! Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306088
The Euro May Gradually Climb To The Target Level

EUR/USD Pair Is Still In A High Position On The 1H Chart

Paolo Greco Paolo Greco 23.12.2022 08:33
M5 chart of EUR/USD EUR/USD is still trading within the 1.0581-1.0658 horizontal channel. As I mentioned before, such a clear horizontal channel is now more of a positive than a negative because traders have clear trading targets, which are executed by the pair itself. For example, yesterday, the price perfectly reached both limits of the channel, which let traders open a position and make profit despite the flat. So it is possible to trade and make profit even in the flat if you follow the basic rules. The US had a macroeconomic background and the GDP report for the third quarter was the first report this week that was actually worth paying attention to. GDP grew not by 2.9% as predicted, but by 3.2%, so the dollar's growth (especially during the US session) was logical and justified. Another thing is that from a technical perspective, this movement did not change anything because the pair remained in the flat anyway. There were several trading signals on Thursday and all of them were quite pleasant. First, the price rebounded twice from the critical Kijun-Sen line. In the first case, it went down by 20 points, so traders had to put a Stop Loss on the trade to Breakeven, which was used to close it. In the second case, the price fell to the Senkou Span B line and 1.0581, where the shorts should have been closed with profit at around 40 pips. You could have used the buy signal, but it did not bring traders any profit, as the price failed to start a new growth. As a result, the deal closed with zero or just a small loss. Altogether there was a profit of about 30-40 points. COT report In 2022, the COT reports for the euro are becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now the net position of non-commercial traders is again bullish and strengthens almost every week. The euro is growing but a fairly high value of the net position may point to the end of the upward movement or at least, to a correction. During the given period, non-commercial traders opened 8,600 long positions, whereas the number of short positions rose by 8,500. Thus, the net positions fell by 100. Notably, the green and red lines of the first indicator have moved far apart from each other, which may mean the end of the ascending trend (which wasn't actually an uptrend because the upward movement of the last two and a half months fits under the "correction" category against the global downtrend). The number of long positions is 125,000 higher than the number of sell positions opened by non-commercial traders. Thus, the net position of the non-commercial group may continue to grow. However, the euro may remain unchanged. The overall number of short orders exceeds the number of long orders by 33,000 (711,000 vs. 678,000). H1 chart of EUR/USD EUR/USD is still in a high position on the one-hour chart, and is still in a total flat. Lines of the Ichimoku indicator may soon merge with each other and lose all meaning. We should now rely on the 1.0581-1.0658 horizontal channel. If EUR manages to go beyond it, then we can count on some trend movement. On Friday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658, 1.0736, 1.0806, as well as Senkou Span B (1.0589) and Kijun Sen (1.0656). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 23, no important report or event scheduled in the EU, while the US will release reports on the PCE Price Index, Durable Goods Orders, and Capital Goods Orders. I don't think these reports will be able to take the pair out of the flat, but there might be some reaction. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 05:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330602
Upcoming Corporate Earnings Reports: Ashtead, GameStop, and DocuSign - September 5-7, 2023

The Economy In Britain And The EU May Shrink In The Second Quarter Of The Fourth

InstaForex Analysis InstaForex Analysis 23.12.2022 09:29
The EUR/USD instrument has been immobilized in the final days of the current year. The upward wave e has already assumed a sufficiently extended form and should be finished, so the market sees no reason to start building a correction wave at this time. Although there hasn't been much news this week, some information has been received. Luis de Guindos, who serves as Christine Lagarde's "right hand," in particular, spoke twice this week. He stated on Monday that he had no idea how much higher ECB rates would go or how high they could go. Such statements from one of the founding members of the ECB, in my opinion, do not boost public confidence in the euro. I'm sure that the demand for the euro currency would be waning right now if the market hadn't taken its vacation earlier than expected. Just as the British pound, which also constructed a sizable wave e but has already begun to decline, is being hit by it. Luis de Guindos provided new commentary on monetary policy on Thursday, stating "The ECB will raise interest rates "at such a pace" for a predetermined period." We mean a step of 50 basis points when we say "at this rate," as was the case at the meeting in December. I'm not sure what is meant by "a certain time," though. Both "two more meetings" and "five more meetings" can be meant by this expression. The market must, however, be aware of the potential magnitude of the rate increase. Since its limit value of 4% and 6% differs, the market response and the euro exchange rate will also vary. In other words, de Guindos omitted to address the crucial issues. He asserted that the EU economy could contract by 0.2-0.3% by the end of the fourth quarter, which could signal the start of a recession. Let me remind you that two consecutive "negative" quarters at the beginning of this year, despite strong growth in the third, could have signaled the beginning of the US recession. In contrast, the economy in Britain and the EU grew only moderately in the first two quarters, shrank in the first quarter of the third, and may shrink in the second quarter of the fourth. As a result, both European economies could experience negative economic growth, which would require central banks to exercise greater caution in tightening monetary policy. In America, there are no such issues at the moment, and the rate is already getting close to its final value. The Fed no longer needs to raise rates by 75 or 50 basis points at each meeting, even though the recession may start in 2023. This situation, in my opinion, will affect the dollar in the coming month or two. This assumption fits the current wave markup very well, as a decrease is anticipated for both instruments. I conclude from the analysis that the upward trend section's construction has grown more intricate and is almost finished. As a result, I suggest making sales with targets close to the estimated 0.9994 level, or 323.6% Fibonacci. Although there is a strong likelihood that the upward portion of the trend will become even more extended and complicated, there is currently a signal to turn lower. The construction of a new downward trend segment is predicated on the wave pattern of the pound/dollar instrument. Since the wave marking permits the current construction of a downward trend section, I am unable to advise purchasing the instrument. With targets around the 1.1707 mark, or 161.8% Fibonacci, sales are now more accurate. Wave e is likely finished, though it could take on an even longer form. Relevance up to 06:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330612
The Results Of The March Meeting Of The Bank Of Japan Are Rather Symbolic

The Bank Of Japan Will Shock The Markets Once More Due To Inflation In Japan Has Increased

InstaForex Analysis InstaForex Analysis 23.12.2022 09:34
The Central Bank of Japan's recent actions appears to have been intended as a warning. As of today, the primary measure of inflation in Japan has increased even further and reached its highest level since 1981, which will undoubtedly increase market speculation that the Bank of Japan will shock the markets once more by altering its monetary policy in 2023. The Ministry of Internal Affairs reports that consumer prices in Japan increased by 3.7% in November compared to the same month last year. The Bank of Japan's primary index's results and the economists' evaluation were in agreement. The growth of the index was primarily driven by higher food prices, which even outpaced the growth of energy prices. It is clear that a variety of government initiatives, such as funding travel, contributed to keeping prices below 4%, but the battle against high inflation is far from over. Those who trade Japanese bonds barely responded to these data: Benchmark 10-year bonds and five-year securities both saw modest increases, which caused yields to drop by one basis point to 0.205%. The foreign exchange market hasn't undergone many notable changes either. Notably, core inflation has gone above the Bank of Japan's 2% target for eight straight months. The main trend is strengthening, as evidenced by the current level of inflation, which is 2.8% when fresh food and energy are excluded. Now, speculation that the central bank is on the verge of a policy reversal will continue to be supported by recent actions of Bank of Japan Governor Haruhiko Kuroda and recent data. Let me remind you that Kuroda shocked the markets at the beginning of the week when he announced that he would now permit the yield on 10-year Japanese bonds to rise to about 0.5%, which is twice the prior cap of 0.25%. All of this is a tactical maneuver to buy time before determining the future yield curve, which will change after the Central Bank's policy is altered next year when it is anticipated that interest rates will be raised. Many economists now anticipate that after the new governor assumes office, a policy change could occur as soon as next spring. Regarding the outlook for monetary policy, many analysts now predict that core inflation in Japan will reach 4% in December of this year before dipping to 2.7% in the first quarter of 2023 as a result of new government subsidies. Furthermore, data for January won't be available until after the Bank of Japan meeting in January, although economists anticipate that these subsidies will start to have a significant impact on inflation in that month. Regarding the USDJPY pair's technical picture, it is clear that the area around 130.20 serves as strong support over the long term. After the most recent news, the level of 121.10 will be the furthest goal. Its breakdown will trigger another significant sell-off in the vicinity of 126.20. It is not necessary to mention that the demand for the yen will decline in some circumstances right now. Regarding the EURUSD's technical picture, the demand for the currency is still quite weak, but there is still a chance that it will reach its December highs. To achieve this, a break above 1.0660 is required, which will cause the trading instrument to surge toward the new December high of 1.0700. You can easily climb to 1.0740 above this point. Only the failure of support at 1.0580 will put more pressure on the pair and drive EURUSD to 1.0540 with the possibility of falling to a minimum of 1.0490 if the trading instrument declines. Relevance up to 08:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330634
Apple Q3 2023 Results – Surpassing Expectations and Aiming for New Heights

Major Currency Pairs Are Trading Green Today. EUR/USD Holds Above 1.06, GBP/USD Trades Help At 1.21

Kamila Szypuła Kamila Szypuła 23.12.2022 12:56
The dollar fluctuated on Friday and was little changed in morning trading in London after two days of gains, as investors weighed up the outlook for interest rates following the release of stronger than expected U.S. economic data on Thursday. The dollar index has dropped more than 8% since hitting a 20-year high in September, with a sharp slowdown in U.S. inflation raising hopes that the Fed may soon end its tightening cycle. A second report said the U.S. economy rebounded in the third quarter at a pace faster than previously estimated. In today's economic calendar, the focus is solely on US economic data. EUR/USD The euro was up slightly against the dollar, standing 0.1% higher at $1.061, after slipping less than 0.1% on Thursday. The pair traded low yesterday around 1.06, sometimes falling below this level. Today, the pair is recovering and trading above 1.06 again, mainly in the 1.0610-1.0620 range GBP/USD The cable pair is trading around 1.20. It is now up and trading close to $1.21, 1.2070 to be exact. Yesterday, the price of the pair fell even below 1.20, today it is recovering, similarly to the euro pair. It grows especially during the European session. Yesterday’s UK GDP brought about the first quarter of negative growth for the UK economy in 2022. In addition, strike action in the UK, dishing household income in the midst of elevated inflation makes conditions tough for the Bank of England (BoE) but may likely end rate hikes sooner than the Federal Reserve. Read next: Migration Of Sports From Traditional Television To Streaming Is Chugging Ahead- The NFL Sunday Ticket On YouTube| FXMAG.COM USD/JPY USD/JPY holds trade above 132. And like the other major currency pairs, it is trading much higher today than it did at the end of yesterday. The Japanese yen was down 0.2% at 132.62 to the dollar. Yet the Japanese currency was on track for a weekly gain of around 3% after the Bank of Japan (BOJ) tweaked a key bond market policy earlier this week. Former deputy finance minister Eisuke Sakakibara said in an interview with Bloomberg that he sees USD/JPY could rise to 120. Earlier this year, he said USD/JPY could rise to 150. In October it was just over 152, its highest level since 1990. And maybe this time his predictions will come true. He also believes the BoJ may raise the yield curve control limit at the January meeting. Further tightening of monetary policy by the BoJ may not be what some market participants expect, and further hawkish attitude may come as a surprise. The Japanese yen is a little confused after CPI figures bring pressure on building prices for the country's archipelago. The headline CPI was the highest in 30 years and by the end of November amounted to 3.8% yoy. It was below expectations at 3.9%, but above standard at 3.7%. AUD/USD The Australian pair traded below $0.67 yesterday. Today she tried to cross that level again. I managed to get over it for a while. Currently, the pair is below $0.67, 0.6696 to be exact. The Australian dollar traded below $0.67 facing renewed pressure as better-than-expected US data bolstered the case for further monetary tightening from the Federal Reserve. Meanwhile, a recent rise in local bond yields has saved the Australian from further losses as an unexpected hawkish turn from the Bank of Japan fueled expectations that Japanese investors could shed Australian debt to bring some funds back home. Source: dailyfx.com, investing.com, finance.yahoo.com
The Pound Is Now Openly Enjoying A Favorable Moment

The Cable Market (GBP/USD) In The Week Leading Up To Christmas Drops Significantly

Kamila Szypuła Kamila Szypuła 24.12.2022 14:33
The dollar weakened against most currencies in uncertain, weak trading on Friday as data signaled the US economy was cooling down somewhat, bolstering expectations of smaller interest rate hikes by the Federal Reserve and improving investors' appetite for risk. Excluding the volatile food and energy components, the PCE index gained 0.2% after rising 0.3% in October. The so-called core PCE price index rose 4.7% year-on-year in November, following a 5.0% increase in October. The Fed tracks PCE price indices for its monetary policy. The Fed is widely expected to raise interest rates by just 25 basis points at its next policy meeting in January, after a series of big hikes. USD/JPY The Jena/Dollar pair enjoyed a high level only on Monday, i.e. before the Bank Of Japan meeting. The pair's trade on this day was the highest of the week, with the day's highest trade reaching 137.4430. On Tuesday, the day of the Bank of Japan meeting, the pair dropped drastically and traded below 133. It also hit a low on that day, trading at 130.68. USD/JPY traded in the 132-133 range for most of the week. It closed the week at 132.8720. Against the yen, the dollar rose 0.4% to 132.82 yen. The dollar, however, was on track for a weekly drop of 2.8% after the Bank of Japan (BOJ) revised a key bond market policy earlier this week. In a surprise move, the Bank of Japan adjusted its yield curve control strategy this week, broadening the range where long-term Japanese yields are allowed to trade. Governor Kuroda downplayed the action as a mere "fine-tuning" of policy to ensure the smooth functioning of the domestic bond market, insisting that it was not really a tightening. Markets now expect the BoJ to leave negative rates by April, pricing in a 15bps rate hike that will bring rates back above zero. Then the new governor of the BoJ will take over, so investors are basically betting that the change of leadership will usher in a new era of monetary tightening in Japan. EUR/USD EUR/USD traded mixed. The weekly range was very wide 1.0580-1.0660. The highest level was recorded at the upper end of the weekly range, 1.0660, and the lowest level was read on Thursday and it was lower than the 1.0578 range. In terms of projected fundamental event risk until the end of 2022, last Friday's PCE deflator was arguably the last significant release. The Fed's preferred inflation reading fell from 6.1 to 5.5, while the core reading was in line with expectations, falling from 5.0 to 4.7 percent. GBP/USD Contrary to EUR/USD, the cable pair has been falling day by day this week. It peaked at the beginning of the week trading above 1.22, 1.2241 to be exact. The lowest level was below 1.20. GBP/USD's weekly low was at 1,996. These declines were significantly affected by the publication of UK GDP. Revised figures show the UK economy contracted more than initially thought in the three months leading up to September. The economy shrank by 0.3%, down from the previous estimate of 0.2%, as business investment performed worse than initially thought. Growth figures for the first half of 2022 have also been revised downwards. The UK is expected to fall into recession in the final three months of the year as soaring prices hit growth. AUD/USD The currencies of Australia, New Zealand and Canada strengthened against the US dollar. The Australian unit rose 0.4% to $0.6710 The Aussie pair mostly traded in the 0.6650-06750 range this week. It peaked on Thursday, with the pair trading high at 0.6768, while the week's low was well below the weekly range. The low of the week is 0.6638. The Australian will close the week at 0.6720. The main drivers were Chinese optimism about stimulating economic growth in 2023, as well as fluctuations in the USD based on US economic data. Markets may be a bit overreacting to global risk sentiment given the worsening COVID situation in China, which could put the Australian dollar at risk for further weakness in the coming week as well as in the first quarter of 2023. Source: investing.com, finance.yahoo.com
The EUR/USD Pair Has A Potential For The Breakout Mode

EUR/USD Pair: Volatility Will Return After The Christmas Holidays

InstaForex Analysis InstaForex Analysis 27.12.2022 08:05
Analysis of transactions in the EUR / USD pair There were no market signals on Monday because the pair failed to test any of the presumed levels. The same situation could occur today, but volatility will return after the Christmas holidays are over. By then, large movements will be seen in EUR/USD. For today, the pair is unlikely to move up, especially since there are no statistics due out in the Euro area. The upcoming US reports on the foreign trade balance, inventories in wholesale warehouses and housing price index are also of little interest, but given the low trading volume, figures that are better than expected could lead EUR/USD lower. For long positions: Buy euro when the quote reaches 1.0655 (green line on the chart) and take profit at the price of 1.0690. Although there is a chance for growth today, it is unlikely to be last long. Also, buy only when the MACD line is above zero or starting to rise from it. Euro can also be bought at 1.0628, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0655 and 1.0690. For short positions: Sell euro when the quote reaches 1.0628 (red line on the chart) and take profit at the price of 1.0590. Pressure will return if the US reports strong statistics. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0655, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0628 and 1.0590. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 05:00 2022-12-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330830
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

EUR/USD Pair Is Still In A High Position And Is Still In A Total Flat

Paolo Greco Paolo Greco 27.12.2022 08:11
M5 chart of EUR/USD EUR/USD is still trading within the 1.0581-1.0658 horizontal channel on Monday. As I mentioned earlier, such a clear horizontal channel is more of a good thing right now since traders have clear reference points that they can use. But in general, there is no such movement, which is naturally hard to consider as a favorable time to trade. Not only was there no trend on Monday, there was basically no movement. The volatility of the day was about 20 points, and there were no reports or events in the US or the EU. This is probably due to the Christmas holidays. Many platforms, exchanges and companies were simply closed on Monday. No trading signals on Monday, which means that you shouldn't enter the market. Today, the situation might improve a bit (in terms of volatility), but we probably won't see any movement outside the 1.0581-1.0658 channel. Especially considering the overnight rebound from the upper limit, which could be regarded as a sell signal. Now the pair can go down to 1.0581. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, non-commercial traders opened 12,700 long positions, whereas the number of short positions fell by 4,800. Thus, the net positions rose by 7,900. The number of long positions is 143,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? From our point of view, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to adjust. The overall number of short orders exceeds the number of long orders by 43,000 (684,000 vs. 641,000). H1 chart of EUR/USD EUR/USD is still in a high position on the one-hour chart, and is still in a total flat. Lines of the Ichimoku indicator have already merged with each other and have lost meaning. As we can see, they are being worked out with precision. You should go for the 1.0581-1.0658 channel. If EUR manages to go beyond it, then we can count on some trend movement. Or you should continue to trade on a rebound from these levels. On Tuesday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658, 1.0736, 1.0806, as well as Senkou Span B (1.0589) and Kijun Sen (1.0656). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 27, no important report or event scheduled in the EU and the US. I don't expect the flat to end today. Volatility will probably remain low. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group. Relevance up to 05:00 2022-12-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330820
The EUR/AUD Pair May Have The Potential To Continue Its Decline

No Justification For The Euro To Rise Against The Dollar

Paolo Greco Paolo Greco 27.12.2022 08:15
On Monday, the EUR/USD currency pair did not stay in a flat position. It did not move at all. The day's volatility, which was 20 points, can be safely regarded as the lowest level of the year. Regarding the present technical situation, there is nothing more to be said in theory. Additionally, from a fundamental and macroeconomic perspective, given that neither the United States nor the European Union had any notable events on Monday. Now, locating the price's position with the moving average or focusing on the linear regression channels' direction is useless. The pair are motionless. Opening transactions is pointless if the market is stagnant. The flat was evident yesterday because, in theory, the pair has been trading in a very narrow side channel for more than a week. It will probably continue at least through the end of this year. Possibly even longer. We still anticipate a significant downward correction in the medium term, but the flat must first end. We continue to see no justification for the euro to rise against the dollar. This has been covered extensively already, so we won't go over it again. Does COVID spread outside of China? The unprecedented rate of the "coronavirus'" spread within their own country may have been the most important news of the previous week. When alarming reports from China first started to arrive a few weeks ago, we issued a warning that the Chinese government might conceal the true number of infections and fatalities. Information about the actual state of things started to leak into the international media, despite the insane rates of dissemination. The number of infected people currently numbers in the hundreds of millions. There aren't enough doctors and hospitals in the nation to treat a fifth or a sixth of the population, making it physically impossible to count every person who has already contracted the disease. Therefore, if the situation is worse in reality, we won't be shocked. According to some reports from unreliable sources, hospitals are overcrowded, which is understandable based solely on the number of infections. The situation is shocking all around. There is no doubt that the Chinese economy will continue to decline even if COVID does not spread beyond China this time. "Lockdowns," widespread illness-related absences from work, an initial massive economic contraction, and the launch of new stabilization initiatives, all of which will accelerate inflation. And it is extremely challenging to identify a nation in the world today that is not connected to China. Additionally, this implies that other nations' economies will also suffer. The world may enter a state similar to that of the end of 2019 and the beginning of 2020 if the infection escapes the Celestial Empire once more. Even though vaccines are available globally, this in no way implies that "coronavirus" infections and fatalities have decreased among people. We appear to be in for another fantastic year full of interesting surprises. As of December 27, the euro/dollar currency pair's average volatility over the previous five trading days was 54 points, which is considered "average." So, on Tuesday, we anticipate the pair to fluctuate between 1.0577 and 1.0685 levels. The Heiken Ashi indicator's reversals are now completely irrelevant because the pair is flat. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: Although the EUR/USD pair continues to move higher, we have been seeing a flat price for more than a week. Trading can only be done on the lower TF inside the side channel because the 4-hour TF hardly ever moves. Explanations for the illustrations: Channels for linear regression help identify the current trend. The trend is currently strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones. Relevance up to 04:00 2022-12-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330816
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

EUR/USD Pair Has Potential For The Further Growth Towards Upper References

Peter Jacimovic Peter Jacimovic 27.12.2022 09:32
Technical analysis: EUR/USD has been trading upside and I found breakout of the resistance zone, which is good sign for the further growth. Trading recommendation: Due to the breakout of the resistance zone and strong upside trend in the background, I see potential for the further growth towards upper references. Watch for the potential buying opportunities on the intraday dips with the first upside objective at the price of 1.0730 MACD oscillator is showing fresh upside momentum, which is strong sign that buyers are in control. Key support is set at the price of 1.0640 Relevance up to 08:00 2022-12-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306419
German labour market starts the year off strongly

Germany’s Firms Brace For A Mild Recession In 2023

TeleTrade Comments TeleTrade Comments 27.12.2022 11:35
Citing a survey conducted by the Federation of German Industries (BDI) and the Association of German Chambers of Industry and Commerce (DIHK), Reuters reported that Germany’s firms brace for a mild recession in 2023 even though supply chain disruptions were expected to gradually ease. BDI’s President Siegfried Russwurm said, "The last quarter of 2022 and the start of 2023 are likely to be accompanied by a decline in economic activity. However, we expect only a slight slump." Meanwhile, DIHK President Peter Adrian noted, "Freight rates for container prices are approaching long-term normal values again, and the congestion outside international ports is slowly easing.” "If the announced relaxations of China's zero-COVID policy are implemented, it would also be a positive signal for global supply chains," Adrian added. Market reaction The above comments have little to no impact on the Euro, as EUR/USD is keeping its range at around 1.0650, still adding 0.18% on the day.
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

GBP/USD Is Struggling, The Aussie Pair Have Good Day And Is Trading Above 0.67$, The EUR/USD Is Trading Above 1.0650

Kamila Szypuła Kamila Szypuła 27.12.2022 13:16
Data released by the US Bureau of Economic Analysis on Friday revealed that the Core Personal Consumption Expenditure (PCE) price index rose 0.2% m/m in November. The annual core PCE price index, the Fed's preferred measure of inflation, fell to 4.7% over the same period from 5% in October. Ahead of the Christmas break, Wall Street's major indices posted gains on Friday and failed to find demand for the US dollar. China has said it will lift quarantine requirements for incoming visitors, further easing three years of border controls to contain COVID-19. China's reopening, which also entails a resumption of Chinese tourist outbound trips, will boost the consumer and service sectors outside the country, particularly in nearby Southeast Asia. As a result, the dollar weakened significantly on Tuesday as most emerging Asian currencies strengthened and risk appetite. Currencies in New Zealand and Australia also rose. It is too early to tell how China's reopening will affect global economic activity, but there appears to have been a positive shift in risk sentiment after the three-day weekend. Attention will also focus on the US economic report, which will include the October housing price index and November data on the balance of trade in goods. Investors, however, are likely to ignore these numbers and focus on risk perception. USD/JPY The yen's strength didn't last long and I'm already seeing a slight increase in USD/JPY today. Today, USD/JPY is back to trading above 133. The pair is trading around 133.30. The weakness of the pair, however, does not excuse the recent mixed data from the US and Japan, let alone comments trying to challenge the political hawks at the Bank of Japan (BOJ). That said, Japan's unemployment rate fell to 3.5% in November from 3.6% previously expected, while the jobs/apprentices ratio again printed 1.35 in the month in question compared to 1.33 market forecasts. Moreover, retail trade growth fell to 2.6%YoY against 2.8% of market consensus and 4.4% previously revised upwards. EUR/USD In recent days, the currency pair has been trading in a short range between $1.0580 and $1.0650. Currently, it is trading slightly above this range, signaling an uptrend. EUR/USD has continued its move higher. The pair is taking advantage of US dollar weakness extensively as risk flows dominate further moves to reopen China. Taking advantage of the weakness of the US currency, the EUR/USD pair is up today and is trading around 1.0650, mostly just above that level. Today's high level so far has been 1.0671.   GBP/USD GBP/USD lost its bullish momentum after encountering resistance near 1.2100 early in the European session on Tuesday. GBP/USD drops towards 1.2050 on light trading as UK markets are closed for Christmas. The pair is downplaying the risk sentiment surrounding China that is weakening the US dollar. China announced earlier in the day that it would lift quarantine requirements for travelers from January 8 as part of its reopening efforts. Over the weekend, Chinese officials said they would stop publishing daily revisions to the number of confirmed coronavirus cases. It is worth noting that the valuation of the US dollar through risk perception should continue to drive the pair's actions. Today, the situation of the cable pair is downside with the current trade at 1.2036. AUD/USD The Aussie trades in a strong tone on Tuesday, supported by positive market sentiment. The pair is rising for the third day in a row, extending its rebound from 0.6650. It is currently trading at 0.6737. Source: investing.com,  finance.yahoo.com Data released by the US Bureau of Economic Analysis on Friday revealed that the Core Personal Consumption Expenditure (PCE) price index rose 0.2% m/m in November. The annual core PCE price index, the Fed's preferred measure of inflation, fell to 4.7% over the same period from 5% in October. Ahead of the Christmas break, Wall Street's major indices posted gains on Friday and failed to find demand for the US dollar. China has said it will lift quarantine requirements for incoming visitors, further easing three years of border controls to contain COVID-19. China's reopening, which also entails a resumption of Chinese tourist outbound trips, will boost the consumer and service sectors outside the country, particularly in nearby Southeast Asia. As a result, the dollar weakened significantly on Tuesday as most emerging Asian currencies strengthened and risk appetite. Currencies in New Zealand and Australia also rose. It is too early to tell how China's reopening will affect global economic activity, but there appears to have been a positive shift in risk sentiment after the three-day weekend. Attention will also focus on the US economic report, which will include the October housing price index and November data on the balance of trade in goods. Investors, however, are likely to ignore these numbers and focus on risk perception. USD/JPY The yen's strength didn't last long and I'm already seeing a slight increase in USD/JPY today. Today, USD/JPY is back to trading above 133. The pair is trading around 133.30. The weakness of the pair, however, does not excuse the recent mixed data from the US and Japan, let alone comments trying to challenge the political hawks at the Bank of Japan (BOJ). That said, Japan's unemployment rate fell to 3.5% in November from 3.6% previously expected, while the jobs/apprentices ratio again printed 1.35 in the month in question compared to 1.33 market forecasts. Moreover, retail trade growth fell to 2.6%YoY against 2.8% of market consensus and 4.4% previously revised upwards. EUR/USD In recent days, the currency pair has been trading in a short range between $1.0580 and $1.0650. Currently, it is trading slightly above this range, signaling an uptrend. EUR/USD has continued its move higher. The pair is taking advantage of US dollar weakness extensively as risk flows dominate further moves to reopen China. Taking advantage of the weakness of the US currency, the EUR/USD pair is up today and is trading around 1.0650, mostly just above that level. Today's high level so far has been 1.0671.   Read next:Shopping On Etsy Continues To Be Popular| FXMAG.COM GBP/USD GBP/USD lost its bullish momentum after encountering resistance near 1.2100 early in the European session on Tuesday. GBP/USD drops towards 1.2050 on light trading as UK markets are closed for Christmas. The pair is downplaying the risk sentiment surrounding China that is weakening the US dollar. China announced earlier in the day that it would lift quarantine requirements for travelers from January 8 as part of its reopening efforts. Over the weekend, Chinese officials said they would stop publishing daily revisions to the number of confirmed coronavirus cases. It is worth noting that the valuation of the US dollar through risk perception should continue to drive the pair's actions. Today, the situation of the cable pair is downside with the current trade at 1.2036. AUD/USD The Aussie trades in a strong tone on Tuesday, supported by positive market sentiment. The pair is rising for the third day in a row, extending its rebound from 0.6650. It is currently trading at 0.6737. Source: investing.com,  finance.yahoo.com
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

The EUR/USD Pair Could Resume Its Larger Degree Downtrend

Oscar Ton Oscar Ton 28.12.2022 08:11
Technical outlook: EUR/USD broke through 1.0670 intraday highs intraday on Tuesday before hitting resistance as projected. Bears came back strong thereafter, dragging prices through 1.0610-20 lows. The pair has recovered since then and is seen to be trading close to the 1.0645 mark at this point in writing. The near-term outlook remains unchanged with a bearish bias against the 1.0736 level. EUR/USD's counter-trend rally looks complete at the 1.0736 mark as prices hit close to projected targets around 1.0750-50. The three-wave rally, which had begun from 0.9535 earlier, has further met trend line resistance as seen on the daily chart here. Furthermore, prices have met the Fibonacci 0.382 retracement around 1.0600, of the entire drop between 1.2266 and 0.9535. EUR/USD could resume its larger degree downtrend against 1.0736 and drag further below 0.9535 in the next several weeks. On the flip side, prices could find support close to the 1.0000-100 zone and turn higher again. Either way, a high probability remains for a slip lower towards 1.0000 at least from current levels. Trading plan: Potential bearish turn against 1.0750 Good luck! Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306527
Bank of England raised the interest rate, UK unemployment data go out tomorrow

The EUR/USD Pair Rose Because Demand For The US Dollar Fell

Jakub Novak Jakub Novak 28.12.2022 09:14
Analysis of transactions in the EUR / USD pair The first test of 1.0655 occurred at the time when the MACD line was quite far from zero, so the upside potential was limited. Sometime later, a second test took place, but this time the MACD line had just begun to move above zero, which was a good reason to buy. This led to a price increase of around 13 pips. The pair fell after the slight upward movement and headed towards 1.0628. Although trading volume was quite low in the past days, EUR/USD rose because demand for dollar fell after reports revealed that the foreign trade balance and inventories in wholesale warehouses in the US rose slightly. And since there are no statistics due out in the Euro area today, markets will focus on the upcoming pending home sales in the US. However, the data will not have much impact on the pair as the problems in the real estate market signal a recession, limiting the upside potential of dollar. This could lead to a further rise in EUR/USD. For long positions: Buy euro when the quote reaches 1.0665 (green line on the chart) and take profit at the price of 1.0695. Although there is a chance for growth today, it is unlikely to be last long. Also, buy only when the MACD line is above zero or starting to rise from it. Euro can also be bought at 1.0634, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0665 and 1.0695. For short positions: Sell euro when the quote reaches 1.0634 (red line on the chart) and take profit at the price of 1.0597. Pressure will return if the attempts to consolidate at weekly highs fail. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0665, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0634 and 1.0597. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 07:00 2022-12-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330957
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

The Euro To US Dollar Pair Is Currently Trading More Sensibly

Paolo Greco Paolo Greco 28.12.2022 09:26
Although this fact is simple to understand, the EUR/USD currency pair was already trading with more volatility on Tuesday than it did on Monday. The reality is that the volatility on Monday was exceptionally low - only about 20 points. This value was a result of the day's actual output status. The flat was still preserved even though the indicator had already risen to average values by Tuesday, as is very clear from the above illustration. If the pair is moving in a side channel, how much volatility does it matter? As a result, there has been no change in the technical situation over the past day. However, we did issue a warning that we could observe a flat up until December 31. The pair has fallen by about 100 points from its recent highs, but there are no signs of a correction at the moment. Remember that the British pound has been actively adjusting over the past two weeks, so the fact that the pound is falling while the euro is not surprising us more than the fact that New Year's Eve will be flat. This is not crucial at this time, though. Since there aren't any significant events scheduled for this week, traders are vacating the market. As a result, the euro/dollar pair is currently trading more sensibly. Since there is no way to plan these movements on the 4-hour TF, we can only wait for the flat to be finished. You could try trading only on the newest TF, but even then it would be very difficult and dangerous. After the New Year, the dollar's demand might start to increase. We think that the pair will eventually fall. Over the past few months, the value of the US dollar has dropped too far and too quickly. As we previously stated, market expectations for a slowdown in the Fed's monetary policy's tightening pace can be viewed as the primary cause of its decline. The dollar started to decline when these rumors first surfaced. But as we all know, the ECB also lowered the growth rate in December. Thus, it appears that the dollar's decline was unjustified and illogical. However, we have repeatedly called traders' attention to the absurdity of the euro and pound price increases. Even purely theoretical explanations weren't always available for this. Even when it was on the dollar's side, the macroeconomic and fundamental context was frequently interpreted in favor of the euro. And this is the first justification for why the US dollar should start to appreciate. China is the second explanation. No matter what anyone says, we think the Chinese epidemic will have an impact on the country's economy. Despite Beijing's denial, there are multimillion-dollar diseases, overcrowded morgues, and overcrowded hospitals. If several hundred million people contract the disease, it will inevitably have an impact on demand, retail sales, production levels, and GDP. People simply refuse to report to work out of fear of contracting an infection or because they are already sick from one. It is even harder to imagine how all macroeconomic indicators will collapse if we are talking about 300 million people. The Angolan economy is not the same as the Chinese economy, though. China accounts for more than one-third of global industrial production. As a result, many businesses will encounter a shortage of particular products, parts, or raw materials. 2020 will be reenacted, when the economy was rapidly contracting even without "lockdowns." As a result, if everything that news organizations are reporting about what is happening in China is accurate, a new financial crisis is imminent. And this is happening at a time when the Central Bank is actively raising rates to counteract the negative effects of the monetary stimulus that was required following the previous "coronavirus" pandemic. The world could once again be engulfed in an epidemic if COVID spreads outside of China, which is very likely given that Beijing recently removed all quarantine restrictions on entry and exit from the country. And it makes no difference that we now have the necessary medications and vaccines. They still only help the disease progress; they still do not offer protection against infection. As of December 28, the euro/dollar currency pair's average volatility over the previous five trading days was 50 points, which is considered to be "low." So, on Wednesday, we anticipate the pair to fluctuate between 1.0594 and 1.0694 levels. The Heiken Ashi indicator's reversals are now completely irrelevant because the pair is flat. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trading Suggestions: Although the EUR/USD pair continues to move higher, we have been seeing a flat price for more than a week. Trading can only be done on the lower TF inside the side channel because the 4-hour TF hardly ever moves. Explanations for the examples: Channels for linear regression help identify the current trend. The trend is currently strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.     Relevance up to 05:00 2022-12-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330931
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

The Optimism Around China Easing Of Covid Protocols Has Cool Down, The Aussie Pair Is Trading Near 0.68

Kamila Szypuła Kamila Szypuła 28.12.2022 13:54
Data on the US housing market will be in the spotlight, and with the housing recession dominating recent headlines, these indicators will provide important information on the health of the US housing market. What's more, the optimism around China and the easing of Covid protocols has dimmed a bit since yesterday after rumors that the US may impose new restrictions on travelers from China. This is because US officials are concerned about the lack of "transparent" data coming from Beijing. USD/JPY The dollar gained against the yen by as much as 0.67% to 134.40 In the morning of the Asian session, the USD/JPY pair rose above the 134 level. This level did not last long and the pair returned to trading at 133. In Asian trade, the highest since December 20, when the BOJ caused the pair to fall sharply as a result of an unexpected loosening of the yield band on 10-year Japanese government bonds. On that day, the yen posted its biggest one-day gain against the dollar in 24 years, closing 3.8% higher on the day as traders speculated on an eventual withdrawal of the stimulus. Now, the yen has also come under pressure after the Bank of Japan signaled last week's surprise policy change did not mark the beginning of a broader withdrawal of monetary stimulus. BJ Governor Haruhiko Kuroda said that "The Bank will pursue the target price in a sustainable and stable manner, accompanied by wage increases, by further easing monetary policy under the control of the yield curve." Meanwhile, Kuroda expressed hope that ongoing labor shortages would encourage companies to raise wages, and said conditions in the Japanese labor market were expected to tighten further. GBP/USD The situation on the cable market has improved. The pair in today's trading was on the rise. Currently, the pair is approaching the level of 1.21. EUR/USD EUR/USD is trading above 1.0630 today. It is currently maintaining its high level above 1.0650. Maintaining support for EUR/USD has recently been more hawkish rhetoric from the European Central Bank (ECB) compared to the US Federal Reserve (FED). ECB policymaker Klaas Knot reiterated this in an interview yesterday, stating that between now and July 2023 it would provide “a pretty decent rate of tightening. Fudge warned that doing too little remains a greater risk with a slowdown to 50 basis points, giving the central bank time to assess the impact of rate hikes. In the rare positive nexus that has been talked about, the worst may already be behind the Eurozone, and the potential recession, if it does occur, will be relatively shallow and short-lived. AUD/USD The Aussie pair is in an uptrend on the daily chart. AUD/USD is trading close to 0.68. The gains were short-lived and the Australian currency is now facing resistance. Australian and New Zealand dollars fluctuated on Wednesday as initial optimism from China, which reopened its borders after three years, gave way to greater volatility over global growth prospects. Australian government bond yields rose as markets reopened after Christmas, catching up with their overseas counterparts. Source: finance.yahoo.com, investing.com, dailyfx.com
Analysis Of The Euro To US Dollar Pair Situation - 30.01.2023

Now The EUR/USD Pair Has Found Strong Support At 1.0630

Ralph Shedler Ralph Shedler 28.12.2022 14:00
The EUR/USD pair is trading in the green at 1.0643 at the time of writing. The price dropped a little in the short term and it has reached a strong demand zone. Still, larger growth is far from being confirmed. The United States reported mixed data in the last trading session. The Goods Trade Balance, HPI, and the S&P/CS Composite-20 HPI exceeded expectations, while Prelim Wholesale Inventories reported poor data. The US Pending Home Sales could move the EUR/USD later today. The economic indicator could remain in the negative territory, it could report a 0.9% drop. In addition, the Richmond Manufacturing Index will be published as well. EUR/USD Accumulates More Bullish Energy! Technically, the EUR/USD pair dropped after failing to stabilize above the 1.0662 key resistance and now it has found strong support at 1.0630. I've told you in my previous analysis that the currency pair could only test and retest this level before coming back higher. The next upside target is represented by the weekly R1 (1.0660). The level of 1.0660 remains a major resistance. EUR/USD Forecast! A valid breakout above 1.0662 and a touch of a new higher high may activate a further upside movement and could be seen as a buying opportunity. Relevance up to 12:00 2022-12-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306587
The EUR/USD Pair Has Key Support Is Near At The Price of 1.5075

The Probability Of The EUR/USD Trend Reversal Towards Fresh Lows Remains High

Oscar Ton Oscar Ton 29.12.2022 08:14
Technical outlook: EUR/SD raised through the 1.0674 highs intraday on Wednesday, just shy by a few pips from our projection at the 1.0680 mark, before finding resistance. The currency reversed sharply thereafter slipping to the 1.0606 lows carving a shooting star candlestick pattern on the daily chart. It is seen to be trading close to the 1.0620 mark at this point in writing, as bears prepare to be back in control. EUR/USD might have completed its lower degree pullback at the 1.0674 mark and is now looking ready to drag lower towards 1.0350 at least. Potential remains for bears to resume the larger degree downtrend and drag prices below the 0.9535 mark. A slip below the 1.0570 interim support will accelerate lower towards 1.0350 and further. EUR/USD further reversed from its trend line resistance and the Fibonacci 0.382 retracement around 1.0736. Hence probability remains high for a trend reversal towards fresh lows below 0.9535. Alternatively, prices could drop towards 1.0000-50 before finding support and resming its rally. Either way, prices are looking lower in the near term. Trading plan: Potential bearish turn against 1.0750 Good luck!     Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306675
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The EUR/USD Pair Is Still In A High Position On The 1H Chart

Paolo Greco Paolo Greco 29.12.2022 08:18
M5 chart of EUR/USD EUR/USD was still trading within the 1.0581-1.0658 horizontal channel. There was one more attempt to cross the upper limit of this channel, but in the end it was followed by a rebound and the pair retained the flat. Just like the previous days, there were no important fundamental or macroeconomic events in the EU and the US. So there was nothing to react to and I'm not surprised that there is a flat. I mentioned before that all we have to do now is to wait for the pair to leave this channel or trade on the lower time frames for a bounce from its limits. But those bounces are not always accurate either. I would like to remind you once again that it is not the best time to trade when facing a flat. All of yesterday's trading signals were near 1.0658 and the critical line. Since the price managed to settle above the level by 9 pips, I added another level to this area so that the signals were clearer - 1.0669. The first two signals to sell proved to be false, in the first case, the pair went down 15 pips, so the trade closed at Stop Loss Breakeven. In the second case, the pair closed above 1.0658 so the trade closed with a small loss. All subsequent signals in this area should not be used. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, non-commercial traders opened 12,700 long positions, whereas the number of short positions fell by 4,800. Thus, the net positions rose by 7,900. The number of long positions is 143,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? From our point of view, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to adjust. The overall number of short orders exceeds the number of long orders by 43,000 (684,000 vs. 641,000). H1 chart of EUR/USD EUR/USD is still in a high position on the one-hour chart, and is still in a total flat. Lines of the Ichimoku indicator have already merged with each other and have lost meaning so I fixed their last position and didn't change it. As you can see, they are being worked out accurately enough. We should go for the 1.0581-1.0669 horizontal channel. If EUR manages to go beyond it, then we can count on some trend movement. Or you should continue to trade on a rebound from these levels. On Thursday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, as well as Senkou Span B (1.0589) and Kijun Sen (1.0656). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are still no important events scheduled for December 29 in the EU and the US. I don't expect the flat to end today. Volatility will probably remain low. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate     Relevance up to 05:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331043
The Outlook Of EUR/USD Pair For Long And Short Position

Very Weak Pending Home Sales Data Helps The EUR/USD Pair To Rise

Jakub Novak Jakub Novak 29.12.2022 08:46
Analysis of transactions in the EUR / USD pair The first test of 1.0634 occurred at a time when the MACD line was quite far from zero, so the downside potential was limited. Sometime later, a second test took place, but this time the market signal was to buy, which resulted in a price increase of around 20 pips. 1.0665 was tested in the afternoon. EUR/USD rose slightly on Wednesday after the US reported very weak data on pending home sales. However, the situation leveled off quickly as ahead are reports on the Euro area's M3 money supply and private sector lending, which are likely to put a lot of pressure on euro. Then, this afternoon, the US will release its weekly data on jobless claims. For long positions: Buy euro when the quote reaches 1.0634 (green line on the chart) and take profit at the price of 1.0668. Although there is a chance for growth today, it is unlikely to last long. Also, buy only when the MACD line is above zero or starting to rise from it. Euro can also be bought at 1.0606, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0634 and 1.0668. For short positions: Sell euro when the quote reaches 1.0606 (red line on the chart) and take profit at the price of 1.0573. Pressure will return if reports from the Euro area turn out to be weaker than expected. Failed consolidation at 1.0606 will also lead to a decline. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0634, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0606 and 1.0573. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 07:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331075
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

EUR/USD Pair Remains Within Its Horizontal Trading Range, The Aussie Failed To Break The Resistance At 0.68

Kamila Szypuła Kamila Szypuła 29.12.2022 13:38
The dollar weakens on Thursday after gaining in the previous session, and investors were nervous towards the end of the year as initial optimism about China reopening has faded. China's reopening was initially met with applause in global markets, giving a boost to the commodity complex and risk assets in general, however, the rising number of COVID cases flooded local Chinese hospitals, adding to the level of concern for a positive reopening. What's more, the Asian stock market is also influenced by information from China. Asian stocks weakened slightly on Thursday as soaring COVID cases in China alarmed investors and cast doubt on the chances of a quick recovery for the world's second-largest economy after the easing of stringent COVID-related restrictions. From the USD's perspective, labor market data is scheduled for later today. Weekly initial jobless claims will be the only data appearing in the US economic report. Although expectations are slightly weaker than the previous reading, if the actual data is in line with these forecasts, the impact on the dollar breakout should be minimal given the minor changes. USD/JPY The Bank of Japan announced an unplanned bond purchase operation for the second time during the day, trying to limit yields. The Central Bank offered purchases of unlimited amounts of 2- and 5-year bills and a daily offer to buy 10-year debt at 0.5%. The BoJ faces an increasing challenge as it plans to increase its planned bond purchases in Q1 2023 by 23%. Although yesterday during the US session USD/JPY exceeded 134, today it is trading well below 133.80. Read next: The First Technical Problems Of Twitter Under The Leadership Of Elon Musk, Tesla Shares Worst Of The Year| FXMAG.COM AUD/USD The uplifting Australian dollar has danced to the rhythm of global factors recently. The Australian and New Zealand dollars struggled to recover on Thursday after failing to sustain overnight gains as concerns over the global interest rate outlook outweighed optimism over China easing COVID-19 restrictions. Faced with a scarcity of major market catalysts, the Australian pair (AUD/USD) lay flat. Thus, the Aussie failed to break the resistance at around 68. Today, the pair is trading above 0.6710 The futures market now suggests the Reserve Bank of Australia may be more aggressive than previously thought as traders price in a higher peak of around 4% by September next year, down from 3.6% just a week ago. They also suspect the RBA will not cut rates until 2024. EUR/USD The EUR/USD pair traded mostly in the range of 1.0620-1.0630 in the morning, sometimes falling below the lower limit. Currently, the pair is trading around 1.0640. EUR/USD fell below 1.0650 in the second half of the week as the risk aversion of the market environment helped the US dollar find demand. However, the pair remains within its horizontal trading range and the technical outlook offers no directional guidance for now. GBP/USD GBP/USD managed to rebound and climb towards 1.2050 early Thursday after falling to the 1.2000 area late Wednesday. The pair's short-term technical picture suggests buyers are still hesitant to commit to a steady recovery. The cable pair trades below $1.21. Mostly trading on the daily chart is below 1.2050. Source: investing.com, dailyfx.com, finance.yahoo.com
The Price Of EUR/USD Pair Will Develop Sideways Movement

EUR/USD Pair May Resume Its Larger Degree Downtrend

Oscar Ton Oscar Ton 30.12.2022 08:03
Technical outlook: EUR/USD rallied through a 1.0690 high during the New York session on Thursday only to find resistance as projected earlier. The single currency pair has eased off and is seen to be trading close to the 1.0655 level at this point in writing. If a potential lower top is in place at 1.0690, prices would reverse sharply from here and drag through the 1.0000-50 zone in the next few trading sessions. EUR/USD has been drifting sideways for the last two weeks after printing the 1.0736 highs. It is likely that bears are going to come back strong since prices reversed from the 1.0690 mark. A break below 1.0570 is still required to confirm a lower top in place and accelerate further towards 1.0350 and the 1.0000-50 mark at least. Looking lower in the near term if 1.0736 holds well. EUR/USD may also resume its larger degree downtrend, which began from the 1.2350 peak in 2021. If the structure holds, prices could drag below 0.9535 mark to complete the two year pattern before giving in to bulls. Either way, we are optimistic for a near term earish drop to at least 1.0350 from current levels before finding support. Trading plan: Potential drop against 1.0750 Good luck! Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306811
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The EUR/USD Currency Pair Remained Completely Flat

Paolo Greco Paolo Greco 30.12.2022 08:20
On Thursday, the EUR/USD currency pair remained completely flat in trading. The macroeconomic, structural, and technical conditions have not changed over the past day. The market either keeps celebrating or is simply on vacation. Even in these difficult circumstances, the pair manages to show growth, albeit a weak one. This phenomenon has already been covered extensively. It is evident even from the aforementioned illustration, which shows the most recent 2.2–2.5 months, that the price has only twice in this period managed to break below the moving average. Keep in mind that a fix below the moving average signals a potential trend change. We only had two warnings available to us in 2.5 months, and we never even noticed a downward correction. The price has been close to the moving average line throughout, but in most cases, it has been unable to fall below it. As a result, the paradoxical growth of the euro currency persists, and if it keeps doing so, the effects of the two-year downward trend will quickly level off. In theory, we have stated numerous times that there are currently essentially no growth factors for the euro. As it waited for a slowdown in the rate of tightening of the Fed's monetary policy starting in September or October, the market started to take profits on short positions. The European currency has increased by 1200 points during this time, and the overall downtrend is 2800 points. As a result, the pair responded roughly one-third to this trend. This is ideal for a correction, but if the movement of recent months signals the start of a new upward trend, then we require convincing justifications for the growth of the euro rather than just a technical requirement to adjust upwards. Additionally, if the upward trend has begun, it cannot occur completely without downward corrections, especially if there are a few reasons for the euro currency to increase in value. The euro currency has been growing in an illogical manner for more than a month, and despite flying the flag of a flat, it has managed to do so even over the New Year's holiday. There are still no drivers of euro growth. Beginning in 2023, macroeconomic statistics will have a significant impact on both the euro and the dollar. Remember that there are no central bank meetings planned for January, so the market can only focus on speeches by the Fed and ECB members as well as data. We are anticipating reports on inflation, nonfarm payrolls, GDP, and other economic indicators, as we would with any month. Recall that the only reports that matter right now are those related to inflation and non-farms. How the ECB and the Fed change their monetary policies is dependent on these data. In December, both central banks started to move away from an aggressive monetary policy, but we think that the Fed is the only one whose actions are warranted. The Fed has managed to slow inflation for five months, and there is every reason to believe that this trend will continue. As a result, there is no longer a need for a sharp increase in the key rate. Furthermore, the Fed won't give up on tightening further. It will probably increase the rate by a total of 0.75%. But there are still a lot of issues with the ECB. It also started to slow down the rate of rate increases, but it did so with only a few declines in inflation. Since the impact of a rate change lasts for 3–4 months, the four previous increases should be sufficient to bring inflation down for a while. However, we think the European regulator gave up the aggressive strategy too soon. By giving up on it, the ECB is also signaling that it is not prepared to raise rates for as long as it takes, which increases the likelihood that the inflation target won't be met or that it will take much longer than in the US. Because neither the euro nor the dollar are currently supported by fundamentals, the euro currency should not grow at all. On the 24-hour TF, however, there is still not a single indication that the correction has started. As of December 30, the euro/dollar currency pair's average volatility over the previous five trading days was 54 points, which is considered "average." So, on Friday, we anticipate the pair to fluctuate between 1.0606 and 1.0714. The Heiken Ashi indicator's reversals are now completely irrelevant because the pair is flat. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trading Suggestions: Although there is still an upward trend for the EUR/USD pair, it has been flat for the past two weeks. Trading can only be done on the lower TF inside the side channel because the 4-hour TF hardly ever moves. Explanations for the illustrations: Channels for linear regression help identify the current trend. The trend is currently strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones. Relevance up to 04:00 2022-12-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331156
The EUR/USD Pair Has A Potential For The Breakout Mode

The EUR/USD Pair Hovers Within Sideways Consolidations

Torben Melsted Torben Melsted 30.12.2022 08:29
EUR/USD has been locked in a sideways consolidation, but we continue to look for a slightly deeper correction towards 1.0470 to complete wave 4/ and set the stage for wave 5/ higher to 1.0927 as this will complete wave 3. In the longer term, we are looking for much higher levels for EUR/USD, but we will have to take the ride higher in baby steps as always as most of the time, the pair hovers within sideways consolidations and corrective counter-trends and only 1/3 of the time, it actually moves higher.   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306831
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Euro (EUR) Is Rigging Again ANd EUR/USD Pair Is Still In A High Position

Paolo Greco Paolo Greco 30.12.2022 08:41
M5 chart of EUR/USD EUR/USD tried to leave the 1.0581-1.0669 horizontal channel ahead of the New Year. We can hardly say that it succeeded, but it was a few dozen points above that channel. But we can't say that the flat is over now either. Yes, there is a slight upward bias, and it might last for the near future, but volatility is still low, and the day's growth by 20-30 points can hardly be called a trend. Basically, I don't expect the market to be active right now, and I don't expect any trend movements from the pair either. Taking into consideration that today is the last trading day of 2022, it is better to wait for the new year and the flat to end. I still expect a downward movement from the euro, but even in the last days of the year we see the desire to rise while the pound is falling. There is almost no logic in the movements now. Trading signals were formed three times yesterday. At the beginning, the pair rebounded from 1.0658 and managed to go down "as much as" 15 pips, so a Stop Loss should have been set at breakeven on the short position. That was followed by another sell signal around the area of 1.0581-1.0669, which could only bring losses, because the pair did not even fall 15 pips. Nevertheless, closer to the evening, the position could be closed manually at a minimum loss. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, non-commercial traders opened 12,700 long positions, whereas the number of short positions fell by 4,800. Thus, the net positions rose by 7,900. The number of long positions is 143,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? From our point of view, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to adjust. The overall number of short orders exceeds the number of long orders by 43,000 (684,000 vs. 641,000). H1 chart of EUR/USD EUR/USD is still in a high position on the one-hour chart, and is still in a total flat. Lines of the Ichimoku indicator have already merged with each other and have lost meaning. As you can see, they are being worked out accurately enough. EUR is rigging again, so we have moved the lines to their real price levels, but the price can easily and freely cross them several times a day. On Friday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, as well as Senkou Span B (1.0654) and Kijun Sen (1.0640). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are still no important events scheduled for December 30 in the EU and the US. I don't expect the flat to end today. Volatility will probably remain low. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 05:00 2022-12-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331160
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The EUR/USD Pair Suddenly Decided To Leave The Horizontal Channel

Paolo Greco Paolo Greco 30.12.2022 08:57
Analyzing Thursday's trades: EUR/USD on 30M chart EUR/USD continued to trade in a very sluggish manner on Thursday. Quotes slightly rose and by the end of the day the pair even managed to settle above 1.0657. However, we can't be too confident on this. The pair formally left the horizontal channel but it is still flat. Therefore, we wouldn't make any conclusions regarding the end of the sideways movement. There is still no fundamental and macroeconomic background, the reports will start coming out next week and it is not a fact that they will be able to bring the market out of the coma. We can only expect serious moves next Friday, which is when the EU inflation report and the Unemployment Nonfarm payrolls in the US will be released. Until then, we may continue to see movement, which will be very much like a flat. I still expect the euro to fall. EUR/USD on M5 chart Recently, novice traders have been lucky with the euro/dollar pai, but there is a limit to everything. There were three signals on Thursday, but due to the fact that the pair suddenly decided to leave the horizontal channel, all the signals were false. At least the first rebound from 1.0657 let beginners close the short position without loss since the price crawled down 15 pips. However, the second sell signal turned out to be absolutely false and the deal closed with a loss. The loss is not considerable since volatility is still low. Moreover, the position should have been closed manually closer to the evening and the loss should have been minimized that way. In general, there were no big losses, but now the pair is no longer in the horizontal channel, which means that there might be a lot of false signals today. Trading tips on Friday: EUR/USD left the 1.0587-1.0657 horizontal channel on the 30-minute chart. However, this doesn't mean that the flat is over. It just means that the euro can cross the upper limit in any direction. Therefore, there could be a lot of false signals today. On the 5-minute timeframe, we recommend trading at the levels 1.0465-1.0483, 1.0536, 1.0587-1.0607, 1.0657-1.0668, 1.0697, 1.0736, 1.0787, 1.0806. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. Today, there are no important reports or events scheduled in the EU or the US, so I don't expect the flat to end. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time. Relevance up to 06:00 2022-12-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331166
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

EUR/USD Pair Is Trading Above 1.0670, USD/JPY Pair Drop Below 132

Kamila Szypuła Kamila Szypuła 30.12.2022 13:41
As we enter the final trading day of 2022, the rebound in the dollar index can be attributed in part to investor repositioning as markets remain cautious ahead of the long weekend. The lack of data this week left markets fueled by renewed tension between Russia and Ukraine, as well as mixed sentiment around rising Covid numbers in China. EUR/USD The EUR/USD pair in the European session exceeded the level of 1.0680. It is currently trading just below that level - 1.0679 EUR/USD surged towards 1.0700 during European trading hours before pulling back slightly. The renewed weakness of the US dollar on the last trading day of the year seems to be helping the pair stay in the red in the absence of fundamentals. In the absence of high-impact macroeconomic releases, investors are unlikely to take large positions on the last trading day of the year. Data from the euro zone showed Spain's Harmonized Index of Consumer Prices fell to 5.6% on an annualized basis in its preliminary December reading from 6.7% in November. However, these data did not have a noticeable impact on the behavior of the euro against rivals. The ISM Chigao Purchasing Managers Index for December will be the only data to appear in the US Economic Report. GBP/USD The Cable pair is trading at 1.2050 now. GBP/USD managed to climb above 1.2050 early Friday after breaking a two-day streak on Thursday. As trading conditions remain weak on the last trading day of the year, the pair may struggle to make a firm move in either direction. Despite cautious market sentiment, the US dollar is struggling to find demand on Friday and is helping the pair limit their losses. Fears of recession in the UK are likely to limit sterling growth in Q1 2023, especially if the housing market continues to deteriorate. In theory, the impact on the GBP should be negative, with lower housing demand resulting in softer inflation and a more dovish Bank of England (BoE). Read next: TC Energy Corp Has Announced That It Is Aiming To Fully Reactivate The Keystone Oil Pipeline System After The Largest Reported Spill In The Pipeline's History| FXMAG.COM AUD/USD The Aussie pair was heading above 0.68 today and it managed to do so, but failed to maintain the level. At the time of writing, the AUD/USD pair is trading below 0.68 at 0.6794. The Australian dollar is set to fall in 2022, falling for a second consecutive year as the US Federal Reserve's aggressive monetary tightening, China's economic woes and slowing global growth have affected the currency. The Reserve Bank of Australia has also made a radical policy change after committing late last year to keeping the cash rate at a record low of 0.1% in 2022. The RBA has now raised the cash rate to 3.1%, its highest since November 2012, and said it expects further tightening as part of ongoing efforts to bring down inflation. USD/JPY USD/JPY is trading below 132 on the last trading day. In October, the yen fell to a 32-year low of nearly 152 per dollar as the Bank of Japan maintained its ultra-low interest rate policy while the US Federal Reserve began an aggressive monetary policy tightening campaign to curb rising inflation. However, the currency recovered about half of those losses as Japanese authorities intervened in the FX markets and defended the yen in the last quarter of 2022, while the BOJ unexpectedly raised the upper end of its 10-year government bond tolerance range to 0.5% from 0.25 % in December. Source: investing.com, dailyfx.com, finance.yahoo.com
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Worst Year Since The Brexit For The British Pound (GBP) But For The US Dollar Look Like The Best Since 2015

Kamila Szypuła Kamila Szypuła 31.12.2022 17:42
The Fed and central banks around the world have been raising interest rates to fight soaring inflation stemming from supply chain problems related to the COVID-19 pandemic and an energy crisis related to oil producer Russia's Ukraine invasion. As a result, all three major averages registered their biggest one-year percentage declines since the 2008 financial crisis. Along with domestic worries, investors around the world have also been monitoring China, the world's second biggest economy, for signs of weakness. The dollar was on track to record its best year since 2015 on Friday on the last trading day of the year, dominated by Federal Reserve rate hikes and fears of a sharp slowdown in global growth. Since March, the Fed has raised interest rates by a total of 425 basis points in an attempt to stem rising inflation. The last trading week of the year is behind us. How the major currency pairs fared. GBP/USD The cable pair ended the last week of the year in bullish sentiment. The week the GBP/USD pair started trading below $1.21 at 1.2050. The pair traded mostly in the 1.20-1.21 range. The highest level of the pair reached the level above the upper limit of the crossbody, i.e. 1.2113. The highest was at 1.2003 and came before the weekly high. The British pound ended 2022 nearly 11% lower at $1.2, its worst year since the Brexit vote in 2016, amid a general cautious mood regarding the economic outlook for 2023, political uncertainty, and as a hawkish Fed sent the USD higher. The pound recovered since then after Rishi Sunak became the new prime minister but remains under heavy pressure, as the recession is looming while the Bank of England appears more dovish compared with its peers. Read next: ESG - Business Management For The Common Good| FXMAG.COM  EUR/USD EUR/USD traded above 1.06 but below 1.07. The pair started the week at 1.0630 and ended at 1.0712. The highest level reached at the end of the trade exceeding 1.07. The lowest level was still above 1.06 - 1.0611. AUD/USD The Australian pair, similarly to the euro pair, managed to break the upper level of resistance, which was at the level of 0.67. Thus, the couple ended the week on the highest level. The lowest level was at the beginning of the week (0.6699). Then the pair received support from information from China and thus grew above 0.67. USD/JPY The USD/JPY pair traded mostly around 132. It peaked above 132 at 134.420 and the low was below 131 (130.8210). The pair ended the last week of the year at 131.1050 The Bank of Japan (BOJ) is considering raising its January inflation forecast to show price growth close to its 2% target for fiscal years 2023 and 2024, the Nikkei reported on Saturday. This month, the BOJ launches an extension of its 10-year yield caps, which is officially intended to straighten out bond market disruptions, but some analysts see them as a way out of ultra-loose monetary easing. Japan's core consumer prices excluding fresh food in November hit their highest since 1981, according to last week's government data. The BOJ will release its latest quarterly growth and price forecasts after its next policy meeting on Jan. 17-18. Source: finance.yahoo.com, investing.com, dailyfx.com
The EUR/USD Pair Is Showing A Potential For Bearish Drop

The EUR/USD Pair Is Showing A Potential For Bearish Drop

Oscar Ton Oscar Ton 02.01.2023 08:05
Technical outlook: EURUSD has rallied through 1.0700, inching closer to the recent swing high at 1.0736. The single currency pair is seen to be trading close to 1.0700 at this point in writing and might test the 1.0736-50 zone before reversing lower again. Prices need to retrace at least towards 1.0000-50 before finding support again. The instrument is looking lower from here in the near term. EURUSD also seems to have most likely completed its larger-degree counter-trend rally, which began from the 0.9535 lows in September 2022. The three-wave rally has further stalled at its 18 months old resistance trend line and the Fibonacci 0.382 retracement of its drop between 1.2266 and 0.9535 as seen on the daily chart here. If the above structure holds well, prices would resume lower from here and drag below 0.9535 in the next several weeks. Alternatively, if EUR has carved a meaningful bottom around 0.9535 and is following an uptrend, prices might resume higher again from the 1.0000-50 zone. Either way, we expect lower prices in the near term. Trading idea: A potential bearish drop against 1.0750. Good luck!   Relevance up to 06:00 2023-01-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306968
Analysis Of The Euro To US Dollar Pair Situation - 30.01.2023

The Euro (EUR) Failed To Correct Against The Upward Movement

Paolo Greco Paolo Greco 02.01.2023 08:17
M5 chart of EUR/USD EUR/USD continued to grow in a sluggish manner during the last trading day of the New Year, but in general the pair's movement in recent weeks still looks like a flat. The euro failed to correct against the upward movement of the last few months, despite the fact that there were plenty of opportunities to do so. So we go into the new year with the same set of factors and the state of the market mood. At this rate, the single currency may continue to rise this week, because the market simply refuses to sell the euro and buy the dollar right now. We have repeatedly talked about why the euro should fall and for example, the pound corrected by nearly 500 points late last year. But if the market refuses to sell, there can be no downward movement. There were several trading signals on Friday, December 30. Traders had the 1.0640-1.0669 area, within which there were two more levels and lines. Therefore, all three buy signals were formed when the price bounced or crossed the entire area, rather than individual price levels. In each of the three cases, the price went up at least 20 pips so traders could and should have put the Stop Loss to Breakeven. Consequently, there was no loss on any of the open positions (if traders opened them on the last trading day of the year), but it is unlikely that they also managed to make profit on them. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, non-commercial traders opened 2,700 long positions, whereas the number of short positions fell by 1,100. Thus, the net positions rose by 3,800. The number of long positions is 146,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 41,000 (685,000 vs. 644,000). H1 chart of EUR/USD EUR/USD is still in a high position on the one-hour chart, and is still in a total flat. Lines of the Ichimoku indicator have already merged with each other and have lost meaning. Since the euro is inclined to rise, we have moved the Ichimoku lines to their real price values, but the price can cross them easily and freely several times a day. On Monday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, as well as Senkou Span B (1.0654) and Kijun Sen (1.0660). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 2, the EU will release its manufacturing activity report for December (final value). I don't expect a significant reaction from the market. The flat will likely persist. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate     Relevance up to 06:00 2023-01-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331255
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD Pair Had A Chance For The Upside Movement

Peter Jacimovic Peter Jacimovic 02.01.2023 10:26
Technical analysis: EUR/USD has been trading downside this morning but I found rejection of the key support zone, which is sign that there is chance for the upside movement. Trading recommendation: Due to the rejection of the rising trend-line and support zone at the price of 1.0665, I see potential for the upside movement towards upside references... Watch for the potential buying opportunities on the intraday dips with the upside objectives at the price of 1.0710 and 1.0735 RSI oscillator is showing oversold condition, which is good sign for the further rally... Key support is set at the price of 1.0665 Relevance up to 09:00 2023-01-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306992
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The EUR/USD Pair Trading Idea By Analytical Expert Of InstaForex

InstaForex Analysis InstaForex Analysis 02.01.2023 12:17
The last trading day of 2022 closed with good trades, which received a negative reaction at the end of the Asian session. This is a recurring phenomenon when a year ends and another one starts. I propose a downward trading idea along the lines of: In fact, there is a three-wave pattern (ABC) in which wave A represents the bearish initiative during the Asian session. I suggest you consider short positions with a pullback of 50% Fibo according to what is shown above. The risks are limited to 1.07130. Profit should be locked in at the breakdown of 1.06355, 1.05700 and 1.04400. This trading idea is based on the "Price Action" and "Stop hunting" methods. Good luck! Don't forget to control the risks. Relevance up to 09:00 2023-01-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331285
Metals Market Update: Decline in LME Copper On-Warrant Stocks, Zinc and Lead Surplus Continues, Nickel Market in Supply Surplus

First Trading Day Of 2023: GBP/USD Is Trading 1.2051, USD/JPY Pair Below 131, The Aussie Pair Is Around 0.68 And EUR/USD Above 1.0680

Kamila Szypuła Kamila Szypuła 02.01.2023 13:54
Central banks and inflation remain the focus of the markets, as well as signals indicating how long and deep the recession may turn out to be. The Euro area economy also heading into recession, concerns over winter gas supplies have eased meaning the slowdown may not be as severe as feared just a few months ago. The first trading day of the year was subdued with many countries, including major shopping malls such as the UK and Japan, closed for the holidays. The dollar strengthened on Monday, moving away from its recent six-month lows against a basket of major currencies for the time being. This week, the critical event that will support the USD Index in gauging a decisive move will be the release of the Federal Open Market Committee (FOMC) minutes. The FOMC minutes will provide a detailed explanation of December’s monetary policy decision. Once trading conditions normalize and major markets return to operation on Tuesday, safe harbor flows could begin to dominate financial markets. In this scenario, the US dollar is likely to hold its ground against its risk-sensitive rivals. USD/JPY The USD/JPY pair is trading below 131 on the daily chart. It is trading in a narrow range of 130.75-130.80. On the Tokyo front, clear inflation projections for the next two years by the Bank of Japan (BOJ) are supporting the Japanese Yen. GBP/USD The cable pair is trading at 1.2051 at the time of writing. On the daily chart, the pair is moving in a narrow range. Following the modest rebound witnessed on the last trading day of 2022, GBP/USD came under subtle bearish pressure and declined toward 1.2050 on the first trading day of 2023. Nevertheless, trading action remains relatively subdued in the absence of data releases. Read next: Twitter Did Not Pay $136,260 Rent, Microsoft Reported Its Worst Quarterly Results In Years| FXMAG.COM EUR/USD After falling towards 1.0650 in the early morning hours in Europe on Monday, EUR/USD managed to rebound towards 1.0700. Thanks to Friday's increases, the pair closed the previous six weeks in the black. Currently, the pair is trading in a range below 1.07, to be precise 1.0686 Meanwhile, the S&P Global manufacturing PMI for the Eurozone was 47.8, in line with market expectations and preliminary estimates.  On the negative side, Germany's S&P Global Manufacturing PMI was 47.1, slightly below the initial estimate of 47.4. In the rest of the day there will be no publication of important macroeconomic data. Eurozone and US bond and equity markets will be closed for the New Year holiday, suggesting EUR/USD is likely to trade in a narrow channel in the second half of the day. AUD/USD Similarly to the euro, the Australian failed to maintain the high level seen at the end of the year. Today, it mostly traded above 0.68, but has now fallen below that level. Trading just below 0.68, at 0.6798 Source: investing.com, finance.yahoo.com
The Outlook Of EUR/USD Pair For Long And Short Position

EUR/USD Pair: The Bias Is Looking Lower In The Near Term

Oscar Ton Oscar Ton 03.01.2023 08:04
Technical outlook: EURUSD rose through 1.0700 on Monday before finding resistance and turning lower. The currency pair missed the recent swing high at 1.0736 by a few pips and might be looking to drag towards 1.0350 and 1.0000-50 in the next few trading sessions. The single currency pair is seen to be trading close to 1.0670 at this point in writing as the bears want to be in control. EURUSD prices have reacted right at the trend line resistance, which connects 1.2266 and 1.1500 highs as seen on the daily chart here. Furthermore, the currency pair has also tested the Fibonacci 0.382 retracement of the larger-degree downswing between 1.2266 and 0.9535. A high probability remains for a turn lower from here towards 1.0350 and the 1.0000-50 area at least. EURUSD has also completed its corrective rally, which began from the 0.9535 lows earlier, just below the 1.0750 mark. The bears will be inclined to drag prices lower below 0.9535 in the next several weeks. Alternatively, if the trend has reversed to the upside against the 0.9535 lows, the instrument might still drop to the 1.0000-50 mark, before finding support again. The bias is looking lower in the near term. Trading idea: A potential bearish move against 1.0750 Good luck!   Relevance up to 03:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307087
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

The EUR/USD Pair Rebounded From 1.0669 During The European Session

Paolo Greco Paolo Greco 03.01.2023 08:20
M5 chart of EUR/USD EUR/USD continued trading with low volatility and mainly sideways on Monday. It showed a slight growth during the final days of 2022, but as a whole remained within the horizontal channel. And on Monday the technical picture didn't change at all. There are still very few fundamental events and macro data. For example, yesterday, the final purchasing manager's index for manufacturing in December was published in Germany. Naturally, it did not provoke any market reaction. More or less important data will be available closer to the end of the week and then we would expect more serious moves. But I warned you last week that the flat may take much longer than many expected. I wouldn't be surprised if it lasts another 2 or 3 weeks. There was only one trading signal and it was very good. There's always a risk of false signals when facing a flat, so the less of them, the better. The pair rebounded from 1.0669 during the European session, but it failed to go up even 15 pips. Basically, in an hour after this signal was formed it was clear that there would be no movement on Monday, so the position could be closed manually with small profit. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, non-commercial traders opened 2,700 long positions, whereas the number of short positions fell by 1,100. Thus, the net positions rose by 3,800. The number of long positions is 146,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 41,000 (685,000 vs. 644,000). H1 chart of EUR/USD EUR/USD is still in a very high position on the one-hour chart, and is still in a flat. Lines of the Ichimoku indicator are very close to each other and have lost meaning. The pair can cross them easily and freely now because it's in a horizontal channel. Therefore, I can't say anything new about the technical picture at the moment. On Tuesday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, as well as Senkou Span B (1.0654) and Kijun Sen (1.0660). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 3, the US will release its manufacturing activity report for December (final value). I don't expect a significant reaction from the market. The flat will likely persist. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 05:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331321
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The EUR/USD Pair Opened Surprisingly Calm This Year

InstaForex Analysis InstaForex Analysis 03.01.2023 08:26
EUR/USD opened surprisingly calm this year. In previous years, it traded within a narrow range during Christmas and the first working days of the New Year, but now it was in a wide range, consolidating under the highs. This means that a breakout is brewing around the top of the range. In terms of the European and US markets, they remain closed during the New Year and just started trading normally today. Thus, it is unlikely that there will be strong movements, so investors need to be careful when entering the market. A good trading idea today is to sell above the current highs of December. If this do not succeed, try again in 60-80 pips. Remember not to risk more than 1% of the deal. Good luck! Relevance up to 07:00 2023-01-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331331
The EUR/USD Pair Has Key Support Is Near At The Price of 1.5075

The EUR/USD Pair Has Key Support Is Near At The Price of 1.5075

Peter Jacimovic Peter Jacimovic 03.01.2023 09:23
Technical analysis: EUR/USD has been trading downside this morning and key support is near at the price of 1.5075. Trading recommendation: Key support zone is set at the price of 1.5075 and watch for the price action around this key support zone to confirm further direction. In case of the rejection of the key support zone at 1.0575, watch for buying opportunities towards upside references at 1.0670 In case of the downside breakout of the support zone, watch for selling opportunities towards objective at 1.0510 Relevance up to 09:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307135
US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

Tesla Hit A Fresh Record, FOMC Minutes And US Jobs Will Give Direction

Swissquote Bank Swissquote Bank 03.01.2023 10:53
The New Year started with the IMF Chief Georgieva warning that the global economy faces ‘a tough year, tougher than the year we leave behind’. German PMI German PMI data pointed at a faster than expected contraction in manufacturing activity in December, while the European manufacturing PMI came in at 47.8, in line with expectations. European markets This being said, trading in European markets was rather optimistic on the first trading day of the year, as European nat gas futures eased on mild weather. Forex The US dollar index kicked off the year on a subdued note, letting the dollar-yen tip a toe below the 130 mark. The EURUSD however, couldn’t build on gains above the 1.07 mark, while Cable remained steady-ish a touch above its 200-DMA, which stands near 1.2030 level. Gold Gold jumped to $1843 per ounce despite the positive pressure on the yields recently, while oil remained offered into the 50-DMA, which stands a touch below the $81 per barrel mark. Bitcoin Trading in Bitcoin remains boring. US data and OPEC On the economic data front, we will watch FOMC minutes, US jobs data, and OPEC meeting this week. EV On individual stocks front, carmakers announce their Q4 deliveries. Tesla hit a fresh record, but the number of cars delivered last quarter fell short of expectations, while Rivian reportedly doubled production in the final quarter of 2022 to hit its 25’000 yearly target. Watch the full episode to find out more! 0:00 Intro 0:17 IMF warns that 2023 could be tougher than 2022 1:31 Chinese data disappoint 2:42 But European stocks remain bid 4:41 FOMC minutes & US jobs will give direction 6:07 US crude tests 50-DMA resistance 7:33 Tesla's record Q4 deliveries fall short of expectations Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #HappyNewYear #2023 #IMF #warning #economic #recession #China #Covid #energy #crisis #USD #EUR #JPY #Bitcoin #XAU #Tesla #Rivian #deliveries #FOMC #minutes #OPEC #US #jobs #data #NFP #DAX #CAC #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The EUR/USD Pair Has Opportunities For Bullish Movement

The EUR/USD Pair's Movement Is Still Much More Similar To A Flat Than A Trend

Paolo Greco Paolo Greco 03.01.2023 12:28
On Monday, the EUR/USD currency pair remained flat, but there was still a slight upward bias. The European currency largely decreased on the first trading day of the week, month, and year, although there was little volatility during the day and no macroeconomic or fundamental background. In comparison to the final week of last year, there have been no changes to the concept. If we merely look at the past two weeks, the pair's movement is still much more similar to a flat than a trend. There is no question about the upward trend if you look at the previous three to four months, and even though the price is near the moving average, it cannot be fixed below it. As a result, the technical situation is unchanged at this time. Due to the poor movement and nearly total flat, trading pairs on the 4-hour TF is still quite difficult. If the right signals are there, trading on the lower TF is conceivable. Since there hasn't been any news over the past two weeks, it has been challenging to share any new information. Only China made the unfavorable decision on the eve of the New Year. In China, a new wave of the coronavirus epidemic started, and unverified reports indicate that by mid-December, there were already hundreds of millions of cases. Although it is impossible for us to determine whether this information is accurate, the market showed no signs of reaction. Therefore, we do not think that current market information on Chinese epidemiology is crucial. A localized epidemic is not particularly terrifying, as we've already stated. It will be frightening if the epidemic spreads from China once more. Some nations have already started to stop flying to China since, after a few flights, it was discovered that roughly half of the passengers had coronavirus. Therefore, a new worldwide wave of the disease may be just around the corner. And after that, the market can experience another "storm," and the US dollar, which enjoys all kinds of catastrophes, will probably become more expensive. Nonfarm may signal the start of a period of dollar growth. The main source of information for this week's macroeconomic background is American news. Only the most significant inflation reports will be made public in the European Union. We want to gauge the likelihood that the pair will fall this week given the existing situation, in which the euro simply will not depreciate flatly. From our perspective, the market right now needs a "kick." Furthermore, it was "a shove from a high mountain," not just a "kick." The value of the euro has increased significantly compared to the fundamental backdrop that traders had at their disposal. Its frantic inability to adapt comes across as quite odd. It is unlikely that the "push" will be an inflation report, but it may be a nonfarm report. Without macroeconomic indicators, traders can certainly begin selling a pair, but since these articles are so significant this week, why not mix business with pleasure? The nonfarm payroll data, therefore, have a great probability of becoming this "push." As always, forecasts for this report are as impartial as they can be. About 200,000 new positions outside the agriculture industry are anticipated to have been added in December. Although such a result was predicted a month ago and a failed ADP was released later, nonfarm finally turned out to be very strong. As a result, we do not rule out the possibility that something similar occurred last month. In any scenario, there is just no room for short-term euro growth. The construction of an upward worldwide trend must be kept up, so some adjustment is required. But for now, we don't see many reasons to keep the configuration going either. The slowing of the ECB's monetary policy tightening pace is the primary cause of concerns regarding the expansion of the euro. If the pair manages to establish itself below the moving average this week; this could be a false breakdown, of which there have been quite a few in recent weeks. Because the price can frequently cross the moving average line because of the current flat movement, it should be kept in mind. As of January 3, the euro/dollar currency pair's average volatility over the previous five trading days was 65 points, which is considered "normal." So, on Tuesday, we anticipate the pair to fluctuate between 1.0601 and 1.0731. A new round of upward momentum will be signaled by the Heiken Ashi indicator's upward reversal. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trading Suggestions: Although the EUR/USD pair continues to move upward, the movement is still sluggish and "flat." Trading can only be done on lower time frames because there are hardly any moves on the 4-hour time frame. Explanations for the illustrations: Channels for linear regression allow identifying the present trend. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.     Relevance up to 05:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331317
China Restricts Gallium and Germanium Exports, Heightening Global Tech War

EUR/USD, GBP/USD And AUD/USD Fell Sharply After The US Dollar Recovered

Kamila Szypuła Kamila Szypuła 03.01.2023 13:23
The US dollar appreciated, mainly due to the minutes from the December meeting of the Federal Reserve. The U.S. central bank raised interest rates by 50 basis points last month after four consecutive increases of 75 basis points in a year, but said it may have to keep interest rates higher for longer to bring inflation under control. Minutes from the December Fed meeting are due to be released on Wednesday, with investors looking for clues as to what rate path is likely to be taken in 2023. The market seems to be struggling to interpret the change in China's Covid-19 strategy. On the one hand, it is predicted that it is likely to unleash the world's second largest economy and its associated supply chains. The Chinese data remains soft and the Caixin manufacturing PMI released today came in with a narrow miss. In December it was 49.0 instead of 49.1 forecast and 49.4 earlier. Moreover, there was a desire from the Chinese side for better relations with the US after their foreign minister said they would look for more open channels of communication. It is worth noting, however, that the exchanges point to a risky market environment, which usually makes it difficult for the US dollar to find demand. USD/JPY The Japanese yen continued to strengthen today with USD/JPY dipping below 130 for the first time since June last year. It has now returned to trading above 130 and is close to 131. The yen, which hit a seven-month high during the Asian trading hours, was recently trading low at 130.45 to the dollar. The pair's decline was mainly driven by a new Japanese yen buying spurt as US equities futures fell at the open and bolstered safe-haven inflows into the yen. Speculation that the BoJ was about to start moving away from its very lax policy flared up in December when the central bank extended the yield cap on 10-year Japanese government bonds (JGB). This was further reinforced by the Nikkei report on Saturday. Read next: The Korea Fair Trade Commission (KFTC) Will Impose A Fine Of $2.2 Million On Tesla Inc| FXMAG.COM GBP/USD GBP/USD drops below the key 1.2000 level for the first time in 4 weeks as the dollar index recovers. Today's morning drop in GBPUSD is due to the recovering dollar index. The risk-positive market environment does not appear to be helping sterling find support so far. As noted above, the decline is attributable to the stronger dollar and not to UK-specific factors, which may also have exaggerated the impact. The UK economy is weighed down by recession fears, high inflation and the cost of living crisis. The Bank of England has raised interest rates nine times since December 2021 to try to bring down inflation, which remains close to a 41-year high. EUR/USD EUR/USD lost traction and fell towards 1.0550 early Tuesday after climbing above 1.0700 on Monday. It's hard to stop the driving force of the pair's recent actions as the market recovers with the US dollar strengthening again. Nevertheless, technical forecasts point to a bearish slope after the sharp decline seen during the European session. Euro still awaits German CPI data release, which may help EUR/USD move towards 1.06. Source: investing.com Read next: New Record For Electric Car Manufacturer - Tesla Deliveries Increased By 40% Year-On-Year| FXMAG.COM AUD/USD The Australian pair fell from above 0.68 to 0.6695 Weaker than expected official Chinese PMI data released over the weekend may have contributed to the decline. The Australian remains supported by expectations that the Reserve Bank of Australia will raise interest rates later this year as part of its ongoing effort to bring down inflation. Markets are currently divided on whether the RBA will deliver another rate hike in February. Australia's trade balance remains at a record high and the AUD/USD exchange rate weakens due to interest rate differentials, and the domestic economy continues to benefit from this. Source: investing.com Source: dailyfx.com, investing.com, finance.yahoo.com
ECB press conference brings more fog than clarity

Traders Of The EUR/USD Pair Can Assume Consolidation With A Subsequent Rebound

InstaForex Analysis InstaForex Analysis 03.01.2023 14:57
Today's European trading session began with a sharp strengthening of the dollar, including against the euro. Perhaps this is how market participants, who follow euro quotes, reacted to yesterday's publication of European macro data, which turned out to be rather weak (yesterday, major world exchanges did not work, and there was low activity of traders and low trading volumes on the market). The S&P Global manufacturing PMI for December came out at 47.1 against the forecast and the previous value of 47.4. The manufacturing PMI for the entire euro area remained at around 47.8. The indices are also below the value of 50, which separates the growth of activity from its slowdown. It is also possible that on the first trading day of the new year, market participants are trying to protect themselves from the risks related to the rising coronavirus infections in China, high inflation, geopolitical tensions, and the threat of a global recession, seeking refuge in a protective dollar. Thus, the EUR/USD pair lost 1.2% in the first hours of today's European session, falling by 130 points to the opening price of today's trading day. As of writing, EUR/USD is trading near 1.0544, very close to the strong support at 1.0525. Considering such a sharp drop, literally in a couple of hours, as well as reaching a zone of strong support, from a technical point of view, near the current levels, we can assume consolidation with a subsequent rebound, given the general upward trend of the pair. European Central Bank Governing Council member Joachim Nagel said yesterday that the ECB needs to take further action to contain inflationary expectations, i.e., continue to tighten their monetary policy. As for today's economic calendar, the preliminary harmonised consumer prices (HICP) for Germany will be released at 13:00 (GMT). The index (CPI) is published by the EU Statistics Office. It is an indicator for inflation and is used by the Governing Council of the ECB to assess the level of price stability. In normal economic conditions, rising prices force the country's central bank to raise interest rates to avoid excessive inflation (higher than the target set by the central bank). Therefore a rise in the index is positive for the national currency (under normal circumstances), and a decrease in the index (expected to 10.7% from 11.3% in November) is negative. At the beginning of the U.S. trading session, the updated PMI for the U.S. manufacturing sector (from S&P Global) will be released. Previous values were 47.7, 50.4, 52.0, 51.5, 52.2, 57.0, 59.2. The forecast for December is 46.2 (the preliminary estimate was 46.2), indicating a continued slowdown in this sector of the U.S. economy, which is a negative factor for the dollar. Relevance up to 12:00 2023-01-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331373
A Bright Spot Amidst Economic Challenges

The IMF Warned That 2023 Would Be Worst Than 2022, As The US, EU And China Would All See A Decline In Growth

Kenny Fisher Kenny Fisher 03.01.2023 15:11
The US dollar is showing strong gains against the majors on Tuesday, with the exception of the Japanese yen. EUR/USD has tumbled by 1.27% and is trading at 1.0528 in Europe. Investors eye German CPI EUR/USD is sharply lower today, despite a very light economic calendar. The only release of note is German CPI, which will be released later today. Despite the lack of fundamentals, the US dollar is taking advantage of risk aversion in the markets. There are headwinds everywhere you look. The war in Ukraine, the threat of recession in the US and the eurozone and China’s slowdown all make for a gloomy outlook as we start the new year. Germany’s inflation has been falling, and the downtrend is expected to continue. The consensus for December CPI is 9.0%, compared to 10.0% in November. If the consensus proves accurate, it could put further pressure on the euro, as the ECB may have to reconsider its hawkish stance on rate policy. The International Monetary Fund didn’t bring any festive cheer with its pessimistic message on Monday. The IMF warned that 2023 would be tougher than 2022, as the US, EU and China would all see a decline in growth. Adding to the gloom, the IMF said that it expected one-third of the global economy to be in recession this year. In October, the IMF cut its growth outlook from 2.9% to 2.7%, due to the war in Ukraine as well as central banks around the world raising interest rates. After the Christmas and New Year’s holidays, the markets are easing back in, as the data calendar gets busier as of Wednesday. We’ll get a look at the Fed minutes from the December meeting, which was a hawkish affair that surprised investors and gave the US dollar a boost. On Friday, the US releases the employment report, which always plays an important factor in the Federal Reserve’s rate policy.   EUR/USD Technical EUR/USD is testing support at 1.0528. Below, there is support at 1.0469 There is resistance at 1.0566 and 1.0636 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.   Source: EUR/USD slides to three-week low - MarketPulseMarketPulse
PLN Soars to Record Highs Ahead of NBP Decision

The EUR/USD Pair Started The Bearish Correction

Paolo Greco Paolo Greco 04.01.2023 08:08
M5 chart of EUR/USD EUR/USD started the bearish correction that I have been talking about for a long time. Of course, it is too early to conclude that the fall will be strong and could take long, but yesterday the pair made a big step towards this scenario. I have been mentioning a strong correction since 3 weeks ago, but there were no sell signals on the higher charts, and the market continued to buy the pair even when there were no reasons to do so. The only macro data from yesterday that I could mention are the data on German inflation and U.S. manufacturing activity. German inflation went down from 10% to 8.6% while CPI has fallen from 47.7 to 46.2. It is unlikely that the euro fell because of these reports. But yesterday's technical picture was quite pleasant. In the very beginning of the European session, there was a sell signal near the Ichimoku indicator, later the price crossed 1.0581 and went down about 50 pips. Unfortunately, the price failed to reach the next target level of 1.0485, but there was no buy signal during the day. Therefore, the deal had to be closed manually closer to the evening with profit around 80 pips. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, non-commercial traders opened 2,700 long positions, whereas the number of short positions fell by 1,100. Thus, the net positions rose by 3,800. The number of long positions is 146,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 41,000 (685,000 vs. 644,000). H1 chart of EUR/USD EUR/USD resumed the downward movement on the one-hour chart, and settled below the horizontal channel, in which it spent several weeks. I expect the euro to fall further, which can only be prevented by Friday's US data. However, I believe that even if they turn out to be weak, in the mid term the US dollar will still show growth. The euro has risen too much and for no reason at all over the last months, a correction is necessary. On Wednesday, the pair may trade at the following levels: 1.0269, 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, and also Senkou Span B lines (1.0623) and Kijun Sen (1.0616). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 4, the ISM manufacturing activity index for December will be released in the US, followed by the Federal Reserve minutes later in the evening. I don't expect the market to show a significant reaction to the minutes, but the ISM index might provoke one in case its value is much different from the forecasts. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 06:00 2023-01-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331409
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD Pair Expect A Final Dip To Below 1.0519

Torben Melsted Torben Melsted 04.01.2023 08:19
EUR/USD has corrected as expected and is close to completing sub-wave iv. We still need EUR/USD to move a little lower and closer to our ideal target near 1.0470, but we are in the final stages of this corrective wave and should soon see wave v take over for the next rally higher towards 1.0927 to complete wave v/ and 3. Longer term, we are looking for much higher levels for EUR/USD, but as always we suggest taking things in baby steps. For now, we expect a final dip to below 1.0519 and ideally closer to 1.0470, but all we need is a dip below 1.0519 to fulfill all requirements for wave c/ of iv/ and to set the stage for wave v/ higher to 1.0927. Relevance up to 07:00 2023-01-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307264
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

EUR/USD: The Moment May Have Come For The Significant Downward Correction

Paolo Greco Paolo Greco 04.01.2023 08:24
On Tuesday, the EUR/USD currency pair dropped abruptly and unexpectedly for many, dropping between 120 and 130 points. It should be noted that although the euro has traveled quite a distance, yesterday's macroeconomic environment did not support such a movement at all. Therefore, what we predicted throughout the three-week flat period came to pass. Strong statistical trends or significant fundamental events had little to no impact on how the flat ended. Only two statistics were available to dealers yesterday: the German inflation rate and the US manufacturing sector's business activity index. The American data was weaker than expected and released considerably later than the pair's decline, so it was unlikely to result in a strengthening of the US dollar. The European currency did not drop more than 100 points as a result of the German inflation report, although it showed a 1.4% y/y decline. The euro could theoretically collapse as a result of the sharp decline in German inflation, which suggests that European inflation may also experience a significant slowdown this Friday. The likelihood of the ECB rate hike cycle finishing earlier increases with the rate at which inflation drops. The likelihood that the ECB will resume raising interest rates by 0.25% in the near future is higher. As we previously stated, market expectations for a slowing in the pace of the Fed's monetary policy tightening are the key cause of the dollar's decline during the past three months. The ECB already slowed these rates in December, and with a new decline in inflation, the likelihood of a swift and dramatic tightening of monetary policy will decrease even further. Therefore, there is no longer any need for the two to keep traveling north. It has struggled mightily to increase for the past three weeks, refusing even to slightly modify. Most likely, what we saw was an inertial movement as traders tried to take advantage of the rally in anticipation of a deeper, sustained decline in the pair. Now that we can see it, the moment may have come for the significant downward correction we have been anticipating for a while. The movement's direction is chosen. If we focus solely on this week's macroeconomic and structural backdrops, substantial changes can hardly be anticipated all day other than Friday. As previously stated, there were no justifications for "flights" yesterday. Only the ISM index for the US manufacturing sector is due today; however, it won't be released until later in the evening. The minutes of the Fed's meeting will be made public later that evening, but as they are a formal document, the market rarely reacts to them. What else is left for this week, then? Non-farm, the ISM service sector index, and EU inflation. This week's reports are all due on Friday. As a result, it will be challenging to predict what traders will trade actively and volatilely today and tomorrow. Or will one day suffice, and today we will once more see flat? Now, the euro should continue to decline logically regardless of the macroeconomic or structural background. Additionally, there won't be a final one this week. The Fed is gradually beginning to awaken, and this week there are many lectures planned by Fed officials. All reports, declarations, and speeches will only occasionally steer the pair in a specific direction; ultimately, everything will depend more on the traders' decision to engage in active trading. However, even while inflation in the EU slows down very slightly on Friday and non-farm payrolls in the US are expected to be low, we continue to feel that the euro should continue to fall. As of January 4, the euro/dollar currency pair's average volatility over the previous five trading days was 88 points, which is considered to be "normal." As a result, we anticipate that the pair will fluctuate on Wednesday between levels 1.0480 and 1.0656. A round of upward corrective will be signaled by the Heiken Ashi indicator's upward reversal. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: The EUR/USD pair has finally resumed or at least attempted to resume, its trend movement. Until the Heiken Ashi indication turns up, you should hold short positions with objectives of 1.0498 and 1.0480. After the price reverses above the moving average, long trades should be initiated with goals of 1.0656 and 1.0742. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones Relevance up to 05:00 2023-01-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331405
Decarbonizing Steel: Contrasting Coal-based and Hydrogen-based Production Methods

FX: The Entire CEE Region Has Regained Its Relationship With Gas Prices, Which Is Driving FX To New Gains

ING Economics ING Economics 04.01.2023 11:38
The dollar has started 2023 with some stability after suffering heaving losses for large parts of the last quarter. Asset managers keen to earn their fees will be looking to put money to work and will probably be positively assessing developments in China. Yet the dollar is seasonally strong in January and February and may hold up better than most think USD: JOLTS and FOMC minutes in focus today The dollar has started the year on a slightly firmer footing, where it has strengthened against all G10 currencies except the Japanese yen (JPY). That is a far cry from the 2% (vs Canadian dollar) to 13% (vs New Zealand dollar) losses suffered by the dollar in 4Q22. Even though December is seasonally a negative period for the dollar, some stability was actually seen on the back of the Federal Reserve's hawkish hike. We felt at the time that the Fed story providing some support to short-dated US yields could help the dollar, which has seemed to be the case. That Fed story will remain a key driver of the dollar and global asset market trends in 2023. The market has been pretty resolute in pricing further Fed tightening to 4.95/5.00% next spring/summer and then a 200bp easing cycle within two years to leave Fed funds at some kind of neutral 3% rate into 2025. That pricing will no doubt be challenged over the coming weeks and months. For example, today's focus will be on the November JOLTS job opening data, which is expected to decline to 10 million from 10.33 million. How this data emerges versus the consensus will shape views on how quickly the tight US labour market is unwinding and whether the Fed can show less concern about frustratingly high inflation. More insights into Fed thinking on the subject will be found in the release of the December FOMC minutes at 20CET.  Away from the Fed, all eyes are on developments in China and whether the liberalisation of Covid containment policies can prompt a re-rating of 2023 Chinese and global growth prospects. It feels a little too early for fund managers to bet the farm on this story, where instead the nation appears to be weathering the storm before shutting down for the Lunar New Year on 23 January. That said, global growth prospects are also receiving a lift from the sharp fall in global energy prices (especially gas) and thus it should not be a surprise to see equity markets starting the New Year on the front foot. Seasonally, January and February are strong months for the dollar and we favour some modest retracement of the heavy dollar losses seen last quarter. Should Fed and global activity (weak PMIs) allow, we have a slight bias that DXY can recover to the 106 area near term - perhaps even to 108 over the next two months. Chris Turner EUR: Benign winds EUR/USD has started 2023 on a slightly softer footing, but it is hard to argue that it needs to fall even more sharply. A major driver of the euro's drop last summer had been the terms of trade story on high gas prices - a story that has completely reversed since September. Equally, the risk environment starts the year with a glass half full/recessions will be mild approach and the dramatic narrowing in two-year EUR:USD swap spreads cannot be hurting EUR/USD either. As it stands then, there does not seem to be a strong and immediate case for EUR/USD to break back down to the 200-day moving average near 1.03. Perhaps one can expect a 1.0500-1.0750 range to build over coming sessions, with Friday's US December jobs data a possible catalyst for a range breakout. Elsewhere, we today see Swiss CPI data for December. We said in our Swiss National Bank (SNB) review back in December that the SNB probably wanted to keep the real Swiss franc strong for the time being as it battled above-target inflation. Assuming Swiss inflation stays near 3% year-on-year in today's release, we would assume the SNB has an interest in keeping EUR/CHF below the 0.9900/9910 area as it continues with its two-sided FX intervention campaign. Chris Turner GBP: Settling after a lively December After a very lively December, EUR/GBP looks to be settling into a trading range above 0.8800. That big rally from 0.86 to a high of 0.8875 was largely driven by the divergence in European Central Bank and Bank of England policy, where the BOE's dovish hike stood in stark contrast to the ECB's move. We had felt that the 0.88/0.89 area was a fair level for EUR/GBP towards year-end and into 1Q23 and sterling's performance this year will probably be driven by how soon the BoE can stop tightening and how quickly expectations of an easing cycle can build.  We are a little more bearish on GBP/USD, where we think the 200bp Fed easing cycle priced from summer 2023 could be pared back a little. 1.1650 would be the GBP/USD target were US (especially price/wages) data to surprise on the upside. Chris Turner CEE: Falling gas prices kick start the region to fuel new gains On today's agenda is the meeting of the National Bank of Poland. We expect rates to remain unchanged and the rhetoric to be the same as in the December meeting. The new forecast will be published only in March, so there is not much to discuss here. The governor's press conference will take place tomorrow at 3pm local time. Also tomorrow, Polish inflation for December will be published, as always the first in the region. Inflation is expected to fall again at an annual rate, but we think this is not the end of the story and the January and February numbers should show a rebound. Then on Friday, the monthly data set from the Czech Republic will be of interest, which so far suggests the deepest recession in the region. We expect November's industry numbers to bring year-on-year growth back into negative territory. On the FX front, the market is only slowly returning from low Christmas liquidity back to normal. While locally, market rates remain highly volatile resulting in more of a decline in interest rate differentials versus the euro, global conditions prevail and support further rallies in the region. Favourable EUR/USD levels are no doubt helping, but the main reason in our view is the massive drop in gas prices over the past two weeks. The entire CEE region has regained its relationship with gas prices, which is driving FX to new gains. The Czech koruna touched EUR/CZK 24.050 yesterday, the strongest level since April 2011, leading the rally in the region. Similarly, the Hungarian forint also took advantage of the favourable global conditions and pegged to the EUR/HUF 400 level. However, gas prices seem to have stabilised and hence this driver should not support these two currencies in the coming days any further. On the other hand, the Polish zloty and the Romanian leu, despite a likely weaker relationship with gas prices, have lagged and could still benefit from this in the coming days. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Drop In German Inflation Is Welcome News, But It Is Mean That Can We Say That Inflation Has Peaked?

The Drop In German Inflation Is Welcome News, But It Is Mean That Can We Say That Inflation Has Peaked?

Kenny Fisher Kenny Fisher 04.01.2023 12:52
After a dreadful showing on Tuesday, EUR/USD has rebounded today. In the European session, the euro is trading at 1.0618, up 0.66%. Investors eye German CPI German CPI was lower than expected in December. CPI slowed to 9.6%, down sharply from 11.3% in November and below the consensus of 10.7%. This marked the first time that German inflation has fallen into single digits since the summer. Spanish inflation, released last week, also slowed in December. The next test is the release of eurozone inflation on Friday. Inflation is expected to fall to 9.7%, down from November’s 10.1%. The drop in German inflation is welcome news, but two caveats are in order. First, the German government enacted a price cap for electricity and gas in December, which meant that energy inflation slowed in December. However, services inflation, which is a more accurate gauge of price pressures, rose to 3.9% in December, up from 3.6% a month earlier. Second, inflation remains at unacceptably high levels. Germany’s annual inflation in 2022 hit 7.9%, its highest level since 1951. If eurozone inflation follows the German lead and heads lower, can we say that inflation has peaked? Some investors may think so, but I wouldn’t expect ECB policy makers to banter around the “P” word. The central bank reacted very slowly to the surge in inflation and has been playing catch-up as it tightens policy. Lagarde & Co. will therefore be very cautious before declaring victory over inflation. If eurozone inflation drops significantly in the upcoming release, it will provide some relief for the ECB in its battle with inflation. The ECB has adopted a hawkish stance, and the markets are still expecting a 50-bp hike at the February 2nd meeting. In the US, the markets are back in full swing after the holidays. Today’s key events are ISM Manufacturing PMI and the minutes from the Fed’s December meeting. In October, the PMI contracted for the first time since May 2020, with a reading of 49.0 (the 50.0 threshold separates contraction from expansion). Another weak reading is expected, with a forecast of 48.5 points. The Fed minutes will make for interesting reading, providing details about the Fed’s commitment to continue raising rates, which surprised the markets and sent the US dollar sharply higher.   EUR/USD Technical EUR/USD is putting pressure on resistance at 1.0636. Next, there is resistance at 1.0674 There is support at 1.0566 and 1.0487 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Metals Market Update: Decline in LME Copper On-Warrant Stocks, Zinc and Lead Surplus Continues, Nickel Market in Supply Surplus

The EUR/USD Pair Is Trading Above 1.06 Again, The USD/JPY Pair Is Close To Level Of 131

Kamila Szypuła Kamila Szypuła 04.01.2023 14:38
The dollar fell on Wednesday, losing against currencies such as the Australian dollar and against the euro, which gained ground on the data series. The dollar was already under pressure from investors becoming more optimistic about the prospect that China's easing of strict COVID restrictions would breathe life into the world's second-largest economy. Wednesday's data showed that consumer price pressure in France fell much more than expected in December, while the previous day's data from Germany also showed that inflation fell much more than expected. Last week's Spanish inflation data painted a similar picture. The Fed meeting minutes from the last Federal Open Market Committee (FOMC) meeting are due to be released later and may shed more light on the board's outlook for the monetary policy tightening cycle. Perhaps more importantly, the market will also be watching employment and inflation figures ahead of the next FOMC meeting in early February. EUR/USD The euro saw its biggest one-day fall against the dollar on Tuesday. Today, the EUR/USD pair is trading above 1.06 again. The breakout took place during the European session, in the asia session the pair stayed below 1.06 The Eurozone showed resilience in late 2022 with plenty of positive data, which so far looks set to continue into 2023. Yesterday brought more positive data as German inflation figures came in at -0.8% vs. forecast - 0.3% with unemployment rate beating estimates. French flash inflation figures were released earlier today, further strengthening the narrative. The S&P Global Eurozone PMI Composite Output Index remains below 50 and is down for the sixth consecutive month at 49.3, up from 47.8 in November. The data signaled the slowest decline since July last year, when activity levels began to decline. This decline has moderated in each of the last two periods of the study. Eurozone Services PMI business activity index rose to 49.8 in December from 48.5 in November. Source: investing.com Read next: Exxon And Chevron Abandon The Global Market And Focus On The Americas| FXMAG.COM USD/JPY The yen pair in the European session is heading towards 131. Japan's manufacturing PMI declined slightly in December. AUD/USD The Australian dollar surged towards 0.68 on Wednesday. Moreover, some experts believe that AUD/USD is moving towards 0.69. The current level of the pair shows that it is further than close to this level. The Australian was driven by optimism that . China considers partial lifting of Australia's coal mining ban Read next: How Dream Sports Built Its Value, High Inflation And Its Impact On The Hedge Fund| FXMAG.COM GBP/USD Sterling rose against the weakening dollar and was slightly higher against the euro as the easing of COVID rules in China prompted investors to bid on risky currencies. The cable market in the morning session stayed below 1.20, in the European session there was a breakout and the pair returned to htrading around 1.2050. ING analysts warned of a potential bearish sentiment in the pound against the US dollar. ING analysts believe that sterling's performance against the euro this year will likely depend on how quickly the Bank of England (BoE) can stop tightening monetary policy. Investors see potential bullish signals for the single currency against the pound if the ECB continues to raise interest rates while the BoE sends mixed messages. Source: investing.com, dailyfx.com, finance.yahoo.com
The Euro May Attempt To Resume An Upward Movement

The EUR/USD Pair Has A Potential For Bearish Drop

Oscar Ton Oscar Ton 05.01.2023 08:01
Technical outlook: EURUSD has been trading within a narrow range for the last 24 hours, after pulling back higher from 1.0520. The single currency pair is seen to be trading around 1.0600 at this point in writing and is expected to remain sideways for a while before the bears are back in control. A break below 1.0520 will open the door to drop towards at least 1.0440 and 1.0350 in the near term. EURUSD seems to have terminated its larger-degree corrective rally to a 1.0736 high over the last week of December 2022. Prices reversed from a convergence of the trend line resistance and the Fibonacci 0.382 retracement of its earlier drop between 1.2266 and 0.9535 as seen on the daily chart here. It is likely that a larger-degree downtrend has resumed against 1.0736 now. EURUSD could proceed towards 0.9535 and lower in that case in the next several weeks. Alternatively, if prices are to resume higher above 1.0736, the instrument needs to produce a corrective drop towards 1.0350 and up to the 1.0000-50 area. Either way, a high probability remains for a drop from current levels to 1.0350 at least, before finding support. Trading idea: Potential bearish drop against 1.0736 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307423
The EUR/USD Pair Has A Potential For The Breakout Mode

The Downward Movement Of The EUR/USD Pair Will Resume

Paolo Greco Paolo Greco 05.01.2023 08:07
M5 chart of EUR/USD EUR/USD quickly returned to the 1.0581-1.0658 horizontal channel on Thursday and it moved exclusively sideways for most of the day. I certainly don't think that the flat will resume now, though we cannot totally rule it out. Anyway, important macro data are coming out now, the holidays are coming to an end, representatives of central banks will soon come back to work and there will be their speeches. However, after the quotes closed below the horizontal channel on Tuesday the downward movement did not continue, which is important. On the one hand, it might mean a pullback to the upside, after which the fall will resume. On the other hand, there were no reasons for the euro to fall on Tuesday, so the market may just admit its mistake and continue moving in the flat. Tomorrow's EU and US macro data is against the second version, as it is hard to imagine that the inflation and non-farms reports will be ignored by the market. All of Wednesday's trading signals were formed in the 1.0581-1.0623 area. That is, in the 40-point range, where the Senkou Span B and Kijun Sen lines ran. Therefore, each time a signal was formed, the price was almost immediately near the next important line or level. Theoretically, it was possible to "add" some ten points of profit, but we leave these decisions to traders, because not everybody likes to trade in the absolute flat. In any case almost all trade signals were not false. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, non-commercial traders opened 2,700 long positions, whereas the number of short positions fell by 1,100. Thus, the net positions rose by 3,800. The number of long positions is 146,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 41,000 (685,000 vs. 644,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD clearly returned to the lines of the Ichimoku indicator, so now it is the moment of truth. If the price clearly bounces from these lines, the downward movement will resume. If not, the flat may resume. After Friday the pair could go anywhere because the macroeconomic background will be very strong on that day. On Thursday, the pair may trade at the following levels: 1.0269, 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, and also Senkou Span B lines (1.0631) and Kijun Sen (1.0616). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 5, the U.S. will release ADP private sector workers report, unemployment claims and the second estimate of the service sector business activity index for December. All three reports are considered to be of little importance, so I don't expect the market to react to them. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 05:00 2023-01-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331496
The EUR/USD Pair Chance For The Further Downside Movement

The EUR/USD Pair May Have A Potential For The Further Growth

Peter Jacimovic Peter Jacimovic 05.01.2023 09:48
Technical analysis: EUR/USD has been trading sideways at the price of 1.0608 and I see potential for the upside continuation towards upside reference. Trading recommendation: Due to the rejection of the key support zone in the background and symmetrical triangle pattern in creation, I see potential for the further growth. Watch for the buying opportunities on the intraday dips with the upside objective at the price of 1.0675 Stochastic Oscillator is showing fresh bull cross, which is good sign for further rally Key support zone is set at the price of 1.0520 Read next: How Dream Sports Built Its Value, High Inflation And Its Impact On The Hedge Fund| FXMAG.COM   Relevance up to 09:00 2023-01-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307460
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

FX: The Fall In The Pound Also Saw Egyptian Hard Currency Foreign Debt Rally

ING Economics ING Economics 05.01.2023 10:49
The December FOMC minutes caused barely a ripple in the FX market. Instead, investors are left to interpret China's battle with Covid and plunging energy prices. The sharp fall in natural gas prices is a boon to European energy importers, but a Fed still concerned with tight labour markets suggests the European FX recovery against the dollar is limited USD: FOMC minutes barely move the needle Last night's release of FOMC minutes could have been perceived as slightly hawkish, yet FX and interest rate markets barely budged. At the heart of the 2023 story is the risk management trade-off of the Federal Reserve under-appreciating sticky inflation versus over-tightening and delivering weaker-than-needed growth. For the time being, the Fed is still more concerned by the former and plans ongoing rate increases. In practice, we think that means another 50bp hike from the Fed in February (the market seems to prefer 25bp hikes in February and March) and then rate cuts from the third quarter onwards. For rate markets the battle this year seems to be whether inflation will allow the Fed to deliver the roughly 50bp of easing expected in the second half of the year. For today's session, the focus will be on the December ADP jobs data, where a +150k number is expected after last month's 127k rise. Currently, the consensus expects tomorrow's December nonfarm jobs reading at +200k. Yesterday we highlighted the importance of the JOLTS job opening data. The December figure showed a surprise rise, which will fan Fed fears of the US labour market staying tight. A firm ADP number today could also deliver a little support to US yields and the dollar. Away from the Fed story, the market's early year focus is on China's Covid battle and slumping energy prices. Commodity markets - always very sensitive to the China demand story - are taking a cautious approach here. In other words, they are not prepared to look through (presumably) surging infections towards the second half growth story. Equally the China story, in addition to very warm weather, is weighing on energy prices where both oil and gas are plunging. Indeed, European natural gas now trades at a discount to Asian natural gas and warns that LNG shipments will be re-routed to Asia. For the time being this fall in natural gas is prompting a re-assessment of European growth prospects and supporting European FX - especially CE4 currencies. That may well remain the near-term trend unless US price data is sufficient to re-price the Fed tightening cycle to the 5.50% area and lift the dollar. As above, ADP will be key for the dollar today. A subdued DXY range well within 104-105 looks likely. Chris Turner EUR: A welcome reprieve from energy The sharp fall in energy prices is being welcomed across Europe. That is already showing up in softer-than-expected German and French inflation data. Today the focus will be on Italian inflation data ahead of tomorrow's eurozone December CPI release, currently expected at 9.5% year-on-year. As discussed yesterday, the sharp fall in natural gas is generating even further improvement in the euro's terms of trade and is a euro positive. However, EUR/USD may struggle to make further upside gains until key event risks have been surmounted such as tomorrow's December US jobs release and next Thursday's US December CPI reading. Expect EUR/USD to continue trading in a 1.0580-1.0640 range, though we would probably say the upside risks are greater given developments in the energy story and the re-rating underway of European equities. Elsewhere, the National Bank of Poland left rates unchanged at 6.75% yesterday. Our team feels that sticky inflation will not allow an easing cycle to materialise in the second half of this year, however. Look out for the press conference from NBP Governor Adam Glapinski at 15CET today. 7.5% implied yields for the zloty and a rally in European bond markets amid lower energy prices can probably keep EUR/PLN gently offered for the time being. Chris Turner GBP: PM Sunak's new targets The UK Conservative government came out on the offensive yesterday with Prime Minister Rishi Sunak announcing five strategic targets for this year, among which were halving inflation, stabilising debt to GDP and ensuring a return to growth. The reduction in inflation may be the most attainable of these three and the one over which the government has the least control.  On the subject of inflation, today sees the 1030CET release of the Bank of England's Decision Maker Panel (DMP) survey. This looks at inflation expectations in the business sector. The November survey, published in early December, saw one-year inflation expectations drop to 7.2% from 7.6% YoY. Presumably, this should fall again in today's survey. We still think the market is over-pricing the BoE tightening cycle at a peak near 4.50% (+100bp) in August this year. But that pricing has been resolute. EUR/GBP should continue in a 0.8800-0.8850 range for the time being, while cable can loiter well within this week's 1.19-1.21 range. Chris Turner EGP: Another devaluation in the Egyptian pound The Egyptian pound (EGP) sold off another 6-7% yesterday. This is a heavily managed exchange rate and the decline is taken as a controlled move by local authorities. The fall in the pound also saw Egyptian hard currency foreign debt rally on the view that authorities were conforming to IMF conditionality of a flexible exchange rate in return for the $3bn IMF facility agreed in October. The legacy of the 2022 inflation and interest rate shock to emerging markets continues to play out in Africa, where sovereign CDS premia remain among the highest in the world. Among those sovereign credits under pressure is Nigeria, which also has a heavily managed exchange rate. The Nigerian naira was allowed to depreciate 4% in December, but with implied yields still at 50% - expecting further naira depreciation - we can only think that lower energy prices will be heaping more pressure on this currency. Those forwards price USD/NGN at 500 in three months' time - which certainly looks to be the direction of travel. Chris Turner Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

The US Stock Market Is Off To A Low Start Before The Bull Market Resumes

InstaForex Analysis InstaForex Analysis 05.01.2023 11:47
Following the decline that occurred on January 2, which was due to the collapse of TESLA and APPLE shares, stock indices rose as investors focused on the latest economic statistics from the US and the minutes of the December Fed meeting. Data in the Euro area also caused a strong surge not only in local indices, but also in EUR/USD. Conversely, the US indicator was in decline, which should have led to a decline in the US stock market. However, this did not happen, probably due to growing expectations that the Fed will soon stop raising rates. Investors are clearly hopeful that the local equity market will not fall further as they believe that the worst has already happened. It can be said that the US stock market is off to a low start before the bull market resumes. The positioning of short and long positions has reached the strongest divergence in favor of sellers, which can be overcome at any time if the market thinks that it is time to start buying. The upcoming inflation data in the US will be a signal to buy, but only if there is a noticeable decline in the figures. Read next: Samsung Suffers From Weakening Demand, Amazon Will Increase The Total Number Of Layoffs To Over 18,000| FXMAG.COM Forecasts for today: USD/JPY The pair is trading around 132.70. A break above this level, which could happen if there is positive sentiment in the market, will push it to 134.45. WTI Oil found support at 73.00. If this level holds and positive sentiment prevails, a rise to 75.00 can be expected.   Relevance up to 07:00 2023-01-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331508
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

FOMC Minutes Were Hawkish, All Eyes On US Jobs Data, Weaker Energy Gives Hope

Swissquote Bank Swissquote Bank 05.01.2023 12:06
Released yesterday, the FOMC minutes were hawkish enough to get the S&P500 erase early gains, but not hawkish enough to get the index to close in the red. The index closed the session 0.75% higher. Nasdaq gained 0.50%. UD Data Today, we will see what the ADP report tells about new hirings in December. Analysts believe that the US economy may have added around 150’000 new private jobs last month. Note that the latter is not a good indication regarding what’s to come on Friday. Last month, the ADP printed a weak 127’000 figure, while the NFP came in at 263’000. Therefore, even the avalanche of layoff news from big companies, and a soft ADP print may not be enough convince that the US jobs market is cooling. Energy In energy, weaker nat gas prices, combined to the past few days’ recession fears, and news that OPEC output increased in December thanks to the recovery in Nigerian supply from outages – despite the OPEC+ will to cut output to keep prices sustained - pulled the price of American crude 5% lower yesterday. Forex In the FX, the Australian dollar is surfing on the positive Chinese vibes, while the US dollar index couldn’t extent the early week gains, and we are about to see a death cross formation on the daily chart. Read next: Samsung Suffers From Weakening Demand, Amazon Will Increase The Total Number Of Layoffs To Over 18,000| FXMAG.COM The EURUSD is bid around 1.0550, as Cable sees buying interest below 1.20 despite its worse economic fundamentals compared to other G7 economies. One of the most popular trades of the moment is long the Japanese yen against EUR, USD and pound. Watch the full episode to find out more! 0:00 Intro 0:31 FOMC minutes… hawkish as expected 2:58 All eyes on US jobs data 5:54 Weaker energy gives hope, but oil could hold support above $70pb 7:45 Chinese stocks shine, as Aussie gets decent boost from China reopening 10:04 Long yen is among the most popular trades of the momet! Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #FOMC #minutes #US #jobs #ADP #NFP #data #USD #EUR #JPY #AUD #China #Covid #reopening #natural #gas #crude #oil #Alibaba #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The GBP/USD Pair Started A New Round Of Downward Correction

Cable Market Is Trading Near 1.2000, USD/JPY Is Above 132, EUR/USD Holds Trade Above 1.06

Kamila Szypuła Kamila Szypuła 05.01.2023 14:10
The dollar was more or less flat in choppy trading on Thursday after the Federal Reserve's closing minutes were released. The FOMC minutes repeated the message of a critical fight against inflation, more rate hikes ahead and no forecasts for 2023. The Fed publication reminded markets that policymakers do not anticipate a rate cut in 2023 and want to see "much more evidence" of progress to conclude that inflation is on a downward path. Analysts said the protocols were broadly in line with expectations, explaining the markets' relatively subdued reaction. A higher-than-expected JOLT reading of 10.45 million job vacancies in November and the ISM Manufacturing PMI survey triggered a rebound in the US dollar (DXY) index. Although the headline PMI fell slightly in December, the employment index in the PNI report unexpectedly rose to 51.4 from 48.4 in November. Meanwhile, the hawkish tone in the minutes of the December Federal Reserve meeting provided additional support for DXY. Looking ahead, the market will be watching the US employment data today to decipher the potential implications for the Fed at its next meeting in February. It's worth watching future reports. Private ADP employment figures will be released tomorrow ahead of NFP figures and on the EU side EU inflation figures will be released tomorrow after Italy showed slightly lower inflation readings in monthly and yearly comparisons. Next week, the US inflation data for December will be watched closely as the Fed continued to stress the impact of inflation on market disbelief as another lower printout would mean a sixth consecutive cooler printout for the headline and third for the core indicator. USD/JPY The Japanese yen trimmed losses from the previous session against the US dollar. On the Tokyo front, the Japanese yen witnessed a sharp decline after BJ Governor Haruhiko Kuroda advocated further policy easing to push the wage price index to meet elevated inflation projections for 2023 and 2024. The currency and commodity markets started the year with a break in volatility. Japan relies heavily on imports for most of its energy, and with crude oil down about 9% in the last few days, the yen could be the beneficiary of this move. In addition to the yen, the US dollar was weakened during the New York close but has since recovered some of those losses. The USD/JPY pair managed to exceed the level of 132 in the Asian session. It looks like the pair will be headed in the direction of 133 in the near future. GBP/USD GBP/USD traded slightly lower in the early hours of Europe on Thursday and fell towards 1.2000. The UK services PMI rose close to breakeven in December, suggesting little change in activity this month. Read next: Samsung Suffers From Weakening Demand, Amazon Will Increase The Total Number Of Layoffs To Over 18,000| FXMAG.COM EUR/USD EUR/USD keeps trading above 1.0600, but a drop below is still possible. The fundamental landscape surrounding the euro area economy has changed slightly compared to the first three quarters of 2022 and this is largely due to the significant reduction in oil and gas prices, which has brought a huge relief to the bulk importer of these commodities. From today's data from europe, the PPI report is expected. The European Economic Report will include a Producer Price Index (PPI), but that data is unlikely to trigger a significant reaction, especially ahead of Friday's Eurozone Inflation Report. AUD/USD The Aussie Pair keeps its trade above 0.68 despite being closer to 0.68 than 0.69. The Australian dollar soars as traders boost economic confidence in China Most of the AUD's gain took place during Wednesday's trading session in the Asia-Pacific region. At the time, investors likely priced in the potential economic impact of future trade flows between Australia and China due to several developments. Read next: Harvard Business Review Research Shows That Education Is No Longer So Important On The Labor Market, The Ban On The Import Of Hamsters Has Been Lifted, 60/40 Portfolio Is Ended?| FXMAG.COM Source: dailyfx.com, finance.yahoo.com, investing.com
Hungary's Central Bank to Maintain Base Rate at 13%, Eyes on Effective Rate Amid Forint's Performance

The EUR/USD Pair Ended The Week Trading At 1.0648, The Cable Market (GBP/USD) Managed To End The Week Above 1.20

Kamila Szypuła Kamila Szypuła 07.01.2023 20:00
The dollar offset earlier gains after US employment data showed employers created 223,000 jobs in December, more than economists had forecast, while wage growth slowed this month. Fed futures traders have raised bets that the Fed will raise interest rates by 25 basis points at the end of its two-day meeting on February 1 after Friday's data. An increase of 25 basis points is now seen as a 67% probability, up from 54% before, and an increase of 50 basis points is now seen as a 33% probability. USD/JPY USD/JPY started the week at 130.92, ended the week much higher at 132.0540. The week's high was even higher than the last reading and the pair crossed 134 at that point. The low was shockingly low compared to the high as it was below 130, 129.53 to be exact. EUR/USD The EUR/USD pair started the week and the new year at a high level of 1.07. It ended the week trading at 1.0648. It was a tumultuous week for the pair as they had to struggle many times to keep their trade above 1.06 and thus their low was read below that level. The lowest level was even below 1.05 at 1.0491, the highest later was at the level from the beginning of the trading week, i.e. at 1.0709. Unsurprisingly, drastically lower energy prices in the Eurozone helped to soften the headline measure of inflation, where it improved year-on-year and month-on-month - highlighting the trend of lower prices for EU consumers. EU headline inflation drops from 10.1% to 9.2% YoY. Core inflation rises from 5% to 5.2% YoY. According to estimates, energy price growth, although still the largest contributor to the overall index, fell from 41.5% in October to 25.7% in December. By contrast, price pressures on non-energy or food items are higher, suggesting that high inflation remains quite common. GBP/USD Similarly for the euro, the cable pair also had a difficult week. The pound was exceptionally weak and fell below 1.20. They will start the week at 1.2111 and thus it is the highest reading in this trading week, and the end of the week was at 1.2093. The lowest level of the GBP/USD pair was below 1.1850 (1.1848). AUD/USD The Aussie pair was the best among the major pairs of valises. Throughout the week, AUD/USD traded in a tight range compared to other pairs. The pair's weekly range was 0.6700-0.6875. The pair started the year trading at 0.6821 and finished at 0.6879. The end of the week was close to the week's high at 0.6888. The pair dropped the lowest in the week at 0.6690. The factors contributing to the pair's volatility appear to have been largely external, with Chinese politics, Federal Reserve meeting minutes and US employment figures playing a role. China's efforts to break out of its economically stifling zero-case Covid-19 policy appear to come with several challenges. While official figures show a situation that is under control, anecdotal evidence from hospitals and morgues suggests a more problematic transition. At the moment, Australia's trade surplus remains at record highs and the November figure will be known this Thursday. Source: finance.yahoo.com, investing.com
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

Today, The Euro (EUR) May Have A Chance To Rise

InstaForex Analysis InstaForex Analysis 09.01.2023 08:08
The dollar's first rush to a massive strengthening across the board since trading opened in the new year was wiped out by Friday's surge in counter-dollar currencies and the return of risk appetite to the markets - stock markets have already exceeded their pre-new year's values. The euro rose 125 pips on Friday, which is one of the signs that the bearish correction is over, but until the price settles over the range of 1.0595-1.0660 and the signal line of the Marlin oscillator on the daily chart falls to the positive area, it is too premature to change the reversal strategy. The second scenario, with the formation of a complex extended divergence, which we considered in mid-December, gets an upgraded look - the reversal from the support area of 1.0470 while reaching the target range of 1.0758-1.0787. On the daily chart, it is marked with the dashed lines. At the moment, under the main scenario, I expect the correction to end in the range of 1.0595-1.0660 and movement below 1.0470, which will also mean that the price will move under the MACD indicator line. On the four-hour chart, the price settled above the MACD line, the Marlin has settled in the positive area, and the situation changes into which the euro could rise. But the price and the oscillator are not settling on the daily chart, so the output on the four-hour chart may not be accurate. Relevance up to 03:00 2023-01-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331698
Analysis Of The Euro To US Dollar Pair Situation - 30.01.2023

The EUR/USD Pair Is Waiting To Start The Next Rally

Torben Melsted Torben Melsted 09.01.2023 08:13
EUR/USD corrected to a low of 1.0482 just above our ideal target seen at 1.0472. Once EUR/USD finished its correction, we saw a very strong rally confirming that wave 4/ had been completed and wave 5/ towards 1.0927 now is in progress. Support is now seen at 1.0636 and 1.0581 which we expected will act as a floor for the next rally towards 1.0927.   Relevance up to 06:00 2023-01-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307771
BSP Maintains Rates Amid Moderate Inflation; Eyes Further Tightening if Needed

The Dollar Is Broadly Weaker, Inflation In The CEE Region Is Still A Problem

ING Economics ING Economics 09.01.2023 11:16
The dollar is broadly weaker after Friday's release of a sub-50 December ISM services reading added weight to the view that the US will enter a recession. At the same time, China's Covid pivot is sparking a re-assessment of activity currencies. We'll hear more from central bankers this week and the data highlight will be Thursday's December US CPI release USD: ISM services knocks stuffing out of the dollar The dollar starts the week under pressure and has seen some sizable losses over the last two trading sessions. Friday's price action proved instructive. The slightly lower-than-expected average hourly earnings data saw the dollar soften a little, but the sub-50 ISM services release really knocked the dollar hard. As our US economist, James Knightley, notes, ISM services readings under 50 are one of the most reliable indicators of a US economy headed into recession. This reading has not so much questioned whether the Fed will be taking rates close to 4.75/5.00% this spring, but rather added to the pricing of the subsequent Federal Reserve easing cycle. Growing convictions that the Fed will have to ease later this year come at a time when China is dismantling its zero-Covid architecture and policy measures - especially in the property sector - are reorienting towards growth. This combination is proving a very benign one for emerging currencies and commodity currencies in general. As usual, we think the FX markets will take their cue from the US yield curve, where Friday's bullish disinversion of the curve (as short-dated yields crumble) point to a more reflationary setting and a weaker dollar. Were US two-year Treasury yields to drop below the 4.10/20% area this week, we would expect another decent leg lower in the dollar. Whether those US short-end yields drop more this week will be determined largely by Thursday's US December CPI release. James Knightley is on consensus expecting core inflation at 0.3% month-on-month and 5.7% year-on-year. Downside surprises here were a big catalyst in the dollar reversing lower last year and this data point will remain one of the biggest FX triggers of the month. The week also sees Fed Chair Jerome Powell speaking at a Riksbank symposium on central bank independence. With concerns building around a US recession and price data easing, the tide seems to be turning against his hawkish rhetoric. In all, we suspect investors will be looking to add to positions in EM FX and the commodity complex this week. The Chinese renminbi is enjoying strong gains and Asia's high beta Korean won is flying. It seems very hard to fight this trend - especially in the second week of the year when money is being put to work. The recent DXY low at 103.45 looks vulnerable and 102.00 now looks to be the direction of travel as US recession fears build. Chris Turner EUR: Memories of 2007 EUR/USD has been participating in this dollar sell-off and the bias looks higher. Conditions here feel a little like the summer of 2007 when the slowdown in the US housing market saw the conviction build - especially from August 2007 onwards - that the Fed would have to ease. Having traded in a 4.50-5.00% range for the first half of 2007, US two-year yields crumbled to 2.70% by the end of 2007 and EUR/USD rallied around 10%. Of course, there are many differences between then and now, e.g. US sub-prime then, versus the US inflation battle now. But a surprisingly hawkish European Central Bank (both then and now) warns that EUR/USD could rally hard if the market is convinced the Fed will ease. Low gas prices and China reopening are also supportive for EUR/USD and we would say that, despite the bearish seasonals for EUR/USD, pressure is building for further near-term gains. With money probably flowing into emerging market funds now - and out of dollar deposits - we can see EUR/USD heading up to 1.0735/85, with outside risk to the 1.09 area should US price data soften again this week. Chris Turner GBP: BoE Chief Economist speaks at 1630CET Sterling has received some support from the better global risk environment. The highlight of today's session will be a 1630CET speech by Bank of England (BoE) Chief Economist, Huw Pill, with the title: 'The UK economic and Monetary Policy Outlook'. We have noted recently that the market has been locked onto expectations that the Bank rate will be taken to the 4.50% area (or +100bp from today's level) into the summer. This pricing has been resolute for several months. Recent job and wage data has yet to assuage the BoE's concerns over a tight UK labour market, thus we doubt Huw Pill will need to sound very dovish today.  With the dollar at risk of falling further, GBP/USD looks biased towards the 1.2350 area this week, while EUR/GBP should find support in the 0.8780 area. Chris Turner CEE: Inflation prints across the region We have a heavy calendar this week led by inflation numbers across the region. Today we start with Hungarian industrial production and foreign trade and in the Czech Republic, we will see the final estimate of 3Q GDP and labour market numbers. Tomorrow, the Romanian central bank is scheduled to meet, and we think it will raise interest rates for the last time to 7.00%, but give a 30% probability that rates will remain unchanged. December inflation in the Czech Republic will be released on Wednesday. We expect a further increase from 16.2% to 16.4%, slightly above market expectations. Then on Friday, we will see December inflation in Hungary and Romania. In Hungary, we expect a further rise from 22.5% to 25.9% YoY, also slightly above market expectations. In Romania, we think inflation has already peaked and expect a small decline from 16.8% to 16.6% YoY. The CEE markets experienced a massive rally in rates and bonds last week, but also in FX for most of the region. This week should show that inflation in the region is still a problem and this chapter is not over yet. Most interesting will be the Hungarian forint and another jump higher in inflation. Hungary is the only country in the region that has seen inflation surprise to the upside in each of the last three months. Thus, another surprise would likely push the forint back above 400 EUR/HUF. Overall, higher EUR/USD after Friday's US jobs report is good news for the region. On the other hand, the fall in market rates is again undermining domestic conditions for FX. As we mentioned earlier, the drivers of the previous rally have been exhausted in our view and we should see a quieter week in the FX market. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Despite The Improvement In The Outlook Due To Falling Energy Prices, The Economic Environment In Britain Remains Difficult

The Bank Of England's Committee Members C.L. Mann: "Restricting Energy Prices Is Forcing A Shift In Spending To The Rest Of The Consumer Basket"

Jakub Novak Jakub Novak 09.01.2023 11:25
More and more politicians have expressed their belief that UK inflation is slowing significantly this year. However, one of the Bank of England's committee members, Catherine L. Mann, said the recent introduction of a price ceiling could trigger inflation in other sectors by boosting consumer spending. Mann speach "By limiting energy prices, we have mechanically lowered the rate of inflation, which is irrelevant to future monetary policy decisions," Mann said during a panel discussion at the American Economic Association's annual conference. "Restricting energy prices is forcing a shift in spending to the rest of the consumer basket, thus causing potentially higher inflation," she added. Mann also spoke about global climate change, arguing that regulatory policies aimed at reducing emissions could change the economic environment over the coming decades. Bank of England  The Bank of England raised interest rates nine times since December 2021 in order to suppress inflation as quickly as possible. Although the bank now expects inflation to fall sharply this year, policymakers are divided on how long interest rates will rise further. Mann voted for a 75 basis point rate hike in December, while the rest of the group opted for a half-point increase. Two other officials opted to leave it at that. At the moment, investors are certain of another rate hike in February this year, but whether it will be by half a point or by a quarter is a big question. Minutes from the last meeting showed that most policymakers consider the labor market to be rather tight and inflationary pressures on domestic prices and wages remain stable. This would well justify further monetary policy tightening. Read next: After The Correction, Jacek Ma's Share In Shareholder Votes Will Fall To 6.2%| FXMAG.COM GBP/USD As far as the technical picture of GBP/USD is concerned, Friday's record rise of over 200 pips was quite impressive. Buyers need to break above 1.2160 to maintain their advantage, adn the breakdown of this range will strengthen the hope for further recovery towards 1.2220. After that, it will be possible to see a rise to 1.2260. But if pressure returns after the bears take control of 1.2100, the pair will rush down to 1.2040 and 1.1980. EUR/USD In EUR/USD, a break above 1.0700 will spur a rise to 1.0730 and 1.0770, while a dip below 1.0650 will increase the pressure on the pair and push it to 1.0610 and 1.0570. Relevance up to 08:00 2023-01-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331722
The RBA Is Expected To Raise Rates By 25bp Next Week

The Aussie Pair Is Trading Above 0.69$, The Euro Above 1.07, The British Pound Also Benefits From A Weak Dollar

Kamila Szypuła Kamila Szypuła 09.01.2023 14:33
The US dollar on Monday approached a seven-month low against other major currencies after data suggested the Federal Reserve could slow the pace of rate hikes. The dollar suffered its biggest quarterly loss in 12 years in the last three months of 2022, driven mainly by investor confidence that the Fed would not raise interest rates above 5%. The probability of a 25 basis point Fed rate hike in early February rose above 70% after the release of this data, reflecting the return of dovish Fed betting. The US economic report will not contain any important macro data on Monday. Later in the day, Atlanta Federal Reserve Bank Chairman Raphael Bostic will give a speech, and he said on Friday that he expects the Fed to keep interest rates at peak levels until 2024. Friday's monthly employment report showed an increase in non-farm payrolls and a slowdown in wage growth. The US employment data hit the US dollar hard. USD/JPY The Japanese yen strengthened above 132 to the dollar, returning to its highest level in seven months. The yen is building on December gains amid mounting speculation that the Bank of Japan may soon move away from ultra-easy policy after it unexpectedly raised the upper end of its 10-year government bond tolerance band to 0.5% from 0.25% last month . However, BJ Governor Haruhiko Kuroda clarified that the move was not a sign of starting a massive stimulus exit, but was intended to improve the functionality of the bond market. AUD/USD The AUD/USD pair builds on Friday's strong rally and gains strong traction on the first day of the new week. This marks the second day in a row of positive movement. The Aussie pair broke through the 0.69 level in the Zajati session. China's hopes of reopening may have contributed to the strengthening of the commodity currency. The world's second largest economy has lifted quarantine requirements for visitors, taking another step towards reconnecting to the world in the post-Covid era. Over the weekend, China finally reopened its sea and land border crossings with Hong Kong, the last pillar of its zero-covid policy, after three years. On the monetary policy front, the currency remains supported by expectations that the Reserve Bank of Australia will raise interest rates further this year in an ongoing effort to bring down inflation. Otherhand, markets are currently split on whether the RBA will deliver another rate increase at its Feb. GBP/USD The British pound hit a two-and-a-half-week high on Monday against a fundamentally weak dollar. GBP/USD entered a consolidation phase and pulled back towards 1.2100 after hitting a two-week high at 1.2175 earlier in the day. The US dollar came under strong selling pressure before the weekend. Traders are fully pricing in a 25bps rate hike at the February BoE meeting with around a 65% chance of a larger 50bps hike. The money markets predict that the bank rate will peak at around 4.5% in the middle of this year. EUR/USD EUR/USD is on a strong gain for the second day in a row. After Friday's rally before the weekly close, EUR/USD rose to 1.0699 on Monday. The euro benefited from better market sentiment. Today the EUR/USD pair climbed towards 1.0700. Unemployment in the EU shows a downward trend and November's print jobs reached 6.5% . Lower gas prices are also contributing to optimism in the eurozone and a better economic outlook for the eurozone, but the main driver of the euro appears to be a sell-off of the dollar along with flows into risky assets. Source: investing.com, finance.yahoo.com, dailyfx.com
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The EUR/USD Pair Has A Potential For Bearish Turn Against 1.0900

Oscar Ton Oscar Ton 10.01.2023 08:06
Technical outlook: EURUSD rose through fresh swing highs around 1.0750-60 on Monday before finding resistance. The entire zone between 1.0750 and 1.0800 is potential resistance as marked with the previous high close to 1.0800. The currency pair is most likely to change trends from the above zone in the near term. Aggressive traders might continue to hold short positions. EURUSD has hit both projected targets of the previous rally in September-October 2022 as marked in the red here. The single currency pair hit the Fibonacci 1.618 extension at 1.0758 and might reach 1.0800 briefly before turning lower again. The projected targets are towards 1.0400 and 1.0130-50 levels in the next few trading sessions. EURUSD is supported at 1.0520 as the bears prepare to take that out in the near term. A drag lower will confirm that a meaningful top is in place around 1.0750-60 and that prices are up for a pullback. Also, note that the Fibonacci 0.618 retracement of the entire rally between 0.9535 and 1.0750-60 is seen passing through the 1.0130 mark, which should be viewed as strong medium-term support. Trading idea: Potential bearish turn against 1.0900 Good luck! Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307915
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

The Eurozone Economy Will Stagnate In 2023

ING Economics ING Economics 10.01.2023 08:37
We see fair value for 10Y EUR swaps around 3% for the rest of this cycle, equivalent to a 10Y Bund around 2.25-2.5%. Federal Reserve cuts and a sluggish European recovery mean a dip in EUR rates around the middle of the year, but this will prove temporary 2023, year of the turn 2023 starts with a number of dilemmas for European rates. On the macro front, milder weather has allowed gas storage to hold up much better than expected at the start of the winter season, and commodity prices more broadly have continued their decline. The resulting slowdown in energy prices has taken European inflation off its peak. But there is a catch: core inflation has not yet turned a corner, and the encouraging situation in the gas market means that the European Central Bank doesn’t face as worrying a growth picture when it decides to raise rates as was feared even a few months ago. The ECB has fewer qualms about tightening policy further The net effect is an ECB with fewer qualms about tightening policy further. Our economics team now forecasts two more 50bp hikes at the February and March meetings, possibly followed by another 25bp increase in May. Contrast that with a Federal Reserve widely expected to reduce further the pace of hikes in February to 25bp, and to conclude its hiking cycle this quarter, and you have the second dilemma facing market participants: should EUR rates continue their climb until a clearer turn appears in ECB policy, or should they follow their USD peers lower, assuming that the ECB pivot will necessarily follow the Fed’s, albeit with a lag? A hawkish shift at the ECB has also come with greater rate cut expectations in 2024 Source: Refinitiv, ING A 3% fair value for 10Y swaps until the end of this cycle The first step is to update where we see the long-term fair value (FV) for traded interest rates. Our economists’ expectation of a 3.25% peak in the ECB deposit rate, followed by cuts back to 2.5% by mid-2025, is close to the path implied by Euribor forwards. That path doesn’t include any inevitable cutting cycle beyond that year, as neither economists nor markets are comfortable with making recession calls more than three years ahead. This may seem surprising, but we think this state of play will persist until much closer to any rate-cutting cycle.  Hiking rates well above neutral typically results in an inverted curve, and means hikes aren’t transmitted to longer interest rates Assuming Euribor fixings will gradually rise relative to ECB policy rates as liquidity conditions are tightened, we have a fair value for 10Y EUR (against 6M Euribor) hovering around 3%. This estimate can move up or down based on the path of inflation and ECB policy but what matters even more is the market’s understanding of where rates would be cut to in a neutral setting. As the experience of the US has shown, hiking rates well above neutral typically results in an inverted curve, and means hikes aren’t transmitted to longer interest rates. We’re already seeing evidence of this in Europe. Whether the 10Y Bund settles around our 10Y EUR swap estimate depends on whether the swap spreads tightening trend continues. A lot of tightening has occurred in late 2022 so the pace will likely slow down but, as far as long-term fair value is concerned, a 2.25-2.5% range seems fair to us. Swap spreads are a wild card in 1Q but tightening should resume later in 2023 Source: Refinitiv, ING US read-across and a softer economy This has to be weighed against a likely muted economic recovery in Europe, if it can be called that. Our economist colleagues forecast that, even taking lower gas prices into account, the eurozone economy will stagnate in 2023, at best. A softening global economy and the prospect of Fed cuts in the latter half of 2023 should put downward pressure on traded interest rates. The deep inversion of the US curve is an early illustration of this dynamic, although it has probably gone too far too quickly and will eventually reverse. Even taking lower gas prices into account, the eurozone economy will stagnate in 2023, at best A trough in Bund yields around 2% by the middle of 2023 is entirely possible, as are temporary dips below that level in periods of economic gloom. Translating this to 10Y swap rates means that dips to 2.5% cannot be excluded. Bear in mind, however, that we see this coinciding with periods of economic angst, so this won’t necessarily bring better risk appetite in riskier markets. As 2023 progresses, we expect a re-steepening of EUR yield curves, and long-dated rates rising back to our fair value estimate. Swap spreads at the beginning of the year are a potential wild card The tightening in the fourth quarter, on easing collateral pressure and in anticipation of the first quarter supply surge, was the correct move but uncertainty remains about how the ECB will decide to treat government deposits placed at the Eurosystem. If nothing changes, these could amount to a significant amount of funds chasing collateral again by the end of April. This will be combined with still healthy swap paying flows in the first quarter as the ECB keeps market participants on their toes about the eventual end point of this tightening cycle. All this is to say that we wouldn’t be surprised to see swap spreads widen this quarter, before returning to their long-term tightening trend. Read this article on THINK TagsInterest Rates Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Euro Will Probably Continue Its Upward Movement In The Near Future

The Euro To US Dollar (EUR/USD) Pair May Further Move Upside

Peter Jacimovic Peter Jacimovic 10.01.2023 09:47
Technical analysis: EUR/USD has been trading upside and I found breakout of the well defined trading range, which is good sign for the further rise. Trading recommendation: Due to the breakout of the defined trading range , I see potential for further upside movement towards main objective. Watch for the potential buying opportunities on the intraday dips with the upside objective at the price of 1.1150 MACD oscillator is showing fresh upside momentum, which is strong sign that buyers are in control. Key support is set at the price of 1.0720   Relevance up to 09:00 2023-01-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307953
Asia's Key Events: BoJ Meeting, Korea's GDP, Singapore Inflation, and Australia's CPI Data

FX: The Romanian Leu Has Benefited From Favourable Global Conditions In Recent Weeks

ING Economics ING Economics 10.01.2023 10:13
FX markets continue to trade with cautious optimism on the view that a US slowdown can rein in a hawkish Fed and that a reset in China policy will (eventually) see resurgent consumer demand and perhaps even improved foreign relations. That looks like a good story for the commodity and EMFX complex. Look out for comments from Fed Chair Powell today and the NFIB The market is growing increasingly confident that the Fed will end its tightening cycle this quarter USD: Powell pushback? Risk assets have started the year on a strong footing, with a good performance from both equity and debt markets. Emerging markets are back in fashion after a tough couple of years, where the building view that the Fed can soften its pressure on the monetary brakes plus China re-opening can see quite a strong recovery in emerging market currencies against the dollar. We note with interest a piece in the Financial Times today speculating on China's approach to stimulating domestic demand and also seeking to improve foreign relations. China's softening of a ban on coal imports from China and yesterday's news of a 20% increase in crude oil import quotas are consistent with the article. This comes at a time when the market is growing increasingly confident that the Fed will end its tightening cycle this quarter and embark on an easing cycle in the third quarter. Today will see two inputs into that Fed story in the form of i) comments from Fed Chair Jerome Powell around 15CET today and ii) the NFIB small business sentiment survey. Powell is speaking at a Riksbank conference on central bank independence, making it unclear whether he will today push back against the recent softening in US financial conditions. Certainly, the market does not buy into the Fed's narrative of the funds rate being taken to 5.00% and being kept there for a long time. Markets seem to price a 50bp easing cycle in 2H23. Regarding the NFIB survey, the market will be interested in whether it sinks any further and supports the recessionary readings provided by last Friday's ISM services release. Assuming that neither Powell's comments nor the NFIB breaks the building narrative of a more relaxed Fed (and Thursday's US CPI will also be key for this story), we would expect momentum to remain against the dollar and continue to favour activity/commodity currencies. Speculation will also be building that the Bank of Japan might have a further Japanese government bond (JGB) yield target adjustment in store after the Tokyo ex-food CPI hit 4% year-on-year – a level last seen in 1981. The Bank of Japan meets next week. DXY looks biased towards the 102.00 as investors put money to work on non-USD assets. Chris Turner EUR: So far, so good EUR/USD managed to nudge up to a new high yesterday without the support of much new news. It seems that asset managers are starting the year by placing money overseas, where dollar sales for emerging market currencies seem to lift EUR/USD as well. That said, European equities continue to outperform at the start of the year and eurozone data also continues to surprise on the upside.  For the time being, we would prefer to back further EUR/USD strength – should today's US event risks allow. This could see EUR/USD pressing last May's high at 1.0785. This week there is an outside risk of 1.0950 should Thursday's US December CPI show another soft reading. Before we dust off the call to 1.15, we should note that a re-opened China will compete for global LNG supplies. This means that the issue of high natural gas prices could well come back and bite the eurozone and the euro later in the year. Chris Turner GBP: Better risk environment provides some insulation Sterling has been performing slightly better, helped no doubt by the constructive risk environment at the start of 2023. The UK has quite a large country weight in global equity and debt benchmarks, meaning that flows into these products can provide some support. Sterling barely budged yesterday on comments from Bank of England Chief Economist Huw Pill that there were early signs that the UK labour market was softening. Again, market pricing of a further 100bp BoE hike to the 4.50% area this summer looks resolute. 0.8770-0.8870 may well contain EUR/GBP for the rest of this week, though GBP/USD could have some more upside should US data allow. Chris Turner CEE: Romania closes the hiking cycle in the region Today's calendar in the region offers National Bank of Romania (NBR) policy meeting. Although it seemed likely that we would not see another rate hike after the last meeting, the November inflation number has convinced us that one more hike is more than likely. That is why we expect the last 25bp rate hike today to 7.00%. However, our chief economist in Bucharest, Valentin Tataru, gives a 30% chance that rates will remain unchanged today. A rate hike is unlikely to impress anyone, and we will look for clues as to how the NBR views the liquidity situation in the market. From a rate perspective, we think this meeting should be the last live one, which will close the CEE region's hiking cycle, given that we do not expect rate hikes anywhere else.  The Romanian leu, like the entire CEE region, has benefited from favourable global conditions in recent weeks and, with the exception of the last few days of last year, has remained below NBR intervention levels. Although Romania is the least energy-dependent country in the region, the positive impact of the drop in gas prices and the more favourable EUR/USD level has not avoided the Romanian market. These conditions are expected to persist in the coming weeks. Although the carry level is among the lower ones within the region, it is at least stable. Moreover, the central bank maintains strong market confidence not to allow a depreciation above intervention levels. Thus, in our view, any EUR/RON upward moves may be tempting for RON buyers. Frantisek Taborsky Read this article on THINK TagsNational Bank of Romania FX Daily Federal Reserve Dollar  
British Prime Minister Rishi Sunak Sees No Chance Of Reducing Inflation, Despite Promises To Halve It

British Prime Minister Rishi Sunak Sees No Chance Of Reducing Inflation, Despite Promises To Halve It

Jakub Novak Jakub Novak 10.01.2023 14:10
UK Prime Minister Rishi Sunak said UK inflation is not certain to slow down this year so there is a need to continue influencing wages in order to limit their rise despite ongoing negotiations with striking sectors, including the National Health Service and the railways. Sunak has come under criticism Sunak has come under criticism over promises to halve inflation this year. This is despite the forecasts of the Budget Authority that the rate of price increase will slow down significantly as it is without any additional intervention from the government. Rising energy prices in the UK led to inflation exceeding 11% last year, causing a cost-of-living crisis. The Prime Minister and many other politicians have also changed for this reason. The new Prime Minister, Rishi Sunak, has decided to take seriously the issue of containing price rises, which is his top priority and the reason why he is resisting calls to adopt high public sector wage demands as this is sure to spur yet another rise in inflation. A growing political problem for the prime minister However, unrest is now taking place all over the country as citizens are pushing for a 19% pay rise. Another issue is that Sunak refused to answer the question of whether he has private medical care, saying it was of little consequence. This has become a growing political problem for the prime minister, who is under pressure from both members of his own Conservative Party and the general public. GBP/USD Talking about the forex market, yesterday's rise in GBP/USD is gradually slowing down, so buyers need to stay above 1.2140 in order to maintain their advantage. The breakdown of 1.2200 will push the pair to 1.2260 and 1.2301, while a drop below 1.2140 will bring it to 1.2090 and 1.2040. EUR/USD In EUR/USD, there is a chance to update the December highs, but this is only if the pair breaks above 1.0760. Such a move will push euro to 1.0790 and 1.0850, while a fall below 1.0720 will bring it to 1.0680 and 1.0650.     Relevance up to 09:00 2023-01-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331837
EUR/USD Pair Has Potential For The Downside Movement Today

The EUR/USD Pair Is Still Above 1.0700$, The USD/JPY Pair Was Little Changed

Kamila Szypuła Kamila Szypuła 10.01.2023 14:52
The US dollar improved slightly against its major trading partners early on Tuesday. The National Federation of Independent Business's monthly small business sentiment reading fell further in December as small businesses continue to struggle with high inflation that is dragging down profits. The economic outlook has deteriorated further this year. Markets are increasingly doubting whether the Fed will need to raise interest rates above 5% to cool down inflation as the effects of its aggressive rate hikes last year are already being felt in the economy. The focus for today will be Fed Chair Powell’s comments. USD/JPY So far, the Japanese yen has changed little against the dollar this week. USD/JPY was little changed on the news, but the Bank of Japan’s ability to maintain a loose monetary policy setting may come under closer scrutiny. USD/JPY is currently bullish and trading at 132.2600. In the earlier trading hours, the pair was even below 132. Japanese inflation appears to be accelerating after the headline Tokyo CPI hit a 40-year high at 4.0% year-on-year to the end of December. This was in line with forecasts, but core CPI was also 4.0% for the same period, above the 3.8% anticipated and 3.6% prior. EUR/USD EUR/USD has lost its traction and declined toward 1.0700 in the early American session on Tuesday. The EUR/USD was even above 1.0750 today. But the current level shows that the pair failed to break through the 1.0740 level, and the daily chart shows that the pair is barely down. It is possible that the EUR/USD pair will drop below 1.0700. While the US dollar remains under pressure from lower rate expectations, the Euro continues to be bolstered by the ECB’s insistence that rates will need to go higher to dampen ongoing price pressures. With the Fed coming to the end of its rate hike cycle, and with the ECB still in full flow, rate differentials between the two will continue to favor Euro strength. The EUR/USD pair as focus shifts to FOMC Chairman Powell's speech. GBP/USD The British pound traded above to $1.2, near a two-and-a-half-week high against the dollar, which hit Monday, The Cable Market is currently below that level, far from it. Trading is at the time of writing around 1.2120. The Bank of England's chief economist, Huw Pill, warned of the risk of continued inflationary pressures from a tight labor market, even if natural gas prices stabilize or fall. The UK central bank is likely to raise interest rates again to 4% next month. Meanwhile, markets are divided as to how much more interest rates will rise. On the data front, all eyes are on the monthly UK GDP figures. AUD/USD The Aussie pair stayed above 0.69 in the early hours of trading, but failed to maintain that level and found itself below it again. Currently, the Australian pair is trading around 0.6860. In addition, the market is also slightly favoring a quarter point hike from the Reserve Bank of Australia (RBA) to 3.35%. The probabilities may change data on monthly prices of consumer goods and services and retail sales for November, which will be published on Wednesday. After a surprise dip in October, inflation picked up again to an annualized 7.3%, while retail spending is expected to rise by a solid 0.7% thanks to major sales this month. Source: finance.yahoo.com, investing.com
The Price Of EUR/USD Pair Will Develop Sideways Movement

Jerome Powell's Speech Was Neutral For The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 11.01.2023 08:06
On Tuesday, the euro traded around 20 pips and settled below the target range of 1.0758/87. This can update the divergence, and its possible form is shown by the dotted line on the daily chart. Federal Reserve Chairman Jerome Powell's speech on Tuesday was neutral, and now investors are waiting for Thursday's US inflation report. On the four-hour chart, the price is also consolidating under the lower limit of the target range, and due to the local sideways movement, the signal line of the Marlin oscillator decreases. As a consequence, there is a prospect of divergence, in which the price may go above the upper limit of the target range (1.0787 - the high on May 30).   Relevance up to 03:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331916
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Euro May Not Have Any Specific Growth Drivers Now

Paolo Greco Paolo Greco 11.01.2023 08:16
On Tuesday, the EUR/USD currency pair attempted to begin a downward correction, but it was unsuccessful. Therefore, no new inferences can be made in light of the outcomes from Tuesday. When we look at technical or fundamental issues, it becomes quite difficult to explain why the European currency is expanding once again. Remember that, in theory, any movement of any instrument on the foreign exchange market can be explained with relative ease. Another query is whether each movement should merely be explained after the fact rather than being predicted. Sadly, it is not always feasible to forecast a movement, if only because there are so many players in any market, even major ones, and they are not always motivated by the desire to benefit from a currency transaction. The euro currency may not have any specific growth drivers now, but if demand for it increases, it may still increase. Additionally, the requirement for large firms and banks to perform business activities may increase demand. In this instance, the situation looks like this: macroeconomics and the foundation at least claim that the expansion of the euro currency is unreasonable, but it is still increasing. We have been observing this exact image for a month. From the perspective of macroeconomics and the "foundation," yesterday was essentially empty. Only Jerome Powell's speech was scheduled, but new language or theses from the president of the Fed are necessary for a response to such an event to occur. What is there to react to if Mr. Powell simply reiterates what traders have known for a long time? The Fed's monetary policy intentions are now public knowledge and include no secrets, so it makes no sense to expect a language change. Recent articles on macroeconomics cannot be characterized as resonant; rather, they were framed by expectations and forecasts. We continue to think that nonfarm payrolls and unemployment should have caused the dollar to appreciate rather than sink, and this week may mark the sixth week of falling inflation. Powell, therefore, has no incentive to alter his rhetoric at this time. The QT program is still in use. Recently, everyone has forgotten that the Federal Reserve uses additional measures to combat excessive inflation in addition to raising the key rate. Since around six months ago, the QT program, which is a reduction in the Fed's balance sheet, has been in effect. In other words, the regulator removes additional money from the economy, which contributed to previously high inflation, by selling government and mortgage bonds that it had actively purchased as part of the QE program. As a result, the decrease in inflation is not just a result of the key rate rising. The Federal Reserve's balance sheet was around $8.5 trillion as of December, having decreased by $350 billion. Using the M1 money supply indicator, we can see that it is currently 19.9 trillion dollars and has dropped by roughly 1 trillion over the past six months. As you can see, this method is likewise quite effective, although the M1 money supply was 4.8 trillion dollars before the epidemic. It has thus multiplied four times. There shouldn't be any more doubts about why inflation has risen at this point. Consequently, the first conclusion is that the QT program should be in place for a very long time because rates are high but the Fed won't keep them that way indefinitely. For a new acceleration of the economy, which can result in a new acceleration of the consumer price index, the rate of inflation must be lowered when it returns to 2%. Therefore, the Fed will attempt to maintain this value only with the aid of the QT program after inflation recovers to 2%. This is a favorable development for the dollar, but the ECB has also begun to cut its balance sheet at this time, and the market isn't exactly keen to purchase US dollars. Therefore, in the near future, a greater emphasis should be placed on technical analysis, but keep in mind that there aren't many fundamental grounds for the euro to increase in value. The Murray level of "8/8" can temporarily halt the expansion of the euro, but for it to decline, there must at least be consolidation below the moving average. As of January 11, the euro/dollar currency pair's five most recent trading days had an average volatility of 110 points, which is considered "high." So, on Wednesday, we anticipate the pair to fluctuate between 1.0626 and 1.0846. A bout of corrective movement will begin when the Heiken Ashi indicator reverses to the downside. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trading Suggestions: The EUR/USD pair is attempting to maintain its ascent. You can continue to hold long positions at this time with a target price of 1.0864 until the Heiken Ashi signal turns down. After fixing the price below the moving average and setting a target price of 1.0498, you may start opening short positions. Explanations for the illustrations: Channels for linear regression allow us to identify the present trend. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones Relevance up to 05:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331920
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The EUR/USD Pair Is Likely To Continue Higher

Torben Melsted Torben Melsted 11.01.2023 08:25
EUR/USD is likely to continue higher towards our target seen at 1.0933 to complete wave 5/ and 3. After a temporary correction in wave 4, renewed upside progress to above 1.0933 should be expected. Short-term we see support near 1.0695 and 1.0577. The latter should act as a floor for the expected rally towards our ideal target near 1.0933. That said, we should also respect the fact that the best part of the rally in wave 3 now is behind us and we only need the final push higher to 1.0933 to complete wave 3 and set the stage for a correction in wave 4.   Relevance up to 06:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308116
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The EUR/USD Pair Is Staying Near Its Local Highs

Paolo Greco Paolo Greco 11.01.2023 08:31
M5 chart of EUR/USD On Tuesday, EUR/USD froze in place. The price moved sideways all day, staying near its local highs. The pair last grew on Friday, when crucial data on the labor market, unemployment and business activity was released in the US. The market, as it has been doing lately, treated this data one-sidedly, just ignoring any positive information for the dollar. And when the upward momentum dried up, once again it could not even start a correction. There was only one event yesterday - the speech of Federal Reserve Chairman Jerome Powell, but he did not touch the monetary policy issues in Stockholm, so traders did not get any new information. There were three trading signals during the day. The price rebounded from 1.0748 every time. And this scenario can be considered just fine, because everything could have been much worse in flat conditions. All the three signals turned out to be false, since the price failed to reach the nearest target level or line. Nevertheless, the pair was going down by 15 points, so a Stop Loss should have been set at breakeven on all open trades. Besides, there was no buy signal. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 29,300, whereas the number of short positions fell by 13,100. Thus, the net positions decreased by 16,200. The number of long positions is 130,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 44,000 (671,000 vs. 627,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD has once again settled above the lines of the Ichimoku indicator. Theoretically, it may mean the beginning of a "swing" movement on the higher chart, but on the lower chart it looks like an attempt to resume the upward movement, despite the absence of the appropriate fundamental and macroeconomic background. For the time being we are getting set on going long, but there's also a high probability of a decline. On Wednesday, the pair may trade at the following levels: 1.0269, 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, 1.0938, 1.1036 and also Senkou Span B (1.0616) and Kijun Sen (1.0622). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 11, there are no important events or reports planned in the US and the EU, so the flat may persist. Nevertheless, traditionally we expect the euro to fall. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group Relevance up to 05:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331924
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

The EUR/USD Pair Is Facing Immediate Resistance Level

Oscar Ton Oscar Ton 11.01.2023 08:38
Technical outlook: EURUSD is pushing through 1.0750 again as the Asian session is progressing on Wednesday. The single currency pair is seen to be trading close to 1.0750 at this point in writing, after registering an intraday high around 1.0755. Please note that the 1.0750-1.0800 zone remains strong resistance as marked on the daily chart. We expect a bearish reaction here. EURUSD has been traded sideways in the past two trading sessions between 1.0710 and 1.0750 levels, which is clear on the hourly chart. The current push higher could be seen as the final thrust before the bears could be back in control. The corrective drop is expected to drag prices lower at least to 1.0350-60, which is a potential support and the Fibonacci 0.382 retracement of the rally between 0.9535 and 1.0760. EURUSD is facing immediate resistance close to 1.0800, while support is seen at 1.0481 on the daily chart. A break below 1.0481 will confirm that the bears are back in control and a meaningful top is in place. Also, note that potential remains for a drag through 1.0130, which is the Fibonacci 0.618 retracement of the above rally. Trendline support from the 0.9535 low is further viewed around 1.0130 as a potential bullish turn. Trading idea: The potential bearish move against 1.0900 Good luck!   Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308126
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

Fed Chairman Jerome Powell Appealed To Lawmakers To Use Their Regulatory Powers To Address Climate Change

InstaForex Analysis InstaForex Analysis 11.01.2023 12:03
Fed Chairman Jerome Powell asked politicians to avoid interfering with the central bank, stressing it should be free from any influence as long as it struggles with persistently high inflation. Price stability is the backbone of a healthy economy He explained that stabilizing prices requires tough decisions that can be politically unpopular. "Price stability is the backbone of a healthy economy and, over time, brings immeasurable benefits to the population," Powell said. "But restoring it when inflation is high may require measures that are unpopular in the short term as we raise interest rates to slow the economy. The lack of direct political control over our decisions allows us to take the necessary measures without regard to short-term political factors," he added. Markets surprisingly took these statements calmly, perhaps because they did not provide any direct indication of where the Fed's policy was heading. Nevertheless, further increases are expected this year. Read next: Pietro Beccari Will Be The Louis Vuitton’s CEO, Departures Several Top Executives At Rivian| FXMAG.COM Senator Elizabeth Warren of Massachusetts criticized the observed round of rate hikes Powell has recently encountered strong opposition and criticism of his actions from both parties. Most recently, Senator Elizabeth Warren of Massachusetts criticized the observed round of rate hikes, while President Joe Biden largely refrained from commenting on the Fed's actions, noting that the central bank is primarily responsible for fighting inflation. "Without clear legislation, it would be inappropriate for us to use our monetary policy" Although Powell repeatedly stated that political factors have not influenced his actions, it is clear that the pressure on the central bank is high as more and more politicians are talking about a return to a softer approach amid the first signs of slowing inflationary pressures. He also appealed for lawmakers to use their regulatory powers to address climate change, as well as asked major banks to check their financial preparedness in case of situations, such as hurricanes and floods. "Decisions on policies that directly address climate change should be made by the elected branches of government, reflecting the will of society," he said. "But without clear legislation, it would be inappropriate for us to use our monetary policy to develop a greener economy or to achieve other goals related to climate change in the world," he added. EUR/USD With regards to the forex market, EUR/USD still has a chance of updating the December highs, but for this to happen, the pair has to break above 1.0760 as only that will push the quote to 1.0790 and 1.0850. Meanwhile, a drop below 1.0720 will bring the pair to 1.0680 or to 1.0650. GBP/USD In GBP/USD, buyers need to stay above 1.2140 to maintain their advantage as the rise is gradually slowing down. The breakdown of 1.2200 will spur the pair to reach 1.2260 and 1.2301, while a fall below 1.2140 will push it to 2090 and 1.2040. Read next: According To Analysts, Russia May Collapse Within A Decade, Guaranty Trust Bank Has Fined| FXMAG.COM Relevance up to 08:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331954
French strikes will cause limited economic impact

Macron's Pension Reform Proposal Becomes A Defining Moment In His Presidency

Jakub Novak Jakub Novak 11.01.2023 12:13
Emmanuel Macron unveiled a plan to gradually raise the minimum retirement age in France from 62 to 64 by 2030, drawing the ire of trade unions. They immediately called for strikes in protest against the reform. A defining moment in Macron's second five-year term as president. In a statement, Macron said citizens need to work longer in order to raise the relatively low employment rate of the elderly, as well as prevent a permanent deficit in the public system financed by employee contributions. However, trade union organizations believe that this just unfairly punishes low-skilled workers and people who started working at an early age. They called for a first day of strikes and demonstrations on January 19, saying it is a start. The reform should be a defining moment in Macron's second five-year term as president. If he manages to push through this, he will face the paralyzing upheaval that accompanied, and sometimes crushed, attempts by his predecessors to change labor and retirement laws. But if he backs down, it will undermine his ambition to bring about a business-friendly transformation of the economy in France over a decade. Macron was forced to withdraw his pension reform proposal in 2020 The government plans to introduce a bill in parliament as early as February this year, and Macron may eventually have to use a special constitutional measure to bypass the vote if he cannot persuade some opposition MPs to support it. Recall that Macron was forced to withdraw his pension reform proposal in 2020 after months of demonstrations and strikes. At that time, they had to back down due to the Covid pandemic. This time, the reason to step aside could be the troubled French economy, which is struggling with rising energy prices and high inflation. Public finances are also struggling after huge spending during the pandemic and energy crisis. EUR/USD  So far, this has not affected the markets in any way, but once the unrest starts, it is likely that euro will decline. But for now, it still has a chance of updating the December highs as long as buyers manage to push the quote above 1.0760. That is the only way for EUR/USD to reach 1.0790 and 1.0850. A drop below 1.0720, meanwhile, will bring the pair to 1.0680 or to 1.0650. GBP/USD In GBP/USD, buyers need to stay above 1.2140 to maintain their advantage as the rise is gradually slowing down. The breakdown of 1.2200 will spur the pair to reach 1.2260 and 1.2301, while a fall below 1.2140 will push it to 2090 and 1.2040.   Relevance up to 08:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331956
Analysis Of The Euro To US Dollar Pair Situation - 30.01.2023

The EUR/USD Pair Maintains A Steady Upward Trend, The Aussie Pair Keeps Close To 0.69

Kamila Szypuła Kamila Szypuła 11.01.2023 14:16
Fed Chairman Jerome Powell gave no policy guidance at Tuesday's panel discussion in Stockholm, and with other Fed officials saying their next moves will depend on the data, investors are very focused on the US CPI data. The dollar has weakened sharply in recent months on hopes that U.S. inflation is declining, which, along with some signs of pressure on the U.S. economy, is fueling expectations that the Fed is nearing the end of its rate hike program. In terms of energy, both the UK and the Eurozone have benefited from the fall in oil and gas prices, but with sanctions and price caps tightening on Russia, Russian retaliation could push energy costs up again. USD/JPY The USD/JPY pair is rising today and trading above 132.7500. What's more, the pair keeps its trade above 132.0000 for second day The current term of BoJ Governor Haruhiko Kuroda ends in April, and former Bank of Japan (BoJ) board member Sayuri Shirai has called for a review of the Bank's policies over the past 10 years in light of the changing inflation landscape. Moreover, the generally positive tone in the equity markets is weakening the safe haven of the Japanese yen and providing some support for the USD/JPY pair. In addition, broader risk sentiment will be taken into account for short-term trading opportunities around the USD/JPY pair. Read next: Pietro Beccari Will Be The Louis Vuitton’s CEO, Departures Several Top Executives At Rivian| FXMAG.COM AUD/USD The AUD/USD pair traded above the $0.69 level in the Asian and European sessions. Currently the Aussie pair is below 0.69, trading above 0.6880 at the time of writing The Australian dollar remains high, continuing to push towards the five-month high seen on Monday near 0.6950. Today's retail sales were 1.4% month-on-month in November, well above the forecast of 0.6% and -0.2% previously. The year-on-year figure to the end of November was 7.4%, not the expected 7.2% and 6.9% earlier. The data shows a downward correction in retail sales in early 2021, but an acceleration in November. Today, the monthly CPI for November was also released, with the headline CPI year-on-year printed at 7.4%, above estimates of 7.2% and 6.9% earlier. Markets are currently divided over whether the RBA will deliver another rate hike in February. China changed its Covid-19 policy in December and the reopening of the world's second largest economy could provide further opportunities for Australian exports. Frosty relations between Australia and China appear to be thawing, which could provide additional stimulus to the Australian economy. Source: investing.com EUR/USD The EUR/USD exchange rate maintains a steady upward trend after reaching a 20-year low of 0.9535 in September. EUR/USD regained traction and turned positive during the day near 1.0750. Currently, the pair is trading just below this level (1.0743) European Central Bank (ECB) Governing Council member Mario Centeno said late Tuesday that the current process of interest rate hikes may be coming to an end. As for the inflation outlook, Centeno noted that inflation may encounter some resistance in January and February before starting to decline in March. Nevertheless, these comments had no noticeable impact on the euro's valuation. The hawkish narrative was reinforced by one of the more aggressive officials in Isabel Schnabel, while ECB's Villeroy spoke in today's speech, stating the need for additional rate hikes in the coming months. Given this, higher relative rate hikes could support the strength of the euro over the next few months. Read next: According To Analysts, Russia May Collapse Within A Decade, Guaranty Trust Bank Has Fined| FXMAG.COM GBP/USD GBP/USD extended its downward correction towards 1.2100 during European trading hours on Wednesday. Improving market sentiment seems to be helping GBP/USD to contain losses for now. The Bank of England (BoE) is projected to move slightly slower than other central banks (e.g. ECB), given that the rate hike cycle started much earlier than the ECB. Source: finance.yahoo.com, investing.com, dailyfx.com
Pound Sterling: Short-Term Repricing Complete, But Further Uncertainty Looms

Eurozone Inflation Has Fallen Back Into Single Digits But The ECB’s Message Remains Hawkish

Kenny Fisher Kenny Fisher 11.01.2023 14:44
The euro is drifting on Wednesday, trading at 1.0730. EUR/USD has climbed about 1% this week, and Monday’s high of 1.0760 is its highest level since June 22nd. Can the euro continue to push higher? ECB unlikely to change aggressive stance Eurozone inflation has fallen back into single digits, raising hopes that inflation may have finally peaked. The headline rate slowed to 9.2% in December, down from 10.1% in November and beating the forecast of 9.7%. The slowdown is welcome news for the ECB, but investors shouldn’t count on the central bank becoming dovish and ending its current rate-tightening cycle, even if inflation continues its downturn in the coming months. The drop in headline inflation has been fuelled by energy subsidies by governments in Germany and other eurozone members, as well as lower energy prices. Core inflation rose to 5.2% in December, up from 5.0% in November, which indicates that underlying price pressures remain strong. The ECB is unlikely to ease its pace of hikes until the core rate shows a sustained fall as well as a drop in wage growth. In the meantime, the ECB’s message remains hawkish. ECB President Lagarde said in December that the markets were underestimating how high rates would go and noting that the ECB was likely to continue raising rates in 50-bp increments “for a period of time”. The US releases December CPI on Thursday, and we’ve seen in recent months how inflation reports can move the equity and currency markets. The consensus for headline inflation stands at 6.5%, following the November gain of 7.1%. The core rate is also expected to ease, with a forecast of 5.7% in December, compared to 6.0% in November. In recent months, soft inflation reports have sent the US dollar lower, as the markets have assumed that the Fed will not be able to continue hiking in the face of falling inflation. I would expect a similar reaction if December’s inflation numbers are lower than expected. Read next: The EUR/USD Pair Maintains A Steady Upward Trend, The Aussie Pair Keeps Close To 0.69| FXMAG.COM EUR/USD Technical EUR/USD has support at 1.0711 and 1.0612 There is resistance at 1.0800 and 1.0953 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Metals Market Update: Decline in LME Copper On-Warrant Stocks, Zinc and Lead Surplus Continues, Nickel Market in Supply Surplus

FX: EUR/USD Optimism Continuing To Build, USD/JPY Is Consolidating At The Lows

ING Economics ING Economics 11.01.2023 14:52
FX markets are consolidating ahead of tomorrow's important December US CPI release. But the dollar bias is lower. Business surveys point to a slowing US economy and, if inflation allows, the Fed will be in a position to ease policy later this year. Commodity markets remain bid on the China rebound story and we expect emerging and commodity FX to remain bid USD: Business pessimism builds We highlighted in yesterday's publication that the day presented two event risks to the building dollar negative sentiment. Those were Federal Reserve Chair Jerome Powell's comments at a Riksbank symposium and the US NFIB small business confidence reading. In the end, Chair Powell avoided discussing monetary policy and instead warned against central bank mission creep into climate policy. And the NFIB survey was very pessimistic indeed, including a view on pricing power which ING's US economist, James Knightley, says is consistent with US core inflation dropping to a more comfortable 2-3% year-on-year area by the late summer. That core reading is currently running at 6.0% year-on-year and is expected to drop to 5.7% YoY in tomorrow's December CPI release - the key US release this week. Thus this year's FX market proposition remains whether US inflation can acquiesce enough to allow the Fed to cut later this year. The markets price a 50/60bp hike into the spring, then a cut of a similar magnitude by year-end. A further 150bp of easing is priced into next year. ING's house view is a little more aggressive, looking for 100bp of cuts this year and then a further 150bp next year. Assuming no upside surprises in inflation then and the increasing focus on China firmly supporting domestic demand, the risk environment is being read as positive. We note copper, a key barometer of Chinese demand, climbing back to $9000/MT in Asia today. We think investors will therefore be looking to sell the defensive dollar on rallies as they put money to work in 2023. As always, we think the short end of the US yield curve will play a major role in FX markets and as long as two-year US Treasury yields continue to hover near the range lows at 4.20/4.25%, the dollar will stay on the soft side.  DXY remains soft and we would say the near-term bias remains towards the 102.00 area, unless tomorrow's US CPI release throws a hawkish curveball. The US event calendar looks exceptionally light today, although we will start to see US quarterly earnings releases build through the week. Chris Turner EUR: Options market turns more bullish EUR/USD remains gently bid, buoyed by expectations of a Fed U-turn in the second half of this year, China reopening and a belatedly hawkish European Central Bank. On that subject, we have four ECB speakers today. Market expectations are firmly set on a further 125-150bp of ECB tightening this year - seemingly 50bp hikes in both February and March and a final 25bp in May to take the deposit rate to 3.25%. Our eurozone team agrees with this pricing.  Looking at the FX options market we can see EUR/USD optimism continuing to build. Measures such as the risk reversal - the cost of a 25 delta EUR/USD call option versus a similar EUR/USD put option - continue to move in favour of EUR/USD upside. As recently as October, the markets were prepared to pay 2% extra in volatility terms for a 3-month 25 delta EUR/USD put option. That skew for euro puts has now narrowed to 0.67%. The skew turning positive - in favour of EUR/USD calls - would be a big moment for the FX market. As above, the seemingly benign investment environment (despite the horrors in Ukraine) probably has investors wanting to buy EUR/USD on dips. It is the time of year when FX markets move on fixing flows from the asset management community. Today's EUR/USD bias looks towards resistance at 1.0785 and potentially towards the 1.09 area tomorrow, should the US CPI release oblige. Chris Turner JPY: Lots of focus on the BoJ USD/JPY is consolidating at the lows and the focus very much remains on Bank of Japan (BoJ) policy after December's surprise widening in the 10-year JGB yield target band. 10-year JGB yields continue to press the topside of the new +/- 0.50% band, with the expectation growing that the band will be widened to +/- 1.00% over the coming months. Despite the BoJ marketing these adjustments as a measure to address JGB market functioning, investors are reading this as BoJ tightening - and yen positive. Focus on the exit of the ultra-dovish BoJ governor in April means that investors will be very cautious selling the yen over coming periods. One month realised USD/JPY volatility is still at an incredibly high 16.5% - making the JPY far too volatile for any kind of funding currency - and we think USD/JPY can end the quarter somewhere near 128. Chris Turner CEE: Czech inflation to rise again Yesterday's meeting of the National Bank of Romania (NBR) brought a 25bp rate hike to 7.00%, as expected. Although we consider this to be the last hike in this tightening cycle, we feel that the NBR wants to keep the door open if needed. But probably the most interesting part is the dropping of the "firm liquidity control" commitment. While dovish in essence, we read this more like an after-the-fact acknowledgement rather than any forward guidance. The Romanian leu barely changed yesterday but we still think it should benefit from global factors, catch up with the lag behind the region and make another move below NBR levels. Today, the focus shifts to the Czech Republic. December inflation we think will show a rise from 16.2% to 16.4% year-on-year, above market expectations. However, as we showed earlier, there is still room for upside surprises. Moreover, fuel prices are the main reason for slower inflation than we have been used to, while inflation remains strong in other parts of the CPI. For the market, the higher number should be a reminder that the inflation problem is still with us and this may be the first opportunity this year to reassess the strong dovish expectations built up recently. At the one-year horizon, markets expect a 170bp rate cut, which is hard to believe given the current Czech National Bank rhetoric, the record strong koruna and the inflation profile. However, the koruna is looking the other way and ignoring domestic conditions. More important for it and the entire CEE region at the moment is the global story, the massive improvement in sentiment in European markets and gas prices below EUR70Mwh. This, in our view, should keep the positive sentiment in the region at least for the rest of the week and keep FX steady.                                Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Euro May Attempt To Resume An Upward Movement

The EUR/USD Pair Is Waiting For The US CPI Report

InstaForex Analysis InstaForex Analysis 12.01.2023 08:15
The euro is set to master the target range of 1.0758-1.0787 this morning. According to our main scenario, I expect the formation of the price divergence with the Marlin oscillator and the euro's reversal to a medium-term decline. It is impossible to predict how high the price will still be able to grow in case the CPI falls, but from a purely technical perspective, a reversal can take place even from current levels, which indirectly implies CPI values are higher than forecasts. The forecast for December CPI is 6.5% y/y versus 7.1% y/y in November, while the forecast for the core index is 5.7% y/y versus 6.0% y/y. It is likely that this strong decline in inflation is causing traders to expect them with excessive optimism. The forecast for monthly inflation, or more precisely core CPI for December, is 0.3% versus 0.2% in November, with the overall monthly CPI forecast at 0.0% versus 0.1% a month earlier. In other words, the data could end up disappointing. Albeit not by much, but enough to keep investors from buying counter-dollar currencies. On the four-hour chart, the price and the Marlin oscillator have a structure similar to the formation of a divergence. We have to wait for the US inflation report and make a decision according to the market behavior. The uptrend will break in case the price falls below 1.0660, that is, when it crosses the support of the MACD line.     Relevance up to 03:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332046
The EUR/USD Price May Fall Under 1.0660

The EUR/USD Pair Continues The Upward Movement

Paolo Greco Paolo Greco 12.01.2023 08:46
M5 chart of EUR/USD On Wednesday, EUR/USD continued to move mainly sideways. There was a slight upward bias, but the pair constantly rolled back down, constantly changing the direction of the movement. The US and the EU did not release any reports so traders had nothing to react to, but they still find reasons to buy the euro, though it is very difficult to do so. The pair failed to start a bearish correction normally, unlike the pound, and today, considering the movements of the last weeks, it will be very difficult to predict the market's reaction to the inflation report. It is better to say that with a high probability the market will try to interpret the report in favor of the euro again. If inflation is falling, that's bad for the dollar. If inflation is falling slowly or not at all, it's good for the dollar. Accordingly, inflation should slow down very weakly in December for the market to start buying the dollar. In other cases, the pair's growth is more likely. All of the trading signals of the day were formed near 1.0736 and all of them were not accurate, but what else should we expect from the signals during the flat? Traders could try to use only the first two, but there was not even 15-point movement in the right direction neither in the first, nor in the second case, so both trades could make the loss. Unfortunately, yesterday it was impossible to avoid it. Read next: The EUR/USD Pair Maintains A Steady Upward Trend, The Aussie Pair Keeps Close To 0.69| FXMAG.COM COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 29,300, whereas the number of short positions fell by 13,100. Thus, the net positions decreased by 16,200. The number of long positions is 130,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 44,000 (671,000 vs. 627,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD continues the upward movement, which started last Friday. Yes, it has weakened, but it still continues even without a local correction. It might do the same thing today, if the US inflation data shows a slowdown as expected. On Thursday, the pair may trade at the following levels: 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, 1.0938, 1.1036, as well as Senkou Span B (1.0597) and Kijun-sen (1.0630). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 12, the US will publish its inflation report. Meanwhile, the EU's calendar of events is empty. So everyone will focus on the inflation data. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 05:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332054
Bank of England raised the interest rate, UK unemployment data go out tomorrow

The EUR/USD Pair: A Bearish Reversal Remains A High Probability

Oscar Ton Oscar Ton 12.01.2023 08:56
Technical outlook: EURUSD rose through the 1.0775 high intraday on Thursday as projected earlier, testing the resistance zone. The single currency pair is seen to be trading close to 1.0762 at this point in writing, having eased off a bit from the intraday highs. A bearish reversal remains a high probability from current levels around the 1.0760-1.0800 zone as the bears remain poised to be back in control. EURUSD might have completed its rally, which started from the 0.9535 lows in September 2022. The instrument might have carved a formidable low around 0.9535, which could hold in the next coming months. As prices approach strong resistance around 1.0800, they are expected to at least retrace lower towards the 1.0300-50 zone, which is the initial Fibonacci retracement of the rally between 0.9535 and 1.0775. EURUSD is supported at 1.0481, while resistance comes in around 1.0800 going forward. It is a matter of time before the bears are back in control and it would be interesting to see how prices react closer to the 1.0800 mark. A break below 1.0481 is what traders will be waiting for to initiate fresh short positions as a high would be in place then. Read next: Discussion Of Bank Representatives On Financing The Ecological Transformation | FXMAG.COM Trading idea: Potential bearish turn against 1.0900 Good luck!   Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308312
FX: The SNB Is Getting Its Stronger Swiss Franc Via Gains Against The Dollar

FX: The SNB Is Getting Its Stronger Swiss Franc Via Gains Against The Dollar

ING Economics ING Economics 12.01.2023 09:24
FX markets today see one of the most highly awaited data points of the month - US CPI. The last two soft releases were the foundation for the fourth quarter rally in risk assets and today's release should determine whether this year's rally - and the decline in the dollar - continue. Next week's Bank of Japan meeting is also in focus as is strength in EUR/CHF EUR: Sowing some independent strength The euro showed some independent strength yesterday and had quite a strong rally against European currencies - especially the Swiss franc (see below). Some tried to link that rally to a story that Germany would support fresh EU bond issuance to support state aid in Europe's fight against US green subsidies in its Inflation Reduction Act. That linkage seems a little far-fetched and European peripheral debt barely budged on the story. But we are still seeing eurozone equity outperformance, which must be providing the euro with some good support. For today, the FX options market prices a 90 pip EUR/USD range for the CPI release. Assuming no upside surprises in CPI, the EUR/USD direction of travel looks towards the 1.09 area. 1.0660/1.0700 might well contain any downside today. Chris Turner USD: December CPI to determine whether risk rally continues It has been a relatively good start to the year for risk assets. Global equity indices are up around 3.7%, led by Europe. Bond indices are up a decent 2-3% and emerging market assets are in demand, with EM local currency bond indices up close to 3%. This environment of money being put to work has weighed on the defensive dollar, which is softer against many emerging market currencies and quite a few G10 currencies. This benign environment has been secured partially on the back of soft US price and activity data. Softer US price data has come both in the form of hard data and through surveys. Today sees the release of the December US CPI. Expectations are that the core will be rising at a relatively subdued 0.3% month-on-month pace and 5.7% year-on-year. This compares to 0.6/0.7% MoM readings last summer. As always, there are many moving parts in the data. For example, will medical costs and used car prices continue to drag the number lower? And does it remain too early to expect lower rental prices to drag shelter costs - a big component - down? Recently, the Federal Reserve has been highlighting that it is focused on the core services inflation reading ex-housing. So let us see what that number offers today. ING's US James Knightley is on consensus forecasting the 0.3% MoM/5.7% YoY reading. A number in line with consensus probably allows the risk rally to continue. Expectations of a Fed easing cycle in the second half of the year, China reopening and lower energy prices are all encouraging this reallocation towards risk and should today's CPI number oblige, DXY could make a move towards the 102 area. Any upside surprise in the number could see DXY bounce to the 104.00/104.25 area, but we doubt it would completely spell the end for the better risk/softer dollar environment. Chris Turner JPY: Bank of Japan meetings are all live USD/JPY sold off in early Asia on a local media report that the Bank of Japan could again review its JGB yield target at next week's meeting. The report suggested December's widening of the JGB yield target band might not have been enough to address the BoJ's concerns over bond market functioning. The report also suggested that the BoJ would raise its fiscal 2023 and 2024 inflation ex-food forecast to 2% - effectively signalling the end of its deflation fears. This comes at a time of much focus on a pick-up in wages in Japan and a more sustainable rise in inflation. The FX options market prices a 1.3% range for USD/JPY today, where a benign US data print could send USD/JPY back to this year's low at 129.50. Next week's BoJ meeting means that any upside should be limited to the 132.60/133.00 area. Chris Turner CHF: Wrong We had been forecasting a lower EUR/CHF this year on the view that the Swiss National Bank wanted a stronger nominal Swiss franc to fight inflation. Instead, EUR/CHF yesterday broke above 1.00. There are probably two factors driving the move. The first is that USD/CHF is a lot lower, meaning that the SNB is getting its stronger Swiss franc via gains against the dollar and does not need it a lot stronger against the euro. The second is that the hawkish European Central Bank and the further 125bp of tightening expected will out-tighten the SNB. Given that it looks like the dollar will stay offered for the time being and the ECB looks unlikely to relent on its hawkishness, this trend to a higher EUR/CHF may remain in place. However, we doubt the SNB would want to see a big rally this early and the move may stall in the 1.0070/1.0100 area. We had thought EUR/CHF could trade to 0.95 this summer, but it looks like we will have to revise up those forecasts. Chris Turner  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
All Eyes On Capitol Hill, Jerome Powell Will Appear Before The Senate Banking Committee

The Fed Will Most Likely Be More Deliberate In Its Decisions

Jakub Novak Jakub Novak 12.01.2023 10:29
While market players await the crucial inflation data from last year, which could trigger another rally, three leading Chicago Fed economists said the Fed will raise rates by one more percentage point before announcing that it has reached the ceiling so it will end the monetary policy tightening. Randall Kroszner Economists predict that rates will peak around 5.5% and stay there for a long time, keeping prices of everything from food to fuel in check. "I do think the Fed is going to keep rates at the highs for a while," said Randall Kroszner, a former Fed governor. "Even if inflation falls by 200 basis points over the year, or maybe even 300 basis points, the Fed will still keep rates at 5.5%," he added. Inflation  Inflation jumped to a 40-year high last year as global demand for goods and services recovered. Although prices have fallen since then, they are still well above the Fed's 2% target, making the bank realize that they missed the appropriate time they should have started to raise rates. Of course, if no more problems arise in the market and if the situation remains stable, economic recession will still be avoided. Interest rates Fed officials increased interest rates to 4.3% last month and forecasted that it will reach 5.1% this year. This is entirely different from the path they took back in the 1970s, when inflation began to slow. It was probably because the decision before was a fatal mistake as prices began to rise sharply again, leading to a crisis in the economy. Read next: Pietro Beccari Will Be The Louis Vuitton’s CEO, Departures Several Top Executives At Rivian| FXMAG.COM The Fed has not lost confidence in the markets Although today's data may indicate that inflation remains under control, the Fed will most likely be more deliberate in its decisions. At least, that is what many market participants are hoping for. But many experts say there is a vast difference between the late 1970s, early 1980s and today as it is obvious that the Fed has not lost confidence in the markets. If events unfold in this way, a rate hike will probably lead to a mild recession later this year, but it will only be short-lived. EUR/USD In terms of the forex market, there are still chances of hitting new monthly highs in EUR/USD as long as buyers manage to push euro to 1.0760. That will spur the pair to rise above 1.0790 and reach 1.0850. But if pressure returns and sellers get ahold of 1.0760, euro will collapse to 1.0720 and head to 1.0680 or as low as 1.0650. GBP/USD In GBP/USD, the rally is gradually slowing down, which means that buyers need to stay above 1.2120 in order to maintain their advantage. Only the breakdown of 1.2180 will push pound to 1.2240 and 1.2300 as a return of pressure around 1.2120 is likely to result in a collapse to 1.2060 and 1.2010.   Relevance up to 08:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332086
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

The Members Of The European Central Bank Remain Hawkish So The ECB Will Raise Rates At The February Meeting By 50 Points

InstaForex Analysis InstaForex Analysis 12.01.2023 10:50
The European Central Bank continues to demonstrate a hawkish attitude amid contradictory data on inflation growth in the eurozone. Last week, a report on the growth of the consumer price index was published. The overall CPI was in the red zone, falling to 9.2% (with a forecast decline to 9.6%). While core inflation, excluding volatile energy and food prices, on the contrary, continued to gain momentum, rising to a record 5.2%. Energy prices  The structure of the report suggests that the growth of energy prices slowed down in December to almost 26%. While food, alcohol and tobacco rose in price by almost 14%, services increased in price by 4.4%, and industrial goods by 6.4% (in November – by 6.1%). This suggests that the decline in overall inflation is due to warm weather in the European region: the purchase price of gas in European countries in December was almost five times lower than in August. The cheapening of the blue fuel had an impact on electricity prices, as many European power plants produce electricity using gas. In particular, in France, the purchase price of electricity at the end of August exceeded €1,000 per megawatt-hour, and at the end of last month it dropped to €240. Germany also contributed to the slowdown in overall inflation: last month, German government provided a one-time compensation for electricity bills. The slowdown in the overall CPI In other words, the slowdown in the overall CPI was not due to the ECB but Mother Nature, which spoils the European region this year with warm days. The growth of the core consumer price index indicates that the problem of high inflation has not only not been resolved, but is getting worse. The ECB Hawkishness Representatives of the European Central Bank understand this very well, and therefore do not lower the degree of intensity in their rhetoric. Moreover, members of the ECB have been sounding clear hawkish signals lately. For example, Latvian central bank governor Martins Kazaks said that he expects a "significant" rate increase at the February and March meetings, after which the steps could become "less as necessary." We are talking about two 50-point rate hikes. The ECB could then slow the pace of monetary tightening to 25 bps. Isabel Schnabel ECB Governing Council member Isabel Schnabel also called for further rate hikes this week, as "inflation will not subside on its own." In turn, Austrian central bank chief Robert Holzmann said there are no signs of weakening market expectations regarding inflation at the moment. However, he added that rates would need to "raise significantly to reach levels sufficiently restrictive to ensure that inflation returns to the target level." His colleague, Bank of Finland Governor Olli Rehn, made a similar statement yesterday, saying that rates should be raised significantly "in the next couple of meetings" to keep inflation in check. The ECB will raise rates As you can see, the members of the European Central Bank remain hawkish, at least in the context of the next two meetings. However, they prefer not to specify where the final point of the current cycle of tightening monetary policy is. For example, French central bank chief Francois Villeroy de Galhau said last week that it was desirable to peak interest rates by summer, "but it's too early to say at what level." At the same time, he stressed that rates will remain at the peak level "for as long as necessary." Thus, now we can say with confidence that the ECB will raise rates at the February meeting by 50 points and very likely by the same amount at the March meeting. This scenario is the base case despite a slowdown in overall inflation in the euro area. EUR/USD Meanwhile, the prospect of a 50-point Fed rate hike at the February meeting is highly questionable. For now, the CME FedWatch Tool says there is a 74 percent chance of a 25 basis point rate hike next month. If today's U.S. inflation report comes out at least at the predicted level (not to mention the red zone), the probability of the 25-point scenario will increase to 80%–90%. In this case, the difference in interest rates between the U.S. and Europe will continue to shrink, and this circumstance will provide background support to the euro. However, this fundamental factor will play on the side of the euro even before the actual implementation—the hawkish attitude of the ECB against the background of slowing inflation in the United States will allow buyers of EUR/USD to organize another offensive upward, to the borders of the 8th figure. Technically, the pair is currently testing the upper line of the Bollinger Bands indicator on the daily chart, which corresponds to 1.0750. Overcoming this target will open the way not only to the next price barrier at 1.0800, but also to the main resistance level at 1.0930 (the upper line of the Bollinger Bands indicator, coinciding with the upper boundary of the Kumo cloud on the W1 timeframe). A slowdown in U.S. inflation, a softening of the Fed's rhetoric, and an increase in the hawkish mood of the ECB will create the necessary information background for the implementation of the upward scenario.   Relevance up to 09:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332090
The USD/JPY Price Seems To Be Optimistic

The USD/JPY Pair Drop To 130, The Aussie Pair Keeps Trading Above 0.69$

Kamila Szypuła Kamila Szypuła 12.01.2023 14:22
Financial markets started Thursday with optimism putting some pressure on the US dollar, although activity remained subdued ahead of the release of the US Consumer Price Index (CPI). Traders, meanwhile, seem reluctant to place aggressive bets and prefer to wait for the release of US consumer inflation data on Thursday. The headline CPI is expected to rise by 6.5% in the 12 months to December, much better than previously at 7.1%, and further decline from a multi-year high of 9.1% recorded in June. Investors will pay particular attention to the underlying reading, which excludes fluctuations in food and energy prices. Core inflation peaked at 6.6% y/y in September, falling to 6% in November. A key US CPI report should clarify whether the Fed will need to raise its interest rate target above 5% to curb stubbornly high inflation. December inflation data from the US may significantly affect the valuation of the US dollar. Apart from inflation data, the US will publish preliminary jobless claims data for the week. USD/JPY The yen gained ground on Thursday amid expectations that the Bank of Japan will review the side effects of monetary easing. Due to the strengthening of the yen, USD/JPY fell to the level of 130.7030. Overall, the yen also indirectly benefited from the more dovish move markets are pricing in for the Federal Reserve. Markets are clearly pricing in a Fed turnaround that will come early after weaker US economic data earlier this month. The upcoming BOJ meeting, expectations of an upward revision of the bank's inflation forecast, and the imminent announcement of a new BOJ chairman are also likely to fuel expectations for a change in policy. Read next: The New Disney Drama: Disney Is Opposing Activist-Investor Nelson Peltz| FXMAG.COM EUR/USD The EUR/USD daily chart has seen an impressive series of green candles this year, extending its rally from deep below par that started in September 2022. EUR/USD keeps trading above 1.0750. On the “EUR” side, further interest rate hikes from the European Central Bank are expected. The bottom line is that expectations for future interest rate support will continue to favor the euro. GBP/USD The GBP/USD Pair lost the momentum of its rebound and dropped below 1.2150 ahead of Thursday's US session amid cautious market sentiment. The short-term technical outlook suggests that GBP/USD's bullish bias remains intact. What's more, the pound fell to its lowest level since late September on Wednesday as the rising euro hit a seven-month high amid hawkish messages from European Central Bank officials. AUD/USD In the Asian session, the pair traded above 0.69, only in the European session did it drop below this level. Currently, the pair of the Australian has regained strength and again trades above $0.6910 The Australian and New Zealand dollars rose on Thursday as markets assumed incoming US data would confirm a cooling in inflation, while Australia boasted a surprisingly large trade surplus amid falling imports. Local data showed how Australia continued to benefit from being a net exporter of resources when commodity prices were still relatively high. The country's trade surplus rose to A$13.2bn ($9.13bn) in November, well above forecasts. Source: dailyfx.com, finance.yahoo.com, investing.com
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

All Eyes On US Inflation Data!, Bitcoin Rebounds

Swissquote Bank Swissquote Bank 12.01.2023 14:29
Today is the most important day of the trading week, in terms of economic data release, as the US will reveal its latest CPI update, and it could be a make-or-break moment for the market sentiment. Consumer price inflation  Consumer price inflation in the US probably eased to 6.5%, from 7.1% printed a month earlier. Core inflation fell to 6% at last release, from a peak of 6.6% printed for October, and is expected to fall further to 5.7% y-o-y.US equities extended gains yesterday, on hope that softening inflation will further boost the Fed doves. Today’s US inflation data will help move things, to one side or the other. But keep in mind that there is room for decent hawkish pricing given that the money markets still price that the US interest rates will top around 4.9%, while the Fed officials are struggling to convince investors that they will go above 5%. Watch the full episode to find out more! 0:00 Intro 0:26 All eyes on US inflation data! 3:27 Why inflation may not ease smoothly this year? 5:51 Some bank analysts see EURUSD at 1.15 7:01 Short sterling? 7:51 Bitcoin rebounds as FTX finds $5bn to repay customers 8:36 Why bonds are better alternative for dovish Fed bets? Read next: The USD/JPY Pair Drop To 130, The Aussie Pair Keeps Trading Above 0.69$| FXMAG.COM Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #CPI #inflation #Fed #China #expectations #USD #EUR #GBP #JPY #crude #oil #copper #Bitcoin #FTX #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      
The Euro May Gradually Climb To The Target Level

The EUR/USD Pair Is Expected To Move Upside

InstaForex Analysis InstaForex Analysis 13.01.2023 08:10
Yesterday's US inflation data came out as forecasted. Despite a 0.3% y/y rise in the monthly core CPI, the index declined to 5.7% from the previous 6.0% y/y and the CPI was 6.5% y/y against the previous 7.1% y/y. The S&P 500 stock index was up 0.34%, the VIX volatility index, otherwise known as the risk index, was down 10.72%, and the yield on 5-year US government bonds fell from 3.66% to 3.53%. All this lifted the euro by more than 90 points so it is able to continue the upward movement. The target level is 1.0990, which is the Fibonacci reaction level (not the standard one) of 314% from the August 28-October 4 movement. Read next: The USD/JPY Pair Drop To 130, The Aussie Pair Keeps Trading Above 0.69$| FXMAG.COM There could also be a subsequent market reversal to a medium-term trend below parity, perhaps a reversal divergence will start to form from 1.0990. But for the time being, I expect EUR to rise until it grows tired of doing so. On the four-hour chart, a weak divergence is formed, which is a sign of forthcoming consolidation. Upon completion of the consolidation, I expect the pair to continue rising. The general trend on this chart is an uptrend.   Relevance up to 03:00 2023-01-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332184
Bank Indonesia Maintains Unchanged Rates Amidst Inflation Stability and IDR Pressure

The US Data Did Not Work Against The Dollar In All Cases

Paolo Greco Paolo Greco 13.01.2023 08:27
M5 chart of EUR/USD On Thursday, EUR/USD continued to move mainly sideways until the US inflation report was released. We learned that the inflation rate fell again in December, to 6.5% on an annual basis. Just as I mentioned: the stronger and faster inflation falls, the more likely it is that the dollar will fall as well. The logic is simple: the Federal Reserve has less and less reason to continue raising rates at all. Thus, yesterday was quite logical in terms of the pair's movements. But it does not mean that the euro was growing logically and reasonably a few weeks before that. Remember that during the last several months we did not even witness a proper correction. It cannot rise for months just because of one factor, right? But on the other hand, expecting the euro to fall is a fundamental hypothesis. If it is not confirmed by concrete technical signals, you should not work it out. All of Thursday's trading signals were formed after the release of the inflation data. That is the time when the price began to "fly" in all directions. In fact, the only strong and clear signal was the rebound from 1.0736, but it was very difficult to enter the market. The last buy signal around 1.0806 was produced when the market calmed down more or less, but at the same time, it was too late. The best option was not to enter the market yesterday. Read next: GM, Ford, Google And Solar Producers Would Work Together To Set Standards For Increasing The Use Of VPPs| FXMAG.COM COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 29,300, whereas the number of short positions fell by 13,100. Thus, the net positions decreased by 16,200. The number of long positions is 130,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 44,000 (671,000 vs. 627,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD continues the upward movement, which started last Friday. The movement is a consequence of the US data, which did not work against the dollar in all cases. But the market interpreted all the reports in favor of the euro, so we see a continuous upward movement. On Friday, the pair may trade at the following levels: 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, 1.0938, 1.1036, as well as the Senkou Spahn B (1.0597) and Kijun Sen (1.0630). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 13, only the Consumer Sentiment Index will be released in the US and Industrial Production in the EU. Not the most important reports at this time. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate       Relevance up to 05:00 2023-01-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332192
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

FX: Weekend Profit-Taking May Pose The Biggest Risk To The EUR/USD Pair

ING Economics ING Economics 13.01.2023 10:06
An on-consensus US December CPI release has allowed the FX markets to revert back to the main event – a potential sea-change in Bank of Japan (BoJ) policy and perhaps plenty of downside in USD/JPY. That is the hottest story in town right now. Soft US consumer sentiment and softening inflation expectations should also keep the dollar bias bearish today Looking at the FX options market, USD/JPY remains the stand-out interest USD: Slip sliding away An on-consensus US CPI release yesterday did not interrupt this year’s narrative of the US Federal Reserve being able to cut rates later in the year and the dollar being able to fall. As our US economist James Knightley wrote in his review of the release, it seems that it is mainly the shelter component holding the core month-on-month reading up here and shelter should start to come sharply lower in the second quarter. Consensus is now behind consecutive 25bp Fed hikes in February and March, followed by a Fed turning dovish over the summer and starting to deliver rate cuts later in the third quarter. The Fed taking rates back towards less restrictive territory remains a tailwind to risk assets – especially to emerging risk assets buoyed by China rebound expectations. Fund flow data show good momentum in Chinese equity ETFs, which is normally very supportive of the renminbi. It is a quiet day for US data, and a soft University of Michigan consumer sentiment plus declining inflation expectations can keep the dollar on the back foot. With USD/JPY expected to stay under pressure into next Wednesday’s Bank of Japan meeting, the DXY can stay biased to the 102.00 area near term. Chris Turner EUR: ECB will be happy with the stronger euro The ECB’s trade-weighted euro has now returned to levels seen last February. And actually, the year-on-year change in EUR/USD is now mildly positive. This will be welcome news to the ECB, where last summer’s 6% YoY EUR/USD decline was contributing to the inflation problem. With short-dated (two-year) USD swaps drifting to new lows for the move, EUR/USD swap differentials continue to move in favour of EUR/USD. And this is a theme which we suspect will play a greater role in EUR/USD pricing over the next 12 months. For today, the eurozone data calendar sees the release of November industrial production and the trade balance. We will also find out how much European banks have repaid of their targeted longer-term refinancing operations (TLTROs) drawings in January. The expectation is around €200bn, with the range being around €50bn-450bn. Any higher-than-expected repayment might be positive for two reasons: i) it would reduce excess euro liquidity and would be supportive of eurozone rates and ii) it might be seen as a sign of confidence as precautionary borrowing is paid back. Let’s see. EUR/USD remains on course for 1.0900 and possibly 1.0950. Weekend profit-taking may pose the biggest risk to EUR/USD, but 1.0750 should now be a good near-term base. Chris Turner JPY: Off to the races Looking at the FX options market, USD/JPY remains the stand-out interest. One-week implied volatility remains at a very high 20% and volatility for the Bank of Japan (BoJ) meeting next Wednesday is priced as high as 40% or a near 1.7% move in spot USD/JPY. As events showed yesterday with the 2% USD/JPY fall, even at these levels the FX options market may still be under-pricing volatility. This huge interest in USD/JPY is understandable. The BoJ may be on the verge of its biggest policy change in decades. Even short-dated JPY Interest Rate Swaps have started to move and are at the highest levels (near 30bp) since 2008! Clearly, USD/JPY has come a long way very fast, but some of the longer-term skews in the FX options market point to a structural shift in the market’s view in USD/JPY. We suspect few will want to stand in the way of the USD/JPY downside. 126.50 looks like the clear near-term target for USD/JPY. Chris Turner CEE: Higher EUR/USD is a small boost for region All the important numbers have already been published this morning. Romania's December inflation fell from 16.8% to 16.4% YoY, more or less in line with market expectations. In Hungary, on the other hand, inflation rose from 22.5% to 24.8 % YoY, less than the market expected. Later today, we will see the final December inflation number in Poland, which surprised in a flash estimate to the downside to 16.6% YoY. We'll also have some secondary data such as the current account in Poland, Czech Republic and Romania, and today, after the end of trading, Fitch will publish a rating review of Poland. The country is currently rated A- with a stable outlook and we do not expect any changes today. Also in Poland, the lower house of parliament will vote on a bill that should help unlock EU money and get access to €35.4bn. On the FX market, we found the CEE currencies almost unchanged after yesterday's US inflation number. However, higher EUR/USD today will give them a chance to erase this week's losses. But still, it shouldn't change much in the picture of a flat week. For the Polish zloty we see a return below 4.680 EUR/PLN and for the Czech koruna levels below 24.00 EUR/CZK. Hungarian inflation numbers should be good news for forint and we can go back below 396 EUR/HUF. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The USD/JPY Price Seems To Be Optimistic

USD/JPY Ended The Week Below 128, GBP/USD Managed To End The Week Above 1.22

Kamila Szypuła Kamila Szypuła 14.01.2023 20:01
The data from the US revealed that the Consumer Price Index declined by 0.1% on a monthly basis in December. The Core CPI, which strips volatile energy and food prices, was up 0.3% in the same period. Finally, annual Core CPI arrived at 5.7%, down from 6% in November, as expected. Although the US Dollar struggled to find direction with the initial reaction to the US inflation report, dovish comments from Fed officials triggered a sharp decline in the US T-bond yields and weighed heavily on the currency. Atlanta Federal Reserve Bank President Raphael Bostic said that he was comfortable with a 25 basis points (bps) increase at the next meeting. On the same note, Philadelphia Fed President Patrick Harker noted that it was time for future Fed rate hikes to shift to 25 bps increments. Dovish comments from Fed officials, however, made sure that investors continued to move away from the US Dollar. The latest Michigan Consumer Sentiment report showed consumer sentiment remaining low. Year-ahead inflation expectations fell to 4% from 4.4% while the five-year reading nudged a touch higher to 3% from 2.9% in December. USD/JPY USD/JPY started the week trading at 130.8020. Over the next days, trading was in the range of 131.50-132.50. The USD/JPY pair reached its highest level on Wednesday, a record high was set at 132.8370. After that, the pair began to fall below 130. The pair recorded a low just before the end of the trading week at 127.53, and ended the week just above the weekly low of 127.8340. The Japanese Yen ended last week on the front foot from both USD weakness driven by softening inflation in the U.S. as well as market hopefulness around a more aggressive Bank of Japan (BoJ). A change from the current ultra-loose monetary policy due to elevated inflationary pressures could be something that can take place next week. The Bank of Japan meets on January 18. EUR/USD For the EUR/USD pair, this week was in an uptrend. The pair started the week at 1.0669. And around 1.0660 it recorded its lowest weekly level. In the following days it was growing, exceeding the level of 1.07. On Thursday, the EUR/USD pair crossed the threshold of 1.08 and above this level reached the weekly maximum - 1.0870. The trade for the pair ended above 1.08 at 1.0828. European Central Bank (ECB) policymaker Martins Kazaks said there was no reason for markets to be betting on an interest rate cut. While the Fed is now widely expected to ease further policy tightening, ECB policymakers are scrambling to ensure markets understand their commitment to the hawkish outlook. GBP/USD The cable pair started the week at 1.2114 and finished much higher at 1.2234. GBP/USD traded the low for the week at 1.2097. The record high level in the week was reached by the pair at the level of 1.2242. GBP/USD has benefited from the broad-based selling pressure surrounding the US Dollar and reached its highest level since December 15 at 1.2250. The pair's near-term technical outlook suggests that the bullish stays intact. Gross Domestic Product Growth was 0.1% when the markets had been looking for a 0.2% contraction. However, as manufacturing and industrial production missed expectations. Interest rate support for sterling is likely to remain fitful as the economic numbers trickle out. Continued poor labor relations and the prospect of recession, possibly accompanied by a degree of ‘stagflation’ will keep the Pound a nervous bullish bet. AUD/USD The Australian pair started the week at 0.6901. In the following days, trading was in the range of 0.6865-0.6950. The lower border of the range was also the weekly low of the AUD/USD pair. The Aussie Pair's weekly peak traded close to the 0.70-0.6984 level. The pair finished trading near 0.70 at 0.6980 Source: finance.yahoo.com, investing.com
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

The Price Of EUR/USD Pair Turned Up From The Upper Limit

InstaForex Analysis InstaForex Analysis 16.01.2023 08:07
On Friday, the euro settled above the target range of 1.0758/87. Now, with the support of the Marlin oscillator, it is rising in the green zone, the price moves to the target level of 1.0990 - to the Fibonacci reaction level of 314.0% from the first growth branch on September 28-October 4. From this level, we expect a renewed divergence to form and the price to reverse into a medium-term decline. On the four-hour chart, the price turned up from the upper limit of the range (1.0787), showing the strength against the earlier convergence. Perhaps the market is preparing for a double convergence at 1.0870, where it could settle before rising further. Consolidation could be based on today's US holiday.   Relevance up to 03:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332319
The Outlook Of EUR/USD Pair For Long And Short Position

The Outlook Of EUR/USD Pair For Long And Short Position

Jakub Novak Jakub Novak 16.01.2023 08:11
Friday's lack of statistics limited the upside potential of EUR/USD, but did not change the bullish dynamics of markets. Apparently, buyers are firm on continuing the upward movement of euro, and good economic statistics are what they are waiting for. Today, Germany is set to release data on its import prices, which is likely to lead to a surge in volatility. Meanwhile, in the US, citizens are celebrating Martin Luther King Day, so trading volume will be low, which will limit the further upside potential of the pair. For long positions: Buy euro when the quote reaches 1.0877 (green line on the chart) and take profit at the price of 1.0957. There is a chance for growth today as there is positive market sentiment. But before buying, make sure that the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0818, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0877 and 1.0957. For short positions: Sell euro when the quote reaches 1.0818 (red line on the chart) and take profit at the price of 1.00738. Pressure will return if the attempt to consolidate at weekly highs fails. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0877, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0818 and 1.0738. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 06:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332337
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

Analysis Of The Price Movements Of The EUR/USD Currency Pair

InstaForex Analysis InstaForex Analysis 16.01.2023 08:20
If we pay attention to the price movements of the major EUR/USD currency pairs on the daily chart, we can see the following facts: 1. The price movement is moving in a channel that is going up (bullish). 2 The price is above its Moving Average. Based on the two facts above, it seems that in the next few days Fiber will try to test the 1.1082 level but with the appearance of deviations between price movements and the Awesome Oscillator indicator this major currency pair also has the potential to be corrected downwards if it turns out to be on its way to the target level that has been set. mentioned above exceeds 1.0639 and if this level is successfully broken down then Fiber has the potential to be halted by its upward movement for the next few days. Relevance up to 06:00 2023-01-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/117629
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

EUR/USD Pair: The Probability Remains High For A Meaningful Pullback

Oscar Ton Oscar Ton 16.01.2023 08:26
Technical outlook: EURUSD pushed marginally higher through the 1.0874 high during the early hours of trade on Monday. The single currency pair has eased off thereafter and is seen to be trading close to 1.0855 at this point in writing. Major resistance at 1.0786 was taken out over the last week and the probability remains high for a meaningful pullback to get underway soon. EURUSD seems to have either completed its rally, which began from the 0.9535 low in September 2022 or is close to completing it. A potential evening star candlestick pattern could appear on the daily chart as seen here. A daily close below 1.0780 will confirm the bearish signal and initiate a meaningful pullback going forward. EURUSD remains well supported at the 1.0481 low as seen on the daily chart. A break there will further confirm that the bears are back in control and drag lower towards the 1.0350-70 zone at least. Also, note that potential remains for a drop until 1.0050 which is the Fibonacci 0.618 retracement of the entire rally between 0.9535 and 1.0874 respectively. Read next:The UK Economy Expects A Slightly Fall In Inflation, Expected To Fall By 0.1%| FXMAG.COM Trading idea: Potential drop against 1.0900 to resume soon. Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308681
The EUR/USD Pair Has A Potential For The Breakout Mode

EUR/USD Pair: The Euro Can Continue To Rise

Paolo Greco Paolo Greco 16.01.2023 08:30
M5 chart of EUR/USD On Friday, EUR/USD corrected to the critical line, bounced from it perfectly, and then resumed the upward movement. The euro grew, though volatility often drops on Mondays, and trend movements are rare at the Asian trading sessions. But as we can see, the market is still set to buy the pair, so there are no sell signals, and the uptrend is unquestionable. On Friday, the EU released a report on industrial production, which can hardly be considered as important. The index rose by 1% as of the end of November, but market participants preferred to ignore it. And why should the euro need any help now, if it is constantly growing? The report on consumer sentiment from the University of Michigan was published in the US in the afternoon, which rose by as much as 5 points, but the dollar got no support from the market. Thus, the picture of the current situation has not changed at all. Friday's trading signals were very bad. If there was an intraday trending movement at the European trading session, then there was none of the kind at the US session (when all the signals were formed). The signals were formed near 1.0806, and traders could try to use only the first two. In both cases, the price was able to pass in the right direction by more than 15 points, so Stop Loss at breakeven should have been set on both trades. Consequently, neither profit nor loss was made on Friday, which is not too bad, given the nature of the movement. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, the number of long positions held by non-commercial traders increased by 16,000, whereas the number of short positions rose by 11,000. Thus, the net positions increased by 5,000. The number of long positions is 135,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 48,000 (702,000 vs. 655,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD continues the upward movement, which started last Friday. The rebound from the Kijun-Sen line has preserved the uptrend, so the euro can continue to rise, even despite the lack of fundamental and macroeconomic background on Monday. The market only sees the euro. On Monday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0938, 1.1036, 1.1137 as well as the Senkou Span B (1.0622) and Kijun-Sen (1.0794). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are no important events or reports scheduled for January 16 in the US and EU. So there will be nothing for traders to react to, but the euro can continue to rise in the current circumstances. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group. Relevance up to 05:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332333
Decarbonizing Steel: Contrasting Coal-based and Hydrogen-based Production Methods

Forex: CEE FX Will Be Driven Mainly By The Global Story, The Polish Zloty (PLN) Should See Slightly Stronger Levels

ING Economics ING Economics 16.01.2023 09:02
FX markets open the week on a quiet footing, but with core 2023 trends intact. Emerging market currencies remain bid on the China reopening story, plus the Japanese yen remains very much in demand ahead of Wednesday's BoJ decision. Softer China data this week will test the conviction of renminbi bulls, plus UK inflation and labour data will be key for GBP USD: Dollar to remain gently offered The week starts with DXY bouncing from a marginal new low at 101.80 in Asia overnight. Today marks a partial US market holiday to respect Martin Luther King day and could mean that trading conditions, which seemed quite illiquid last week, remain so. The US data calendar is relatively light this week but as our US economist, James Knightley, writes in our economic preview, retail sales, industrial production and existing home sales should all fall on the soft side. In theory, then, this should not impact too much the market expectations of two 25bp Federal Reserve hikes in February and March, both of which are expected to be reversed by year-end. The benign Fed story and the China reopening trade have kept emerging market currencies on the front foot. What seems a conviction call in the market now is that the dollar has turned, pressure to defend emerging market currencies with rate hikes has reversed and 2023 will mark the virtuous cycle of flows into emerging markets, currency gains, rate cuts and local currency bond markets performing well. Indeed, one of the benchmark EM local currency bond market indices is already up 4.2% this year and has retraced more than two-thirds of last year's decline. The further success of this story clearly relies both on a benign Fed and more positive news on China. On the issue of China, we are now starting to see local authorities admitting the rising death toll after abandoning the zero-Covid policy last November. Clearly, any renewed shut-down would dent this year's optimism. Equally, tomorrow sees the release of China's fourth-quarter GDP data, which is expected to have contracted on the quarter with an exceptionally low reading of 1.5% year-on-year. We presume that investors are looking through the fourth quarter and probably through the first quarter Chinese data and are positioning for the reopening benefits to appear from the second quarter onwards. So let's see how long Asian FX positioning copes with some softer Chinese data tomorrow. Also very much in focus this week is the Bank of Japan (BoJ) meeting on Wednesday. Further adjustments to its JGB targets are in focus and investors are positioning for this with higher longer-dated swap rates. 10-year Japanese swap rates have pushed another 5bp higher overnight to the highest levels in a decade. We suspect USD/JPY can trade down to 126.50 before Wednesday. The factors that have pressured DXY below 102 remain in place, but DXY may find support in the 101.30/50 region this week. Chris Turner EUR: 1.0900/1.0950 may be best EUR/USD levels of the week EUR/USD continues to trade comfortably above 1.09. The focus in Europe this week may be some key speakers at the World Economic Forum in Davos, where European Central Bank President Christine Lagarde speaks on Friday. We will also see some German data in final CPI and the ZEW investor expectations survey - which is expected to have improved. As above, EUR/USD will probably be driven by events in Asia this week. However, we suspect that 1.0900/1.0950 levels may be the best of the week.  Elsewhere this week we have a Norges Bank policy meeting. A final 25bp rate hike is expected to 3.00%. The oil market remains bid on the back of the foreseen pick-up in Chinese demand. And with investors taking a glass-half-full approach to risk assets this year, the EUR/NOK bias is probably lower this week. Chris Turner GBP: UK data will be key this week Sterling has taken rather a back seat so far this year. However, the UK data calendar picks up in the form of both labour market data and December CPI this week. Last week had seen the conviction of a further 100bp hiking cycle from the Bank of England (BoE) start to soften. 95bp of tightening is now priced in by August this year. It is not clear that this week's data will add to those softer expectations - wages and inflation could remain high- but we do see those BoE tightening expectations coming under pressure over coming months. That could see EUR/GBP continue to nudge up towards 0.89, which is our target for the end of this first quarter. Chris Turner CEE: Light calendar means stronger FX This week we are looking at a lighter calendar in the CEE region with rather secondary data prints. Today, we will see the release of the Czech Republic's PPI, Poland's state budget result for last year, and Poland's core inflation for December. The core CPI rose from 11.4% to 11.7% YoY, according to our estimates, despite a drop in the headline number. Romania's industrial production for November will be released on Wednesday. On Friday, we will see data from the Polish labour market, and after the close of trading Fitch will publish a rating review of Hungary. Given the drop in gas prices and the compromise found between the Hungarian government and the European Commission, we do not expect any changes. On the political front, we will follow the EU story and the government's efforts to unlock access to EU funds. Last week the lower house passed a law on judicial reform and now it is the turn of the opposition-controlled Senate. On the FX market, given the lack of regional momentum, CEE FX will be driven mainly by the global story. In general, we expect higher EUR/USD and good sentiment in Europe to keep CEE supported. Moreover, gas prices are testing lower levels again, which could be positive for the Czech koruna and Hungarian forint. In addition, the forint should still benefit from lower-than-expected inflation and could test lower levels below 394 EUR/HUF this week. On the other hand, we think the koruna has the strongest long positioning in the region at the moment and further gains will be difficult. Thus, we expect levels around 24.00 EUR/CZK for this week. The Polish zloty, which has lagged behind the region so far, should also see slightly stronger levels and could benefit from the regional optimism and move a bit lower below to 4.68 EUR/PLN. Frantisek Taborsky  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

The EUR/USD Pair Is Expected The Upside Movement

Peter Jacimovic Peter Jacimovic 16.01.2023 09:52
Technical analysis: EUR/USD has been trading downside this morning and I found the test of the key support zone at the price of 1.0800. I see potential for the upside movement. Trading recommendation: Due to the intraday oversold condition and the test of the key support zone, I see potential for the upside rotation towards upper reference at 1.0870. Watch for potential buying opportunities with the upside objective at 1.0870 Stochastic oscillator is showing oversold condition and potential for the upside rotation. Key support is set at the price of 1.0800 Read next: The Swedish Real Estate Market Will See Significant Price Drops| FXMAG.COM Relevance up to 09:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308717
The USD/JPY Price Reversed From The Lower Limit

USD/JPY Pair Is Trading Above 128 Again, The Testimony Of Bank Of England Governor Andrew Bailey May Have Affect On The Pound (GBP/USD)

Kamila Szypuła Kamila Szypuła 16.01.2023 12:52
The dollar started the week on the back foot to a seven-month low against a basket of major competitors in Asian trading, with the yen in particular, as investors increased bets that the Bank of Japan would further improve its yield control policy. USD/JPY Year-on-year PPI by the end of December amounted to 10.2%, above the previous forecasts of 9.5% and 9.7%. The month-on-month figure for December was 0.5%, above 0.3% expected and 0.8% earlier. The data revealed upward revisions. From a macro perspective, the soaring PPI is problematic for corporate Japan, with companies facing a dilemma related to rising production costs. The upcoming central bank meeting, expectations of an upward revision of the bank's inflation forecast, and the imminent announcement of a new BOJ chairman are also likely to fuel expectations for a policy change. A generally positive tone around the equity markets undermines the safe-haven Japanese Yen and lends some support to the USD/JPY pair. Now the pair is above 128.20. Source: investing.com Source: finance.yahoo.com AUD/USD The AUD/USD pair started the new week on a positive note and climbed to its highest level since mid-August during the Asian session, surpassing the 0.70 level. Unfortunately, the Australian pair failed to hold above 0.70 and is now trading above 0.6970. Iron ore, Australia's main export, fell slightly on Monday but remains well above its low of last October. Tomorrow, China's GDP data will be watched closely for clues on the health of the world's second-largest economy. Higher commodity prices and China's quick re-opening from Covid restrictions have also supported the currency, with Australia's main trading partner partially lifting restrictions on Australian coal exports after an unofficial ban in 2020. Markets are currently divided over whether the RBA will make another rate hike in February. Read next: McDonald's Will Be Replaced In Kazakhstan By The Russian Vkusno & Tochka| FXMAG.COM EUR/USD EUR/USD showed a decent gain after breaking the critical resistance of 1.0840 in the Asian session. Although the EUR/USD pair failed to hold above 1.0840 and then dropped significantly, it has recovered and is trading above 1.0830. The publication of the expected decline in the US consumer price index (CPI) for December increased the chances of further slowing down the pace of policy tightening by the Fed. It is worth noting that in December the Fed announced a less hawkish monetary policy. The Fed raised interest rates by 75 basis points (bp), but after observing a significant decrease in inflation, it may change the scope of the increase. In the euro area, the European Central Bank (ECB) wants to reach the final interest rate faster. ECB Governing Council member and French central bank governor Francois Villeroy de Galhau, quoted last week, said the central bank should aim to reach its final interest rate by the summer. GBP/USD GBP/USD halted the correction, recovering to 1.2200 in the European session on Monday. The US dollar continues to rebound despite betting on smaller rate hikes by the Fed. Furthermore, a bank holiday in the US market could also keep volatility high around the GBP/USD pair with limited liquidity. Attention is now focused on the testimony of Bank of England (BoE) Governor Andrew Bailey before the Treasury Select Committee of the UK Parliament. Source: investing.com, finance.yahoo.com
The Euro May Attempt To Resume An Upward Movement

The EUR/USD Pair Maintains The Uptrend, So The Euro Can Continue To Rise

Paolo Greco Paolo Greco 17.01.2023 08:06
M5 chart of EUR/USD On Monday, EUR/USD tried to start a corrective movement, but it was not even able to settle below the critical line. And the Kijun-Sen line was in close proximity to the price. No pullback either. It would be better to say: the price has simply stopped rising. Such movements are absolutely logical for Monday. Fundamental and macroeconomic backgrounds were absent, traders had nothing to react to. Next, there will be more news and events, but not sure that they will be important, as this week only representatives of the Federal Reserve and the European Central Bank will speak. They may release information which is not yet known to traders or may not. This will determine traders' activity and volatility of the pair this week. I still believe that the euro went up too much during the last months and we are waiting for a bearish correction. Lately, it's been obvious that the upward momentum is fading, so new long positions will require some strong reasons. So far, there are none. As the pair showed the trend movement only at night and in the morning, and spent most of the day in the flat, Monday's trading signals were not the best. The price rebounded from 1.0806 twice, creating buy signals. In the first case, it was 20 pips up, which was enough to set Stop-Loss to breakeven. In the second case, it was 8 points, but the price had not fallen below 1.0806 till the end of the day, so the position could be closed manually at zero. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, the number of long positions held by non-commercial traders increased by 16,000, whereas the number of short positions rose by 11,000. Thus, the net positions increased by 5,000. The number of long positions is 135,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 48,000 (702,000 vs. 655,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD continues the upward movement, which started last Friday. The location above the Kijun-Sen line maintains the uptrend, so the euro can continue to rise, even though there is no fundamental and macroeconomic background. The market only sees the euro. On Tuesday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0938, 1.1036, 1.1137 as well as the Senkou Span B (1.0630) and Kijun Sen (1.0800). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are no important events or reports scheduled for January 17 in the US and EU. John Williams, a member of the Fed's monetary committee, will give a speech late in the evening. Therefore, traders will have nothing to react to, but the euro may still rise. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 05:00 2023-01-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332449
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

The EUR/USD Pair Has A Potential For The Further Upside Movement

Peter Jacimovic Peter Jacimovic 17.01.2023 09:05
Technical analysis: EUR/USD has been trading sideways at the price of 1.0820 but I see potential for the breakout play to the upside. Trading recommendation: Due to the breakout of the Pitchfork channel to the upside and the bullish trend in the background, I see potential for the further upside movement. Watch for the potential buying opportunities with the upside objective at 1.0870. Stochastic is showing neutral reading Key support is set at the price of 1.0805   Relevance up to 08:00 2023-01-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308849
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Forex: The Bank Of Canada (BoC) Looks Set To Face A Hike Or No-Hike Dilemma

ING Economics ING Economics 17.01.2023 10:00
Chinese activity data for 4Q22 released overnight was much better than expected and supports the proposition that the 2023 Chinese growth story will support pro-cyclical currencies, including the euro. Ongoing declines in natural gas prices are also helping. Today's focus will be on digesting UK labour market data, the German ZEW, and Canadian CPI Activity data released overnight supports the view that China's zero-Covid reversal will spark resurgent Chinese demand USD: Quiet start to the week still favours pro-cyclical currencies FX markets have had a quiet start to the week – perhaps awaiting edicts from Mount Davos? However, Chinese data released overnight was material and very much supports this year's hottest trend that China's zero-Covid reversal will spark resurgent Chinese demand. My colleague Iris Pang was very impressed by the December retail sales and fourth-quarter GDP data, so much so that she has revised up the 2023 China GDP forecast to 5%. The December data, in particular, supports the proposition that despite the pick-up in case numbers, the freedom of movement story is positively dominating the Chinese demand story. The Chinese data did not, however, trigger any follow-through buying of the renminbi or Asian currencies in general. Rather than concluding that this story has already run its course in FX markets, we would prefer to see price action as merely quiet before the Chinese New Year starting next week, and the big event risk in early Asia tomorrow, which is the Bank of Japan (BoJ) meeting. The dollar itself is steady. The US data calendar only really kicks off with what may be a soft December US retail sales release tomorrow. And there are no Fed speakers during European hours today. Some further DXY consolidation looks likely in a 102.00-102.50 range today. A downside break could emerge in Asia tomorrow, were the BoJ to again tweak its 10-year JGB yield target. Chris Turner  EUR: Revising the EUR/USD forecast higher Yesterday we published some substantial upside revisions to our EUR/USD forecast profile. Broadening signs of slowing US price pressures, stronger signs of US recession, a better Chinese demand outlook and a better energy situation all made our sub-consensus EUR/USD forecasts untenable. We now favour EUR/USD moving higher through 2Q23 towards the 1.15 area – but the gains may stall there in 2H23 given what could be trouble with the US debt ceiling in late summer and higher energy prices next winter. Back to the shorter term, the EUR/USD backdrop remains supportive. As discussed above, China's demand trends are supportive of pro-cyclical currencies like the euro. That better outlook for the eurozone could appear in today's German January ZEW investor survey, where the expectations component is expected to have improved from -23 to -15.  Also positive is the continuing fall in European gas prices. Two stories caught our eye today. The first is that European natural gas inventories are now 82% full versus the average levels of 63% normally seen at this stage of the heating cycle. The second is that Chinese importers are redirecting LNG shipments to Europe, given local inventories seem sufficient. That is a surprise. The continuing fall in European natural gas remains a positive development for the eurozone trade balance and is euro supportive. EUR/USD may consolidate in a 1.0780-1.0870 range today – but the near-term macro trends remain supportive. Chris Turner GBP: 50bp hike still in play for February Our UK economist, James Smith, describes today's release of November jobs figures as "another month of relative resilience in the UK jobs market". Wage growth was a little higher than expected and supports the latest findings from the Bank Of England's Decision Maker Panel survey. Depending on the resilience of tomorrow's release of December UK CPI data it seems too early to dismiss the risk of another 50bp rate hike from the Bank of England on 2 February. Currently the market prices in around 42bp of tightening at that meeting. Today's data saw EUR/GBP drop 15 pips – a move that makes sense. EUR/GBP is trading close to 0.89 because of December's hawkish ECB shift. The longer the BoE stays in hawkish mode, the more support sterling can get. Expect EUR/GBP to trade on the soft side of an 0.8850-0.8900 range today, with tomorrow's UK CPI release proving the next major input. Chris Turner CAD: Inflation key for BoC January move The Bank of Canada (BoC) looks set to face a hike/no-hike dilemma at next week’s (25 January) policy meeting. Signs of slowing economic activity were taken on board in the latest BoC statement and clearly emerged in yesterday’s BoC Business Outlook survey, where the future sales index dropped to the lowest since the pandemic and most interviewed firms said they expect a recession in Canada. However, the jobs figures came in very strong in the December read, with robust full-time hiring keeping the unemployment rate around cyclical lows. The slowdown in wage growth from 5.4% to 5.2% did not seem enough of a silver lining, and markets have been reluctant to price out the 19bp currently embedded in the OIS curve. Today’s CPI read will be key. Consensus expectations are centred around a deceleration in headline inflation from 6.8% to 6.4%, and from 5.0% to 4.9% in the core (median) rate. Any signs of resilience in inflation would likely see markets fully price in a 25bp hike in January. Below-consensus reads should support CAD short-dated bonds, but it seems hard that investors will completely rule out a hike next week. The impact on CAD should be quite visible in both directions, although external forces should remain the key drivers on the loonie. Building USD weakness may favour a USD/CAD contraction to 1.31-1.33 in the coming weeks, although a surprise hold by the BoC is a clear upside risk for the pair.  Francesco Pesole Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Bestway Might Have Larger Designs On The UK's Second Biggest Supermarket

In UK Employers Are Starting To Lay Off Workers, Wages Are Also Reported To Have Fallen

Jakub Novak Jakub Novak 17.01.2023 11:06
Pound rallied on Monday after news emerged that average wages in the UK continued to rise at an almost unprecedented rate. However, this puts further pressure on the Bank of England in terms of interest rates, forcing it to consider another increase at its meeting scheduled for next month. Reportedly, average household income excluding bonuses was 6.4% higher in the last three months to November 2022, which is the biggest increase since records began in 2001, not counting the peak of the coronavirus pandemic. This indicates that the labor market remains too challenging for the central bank, especially since inflation could hit double-digits if wages continue to rise at the current rate.  Labor shortages in the UK pushed unemployment to fall to a record low In a bid to prevent an inflationary spiral, the central bank raised rates from 0.1% to 3.5% late last year and is expected to announce a further 50 basis point increase as early as February. However, labor shortages in the UK pushed unemployment to fall to a record low below 4%, giving workers unprecedented market power. The pressure was most acute in the private sector, where wages rose by 7.2%. In the public sector, growth was only 3.3%, well below the current inflation rate of 10.7%. The decline in living standards has triggered a wave of strikes in recent months as workers insist on wage increases to offset inflation. Wages are also reported to have fallen by 2.6% compared to last year instead of rising at the end of December. The Bank of England's latest forecast says the unemployment rate will exceed 6% According to reports, the number of new vacancies fell by 75,000 to 1.16 million in December. This suggests that employers are starting to lay off workers as the economic situation worsens. The rate has jumped to 3.4% per thousand employees in the three months to November, up 1.1% from the previous three-month period. The Bank of England's latest forecast says the unemployment rate will exceed 6% over the next three years. GBP/USD Going back to GBP/USD, attempts to get out of the horizontal channel have been unsuccessful. Now, buyers need to stay above 1.2160 in order to maintain their advantage. A breakdown of 1.2225 will push the pair to 1.2300 and then towards 1.2350. Meanwhile, sellers taking control of 1.2160 will lead to a decline to 1.2090. EUR/USD As for EUR/USD, there is a chance of further growth, but buyers have to hold above 1.0810. That will spur the pair to rise to 1.0840 and 1.0885. Meanwhile, a decline to 1.0810 will put pressure on the pair, bringing it towards 1.0755 and 1.0720, or possibly to 1.0685   Relevance up to 08:00 2023-01-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332485
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

The European Central Bank Have Provided Support For The EUR/USD Pair And The Euro

InstaForex Analysis InstaForex Analysis 17.01.2023 12:05
The US currency is working hard to stay afloat and not slide to the lowest levels. Nevertheless, the greenback occasionally slumps, unwittingly giving a chance to the euro. The latter willingly uses this opportunity and tries to rise as much as possible, having accumulated a certain amount of growth. Analysis The greenback started the week lower, hitting a 7-month low against other currencies, but stabilized later on. On Monday evening, January 16, EUR/USD soared to a new 9-month high of 1.0874 but then pulled back to the critical 1.0816 mark. As a result, the pair lost 0.16%, but started recovering by the next trading session. On Tuesday morning, January 17, EUR/USD traded in the range of 1.0829-1.0830, having partly recouped its earlier losses. The technical situation According to analysts' estimates, the technical situation has stabilized slightly. At a certain moment, the pair reached the highest level since April 2022, but then retreated to the lower limit of the current range. This is because risk appetite has decreased, which supports the dollar and is a "headwind" preventing the euro's growth. Disappointing US macro data, published last week, contributed to the dollar's downfall. Recall that in December 2022, US consumer prices fell for the first time in more than 2.5 years. This had a significant impact on the greenback, as aggressive Federal Reserve rate hikes were the key driver of its growth (by 8%) in 2022. EUR/USD The US currency is gradually recovering from a seven-month low. This puts significant pressure on the EUR/USD pair. Traders and investors are worried about the economic problems triggered by the outbreak of COVID-19 in China, as well as the protracted Russian-Ukrainian conflict. This increases fears about the global economic downturn and restrains optimism in the markets. In such a situation, experts record a massive outflow of capital to USD as a safe asset. This limits the euro's growth and worsens its future prospects. US inflation  On the bright side, US inflation is gradually easing, which recently reached its highs in the last 40 years. Against this background, investors expect the Fed to pause rate hikes. In addition, market participants believe that interest rates will not be raised immediately, but gradually and by a certain amount. Most economists (91%) expect a 25bp hike and only 9% expect a 50bp hike. The Fed would soften its hawkish stance According to experts, a significant recovery of the dollar is still elusive. Market participants used to be confident that the Fed would soften its hawkish stance after seeing signs of continued easing of inflation pressures. However, assumptions that the central bank is close to ending its rate hikes were not justified. At the moment, it will probably continue to raise rates, but may slow the pace of rate hikes (only by 25 basis points in February). According to economists at Deutsche Bank, most of the current factors are in favor of a continued decline in the greenback and a relative stabilization of the euro. A combination of China's economic reset after the removal of covid restrictions and an improving energy situation in the EU have set the USD back. In addition, recent hawkish statements from the European Central Bank have provided support for EUR/USD and the euro. At the same time, there is growing confidence in the markets that inflation in the US will peak, so EUR/USD could rise to 1.1500 in 2023 and the dollar could remain in a downtrend Relevance up to 09:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/332491
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

GBP/USD Is Strengthening And Trading Above 1.2260, Investors Took A Breather Ahead Of The Bank Of Japan Meeting

Kamila Szypuła Kamila Szypuła 17.01.2023 14:11
The US dollar is under pressure as the market seems to expect the Federal Reserve to ease its aggressive monetary policy later this year. USD/JPY The yen was close to a seven-month high as investors took a breather ahead of a potential change in policy at the Bank (BOJ). At the last meeting, the Yield Curve Control (YCC) program was changed, setting a range of +/- 0.50% around zero for Japanese government bonds (JGB) for up to 10 years. They previously targeted +/- 0.25% around zero. While they are not expected to change their prime interest rate, which currently stands at -0.10%, another change to the long-term yield target range is being discussed. Today, USD/JPY managed to break above 129 but failed to hold. The USD/JPY pair stabilized above 128.50. AUD/USD The Australian dollar jumped towards yesterday's six-month high against the US dollar, with China's GDP much better than forecast. China's GDP printed at 2.9% year-on-year in the fourth quarter versus expectations of 1.6% and 3.9% previously. At the same time, other Chinese data were released, and industrial production for the year to end-December was 1.3% instead of the expected 0.1%. On the monetary policy side, the local market favors a quarter-point hike from the Reserve Bank of Australia (RBA) to 3.35% in February, with some chance it could stop at its first meeting since May. Australian government bond yields remained stable, albeit close to last week's one-month lows. Monday's drop in the AUD/USD pair did not affect the prevailing uptrend. The pair of the Australian in the morning session was approaching the key level of 0.6975, the pair managed to exceed this level, but did not hold it and fell in the European session. Currently the Aussie Pair is trading above 0.6955. Read next: Alibaba And Its Share Buyback Program Which Is Supported By Ryan Cohen, Microsoft Corp. Plans To Incorporate AI Tools| FXMAG.COM GBP/USD The British pound edged higher on Tuesday after data showed a tight labour market and accelerating pay growth. GBP/USD trades above 1.2200, bouncing back from daily lows after the UK jobs report. The UK unemployment rate stabilized at 3.7% in November, while average hourly earnings rose more than expected. GBP/USD raises bids to reverse early-week pullback from monthly high. Broad US dollar pullback lays foundation for cable pair recovery ahead of key jobs report. Talks of Brexit labor shortages, UK labor strikes and British Prime Minister Sunak's difficulties are being explored by the GBP/USD bulls. The Bank of England is expected to raise interest rates at its tenth consecutive meeting on February 2 in an attempt to bring inflation down further. Today's UK employment data becomes more important for GBP/USD traders. The pair traded close to 1.2200 in both the Asian and European sessions and also fell below 1.2200. Currently, the cable pair is rising and trading above 1.2260 EUR/USD The latest German economic sentiment index, ZEW, rose in January, beating both last month's reading and market forecasts. The positive reading, the first since February 2022, points to "a notable improvement in the economic situation over the next six months" Today's ZEW release had little or no impact on the euro, which has been treading water against the US dollar so far. EUR/USD remains above 1.0800. The euro is expected to take center stage as the European Central Bank (ECB) aims to peak interest rates by the summer. The EUR/USD pair started Tuesday trading around 1.0830. In the European session it fell below this level. It managed to cross 1.0840 but dropped to around 1.0835 Source: investing.com, dailyfx.com, finance.yahoo.com
FX Daily: Upbeat China PMIs lift the mood

In 2023 There Will Be Conditions For Economic Growth In China

InstaForex Analysis InstaForex Analysis 17.01.2023 14:25
The fundamental background for the EUR/USD pair remains ambiguous. On the one hand, the dollar is under pressure amid growing confidence in the slowdown of the Fed rate hike to 25 points. On the other hand, traders need additional information impulse for the upward movement. The pair consolidated within the 8th figure (for the first time since last April), but to conquer the 9th price level, not to mention the 10th figure, they need a powerful informational trigger. Chinese anti-records Experts pinned certain hopes on China, which today published key data on its economic growth. However, these hopes were not justified. The data turned out to be negative, but for the most part they came out in the green zone. Neither the dollar nor the euro were the beneficiaries of today's release. In terms of figures, the situation is as follows. China's GDP grew 3.0% last year, down from 8.4% in 2021. If we exclude the 2.2% growth after the first blow of the coronavirus crisis in 2020, this is the worst performance since 1976. Clearly, this result reflected the effects of the "zero tolerance" policy on COVID, which Beijing abandoned only at the end of last year. A sharp 180-degree turn suggests that in 2023 there will be conditions for economic growth in China. In addition, according to The Wall Street Journal, the Chinese authorities have significantly eased pressure on technology companies, relaxed strict regulation of real estate and recently lifted the ban on coal imports from Australia (which was in effect for more than two years). However, another question remains regarding the overall global demand for Chinese goods, given the global economic slowdown and the threat of recession in the world's largest economies. In addition, another alarming signal was published today: it became known that the population of the People's Republic of China decreased last year for the first time in more than 60 years. According to a number of analysts, this is a historic shift, which in the future will have long-term consequences for both the Chinese and the global economy. According to data, Chinese population decreased by 850,000 people last year to 1.41 billion. The reverse side of a coin However, despite the set anti-records, the safe dollar could not benefit from the situation, including in pair with the euro. Several factors acted as a counterbalance. First, almost all the components of today's release came out in the green zone. China's fourth-quarter GDP beat forecasts despite growth at the slowest pace since the 1970s, with China's economy expanding 2.9% (slowing down from 3.9% growth in the third quarter), while the consensus forecast was 1.8%. As mentioned above, in 2022, the Chinese economy grew by 3.0%, while the forecast was at 2.7%. Other indicators are also green: for example, retail sales in December fell by 1.8%, while experts were more pessimistic in their estimates, expecting a decline of 9.5%. In turn, the volume of industrial production grew by 1.3% (in annual terms), with a weak growth forecast of 0.5%. The official unemployment rate fell to 5.5% (forecast was 5.8%). The second support factor that somewhat smoothed over the negative emotions on the market from today's release was the fact that Beijing still abandoned the frankly destructive policy of zero-COVID policy. Thus, contradictory signals from China could not tip the scales—neither in the direction of buyers nor in the direction of sellers of EUR/USD. Moreover, some support for the euro is provided by the ECB representatives, who voiced hawkish comments. In particular, European Central Bank chief economist Philip Lane said in an interview with the Financial Times that "interest rates should be much higher than they are now." Earlier similar messages were voiced by other representatives of the European regulator, in particular Martins Kazaks, Isabel Schnabel, Robert Holzmann, Olli Rehn and Francois Villeroy de Galhau. Conclusions The pair is holding within the 8th figure, against the background of the general weakness of the greenback and the 90% probability of the implementation of the 25-point scenario at the February meeting of the Fed. The hawkish comments of the ECB only fuel interest in buying EUR/USD, but do not allow the pair's bulls to organize a large-scale counterattack. In my opinion, short positions on the pair are too risky and fundamentally unreasonable. Whereas it is advisable to consider longs only after overcoming the 1.0860 resistance level, which corresponds to the upper line of the Bollinger Bands indicator on the D1 timeframe. It is likely that the price turbulence (which may not be in favor of the dollar) will be provoked by representatives of the Fed, many of whom will voice their position in the second half of the week. The market is expecting speeches by Lorie Logan, Susan Collins, Lael Brainard, Patrick Harker, Christopher Waller and John Williams. Perhaps they will shift the balance of power towards EUR/USD buyers. However, in the current, rather shaky situation, it is best to take a wait-and-see attitude Relevance up to 10:00 2023-01-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332508
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD Pair Is Shifting Into A Downtrend

InstaForex Analysis InstaForex Analysis 18.01.2023 08:06
Yesterday, the euro closed the day lower, with an attempt to enter the target range of 1.0758/87. Trading volumes were slightly above the average. This does not mean that big players have already closed their long positions, but it suggests that their partial repositioning is likely. There is still a probability of forming an updated price divergence with the Marlin oscillator on the daily chart. But with the signal line of the oscillator moving below the zero line, and once the price settles under 1.0758, this probability will be neutralized. The nearest target is 1.0660, followed by 1.0595. The MACD line is approaching 1.0595, accordingly, crossing this support will be the key point in breaking the uptrend. The price has formed a standard divergence with the oscillator. On the four-hour chart, the Marlin has settled in the area of the downtrend, the price has settled under the balance indicator line (red sliding), indicating a shift into a downtrend. Moving the price under the lower limit of the support range of 1.0758/87, where the MACD line is approaching, will inspire the bears to cross the lower supports as well   Relevance up to 03:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332566
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

Representatives Of The ECB Claim That By The End Of 2023, Inflation Should Have Reached The Target Level

Paolo Greco Paolo Greco 18.01.2023 08:23
On Tuesday, the EUR/USD currency pair continued to rise and showed no signs of wanting to begin a reversal. The first two trading days of the week had essentially no fundamental or macroeconomic background, but traders still could not see any reason to fix at least some of the profit on long holdings. Therefore, the technical situation is unchanged at this time. While we have been anticipating a significant downward correction for more than a month, we also recognize that this is merely a basic hunch. We cannot think of any justifications for the European currency to have grown so strongly in such a short amount of time. There is now no sell signal, but the price is still above the moving average line on the 4-hour TF and above the lines of the Ichimoku indicator on the 24-hour. Many analysts' recent economic and currency forecasts have made mention of the Chinese economy. They present completely disparate arguments at the same time that frequently conflict with one another. For instance, the removal of COVID's "zero tolerance" policy is considered a benefit for the world economy and volatile currencies. Everyone is aware that the US dollar often emerges as the most secure and stable currency when uncertainty occurs. Right now, the situation is reversed. The Celestial Empire's economy is expanding, but at the same time, birth rates are declining, and population growth is declining for the first time in 60 years. We've long accepted that the Chinese population is growing, but since 400 million of the nation's 1.5 billion people are seniors, international experts are now raising the alarm. Since there will always be more retirees, if there is no growth, there will also be no economic growth and a recession. The Chinese government has already started encouraging more children to be born by removing limitations on having one or two children in a family and instead giving financial advantages to each child. This news, in our opinion, only serves as background information and does not directly affect the movement of the euro/dollar pair. The ECB officials' language continues to be "hawkish." The ECB and Fed's interest rates are currently one of the most important factors affecting the foreign currency market, as has been stated numerous times. We think that market participants are still buying euros because they anticipate a significant rate increase in the European Union but not a comparable process in the United States. It's straightforward: Since the Fed's rate has nearly reached its maximum, it makes no sense to raise it quickly. The next two meetings are expected to see two increases of 0.5% each, followed by an increase of 0.25%, according to the ECB rate. Representatives of the ECB claim that by the end of 2023, inflation should have reached the target level. They also anticipate that a dramatic fall in the price of gasoline and oil will have a favorable impact on the inflation rate. While we somewhat concur with Philip Lane and Isabel Schnabel, we think that inflation may not be moderate enough to prevent rate increases in the coming months. In any scenario, the euro currency will no longer have any motivation to demonstrate growth if the ECB also completes the tightening program. So far, we are unable to identify any causes for the European currency to increase during the majority of this year. We might claim that it is currently partially fortunate because the market frequently ignores favorable news for the currency. Lucky is the lucky one, though. One cannot dismiss the expansion of the euro as completely irrational. It is unstable and not very promising, in our opinion. One of the riskier currencies is still the euro, and nobody can predict what surprises 2023 will bring. We are certain that the euro may plunge once more if new global tensions develop. The euro could quickly decline once the ECB has finished hiking rates. The euro may drop quickly if the EU economy does go into recession. As of January 18, the euro/dollar currency pair's average volatility for the previous five trading days was 89 points, which is considered "normal." So, on Wednesday, we anticipate the pair to fluctuate between 1.0704 and 1.0882. The Heiken Ashi indicator will turn back up to signal the start of the upward movement. Nearest levels of support S1 – 1.0742 S2 – 1.0620 S3 – 1.0498 Nearest levels of resistance R1 – 1.0864 R2 – 1.0986 Trading Suggestions: The moving average has undergone a new micro adjustment in the EUR/USD pair. At this point, we can take into account opening additional long positions with goals of 1.0864 and 1.0882 if the Heiken Ashi indicator reverses direction and moves higher or the moving average recovers. After the price is locked below the moving average line, you can start opening short positions with targets of 1.0704 and 1.0620. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 05:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332572
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Euro To US Dollar (EUR/USD) Pair Is Struggling To Rise

Torben Melsted Torben Melsted 18.01.2023 08:36
EUR/USD is struggling to spike higher to our ideal target at 1.0933. We still think that a final short-term spike closer to 1.0933 could be seen to complete wave 3 and set the stage for a correction in wave 4 towards the 1.0437 - 1.0500 area. That said, we are aware of the possibility that we have seen a fifth wave failure at 1.0869 that completed wave 3 and wave 4 already is in motion. If this is the case, then we need a direct break below support at 1.0726. Then fifth-wave failures are rare. So, taking for granted that a fifth-wave failure has been seen, is being over-confident, therefore it's not our preferred count. Relevance up to 06:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309033
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

Oscar Ton Oscar Ton 18.01.2023 08:58
Technical outlook: EURUSD dropped below 1.0800 overnight and registered a fresh intraday low at 1.0766 during the Asian session on Wednesday. The single currency pair is seen to be trading close to 1.0770 at this point in writing as the bears are still poised to be in control. A meaningful top could be in place at 1.0874 as projected earlier. EURUSD is about to carve either a Doji or Engulfing Bearish candlestick pattern on the weekly chart after having reversed from 1.0874. Traders might be preparing for a sharp bearish reversal over the next week with an initial target around 1.0370. That would break the immediate price support of 1.0481 seen on the daily chart here. EURUSD is facing no intraday resistance around the 1.0820-30 area. Any pullback rallies should be met with resistance over there as the bears are regaining control. On the flip side, a consistent push above 1.0874 will test the price above 1.0900 before finding resistance again. Having said that, a high probability still remains for a drop lower with 1.0874 intact. Trading idea: Potential bearish reversal against 1.0950 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309041
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

There Is A Clear Need To Stimulate Demand For The EU Currency (EUR)

InstaForex Analysis InstaForex Analysis 18.01.2023 09:01
The wave marking on the euro/dollar instrument's 4-hour chart is still quite compelling and getting more intricate, and the entire upward segment of the trend is still quite convoluted. Although its length is better suited for the pulse portion, it has taken on a powerful corrective and extended form. The waves a-b-c-d-e have been combined into a complicated corrective structure, with wave e having a form that is far more complex than the other waves. Since the peak of wave e is substantially higher than the peak of wave C, if the wave markings are accurate, construction on this structure may be nearly finished. I'm still planning for a decline in the instrument because we are predicted to build at least three waves down in this scenario. The demand for the euro currency increased throughout the first two weeks of the year, and during this time the instrument was only able to modestly deviate from previously established levels. A further attempt to surpass the 1.0721 level, which corresponds to 127.2% of the Fibonacci ratio, was successful, allowing the wave e to grow even longer. Unfortunately, there is another delay in starting to build the trend correction part. The euro may be supported by rate divergence up until the ECB meeting. On Tuesday, the euro/dollar instrument had a 30 basis point decline. As a result of how small these price increases are, the current wave markup hardly changes at all. However, since the instrument's present motions are more horizontal in type and the news background is essentially nonexistent, I am unable to compare them to the instrument's current movements. Only the German inflation report might have been of interest to market players yesterday. The market was aware of the expected value because the second estimate was identical to the first. The decrease in the euro in the afternoon can be attributed to the German inflation report from the morning, but how can you account for the euro's rise in the morning? I think that the current news context shouldn't be used to explain the fluctuations of the euro. Other aspects form the basis of the market. Since the ECB is 90% likely to hike rates by 50 basis points in February and the Fed by 25, the market has already determined, in my opinion, that there is a clear need to stimulate demand for the EU currency. As a result, for the first time in a long time, the difference between the ECB and Fed interest rates will be decreasing rather than widening. This element may encourage strong demand for the euro. If this is the case, then the response to the ECB rate hike in two weeks is already being seen. This factor may already be coming into play on the day of the European regulator's meeting, and we will observe a decline in the instrument. This decline may coincide with the completion of wave e, which has already taken on an overly extended form. If my assumption is correct, then wave 5-e is being built now. This means that the increase could break off at any time. Conclusions in general I conclude that the upward trend section's building is about finished based on the analysis. As a result, given that the MACD is indicating a "down" trend, it is now viable to contemplate sales with targets close to the predicted Fibonacci level of 0.9994 (323.6%). The potential for complicating and extending the upward portion of the trend remains quite strong, as does the likelihood of this happening. The market will be ready to finish the wave e when a bid to break through the 1.0950 level fails. The wave marking of the descending trend segment notably becomes more intricate and lengthens at the higher wave scale. The a-b-c-d-e structure is most likely represented by the five upward waves we observed. After the construction of this portion is complete, work on the downward trend segment can start   Relevance up to 06:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332580
The EUR/USD Pair Has Opportunities For Bullish Movement

The EUR/USD Pair Has Opportunities For Bullish Movement

Peter Jacimovic Peter Jacimovic 18.01.2023 09:12
Technical analysis: EUR/USD has been trading upside this morning and I found rejection of the key support zone at the price of 1.0770, which is good sign for the further rally. Trading recommendation: Due to the rejection of the support zone and strong upside trend on the higher frames, I see potential for further growth towards upside references. Watch for the potential buying opportunities on the intraday dips with the upside objectives at 1.0865 and 1.1100 Stochastic oscillator is showing oversold condition and fresh flip up, which is good sign for further bullish movement. Key support is set at the price of 1.0770   Relevance up to 08:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309080
Hang Seng Index Plummets -2% Amid Weak China Data, Short-Term Trend Intact

Forex: The EUR/GBP Pair May Struggle To Trade Sustainably, The Reserve Bank Of Australia's Policy Remains An Open Question

ING Economics ING Economics 18.01.2023 09:55
The Bank of Japan defied hawkish speculation and held policy steady this morning, sending the yen lower. Some market confusion was also generated by a headline suggesting the European Central Bank is mulling slower rate hikes: clarifications may come from Davos by the end of the week, and the euro may recover. In the US, the data calendar picks up again The Bank of Japan in Tokyo USD: US data back in focus An exceptionally grim Empire Manufacturing reading for January has been the only noteworthy data release out of the US so far this week, and the dollar has continued to be a bystander as developments in Japan, Europe and China drive most market moves. Today, retail sales, PPI, industrial production and TIC flows data will be in focus. The market's scrutiny over the US economic outlook has grown exponentially since the ISM service report pointed to an imminent recession: expect more pain for the dollar should fresh signs of a slowdown emerge now that the US data calendar is picking up again. The Fed’s Raphael Bostic, Patrick Harker and Lorie Logan are set to speak today. The fall in the yen after the BoJ announcement (more details in the JPY section below) is offering some relief to the dollar this morning. However, we suspect this may only prove temporary and downside risks into the 101-102 area still prevail in the very near term. After all, the global environment continues to be rather benign for the ongoing rerouting of flows into emerging markets and high-beta currencies. The growing feeling that China may face a reality check on the sustainability of looser Covid rules may be contributing to halting CNY gains, but recent data gave reasons for optimism on Chinese growth, as noted by our colleague Iris Pang here. We are also approaching the lengthy Chinese New Year holiday season, which may be keeping some investors on hold before moving significantly into Chinese assets. Our commodities strategists have revised their forecasts for iron ore and copper prices higher on the back of China’s reopening. A demand-driven improvement in the metal price outlook is an ideal scenario for commodity currencies: the Australian dollar is a good example here, also considering the tentative conciliatory steps in Sino-Australian diplomatic relations. Indeed, the Reserve Bank of Australia's policy remains an open question: the resilience of inflation poses risks to our conservative call for only two more 25bp hikes before the end of the hiking cycle, and could add some more steam to the AUD rally. A 0.70-0.72 range could easily become the norm for AUD/USD in the next few weeks. Francesco Pesole EUR: Conflicting news Yesterday was a day of conflicting headlines for the euro. In a long interview to the Financial Times, Chief Economist Philip Lane offered elaborate reasoning to support the ECB’s recent hawkish rhetoric. However, later in the day, a Bloomberg report cited some ECB officials saying that Governing Council members are actually considering a slower pace (25bp) of tightening. EUR/USD dropped below 1.08 on the news. It does seem premature for the ECB to unwind its hawkish narrative just yet, and we would not be surprised to see some remarks aimed at “mitigating” yesterday’s dovish headline. Francois Villeroy (today) and President Christine Lagarde (tomorrow) have a chance to do so in Davos. Either way, the overall environment looks likely to stay largely supportive for EUR/USD and a return to 1.0850-1.0900 seems possible by the end of this week. Other conflicting headlines came from Germany. Chancellor Olaf Scholz said he’s sure that Germany will avoid a recession, while his finance minister suggested in a previous interview that there will indeed be a recession, but it should be very mild. The ZEW expectation survey (which spiked into positive territory yesterday) surely seemed to favour more optimism on the German outlook, and undoubtedly fed into the divergence in growth narratives between the eurozone (increasingly upbeat) and the US (increasingly downbeat). This ultimately makes us believe EUR/USD can stay mostly supported for now. Francesco Pesole GBP: Inflation matches expectations December CPI numbers were released in the UK this morning and largely matched consensus expectations. Headline inflation decelerated from 10.7% to 10.5%, while the core rate held at 6.3%. With the peak apparently past us, we could see headline inflation return to 6% in the summer and 3.5-4% by year-end, according to our economists. It’s important to note that core services jumped from 6.4% to 6.8%, a development that the BoE should particularly take into consideration, and when added to yesterday’s wage data should tilt the balance towards a 50bp hike in February. EUR/GBP is back to pre-Christmas – sub-0.8800 levels – thanks to some idiosyncratic EUR underperformance and a supported pound. As discussed in the euro section above, ECB-related weakness in the euro may not last long, and EUR/GBP may struggle to trade sustainably below 0.8800 for now – also given the lack of strong bullish forces in the pound. Francesco Pesole JPY: No hawkish surprise by the BoJ The Bank of Japan’s decision to leave its policy tools unchanged has seen USD/JPY live up to its pricing as one of the most volatile pairs in the G10 space. We expect that to continue. The big correction higher in USD/JPY may endure for a little while. This is because the BoJ’s forecasts for CPI ex-food remain below 2% for FY23 and FY24 and could make the case for the new BoJ governor in April to continue with the current ultra-loose policy. Yet USD/JPY is down at 130 on both the BoJ and the dollar story. We look for a broadly weaker dollar – especially in the second quarter when US core inflation should fall more quickly. This means USD/JPY should again come under pressure from the dollar side. And plenty of speculation over a BoJ policy shift in April should limit USD/JPY upside too. We see this correction stalling in the 132.50/133.00 area (outside risk to 135), with a bias to 126/128 for the end of the first quarter. Later in the year USD/JPY will probably be trading under 125. Chris Turner Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Despite The Improvement In The Outlook Due To Falling Energy Prices, The Economic Environment In Britain Remains Difficult

Yields On JGB's Fell Back Sharply, Markets May Expect To See Another 50bps Rate Hike From The Bank Of England

Michael Hewson Michael Hewson 18.01.2023 11:34
Yesterday saw another positive session for European markets, although the FTSE100 underperformed despite hitting a new 4 year high. US markets returned from their long weekend break with a choppy and somewhat mixed session, with the Dow and S&P500 struggling while the Nasdaq 100 finished slightly higher, as various earnings announcements painted a mixed picture of the US economy. Bond yields also chopped between negative and positive territory as yields ended the day little changed. BoJ tweaks bond program Asia markets have spent the day still digesting yesterday's economic numbers from China, as well as today's Bank of Japan rate decision. The Japanese yen has seen some decent gains over the past few weeks, with those gains accelerating after the Bank of Japan caught markets by surprise last month by widening the band of its yield curve control to between -0.5% and +0.5%, from +/-0.25%. It would appear that with current governor Kuroda set to leave in April that the BoJ wanted to start seeding the ground for a possible shift in the coming months, however as with everything related to monetary policy markets have already started to front run any possible change.. The 10-year JGB has consistently tested above the upper bound of the 0.5% in the past few days testing the central banks resolve in the process. The central bank has been consistent in maintaining that they aren't in any rush to make major adjustments to its yield curve control policy yet, however events appear to have overtaken them, as volatility has increased. The Bank of Japan's challenge today has been to try and reset market expectations, as well as try to avoid a further rapid appreciation in the yen, in the same way they wanted to manage the declines in their currency over the past few months. Suffice it to say they appear to have succeeded, pushing back on the recent moves that have pushed the yen higher. This morning the Bank of Japan kept monetary policy unchanged, which wasn't a surprise, but they also announced they would continue large scale bond buying and be more flexible about duration in order to keep policy settings loose. Yields on JGB's fell back sharply from the 0.5% upper bound in the wake of the announcement. Today's pushback or reset whatever you want to call it, shouldn't have been too much of a surprise given recent yen moves. Japanese central bank officials have always been particularly sensitive to sharp short term moves in either direction where the yen is concerned in the same way they were about recent yen weakness. The direction of the move is less of a concern rather than the speed of it, and in slowing the yen move lower the BoJ is merely resetting market expectations about future policy change, with the US dollar rising back above 130.00 UK inflation set to slip back in December After the peak of 11.1% in October, headline CPI fell back to 10.7% in November in a welcome sign that we could well be past the peak, when it comes to price rises.Recent falls in oil and gas prices are also likely to start to feed into the underlying numbers, while PPI inflation has also been falling in recent months, though given problems with the PPI calculations we haven't had clear visibility on that in the past couple of months, as the ONS continues to review how that is calculated. Today's December inflation numbers are expected to show that inflationary pressures continue to subside, but are only expected to fall modestly to 10.5%, with core prices also still high at 6.2%. We already know that food price inflation is trending in the mid-teens, which means that headline CPI is expected to remain above 10% for a while. It's also important to remember that RPI is even higher. With average wage growth trending at 6.4% and unemployment still low, the gap between wages and inflation is still quite wide, although it is narrowing from both directions. This probably means we can expect to see another 50bps rate hike from the Bank of England when it meets in just over 2 weeks' time, although any decision is unlikely to be unanimous, given the 3-way split last time. Headline CPI in the EU is also expected to be confirmed at 9.2% in December with core prices at 5.2%. EUR/USD – has struggled to overcome the 1.0870 area, prompting a fall to 1.0780. Could see a deeper fall towards 1.0720. The key resistance sits at 1.0950 which is a 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110. GBP/USD – ran out of steam at 1.2300 yesterday, with the risk that the move above 1.2000 level is running out of steam, despite the decent rebound from the 1.1830/35 area. The next big resistance lies at the 1.2350 area. We need to hold above the 1.2000 area for further gains to unfold. EUR/GBP – the failure at the 3-month highs at 0.8895 this week has seen a drift back towards last week's low at 0.8770/80. Below 0.8770/80 retargets the 0.8720 area. USD/JPY – has recovered off 127.20 area this week, just shy of the 126.50 area which is the 50% retracement of the up move from 101.18 to the highs at 151.95. Has squeezed back above the 130.00 area and could extend back through 132.60 on towards 134.80 without undermining the downward momentum. FTSE100 is expected to open 10 points lower at 7,841 DAX is expected to open 32 points higher at 15,219 CAC40 is expected to open 11 points higher at 7,088 Email: marketcomment@cmcmarkets.comFollow CMC Markets on Twitter: @cmcmarketsFollow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

The Euro-Area Economy Is Performing Better Than Many Anticipated

Ipek Ozkardeskaya Ipek Ozkardeskaya 18.01.2023 11:41
Holy Bank of Japan! The Bank of Japan (BoJ) kept its below-zero interest rate and its faltering yield curve control policy unchanged.  No-action sent the Japanese 10-year yield tumbling by up to 14 bp – that's almost a 30% plunge. The dollar-yen spiked above the 131.50 level, losing more than 2.50% against the greenback.   The BoJ revised its GDP lower for this year, but kept its inflation forecast unchanged at around the 3%. And yet, the producer price inflation in Japan spiked above the 10% in December.   It feels like the BoJ doesn't want to face the reality, and isn't acting according to the market's needs.   Anyway, I think that traders will continue defying the BoJ's YCC strategy and try to break its back, but we will likely see more volatility in the yen, as the policymakers keep fighting the market – perhaps not to lose face?   On the currency front, we can't rule out the possibility of an advance above the 133 level, the minor 23.6% Fibonacci retracement on Oct to January retreat. The negative trend in USDJPY will remain intact below the 136 level, the major 38.2% retracement level.   Yen selloff supports the dollar index.  If the yen changes direction, the impact on the dollar index will also be felt – and it will be positive.   The dollar index is stronger this morning.  The EURUSD is below the 1.08 mark, and could extend losses toward the 1.0630, the lower end of the actual positive trending channel.   And yet, the ZEW data released yesterday showed that investor expectations for the German economy jumped to the highest level in almost a year and German Chancellor Olaf Scholz said that he is sure Germany will avoid recession this year, thanks to China's reopening and growing confidence that the energy-price squeeze is easing.   And now that the Euro-area economy is performing better than many anticipated in the face of record inflation and the energy crisis, the European Central Bank (ECB) is expected to raise the rates by 50bp in February and in March, and by another 25bp in May or in June. That should throw a floor under the euro weakness and may not let the euro slide too low against the dollar.   Across the Channel, Cable does particularly well, since Britain revealed a near-record pace of 6.4% in wages growth between September and November year on year. The latter will unlikely ease the anger of those striking for a better pay – headéine inflation in Britain came in at 10.5% in December, as core inflation didnt ease as expected - dwarfing the near-record pay rise. The latest numbers will only force the Bank of England (BoE) to deliver yet another rate hike next month to avert a further wage-price spiral. And that's positive for sterling.   S&P500 struggles finding buyers above 4000  Confusion and lack of direction best described yesterday's sentiment in the US.   US futures were pointing at a negative start, then turned higher in early trading as we heard a lot of talk about "green shoots" and "bright spots" in the economy when Chinese Vice Premier talked in Davos yesterday saying that he expects China's economy to return to normal this year.  The S&P 500 shortly traded above the 4000 level, but reality soon hit the fan with mixed earnings from Goldman and Morgan Stanley, and brought the top sellers in.   And the top sellers kept selling into the 4000 level to the end of the session. Finally, the index closed the session 0.20% lower, spot on the 2022's down-trending channel top and above the critical 200-DMA.  But the first set of earnings doesn't support a sustainable move above that 200-DMA level.   If we dive into the latest bank earnings, Goldman Sachs and Morgan Stanley earnings were mixed. Golman reported a 69% drop in Q4 profit as the slump in deal-making and its wealth management business weighed on Q4 results. Goldman shares closed the session almost 6.50% lower.   Morgan Stanley was also hurt by weakness in deal-making, but the wealth management and trading revenue grew. The shares closed almost 6% higher.   Note that Morgan Stanley set aside $85 mio for credit losses compared to only $5 mio a quarter ago, as proof that the bank is not optimistic about what's to come this year, either. Therefore, the 6% rally was certainly a bit exaggerated. 
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

The Japanese Yen (JPY) Weakened, The Aussie Pair Is Trading Above 0.70$

Kamila Szypuła Kamila Szypuła 18.01.2023 13:33
Today the US releases data on retail sales and PMI indices, which are supposed to show support for inflation fading. USD/JPY At the two-day meeting, the BOJ unanimously maintained its YCC targets, set at -0.1% for short-term interest rates and around 0% for 10-year yields. The Japanese yen weakened by more than 2 percent in the wake of the Bank of Japan's monetary policy announcement in January. If the losses continue, this will be the best one-day performance for the USD/JPY pair. To understand why the yen weakened so quickly here, one has to go back to what happened in December. Last month, the central bank shocked the markets by widening the yield curve band around 0% to plus/minus 50 basis points. It was from +/- 25 bp. The central bank also increased asset purchases to 9 trillion yen each month from 7.3 trillion previously. The markets saw this as a move by the central bank towards normalizing policy. Therefore, investors were strongly focused on further corrections today. When this did not happen, these bets were voided. The USD/JPY pair strengthened and traded above 131. After this recovery, the pair began to fall to a level around 129.10. AUD/USD The Australian and New Zealand dollars gained on Wednesday on the retreating yen. The Australian jumped 2.0% to 91.36 yen. For now, the BJ's pledge to keep yields low has provided relief to global bond markets and the Australian 10-year yield fell 8 basis points to 3.57%. The main event of the week in the country will be data from the Australian labor market, which will be released on Thursday. The Austrailan pair (AUD/USD) has broken through the 0.70 level and is trading at 0.7020 at the time of writing Read next: Un Secretary General Antonio Guterres Encouraged The Transition To Green Energy At The World Economic Forum In Davos, The Chinese Economy May Surprise You Positively| FXMAG.COM GBP/USD The British pound received support this morning after mixed inflation data. UK headline inflation fell as expected to 10.5%. UK consumer price inflation fell to a three-month low of 10.5% in December but remains close to 40-year highs. The core CPI reading, which excludes food and energy from the calculations, underscores the tense labor market conditions seen in yesterday's UK employment data, while the recent fall in energy prices has contributed to the decline in the headline figures. The BoE has raised interest rates nine times since December 2021 to try to bring down inflation, with markets currently evaluating an 82% chance of a 50 bp rate hike at its next meeting, scheduled for February 2. GBP/USD holds its gains above 1.2300 again, undisturbed by mixed UK CPI data amid fresh US dollar weakness. Today's UK employment data becomes more important for GBP/USD traders given the recent comments from Bank of England (BoE) governor Andrew Bailey, as well as the worsening conditions of the UK labor strikes. EUR/USD The EUR is one of the weakest contenders against the US Dollar, with EUR/USD pulling back sharply after testing the 1.0870 level. The rest of this week is quite sunny on the economic calendar, which tends to support existing trends. The EUR/USD pair fell sharply mid-session in the US despite significant US dollar weakness. The euro fell after market talks suggesting that representatives of the European Central Bank (ECB) are considering slowing down the pace of monetary policy tightening. Rumors suggest that CEO Christine Lagarde and company will decide to raise interest rates by 50 basis points in February. The comments of the European Central Bank's chief economist Philip Lane also influenced the euro, who said that in order to bring interest rates back to their target levels and bring inflation back to the desired level, it will be necessary to stop the tightening of monetary policy by the central bank. At the World Economic Forum EU officials have announced their intention to accelerate the energy transition with a series of fiscal measures that support technological innovation in the green energy space. The support is expected to include a state aid mobilization as well as a sovereignty fund to stop companies relocating to the US. Source: finance.yahoo.com, investing.com, dailyfx.com
Assessing the 50-50 Risk: USD's Outlook and Market Expectations for a June Fed Hike

The ZEW Index: The Mildly Negative Assessment Of The US Economy, The German Economy Was Assessed Similarly To The Eurozone As A Whole

Conotoxia Comments Conotoxia Comments 18.01.2023 13:54
The ZEW Index is a survey of the economic sentiment of financial market experts in Germany. It measures expectations for the German economy over the next six months. The survey is conducted by the Centre for Economic Research (ZEW). The indicator is based on responses from analysts and economists from banks, insurance companies and other financial institutions. It is regarded as an important indicator for assessing economic activity in Germany and is closely monitored by many investors. Currently, the value of this indicator has reached a positive reading for the first time since February 2022 (16.9 points), which could mean that the situation of this economy could be improving. What else could we learn from the survey? Evaluation of the economic situation The January survey was conducted among 179 analysts and specialists. Regardless of the region assessed, the majority of specialists view the current economic situation negatively. The worst performer here is China, where as many as 77% of respondents view the current economic situation negatively. Second from the bottom is Germany with 60.3%. What may seem interesting is the mildly negative assessment of the US economy, currently at minus 5 points, which is a drop from the previous positive reading of 6.8 points.China also ranks first in terms of perceptions of the future. As many as 58.9% of respondents answered that the situation for this economy would improve (previously 41.9%). This may be linked to the expected easing of the 'zero COVID' policy. Similarly, respondents answered about the behaviour of the SSE Composite index (56% positive responses), to which we could gain exposure through the iShares MSCI China ETF (MCHI). Source: Conotoxia MT5, MCHI, Weekly The future of the German economy was assessed similarly to the euro area as a whole. The ZEW index reached 16.9 points and 16.7 points respectively. This is a significant improvement on the previous reading, which rose by more than 40 points in both cases. 44% of specialists forecast that the value of the DAX index (DE40) would increase, while 38.1% of respondents believe that it would remain unchanged. There is a noticeable improvement in sentiment relative to the last survey for all indices. Source: Conotoxia MT5, DE40, Weekly Despite the negative reading of the ZEW indicator for the future of the US economy, at minus 6.7 points, we continue to see an improvement on the last reading, which was minus 23.3 points. One could conclude that more important than the value of a given indicator is its trend of change. A more optimistic view is taken of the future of the Dow Jones Industrial index (US30), with 48.2% of respondents expecting it to increase in value (previously 41.1%), while 31% believe it would remain unchanged. Source: Conotoxia MT5, US30, Weekly The foreign exchange market and interest rates The survey questions also focused on two currency pairs: the euro to the US dollar and the euro to the Chinese yuan. In both cases, survey's experts expect a significant strengthening of the European currency. The biggest change is expected for the EUR/USD pair, where as many as 53.5% of respondents expect an increase (previously 46.2%) and 33.5% assume no major change. Source: Conotoxia MT5, EURUSD, Weekly The positive attitude towards a strengthening of the euro appears to be linked to interest rate expectations. Almost unanimously, 87.1%, respondents were in favour of an increase in euro area interest rates in the short term. However, they are less positive about increases in the long term (we could assume more than six months), where 48.3% of respondents expect rates to rise and 36.5% expect no change. In second place in terms of expected interest rate increases is the United States. 79.2% of respondents see a further tightening of monetary policy in the forthcoming FOMC decision. In the long term, 38% of respondents expect an increase and 39.8% expect no change. These expectations seem to be reflected in US bond yields. Long-term 10-year bonds have lower yields than short-term ones (e.g. 2-year bonds). Currently, this difference is 0.65 percentage points. This situation may seem illogical, as why would we want to receive less for holding our funds longer. Historically, a similar relationship has usually heralded a period of recession or slowdown in the economy, which, it seems, we are beginning to feel today. Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service)
The EUR/USD Price May Fall Under 1.0660

The Euro Closed The Day With Growth Of Only 5 Points

InstaForex Analysis InstaForex Analysis 19.01.2023 08:03
The U.S. S&P 500 stock index collapsed 1.56% on Wednesday, pulling down counter-dollar currencies and curtailing risk appetites. The reason was the strong decline in U.S. retail sales. In the December estimate, sales were down 1.1%; a revision to the November estimate lowered the figure from -0.6% to -1.0%. The yield on 5-year U.S. government bonds fell from 3.61% to 3.43%. This is an important moment as it shows that investors are starting to withdraw from risky instruments. If our assumption is correct, then the stock market will be the driver of the dollar's strength in the future. The euro was able to gain 100 points yesterday, but closed the day with growth of only 5 points. It stopped falling at the upper limit of the target range at 1.0758/87. Now the divergence, marked by the blue line on the daily chart, can be considered as completed. After the price leaves under the lower limit of the range (1.0758), the target 1.0660 will become available. Yesterday, on the four-hour chart, the Marlin oscillator made a false breakout into the positive area (ascending trend area), quickly returned to the negative territory, and now the oscillator helps the price cross the 1.0758/87 range and together with it the MACD indicator line. In case it succeeds, the price will be stimulated to reach the first target   Relevance up to 03:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332699
Analysis Of The Euro To US Dollar Pair Situation - 30.01.2023

A Significant Downward Correction Of The EUR/USD Pair Is Still Expected

Paolo Greco Paolo Greco 19.01.2023 08:18
On Wednesday, the EUR/USD currency pair started trading up again after adjusting to the moving average line. Again, we observed a very typical technical image: the euro currency microscopically sank before starting to rise again. The most intriguing aspect is that there was no justification for this yesterday. However, what can you do if the market perceives any communication channel as supporting the euro currency? The EU released its December inflation report in the morning. It would appear to be a significant report, but this was the indicator's second and final estimate for December, and it was identical to the first. In addition, the report stated that inflation decreased to 9.2%, or by as much as 0.9%. Such drop rates can be described as "extremely quick." The decline in inflation is a "dovish" factor for the euro, though, since it may prompt the ECB to resist a swift increase in the key rate sooner rather than later. Keep in mind that the US currency stopped increasing last year just as inflation started to decline. Therefore, there is no chance that this report has anything to do with the strengthening of the euro. To put it more properly, the market was free to interpret it in any way it saw fit, which is likely exactly what it did. Once more, we witnessed the euro's growth without any justification. There is now no trading signal to sell, and a significant downward correction is still expected. Additionally, the more the euro appreciates, the more it will eventually decline as investors realize they may sell as well as buy. However, given that there are now no sell indications, we do not advise taking short positions. This week's three trading days have demonstrated that the sentiment of the market has not changed. It is still just interested in purchasing euros, so when it takes a pause, the bears are not strong enough to cause even a standard correction. Pay close attention to the 24-hour TF, which demonstrates unequivocally that the growth is now 1100 points, almost reversed. This distance is critical for the euro. The head economist of the ECB thinks that rates ought to be higher. Nobody is debating. This week's events included a speech by ECB head economist Philip Lane in addition to the completely useless inflation report. He offered no ground-breaking information in his address. Mr. Lane just mentioned that the rates naturally needed to be substantially higher than they are now. And it appears that the market took note of this development, cheering the addition of a new motive to buy. In reality, everyone is aware of the necessity for additional tightening of monetary policy and has done so for much longer than the first month. We do not dispute the length of the process required to tighten monetary policy, during which time the market can provide the necessary fundamental background. But how much longer will the euro's value increase based solely on the issue of declining rate divergence? Additionally, the rates from the Fed and ECB have not even begun to converge yet. The gap still exists, and the Fed will keep raising its rate; if the spread were twice as large, the euro would grow logically. Even the market is aware of the rate increase that will take place in early February. By 0.25 percent in the United States (with a 90% chance) and by 0.5% in the European Union. It has also been known for a very long time that this is true. Remember that the euro's whole downward trend (the last one, as there have been several throughout the years) was 2800 points, taking 21 months to complete. In less than 4 months, the euro has now increased by 1,350 points. At this rate, all losses from the previous two years will be absorbed for another four to five months. In any scenario, the Fed rate will stay above the ECB rate for a considerable amount of time, even if there are unique underlying reasons for this. It is unclear whether the ECB will keep up its rate hike policy after boosting the rate by 1.25%. In general, we continue to think that the euro's strength is excessive but normal growth. As of January 19, the euro/dollar currency pair's average volatility over the previous five trading days was 103 points, which is considered "high." So, on Thursday, we anticipate the pair to fluctuate between 1.0693 and 1.0899. The Heiken Ashi indicator will turn back up to signal the start of the upward movement. Nearest levels of support S1 – 1.0742 S2 – 1.0620 S3 – 1.0498 Nearest levels of resistance R1 – 1.0864 R2 – 1.0986 Trading Suggestions: A new micro pullback to the moving average has begun for the EUR/USD pair. In the event of an upward reversal of the Heiken Ashi indicator or a rebound from the moving average, we can currently consider opening new long positions with goals of 1.0864 and 1.0899. After putting the price below the moving average line, you may start opening short trades with goals of 1.0693 and 1.0620. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.     Relevance up to 04:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332701
The Euro To US Dollar Instrument Did Not Change In Value

The Euro To US Dollar Instrument Did Not Change In Value

InstaForex Analysis InstaForex Analysis 19.01.2023 08:26
The wave marking on the euro/dollar instrument's 4-hour chart is still quite compelling and getting more intricate, and the entire upward segment of the trend is still quite convoluted. Although its length is better suited for the pulse portion, it has taken on a powerful corrective and extended form. The waves a-b-c-d-e have been combined into a complicated corrective structure, with wave e having a form that is far more complex than the other waves. Since the peak of wave e is substantially higher than the peak of wave C, if the wave markings are accurate, construction on this structure may be nearly finished. I'm still planning for a decline in the instrument because we are predicted to build at least three waves down in this scenario. The demand for the euro currency was increasing again in the first week of 2023, and the instrument was only able to deviate somewhat from its prior highs during this time. A new attempt to surpass 1.0721, which according to Fibonacci amounts to 200.0%, was successful, allowing the wave e to take on an even longer form. Unfortunately, there is another delay in starting to build the trend correction part. The Eurozone's inflation rate dropped to 9.2%. Despite having a high amplitude throughout the day on Wednesday, the euro/dollar instrument did not change in value. Just like that, demand for the euro rose in the morning while demand for the dollar rose in the afternoon. Two motions in separate directions that were almost identical were received. Since wave e is still under construction, it cannot be said to be finished. Since the data for the same month of December had already informed the markets of a decline to 9.2%, many experts did not pay the report on European inflation the proper attention. The final evaluation and the original one agreed. However, this report continues to be crucial in my opinion, which is why. Because central banks "dance" on inflation, it is currently a top concern in many countries around the world. Therefore, it is irrelevant whether it is the first or second assessment. The most important development is that inflation has begun to fall and is doing so swiftly. Perhaps Andrew Bailey and Christine Lagarde were correct when they predicted that lower energy prices would lead to lower inflation (which we are now seeing). Similar remarks were made by the ECB president at the same time last year. Since the ECB won't need to hike rates in increments of 75 or 50 basis points anymore, I think that over time, the European Union's declining inflation rate will start to put pressure on the euro. But as of now, inflation is still too high, so a slowdown in the rate of interest rate hikes is out of the question. Even if the consumer price index experiences a new, significant slowdown the next month, I believe the plans to increase the rate in the European Union by another 100-125 basis points will stand. However, the ECB might then decide to tighten by 25 points. Conclusions in general I conclude that the upward trend section's building is about finished based on the analysis. As a result, given that the MACD is indicating a "down" trend, it is now viable to contemplate sales with targets close to the predicted 0.9994 level, or 323.6% per Fibonacci. The potential for complicating and extending the upward portion of the trend remains quite strong, as does the likelihood of this happening. The market will be ready to finish the wave e when a bid to break through the 1.0950 level fails. The wave marking of the descending trend segment notably becomes more intricate and lengthens at the higher wave scale. The a-b-c-d-e structure is most likely represented by the five upward waves we observed. After the construction of this portion is complete, work on the downward trend segment can start.   Relevance up to 06:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332711
The EUR/USD Pair Chance For The Further Downside Movement

On The One-Hour Chart The EUR/USD Pair Has A Chance To Move Down

Paolo Greco Paolo Greco 19.01.2023 08:32
M5 chart of EUR/USD EUR/USD tried to cross 1.0868 on Wednesday twice, but by the end of the day it still moved away from this mark. If we weren't already used to the fact that the euro could rise by more than 1000 pips over the past months, we would say that the market is now in a flat. The pair has been between 1.0780 and 1.0868 for several days. But it might be just the calm before the euro surges. Do recall that the euro is desperately unwilling to correct, and only takes pauses from time to time. Yesterday the EU published a totally uninteresting inflation report. "Uninteresting" because it was the second estimate of the indicator for December, and it was not at all different from the first. Moreover, inflation fell quite noticeably, by 0.9%, which could in no way provoke a rise in the euro in the first half of the day. The euro was already falling even more during the US session, though the US reports were also weak. Despite the unusual behavior, Wednesday's trading signals were actually quite good. The first buy signal was not formed at the beginning of the movement, near 1.0806. After that the price managed to rise to 1.0868 and rebound from it, which was exactly ideal. The profit is 40 pips. The rebound from 1.0868 should have been used to open a short position, but the price failed to reach 1.0806, so this trade was closed with a Stop Loss at breakeven. Then followed a buy signal around 1.0868, which turned out to be false, the loss was 20 pips. And the last sell signal near the same level brought traders the profit of about 60 pips, as the price dropped below the critical line. In general, the day was very successful. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, the number of long positions held by non-commercial traders increased by 16,000, whereas the number of short positions rose by 11,000. Thus, the net positions increased by 5,000. The number of long positions is 135,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 48,000 (702,000 vs. 655,000). H1 chart of EUR/USD You can see on the one-hour chart that EUR/USD has a chance to move down. Crossing the critical line is quite an important signal, unless the price manages to rise above it today. This is a possibility, because lately the pair's movement seems more like a flat. On Thursday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137 and also Senkou Span B (1.0675) and Kijun Sen (1.0802) . Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 19, European Central Bank President Christine Lagarde will give a speech in the EU, which might be interesting. Then there are just minor reports and a few speeches from the Federal Reserve in the US. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 05:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332705
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

The EUR/USD Pair Has A Potential For The Higher Prices

Peter Jacimovic Peter Jacimovic 19.01.2023 08:49
Technical analysis: EUR/USD has been trading sideways at the price of 1.0786 and I see potential for the upside rotation towards upper references. Trading recommendation: Due to the strong support zone at the price of 1.0770, I see potential for the upside rotation towards resistance zone. Watch for the potential buying opportunities with the upside objective at the price of 1.0870. Stochastic oscillator is showing oversold condition and potential for the higher prices. Key support is set at the price 1.0770 Relevance up to 08:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309259
The Challenge to the Dollar: De-dollarisation and Geopolitical Shifts

Rates Daily: The Market Is Now Homing In On A 25bp Hike From The Fed At The February Meeting

ING Economics ING Economics 19.01.2023 09:17
The rates rally is extending, but also looking increasingly stretched, especially in the euro area where 10Y Bunds are back below 2% and 2023 European Central Bank rate cut expectations are creeping in. Today's session holds fewer data to feed the rally, and we might get more pushback from the ECB against the notion of slowing hikes   The belly of the curve leads the rally as the focus increasingly turns to Fed cuts The bond bulls got all they could hope for yesterday to extend the rates rally with US dictating the way. The 5Y part of the curve led the way lower in Treasury yields dropping by more than 18bp on the day, and the 10Y yield dropped below 3.40% in a session capped off by a strong 20Y auction. The BoJ and softer US data provided the backdrop for a further bid Certainly, the Bank of Japan leaving its policy of yield curve control in place paved the way for lower rates ahead of the session, US data later provided the backdrop for a further bid. Softer-than-expected retail sales, a producer price index hinting at weaking pipeline inflation pressures and a miss in industrial production data suggest that the Fed is close to the end of its hiking cycle with recession on its way. Near term the market is now homing in on a 25bp hike from the Fed at the February meeting and the possibility of another hike following in March. This implies the peak of the Fed funds upper bound target rate at 5%. The Fed hawks Bullard and Mester were making the case for tightening policy rate beyond 5%, but the market easily glossed over their comments also given that in the Fed’s own survey, the Beige Book, contacts reported expectations of further moderating price growth. The focus is increasingly turning to the first Fed cuts, 50bp in total now discounted for the second half of the year. The 5Y sector is rallying faster than other maturities, indicating growing cut expectations Source: Refinitiv, ING The rally spills into EUR rates, but might receive more pushback today EUR rates rallied alongside US rates with the 10Y Bund yield dipping below 2% for the first time since mid-December. The EUR market obviously had its own dovish ECB sources story this week to underpin the rally, but that story has received pushback in ECB officials’ comments yesterday. With an eye on the keeping financing conditions sufficiently tight to rein in inflation, ECB officials possibly see their earlier efforts of decoupling its outlook from the Fed at risk.  Earlier efforts of the ECB to decouple itself from the Fed are at risk France’s Villeroy stated that the President’s guidance from the last meeting for a series of 50bp hikes was still valid. Similarly, Finland’s Rehn said “significant interest rate hikes in the near-term monetary policy meetings are justified”, arguing it was too early to speculate about the pace of hikes after March. Today we will hear from the ECB President herself when she speaks in Davos. Equally as impressive as the outright rally in EUR rates was the further tightening of intra government bond spreads. The key 10Y spread between Italian government bonds and the German peers briefly dipped below 170bp, the tightest since April last year. Back then the ECB already flagged its intention to wind down asset purchases, but it was still ahead of the rate hikes and any plans of quantitative tightening. 250bp of hikes later with another 125bp likely to come and balance sheet reduction well under way, that is an impressive feat. But keep in mind, even EUR markets are now pricing in the prospects of first ECB rate cuts for the second half of this year. Real swap rates haven't yet eased financial conditions but tighter sovereign spreads have Source: Refinitiv, ING Today's events and market view Rates markets are on a run. Events and data have given at least US rates good reason to do so, though we think that levels are becoming more stretched. Technical factors like the historically wide gap between the Fed funds rate – still set to rise near term – and the 10Y yield suggest building upward pressure. But there is also an underappreciation of inflationary risk coming from a re-opening China and we have also not seen the last chapter of the BoJ story. But it is especially in the eurozone we think the spilling over of rate cut expectations looks overdone. Today’s data calendar features housing data, initial jobless claims and the Philadelphia regional Fed index  in the US. There is little by way of data in the euro area, but we will get the accounts of the December ECB meeting in which the central bank delivered a ‘smaller’ 50bp hike than at the previous meeting, but with a hawkish twist. Quantitative tightening was kicked off and President Lagarde hinted at more 50bp hikes to come. This puts particular focus today on her scheduled appearance at the Davos Economic forum. With ECB's Klass Knot there is also another ECB hawk who could push back at the notion that the pace of hikes could be slowed in March. In primary markets we will see France and Spain with auctions today.    Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Forex: Most NOK Gains May Be Channelled Against The Dollar

Forex: Most NOK Gains May Be Channelled Against The Dollar

ING Economics ING Economics 19.01.2023 09:22
Intense scrutiny of the US growth story means that the dollar remains vulnerable to data releases as markets keep scaling back Fed rate expectations. We see more downside risks for USD in the near term. Elsewhere, hawkish ECB minutes and remarks by Lagarde could support the euro, and we expect a 25bp hike by Norges Bank despite rising bets of a hold Source: Shutterstock USD: Data continues to haunt the dollar In yesterday’s FX Daily, we flagged the risk of fresh US data hitting the dollar given the recent scrutiny (and pessimistic narrative) by the market of the US growth story. That risk materialised as retail sales and industrial production came in softer than expected, triggering another round of dovish repricing in Federal Reserve rate expectations. The USD 2-year swap rate hit 4.35% yesterday, the lowest since early October, and the differential with the corresponding EUR rate is now very close to the -124bp December high. Our US economist now sees growing risks that the Fed may stop hiking after a 25bp move in February. The correlation between the 2-year swap rate differential and EUR/USD has not been very strong in the past year but is picking up again. Most importantly, the weakness in the correlation largely derived from the euro’s low sensitivity to European Central Bank policy, rather than to the Fed’s. The fact that the ongoing dovish repricing is not only a consequence of slowing inflation but also of a worsening economic outlook in the US has exacerbated the negative implications for the dollar, especially as a positive re-rating of growth expectations is happening in Europe and China. One could argue that the dollar is facing a rather uniquely-timed combination of negative factors, and that the sustainability of the optimistic growth re-rating in Europe and China may be challenged by fresh commodity price volatility and high infection numbers – respectively. We see value in such an argument, and a straight-lined dollar depreciation in the first quarter is far from assured. But global and US-specific dynamics continue to suggest a bearish bias on the dollar in the near term. DXY may re-test yesterday’s 101.55 lows by the end of the week. Today, markets will watch the size of the increase in initial jobs claims, as well as housing data and the Philadelphia Fed survey. The Fed’s Susan Collins, Lael Brainard and John Williams are scheduled to speak. Elsewhere, Asian G10 currencies are following diverging paths this morning. The yen is recovering across the board as markets seem to cautiously re-enter long positions after the Bank of Japan defied the hawkish speculation yesterday. We continue to see downside risks for USD/JPY despite a dovish BoJ. The Australian dollar has come under pressure after a surprise contraction in employment in December, which endorses the recent cautious stance by the Reserve Bank of Australia. Still, we’d need to see inflation come off more convincingly before making strong calls about the end of the RBA hiking cycle. We continue to favour AUD/USD on the back of positive external developments (China, risk sentiment). The New Zealand dollar is suffering from some spill-over effects from AUD, while the news that prime minister Jacinda Ardern is resigning at the end of her mandate hardly seems like a key driver considering that her party is trailing in the polls ahead of the October election. Francesco Pesole EUR: ECB pushes back against dovish speculation Yesterday, ECB Governing Council member Francois Villeroy explicitly pushed back against recent reports suggesting a switch to 25bp increases and said that President Christine Lagarde’s 50bp guidance remains valid. Lagarde herself will speak in Davos today, and there is a good chance she will reiterate the ECB’s hawkish stance despite lower energy prices. Dovish speculation should be further challenged by the release of the December 2022 ECB meeting minutes, as the details of the dissent to a “too conservative” 50bp hike should emerge, as well as guidance to “multiple” 50bp increases. We expect to see some consolidation/further upside in EUR/USD by the end of the week when the pair could trade around 1.0850/1.0900. Francesco Pesole GBP: Starmer to pledge Brexit fix The leader of the opposition Labour Party, Keir Starmer, is reported to deliver a rather conciliatory speech in Davos today about the future of EU-UK relationships. In an interview with the Financial Times, Starmer criticised the Brexit deal and said he aims to rebuild good trade relationships with the bloc. The Labour party is leading by a rather large margin in the latest opinion polls ahead of next year’s general elections and evidence of a softer stance on Brexit should benefit the pound in the long run. Today, there are no events or data releases in the UK. Some recovery in the EUR may still send EUR/GBP back to 0.8800+ by the end of this week. Francesco Pesole NOK: Norges Bank may deliver last hike today Norges Bank announces monetary policy this morning, and the consensus is split between a 25bp and a hold. The latest projections saw the Bank signal a 3.00% peak rate (now at 2.75%) in early 2023, and a combination of resilient underlying inflation, growth and employment suggests – in our view – this should be the right time to deliver the last hike of the cycle. Indeed, concerns about slowing economic activity, lower energy prices and housing market vulnerability are all important factors in the Norges Bank’s decision-making process, and we admit it’s a rather close call. There will be no new projections today, but only a brief statement, so the krone's reaction will primarily depend on the hike/no-hike decision. In line with our call, we see upside risks for NOK today. EUR/NOK could trade close to 10.60-10.65 again today, but idiosyncratic EUR strength suggests most NOK gains may be channelled against the dollar. Francesco Pesole Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

The Fed Needed To Get Rates Above 5% Sooner Rather Than Later

Michael Hewson Michael Hewson 19.01.2023 13:34
Yesterday saw another broadly positive session for European markets, with the FTSE100 once again underperforming, after UK inflation data showed itself to be much stickier than was anticipated, putting upward pressure on the pound in the process.   US markets initially started the day on the front foot until a double punch of weak data saw yields slide sharply on both the short and long end, prompting concerns that US economic activity was being impacted by the lagging effects of multiple rate hikes.   This concern about the economic outlook, along with announcements from the likes of Amazon and Microsoft about job losses, saw US markets roll over after European markets had closed, closing sharply lower, as once again the S&P500 failed above the 4,000 level.   Yesterday's weakness came as a result of concerns about the health of the US consumer. After a strong performance throughout most of 2022, consumer spending appears to have run out of steam with November and December retail sales declining 1% and 1.1% respectively. US PPI for December also saw a lower-than-expected rise of 6.2%, a sharp drop from the 7.4% seen in November.   The Fed Beige Book added little to the picture when it came to how the US economy is doing, apart from an acknowledgement that price pressures are starting to slow, however St. Louis Fed President James Bullard added to the uncertainty by insisting that the Fed needed to get rates above 5% sooner rather than later. This view conflicts with the prevailing market narrative of a 25bps hike next month, as concerns rise that the Fed could well be hiking into a potential recession.   These economic concerns also translated into crude oil prices which having hit their highest levels since the beginning of December early on the day, promptly reversed course to close the day sharply lower.   One thing in the favour of the US economy in the face of disappointing economic reports is a resilient labour market, with today's weekly jobless claims expected to see a modest rise from 205k to 214k.   We also have housing starts and building permits data for December, with the recent cold weather not expected to offer much hope of a respite here.   Last night's weaker US close looks set to translate into a lower European open.   The US dollar had a mixed day slipping to a marginal 8 month low against the euro before recovering, while against the Japanese yen we saw a 400-point range, after the Bank of Japan pushed back on market expectations of further measures to tweak its monetary policy settings around yield curve control.   Governor Kuroda went on to say that a further widening of the YCC band wasn't needed yet, as he looked to finesse the central banks messaging around its next policy move. The BoJ's biggest problem is that yesterday's events only delay the inevitable, with national CPI for December expected to reach a 42 year high of 4% later today.   With the Fed closer to the end of its rate hiking cycle, and the Bank of Japan yet to start its tightening regime, the line of least resistance for USD/JPY is likely to be a move towards 120 and possibly lower in the coming weeks.   EUR/USD – made a marginal new high of 1.0887 yesterday, before sliding back again, as the market struggles for direction. Could see a deeper fall towards 1.0720. The key resistance sits at 1.0950 which is a 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110.   GBP/USD – ran out of steam just shy of the December peaks at 1.2440. Above 1.2450 could see a move towards 1.2600. We need to hold above the 1.2000 area for further gains to unfold or risk a return to 1.1830.   EUR/GBP – the failure at the 3-month highs at 0.8895 this week has seen a move below last week's low at 0.8770/80, with the risk we could see a move towards the 0.8720 area, and 50- and 100-day SMA. The next support below 0.8720 targets 0.8680.   USD/JPY – the failure to hold onto the gains above 130.00 yesterday suggests the prospect of further weakness and a move towards the 126.50 area which is the 50% retracement of the up move from 101.18 to the highs at 151.95. Below 126.50 targets the 120.60 area.   FTSE100 is expected to open 38 points lower at 7,792   DAX is expected to open 60 points lower at 15,121   CAC40 is expected to open 30 points lower at 7,081   Email: marketcomment@cmcmarkets.com   Follow CMC Markets on Twitter: @cmcmarkets   Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
The EUR/USD Pair Has A Potential For Drop

EUR/USD Pair Holds Gains Above 1.0800, The Aussie Pair Falls To 0.6875

Kamila Szypuła Kamila Szypuła 19.01.2023 14:16
Concerns about US growth due to recent shortages in US PPI and retail sales cast a shadow over the dollar. The Fed's hawkish speakers are being largely shunned by the markets at this point. USD/JPY The Japanese yen, long favored as a safe haven and funding currency, has become so embroiled in market speculation over central bank policy in recent weeks that Wednesday's status quo decision triggered the yen's biggest fall in nearly three years. In a bond market where the central bank battled bond bears to defend its yield cap, the BoJ bought up so many of the issued 10-year Japanese government bonds that market liquidity virtually dried up. Speculators focused on the yen instead. Until late last year, BJ's dovish stance in the face of aggressive rate hikes by the Federal Reserve and other major central banks meant the yen was cheap and weak, making it an ideal currency to borrow for investment. Today USD/JPY started the day at 128.55 but then dropped below 128. USD/JPY is now trading back at the level from the start of the day, above 128.50 AUD/USD The Australian dollar falls after the unemployment rate in December was 3.5% from 3.4%. The figures show that the labor market remains robust, even as the Reserve Bank of Australia raised the cash rate by 3% from its pandemic low. The bank has rolled back large rate hikes and the futures market has a 50-50 chance of a 25 basis point hike priced at the February 7 monetary policy meeting. Ahead of this meeting, the key CPI data for the fourth quarter will be released on Wednesday next week, January 25. The RBA said it expects growth to 8% later this year The AUD/USD pair extended an overnight sharp pullback from the 0.7060-0.7065 area, its highest level since Aug. 16, and remains under strong selling pressure for a second consecutive day on Thursday. The downward trajectory remains uninterrupted throughout the European session. The Australian pair is currently trading below $0.70 but above $0.6850. Read next: Elon Musk Is Facing Trial In Fraud Trial Over 2018 Tweets| FXMAG.COM GBP/USD GBP/USD consolidates losses below 1.2350 during Thursday's European session. GBP/USD pair is currently above 1.2330. On the UK front, inflationary pressures have eased, according to the December Consumer Price Index (CPI) report published on Wednesday. Headline inflation was lowered to 10.5% on an annualized basis and the core CPI, which excludes oil and food prices, remained stable at 6.3%. The magnitude of the drop in the inflation rate is not enough to convince market participants that inflation in the UK is falling in a promising way. Therefore, investors should prepare for the continuation of the extremely hawkish monetary policy of the Bank of England (BoE). The UK data schedule is empty on Thursday, however, and traders will have to content themselves with looking ahead until Friday, when consumer confidence figures for January and retail sales figures for December are released. Consumers are expected to be a little less optimistic than they were. EUR/USD European Central Bank (ECB) President Christine Lagarde's speech on Thursday will point investors to the likely monetary policy actions in February. Falling energy prices in the euro area have moderated inflation, but the current rate of inflation is still far from the median. Therefore, investors should prepare for a hawkish comment by Lagarde from the European Central Bank. European Central Bank (ECB) policymaker Francois Villeroy de Galhau said on Wednesday it was "too early to speculate what we will do in March". However, he believes that Lagarde's earlier forecast of 50 bp is still valid. EUR/USD holds gains above 1.0800 in European trading. The pair is supported by falling US Treasury yields. Source: investing.com, finance.yahoo.com
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

InstaForex Analysis InstaForex Analysis 20.01.2023 08:07
Yesterday's attempt to overcome the support range at 1.0758/87, just like the previous day, had failed. The euro rose by 38 pips. Now, the EUR/USD has a chance to rise to the target level of 1.0990 like it did on Wednesday. It has a small chance, the main scenario is still a downtrend, with the price crossing this range and settling below it. The probability of growth will increase only when the divergence breaks on the daily chart. This may happen after EUR crosses the January 18 high at 1.0887. On the four-hour chart, yesterday's rebound occurred from the MACD indicator line. Here, too, at the moment, the Marlin oscillator is in the red zone.   Relevance up to 03:00 2023-01-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332818
The EUR/USD Price May Fall Under 1.0660

The EUR/USD Pair Is Still Vulnerable To A Bearish Reversal

Oscar Ton Oscar Ton 20.01.2023 08:17
Technical outlook: EURUSD rallied through the 1.0844 highs intraday on Friday before finding resistance. The single currency pair is seen to be trading just below 1.0830 at this point in writing and could slip below the 1.0770 interim support anytime soon. That would confirm that a meaningful top is in place at 1.0887 early this week and the bears are back in control going further. EURUSD has risen in the past several weeks from the 0.9535 low through the 1.0887 high. In the process, the bulls have taken out a major resistance around 1.0786. This price action is indicative of the fact that the instrument should be preparing for a meaningful pullback towards at least 1.0370 and down to 1.0050 in the next few weeks. EURUSD is still vulnerable to a bearish reversal from the resistance zone of 1.0800-1.0900 as marked on the daily chart. Immediate support is seen at 1.0481; while resistance is around 1.0900-10 respectively. A break below 1.0481 will add further confidence to the bearish proposed target of 1.0370, followed by 1.0050. Trading idea: Potential bearish move against 1.0950 Good luck!     Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309396
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

Rates Daily: Pushback From The ECB Against The Notion That Its Rate Hikes Could Be Downsized

ING Economics ING Economics 20.01.2023 08:36
The European Central Bank's pushback against market rates lower has had modest success so far, but we think more headwinds are brewing for EUR rates in particular. It is not just from the last dash of ECB communications ahead of the quiet period, but also from the direction of supply and data next week The ECB's pushback is becoming more explicit US markets remain focussed on the looming recession, though data not being quite as bad yesterday allowed for a modest bounce back in rates. But it was a  bigger bounce in Bund yields where we witnessed more pushback from the ECB against the notion that its rate hikes could be downsized to 25bp starting in March. Going into the session the ECB’s Klaas Knot put it very bluntly, saying that the ECB was planning on hiking by 50bp ‘multiple’ times. President Lagarde, who had originally given out a series of 50bp hikes as a guidance at the last meeting, was less explicit in her remarks. She did make it clear, though, that inflation remained way too high and that the ECB would stay the course. Knot: The ECB is planning on hiking by 50bp ‘multiple’ times The minutes of the December meeting which were released yesterday gives us more reason to believe that we have not seen the last of the ECB's efforts to steer market expectations higher again. In December the central bank assessed that the “configuration of interest rates and expectations embodied in market pricing was not sufficiently restrictive". After the temporary push higher in market rates over the year-end, these rates are now close to where they were just ahead of the last meeting. While the ECB has officially moved to a meeting-by-meeting approach, it implicitly still sees it as crucial to its goals to guide longer term rates. One should expect more micro management of market expectations in coming days. We expect the ECB to push back against the lower terminal rate and cuts in 2024 priced in by swaps Source: Refinitiv, ING More headwinds brewing next week, especially for EUR rates The distance Bunds have put between themselves and the 2% mark is yet small when benchmarked against the overall volatility we have witnessed, but we think it should grow further. For one we would be surprised if ECB officials were not to make good use of their final opportunities to steer expectations before the quiet period ahead of the February policy meeting kicks in next Thursday. Already scheduled to speak early next week are again Lagarde and Knot, but also Holzmann, on the hawkish end of the spectrum, and Panetta, who occupies the dovish end. Data and long end supply are other factors to watch On the data front we will get the flash PMI readings for which consensus is pencilling in a slight improvement. This would gel with the latest less downbeat data, but should also give the ECB additional room to tighten policies more aggressively than the market currently prices. Supply could provide a more technical headwind for rates markets with the EU slated to sell bonds via syndicated deals next week. The EU tends to be an issuer in longer tenors, although lately market expectations seem to have turned more towards a tap of an existing ultra-long bond as part of a dual tranche deal rather than a new 30Y issue. Scheduled supply from the euro area sovereigns themselves is relatively muted, though markets are still waiting for new issue deals from Spain and France anytime now.   Of course one always has to take into account what happens on the other side of the Atlantic. The Fed will stay quiet next week ahead of its policy meeting, but we may still get some spill-over from market reaction to US data. Most prominently we will get the advance GDP reading for the final quarter of 2022, giving an indication of economic momentum late last year. We will also have the personal income and spending data, which will be scrutinized in the wake of the latest weak retail data readings. And crucially, the Fed’s favoured inflation measure, the Personal Consumption Expenditures price index will also be released, where the consensus survey is pointing to a small uptick in the month-on-month core reading. Supply and profit-taking are key risks to the January bull run Source: Refinitiv, ING Today's events and market view Overall we have already suggested earlier that the current levels of market rates look stretched. The upcoming policy meetings may eventually put the rally to the test, but it is for EUR rates that we see the clearest signs of headwinds brewing already near term – not just from last dash ECB communications, but potentially also data and supply. We think the least we should see is an underperformance of EUR rates versus the US.   The Fed’s Harker and Waller are the last scheduled speakers before the quiet period ahead of the Fed meeting sets in tomorrow. In Europe we will hear from Lagarde again today, and given the limited impact of communications over the past days she would have good reason to be more explicit. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Navigating Interconnectedness: Analyzing Banks' Exposures and Funding from Non-Bank Financial Institutions

Forex: The Czech Koruna (CZK) And Hungarian Forint (HUF) Touched New Lows Against The Euro (EUR)

ING Economics ING Economics 20.01.2023 09:50
Dollar losses have abated amid deteriorating risk sentiment, but the ongoing dovish repricing of Fed rate expectations and hawkish rhetoric by the ECB point to upside risks for EUR/USD in the near term. Elsewhere, Hungary's sovereign rating should remain unchanged. Worsening sentiment will be the reason if we see a correction of recent gains in CEE USD: Taking a breather G10 volatility has started to wane amid fewer market-moving data releases in the second half of this week and as Asian markets approach the long Chinese New Year holiday. The dollar is stabilising, as the underperformance of stocks seems to be offsetting the recent negative turn in US data. Yesterday, a surprise drop in jobless claims confirmed that signs of weakness in the US economy are still not being found in the jobs market. The tightness of the labour market remains the key factor precluding front-end bonds from another big rally: markets are still pricing in a 4.90% peak Fed rate and 'only' 60bp of cuts in the second half of the year. Our economics team is calling for a larger-than-expected easing package later this year: 100bp from a 5.0% peak. For now, however, markets may feel comfortable with the current dollar levels ahead of next week’s fresh round of data releases in the US. DXY could hold above 102.00 today, with some focus on housing data and two Federal Reserve speakers (Patrick Harker and Christopher Waller). Discussions over the US debt ceiling are set to be an important driver for markets, but we currently see this having a material impact on the FX market only around the late summer. Francesco Pesole EUR: ECB dovish speculation didn't last long The European Central Bank provided a very reasonable amount of pushback against reports earlier this week that suggested 25bp increases were being considered. Christine Lagarde reiterated her recent hawkish rhetoric yesterday and the minutes from the December meeting all but confirmed the growing pressure from the hawks in the governing council. The details of the 'deal' with the more moderate near term were quite clear: a conservative 50bp hike in December was acceptable only with a pre-commitment to two 50bp hikes in February and March. Taking the ECB guidance at its word has its risks, but those two hikes look very likely at this point. This is good news for the euro, and as long as US data remains on the soft side, EUR/USD should benefit from a rather supportive rate differential. A test of 1.0900/1.0950 next week looks on the cards, but things may be rather quiet today since the eurozone calendar is quite empty and Christine Lagarde should not surprise with anything new as she speaks again in Davos.  Elsewhere in Europe, Norges Bank held rates unchanged at yesterday’s meeting but announced that it is likely to raise them again in March. That should be the last hike of the cycle according to the NB projections, even though the Bank did not go as far as explicitly saying so yesterday. That may have helped offset the negative impact on the krone, which remains driven by external factors for now. Francesco Pesole GBP: A negative surprise with one piece of optimism UK retail sales for December were released this morning and delivered a pretty strong disappointment. Numbers are down roughly 1% month-on-month and follow another dip in consumer confidence in data released earlier this morning. Because of volatility surrounding the Queen's funeral last year, it looks like fourth quarter GDP will be flat. But ongoing weakness in consumption, and some expected declines elsewhere (construction/manufacturing perhaps), mean first quarter GDP will probably fall by upwards of 0.5pp. One piece of good news - it looks like the government won't need to increase household energy bills from April, or if they do the uplift will likely only last one quarter. That should mean the squeeze on consumers isn't quite as bad as first feared. While the economy is still showing signs that it's headed for recession through 2023, ongoing pressure in wages and core services inflation suggest the Bank of England is on course for one final 50bp rate hike in February, rather than the more modest 25bp move the Fed appears to be heading for. The pound has reacted negatively, down 0.30% after the release. However, we continue to favour GBP versus the dollar but see moderate upside risks in EUR/GBP. Francesco Pesole CEE: No change expected to Hungary's rating Today, we have only labour market data from Poland on the calendar. We expect wage growth to slow at an annual pace but remain above market expectations. At the same time, employment growth should remain solid despite the slowing economy. Later today, Fitch will publish a rating review of Hungary. We expect the rating and outlook to remain unchanged. While we still see downside risk to the outlook, we expect that the current EU story and fiscal policy developments should be sufficient to warrant no change in today's review. In the FX market, the CEE region remains strongly supported with EUR/USD higher and gas prices testing new lows in recent days. The Czech koruna and Hungarian forint, current stars of the region, touched new lows against the euro and the Romanian leu strengthened to its strongest levels in weeks following a record-breaking government bond auction. The Polish zloty, on the other hand, as the only outperformer within the region, continues to slide higher, weighed down by several risks. Today, on the other hand, we could see a slight retracement of gains in the region resulting from yesterday's correction in equity markets and the deterioration in sentiment after the new year rally in Europe. We expect the koruna to return to 24.00 EUR/CZK and the forint back to 396 EUR/HUF. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ECB press conference brings more fog than clarity

The Necessity Of Raising The Rate By Half A Point In The Near Future Still Hold

Jakub Novak Jakub Novak 20.01.2023 12:45
After Christine Lagarde, president of the European Central Bank, warned yesterday that inflation in the eurozone is still too high and is the biggest problem, the euro increased somewhat. She also pledged that lawmakers will not back down from their attempts to get price growth back to normal levels. Lagarde stated on Thursday in Davos that "Inflation by any measure, no matter from which side you look at it, is too high. We'll continue raising rates and then shift to a trajectory that restricts spending for a sufficient amount of time to quickly bring inflation back to 2%." Core inflation is far from ideal Some eurozone politicians have previously suggested that it is already reasonable to discuss the viability of a less aggressive rate hike after price growth slows and the price of natural gas declines, but only after another step of 0.5 percentage points is predicted in February. Some, on the other hand, argue that core inflation is far from ideal and point out that it set a new record high in December. Christine Lagarde and those who want to keep moving forward with rate increases will benefit from this.  Francois Villeroy de Galhau and Klaas Knot Lagarde's words from last month regarding the necessity of raising the rate by half a point in the near future still hold today, according to members of the Governing Council Francois Villeroy de Galhau and Klaas Knot, who recently confirmed them in Davos. At least one additional rate rise of 50 basis points is anticipated at the following meeting based on the new data that is now available. However, if the rate of inflation increase does not aggressively go down, the regulator will likely continue to pursue a strong stance until the spring of this year. A report from the European Central Bank's monetary policy meeting A report from the European Central Bank's monetary policy meeting claims that several officials first predicted a rate increase of 75 basis points in December but afterward revised their prediction downward by 0.5%. The risks of underlying pricing pressure are discussed in the paper, along with worries about inflation being entrenched in the eurozone countries for a longer period. Lagarde's words Lagarde added that a little recession is now more probable than the start of one. "Over the past three weeks, the news has changed dramatically for the better. Despite not being a great year, it will be substantially better than we anticipated," said Lagarde.  EUR/USD  Given that the bullish trend has not yet been broken, the technical picture of EUR/USD indicates that demand for the euro could resume at any time. There is also a prospect for more expansion and setting new records for the year. Staying above 1.0820 will cause the trading instrument to surge to the 1.0870 region, which is what is needed to achieve this. You may reach 1.0930 with ease by climbing over this point. If the trading instrument falls, only a breakdown of support at 1.0820 will put more pressure on the pair and potentially cause it to fall as low as 1.0720. GBP/USD Regarding the technical picture of the GBP/USD, it failed to update the weekly maximum, severely limiting the pair's future upward potential. Buyers must continue to trade over 1.2330 to keep their advantage. The only thing that will increase the likelihood of a further recovery to the 1.2500 region, after which it will be feasible to discuss a more abrupt move of the pound up to the 1.2550 area, is the loss of resistance at 1.2430. After the bears seize control of 1.2330, it is feasible to discuss the pressure on the trading instrument. The GBP/USD will be forced back to 1.2250 and 1.2190 as a result, hitting the bulls' positions Relevance up to 09:00 2023-01-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332859
Analysis Of The EUR/JPY Pair Movement

The USD/JPY Pair Is Trading Close To 130.00, The EUR/USD Pair Is Still Above 1.08

Kamila Szypuła Kamila Szypuła 20.01.2023 13:24
The dollar traded around seven-month lows on Friday as a plethora of data worries investors that an economic slowdown may be inevitable. Today's day in the economic calendar is quite calm, apart from the events from the economic forum in Davos and statements of the Fed (Waller, Harker). Next week, however, we'll get our first look at the US GDP figures, which are crucial to the outcome of the "soft landing" the Fed hoped for as it continued to tighten financial conditions to bring down inflation. Markets expected a smaller tightening from the Fed after US retail sales revealed their lowest level of activity in the last 12 months. USD/JPY The Japanese yen fell today despite the December CPI data. Further selling pressure around the Japanese yen lifts USD/JPY Pair to fresh daily highs. On the daily chart, USD/JPY is in an uptrend and is approaching 130.00. The 10-year Japanese government bond (JGB) yield fell below 0.40% today, well below the Bank of Japan's 0.50% ceiling that remained unchanged at its meeting earlier this week. GBP/USD The pound fell on Friday after weak retail sales data reminded investors about the gloomy outlook for the British economy. The cable pair started the day close to 1.24, but reports caused a weakening and a change of direction. The pair is currently trading below 1.2360. UK CPI data showed yesterday that there was an increase in inflation in services and an acceleration in food/beverage prices, which will be a cause for concern for decision makers at the Bank of England. The poor economic outlook in the UK fuels speculation that the BoE may be less hawkish on policy than previously expected. Retail volumes are down 1% since November, pointing to a challenging environment for consumers as the cost of living continues to be reduced. EUR/USD EUR/USD holds slight gains while trading above 1.0800 in European trading. The US dollar is trying to rebound alongside US Treasury yields, despite an improved risk profile. Looking ahead, EUR/USD traders should pay attention to ECB President Lagarde's speech and recent speeches from Fed policy makers. ECB's Lagarde reiterates that the central bank will continue to raise rates. The recent gains of the major currency pair can be linked to the broad weakness of the US dollar, as well as the optimism surrounding the old continent, namely the Eurozone. Today, the major currency pair EUR/USD traded mostly in the range of 1.0830-1.0847. Currently, the EUR/USD pair is below this range at 1.0820. Read next: $1 Million In Sanctions Against Former President Donald Trump, Netflix Co-Founder Reed Hastings Has Stepped Down As CEO| FXMAG.COM AUD/USD AUD/USD is down sharply for the second day in a row, and the risk of continued decline has increased with the pair below 0.6930. The sentiment-linked Australian dollar has underperformed its major counterparts over the past 24 hours. The Australian was weighed down by local data on Thursday, which showed Australian employment unexpectedly fell in December, spurring a bond rally as markets priced in a lower interest rate peak from the Reserve Bank of Australia. The focus is now on the quarterly inflation report next Wednesday. Economists expect consumer prices to increase by 7.5% in the fourth quarter of last year compared to last year. Source: investing.com, finance.yahoo.com, dailyfx.com
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

The EUR/USD Currency Pair Failed To Initiate A Correction

Paolo Greco Paolo Greco 20.01.2023 13:31
EUR/USD 5M analysis. On the fourth trading day of the week, the EUR/USD currency pair failed to initiate a correction once more. Since there has been a total flat in the region of 1.0780 to 1.0868 for the past five days, the quotes have been mostly drifting sideways all day. On Thursday, there were no significant publications or events, so traders were unable to find any justification for engaging in active trading. Christine Lagarde spoke at the World Economic Forum in Davos and reaffirmed the ECB's willingness to keep hiking the key rate, but the market was already fully aware of this information before her remarks. Furthermore, we think that the euro's recent gains, possibly even months' worth of growth, are directly related to the prospect of future ECB rate hikes and the impending rejection of the Fed's rate hike. As a result, we think Lagarde hasn't provided the market with any new information. Several trade signals emerged yesterday, however, they were all centered around the price range of 1.0806 to 1.0802. The pricing was never able to determine the closest goal level because there was essentially no movement. All of the signals were therefore erroneous. Only the first two of them could be figured out by traders. The pair were fastened below the designated area first, and then above. The purchase transaction was completed at a stop loss at breakeven in the second example since it could move 15 points in the right direction in the first. Consequently, traders suffered a slight loss. However, false signals are often formed in the flat, so nothing terrible happened. COT Report The recent COT reports on the euro currency are entirely consistent with market activity. The aforementioned image makes it very evident that, from the start of September, the net position of significant players (the second indicator) has been improving. At about the same time, the value of the euro started to increase. Although the net position of non-commercial traders is currently "bullish" and growing virtually weekly, it is the relatively high value of the "net position" that now permits the upward trend's impending end. This is indicated by the first indicator, which frequently occurs before the end of a trend and on which the red and green lines are quite far apart. The number of buy contracts from the "non-commercial" group increased by 16,000 during the reporting week, while the number of short positions decreased by 11,000. The net position consequently increased by 5,000 contracts. For non-commercial traders, there are currently 135 thousand more buy contracts than sell contracts. What remains to be seen is how much longer the major players will boost their long positions. Moreover, a downward correction should have started long ago from a technical perspective. We think this process can't go on for another two or three months. You need to "discharge" a bit, or alter, even based on the net position indicator. Sales are 48 thousand more if you look at the overall indicators of open longs and shorts for all trading categories (702 vs. 655k). EUR/USD 1H analysis. The pair has been trending sideways for a week on the hourly timescale, albeit maintaining an upward mood. The euro currency is currently moving in the manner of bitcoin, which has been quite fond of sliding down during the past year, then going flat for a few weeks or months. However, the downward correction has not yet started. We corrected the Ichimoku indicator's last digestible value and did not transfer the weak Ichimoku indicator lines to the flat's end. We reserve the following levels for trade on Friday: the Senkou Span B (1.0679) and Kijun-sen (1.0802) lines, as well as the range of prices between 1.0658 and 1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, and 1.1137. The Ichimoku indicator's lines might move during the day, therefore, this should be considered when choosing trade signals. Additional support and resistance levels exist as well, but no signals are created close to them. Levels, extremes, and lines can be "bounced" and "overcome" by signals. Remember to place a break-even stop-loss order if the price moves up or down by 15 points. If the signal turns out to be bogus, this will shield against potential losses. Christine Lagarde will give another speech in the European Union on January 20, but the market indicated yesterday that it was not very interested in what she had to say. Furthermore, Lagarde herself didn't offer anything essentially novel. In the United States, nothing noteworthy will happen today. Explanations for the illustrations: Price levels of support and resistance (resistance/support) are thick red lines, near which the movement may end. They are not sources of trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, transferred to the hourly timeframe from the 4-hour one. Are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They are sources of trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "Non-commercial" group Relevance up to 11:00 2023-01-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332877
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Eurozone Economy Is Holding Up Fairly Well Despite The Ukraine War

Kenny Fisher Kenny Fisher 20.01.2023 14:36
The euro continues to have a very quiet week, as EUR/USD appears content to trade around the 1.08 line. Lagarde brings her message to Davos It’s difficult to think of ECB President Lagarde as a hawk, as she ignored rising inflation in the eurozone for a long period, insisting that it was transitory. The ECB was late to the global tightening party and found itself scrambling to curb inflation. The new Lagarde has become more hawkish and hasn’t shied away from making strong statements, such as warning the markets not to underestimate the ECB’s rate policy. Lagarde has brought her hawkish message to Davos this week, saying that inflation remains “way too high” and that the ECB would stay the course until inflation returns to 2%. With inflation currently at 9.2%, that promises to be a slow process. The ECB is widely expected to raise rates by 50 basis points in February, but what happens after that isn’t clear. The eurozone economy is holding up fairly well despite the Ukraine war and the feared energy crisis appears to have been averted, thanks to a warm winter and diversification efforts. The question going forward is whether the ECB will respond to the positive economic environment with a smaller hike of 25 bp or will it keep the pedal on 50-bp increases in order to ensure that inflation does not become entrenched. Lagarde said in December that the Bank would determine future rate moves based on data and that it was very possible that more 50-bp increases were coming after February. ECB members are divided on the issue, leaving the markets uncertain about what will happen at the March meeting. The Federal Reserve begins a two-week blackout period after today, ahead of the rate meeting on February 1st. This means that public comments or interviews from Fed officials will be sharply limited. Fed member Brainard spoke on Thursday and echoed the Fed’s hawkish stance. Brainard said that rates needed to remain high even with signs that inflation was starting to ease. The Fed dot plot indicates that rates will peak at 5.1%, while the markets have priced a peak at around 4.75%. We’ll hear from Fed members Harker and Waller later today.   EUR/USD Technical 1.0780 is a weak support line. Below, there is support at 1.0691 1.0921 and 1.1010 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Analysis And Trips For Trading The GBP/USD Pair In Short And Long Positions

It Was A Good Week For The Cable Pair, GBP/USD Pair Achieved 1.24$. EUR/USD Kept Above 1.08

Kamila Szypuła Kamila Szypuła 21.01.2023 17:52
During the week we heard from a chorus of speakers at the Fed who raised the alarm about an interest rate hike and didn't wait for weaker and disinflationary data, the dollar could have been stronger. In the last trade, st. Louis Federal Reserve Chairman James Bullard spoke for the second time this week and said US interest rates must continue to rise to ensure inflationary pressures subside. USD/JPY The USD/JPY pair started the trading week at 128.07. On Monday, the pair was falling, so the pair recorded its weekly low on that day, below 128.00 at 127.2530. In the following days, the USD/JPY pair rose until it reached a weekly high of 131.45. USD/JPY did not stay above 130.00 and in the following days the pair fell. The pair closed the week at 129.5390. The Bank of Japan met this week remains unchanged. The governor of the Bank of Japan reiterated that the central bank will maintain its very loose monetary policy. The next meeting of the Bank of Japan is scheduled for March 9-10. GBP/USD It was a good week for the cable pair. The pound gained strength which helped the GBP/USD pair to rise. GBP/USD started the week at 1.2226. The weekly minimum at 1.2175 appeared at the beginning of the week on Monday and Tuesday. The cable pair peaked above 1.24 (1.2428), and the GBP/USD pair ended the week above this level (1.2401). UK retail sales figures revealed a monthly decline in both the report's "volume" and "value" metrics. After alcohol fueled the World Cup's economic recovery in November, British consumers decided to tighten their belts in December as the cost of living remained low. In the strike-hit month of December, consumers not only spent less but also bought fewer goods, which had negative readings on both accounts compared to November. Bank of England Governor Andrew Bailey had further comments on inflation and the market's view of where the final rate will be. Bailey reiterates earlier forecasts that inflation will fall significantly in 2023, but still well above the 2% target. Big Sterling impact events are few and far between next week and mostly include manufacturing PMI data. EUR/USD The main currency pair EUR/USD is holding steady in the week despite falls above 1.08. Also above this level it started and ended the trading week. The EUR/USD trading week started at 1.0828 and ended at 1.0858. The pair recorded a weekly low well below the 1.08 level at 1.0774, and the week's high came close to the 1.09 level at 1.0884. The next meeting of the European Central Bank is scheduled for February 2. ECB President Christine Lagarde said on Friday that the ECB will "keep the course" on raising rates as inflation remains too high. AUD/USD The Australian's pair started the week at .6979. Over the next few days, the AUD/USD pair traded above 0.6950 and rose until it reached a weekly high of 0.7059. It then declined until reaching a weekly low of 0.6875. At the end of the trading week, the Aussie Pair rebounded from the low to end the week at 0.6973. Source: investing.com, finance.yahoo.com
The EUR/USD Price May Fall Under 1.0660

The ECB Has No Other Options But To Keep Tightening The Monetary Policy

Paolo Greco Paolo Greco 22.01.2023 15:25
Analyzing Friday's trades: EUR/USD on 30M chart On Friday, EUR/USD continued to trade mainly sideways with low volatility. It spent the entire day between 1.0806 and 1.0867. There were no important events in the EU or the US on Friday, only European Central Bank President Christine Lagarde speech at Davos forum. This is Lagarde's second speech this week. The first one was held on Thursday and she didn't reveal any important information that traders have not heard yet. Judging by the fact that the pair has been flat for the entire day, Lagarde said nothing important on Friday. But what can she say now except that rates will keep going up? The ECB has no other options but to keep tightening the monetary policy. The euro has been rising for several months on that factor (as well as on the market expectations of an end to the Federal Reserve rate hike). Thus, the technical picture has not changed at all on Friday. EUR/USD on M5 chart Since the movement was mostly flat, it is not surprising that a lot of signals were formed. At the end of the day I removed 1.0837 from the chart, and beginners could work out only the first two signals near this level. I only marked the first two signals, because all subsequent signals should not be worked out. The price could not pass in the right direction by even 15 points neither in the first, nor in the second case, so both trades closed with a small loss. The next signal worthy of attention was formed near 1.0806 during the US trading session. Due to this signal, beginners were able to win back the morning losses. The price went up about 30 points, and closer to the evening the deal should have been closed manually. Therefore, the total possible profit/loss fluctuated within +-10 points. Not the most successful day, but it is difficult to expect other results from the flat. Trading tips on Monday: The pair maintains the uptrend on the 30-minute chart, despite crossing the trend line. As we can see, neither four bounces from 1.0867, nor crossing 1.0806 can change the market sentiment to bearish yet and could not contribute to the end of the flat. As a result, we have a flat on the highest price values of the last time without any hint of correction. On the 5-minute chart, it is recommended to trade at the levels 1.0657-1.0668, 1.0697, 1.0736, 1.0768, 1.0806, 1.0905, 1.0923-1.0933, 1.0966, 1.0989. Lagarde will speak in the EU and there's nothing in the US. I believe that Lagarde's new speech will be no better than the old ones, so I don't expect a strong reaction. The flat is likely to continue. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.   Relevance up to 11:00 2023-01-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332921
Credit squeezing into central banks – what next?

The Euro Is Moving Towards The Target Level

InstaForex Analysis InstaForex Analysis 23.01.2023 08:02
The stock markets' brisk rise helped keep the euro from nearly an "imminent" breakthrough from the 9-month high. This morning, there is a gap. Even the signal line of the Marlin oscillator was above the divergence line. We don't know why the S&P 500 rallied by 1.89% on Friday, almost simultaneously (since Thursday) with pension funds contributions being cut to delay the "shutdown", as the US starts a hot period of disputes about the limit of the national debt. In the meantime, the euro is moving towards the target level of 1.0990. But the gap is open, and if it closes after crossing 1.0990 or if the price doesn't reach this mark, we don't know what will happen. I don't expect the euro to rise above 1.0990, we consider the given growth only as a temporary way out of the general strategy, which involves a decrease in risk appetite. On the four-hour chart, nothing interferes with growth, except for the window at the opening of the session. The price is above the indicator lines and the Marlin oscillator is in a good position for growth. The growth is expected to be short-term.   Relevance up to 03:00 2023-01-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332931
The EUR/USD Pair Maintains The Bullish Sentiment

Analysis Of The Euro To US Dollar Pair Situation

Torben Melsted Torben Melsted 23.01.2023 08:15
EUR/USD is struggling to hold its head above water but the ongoing correction from 1.0887 will soon drag it lower towards the 1.0437 - 1.0500 target area. We did say that we expected this correction to be complex and shallow in alternation with wave 2 which was deep and simple in its structure. It's possible that the ongoing sub-wave b of 4 will be able to reach resistance at 1.0933 which was our ideal target for wave 3 but it failed to reach this target. Then, we often see the sub-wave b of the following correction reach the expected target. However it's not a requirement, so don't take it for granted that we reach 1.0933 before the following decline towards the 1.0437 - 1.0500 target area.   Relevance up to 06:00 2023-01-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309559
The Upside Of The EUR/USD Pair Remains Limited

The Upside Of The EUR/USD Pair Remains Limited

Oscar Ton Oscar Ton 23.01.2023 08:19
Technical outlook: EURUSD rose through 1.0903 in the early Asian session on Monday. The single currency pair is seen to be trading close to 1.0895 at this point in writing as the bears prepare to take control back. Prices have reached the resistance zone as marked on the daily chart here and could turn lower from here. The upside remains limited going forward. EURUSD is close to terminating its larger-degree corrective wave, which began from 0.9535 back in September 2022. The bulls have managed to remain in control for the past several weeks taking out major resistance at 1.0786 over the last week. They will likely take a break as the bears prepare to drag lower towards 1.0380 and down to 1.0050 going forward. EURUSD has also been accompanied by bearish divergence on the RSI on several different timeframes (hourly, 4H and Daily). This could also be a potential turning point and trend reversal. A break below 1.0481, which is immediate price support, will confirm a meaningful top in place above 1.0900. The instrument is looking lower from here soon. Trading idea: Potential bearish reversal against 1.0950-70. Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309563
The EUR/USD Pair: There Are Still No Sell Signals

The EUR/USD Pair: There Are Still No Sell Signals

Paolo Greco Paolo Greco 23.01.2023 08:25
M5 chart of EUR/USD Last Friday, EUR/USD was trading flat again. The end of last week was quite dull since the market decided to take a break. Macroeconomic and fundamental backgrounds were almost absent, but at the same time traders did not use this time for a correction. Thus, the euro once again failed to move down at least a little bit. The pair spent several days near the local highs, and on Monday it easily updated them, and this week we will see growth. Surely, there were no important events during the weekend or on Monday night, that's why the euro was aiming for growth again without any reasons. Reminder: the meetings of the Federal Reserve and the European Central Bank will be held in a week and the central banks' rates are one of the key factors, which explains why the euro grows. The Fed is almost guaranteed to lower the tightening rate to 0.25% and the ECB will continue to raise the rate at 0.5%. Based on the fact that the rate gap is starting to narrow, traders are still buying the euro. There was only one trading signal on Friday. The price rebounded from the 1.0802-1.0806 area at the beginning of the US trading session, and then went up about 30 points. That is how much profit could be made on Friday. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders increased by 16,000, whereas the number of short positions rose by 11,000. Thus, the net positions increased by 5,000. The number of long positions is 135,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 48,000 (702,000 vs. 655,000). H1 chart of EUR/USD You can see on the one-hour chart that EUR/USD has spent about a week in the 1.0806-1.0868 horizontal channel, but today it could come out of it through the upper limit. Therefore, the ascending movement may continue this week, but there are still no sell signals. On Monday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137 and also Senkou Span B (1.0679) and Kijun Sen (1.0834). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 23, ECB President Christine Lagarde will give another speech in the EU, but it will be late in the evening. In the US, there are no major events scheduled for tonight. We do not expect a strong market reaction to Lagarde's speech but at the same time the euro might continue to rise even without a clear reason. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 05:00 2023-01-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332935
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

FX: Low Gas Prices Should Remain Supportive For FX In The CEE Region

ING Economics ING Economics 23.01.2023 09:17
Risk assets are largely holding onto their 2023 gains, buoyed by the view that recessions may be mild and that slowing price pressures could allow the Fed to respond if need be. This has left the dollar gently offered. Ahead of next week's Fed and ECB policy decisions, this week's focus will be on US 4Q GDP, PMI readings, and rate decisions in Canada and Hungary USD: Dollar to stay gently offered The dollar starts the week gently offered. Trading conditions in Asia overnight have been quiet as China starts a week of public holidays for the Lunar New Year. A quick review of asset market performance year-to-date shows equities performing well with European and Chinese equities leading the pack at +8%. Bond markets have also been performing well, led by the emerging market local currency sector. The big question for this year remains whether we will see a differentiation between equities and bond markets as the US and Europe go into recession. And indeed, it seems that credit market participants are reluctant to drive credit spreads any narrower at this stage in the cycle. Ahead of next week's Fed meeting, the US focus this week will be on the provisional January PMI readings, where both manufacturing and services sentiment are expected to continue with recessionary sub-50 levels. Thursday should see a reasonably strong 4Q22 US GDP figure of 2%+ quarter-on-quarter annualised, although as our US economist James Knightley writes, that strength may be driven by the trade side and on the back of weak US imports. Friday sees the December personal income data, including the Fed's preferred measure of inflation, the core PCE deflator. James is sub-consensus on this, looking for a 0.2% month-on-month reading and supporting the narrative that the US inflation threat is easing. The data calendar in theory should keep the dollar on the soft side this week. However, DXY has come quite a long way already and we doubt whether the market is ready to add to short dollar positions ahead of next week's FOMC meeting - which could pose a positive event risk to the dollar should the Fed push back on the 50bp of easing the market now prices for this year. As such, DXY may find support in the 101.30/102.00 range this week. Chris Turner EUR: ECB pushback successful Judging by the levels of the two-year EUR swap (3.19%) European Central Bank speakers have been successful in pushing back against last Tuesday's Bloomberg News story that the ECB wanted to slow the pace of its hikes after February. This story had sent this swap rate down to 3.05%, softening EUR/USD with it. Both of those trends have now been reversed. However, as above on the dollar story, we suspect investors may be reluctant to chase EUR/USD through resistance at 1.0950/1000 ahead of next week's central bank event risks. In terms of eurozone data, look for the provisional January PMI readings across the eurozone, Germany, and France (released tomorrow) and Germany's Ifo on Wednesday. The Ifo will be particularly interesting to see whether the expectations component picks up anywhere near as sharply as the German ZEW investor survey. Please see here for our eurozone macro team's latest views on the region. A bullish wildcard for the euro could come from any further comments on new joint EU bond issuance to support green investments, as European politicians attempt to support local industry in the face of President Biden's Inflation Reduction Act.  Elsewhere, Francesco Pesole has today published a scenario outlook for the EUR/SEK. Our core view is for a lower EUR/SEK this year. Chris Turner GBP: Holding its own Sterling continues to perform well and is holding onto the gains made last week on the back of high wage and core CPI readings. The market now prices a 45bp Bank of England (BoE) hike at next week's meeting. The firming up of BoE tightening expectations has allowed sterling to match this year's strength of the euro. And certainly, there has been a marked improvement in the perception of UK sovereign risk as evidenced by the five-year sovereign CDS trading back down to 22bp last week. This week's UK calendar mainly focuses on the January PMI readings, where again both the manufacturing and services components are expected to be in recessionary territory. Overall, we suspect GBP/USD might not have the momentum to sustain a break above 1.2450/2500 this week, while EUR/GBP should find support in the 0.8700/8730 area. Chris Turner CEE: All eyes on the Hungarian forint This week, the region gets interesting again. Today, we get a series of monthly indicators from the Polish economy, which should show further signs of slowing. The main focus will be on industrial production, which we estimate grew by 1.2% year-on-year, less than market expectations. Tomorrow, consumer confidence in the Czech Republic will be published and later we will see the decision of the Hungarian National Bank (NBH). We saw a downside surprise in December inflation, but believe the peak is still ahead. We do not expect any changes in monetary policy settings, but the market will be looking for some signs of an early interest rate cut. In our view, the NBH will maintain a hawkish tone and will not encourage speculation of premature action. On Wednesday, Poland will release labour market data. Besides the calendar, we can expect further statements from the Czech National Bank board members before the blackout period for the February meeting begins on Thursday. However, at the moment everything points to continued stability in interest rates. In Hungary, Fitch downgraded the sovereign rating outlook from stable to negative on Friday. The agency cites among the reasons the delay in payments from EU funds, which implies insufficient progress in the EU story. In addition, this Friday, S&P will publish a rating review of Hungary. The agency already downgraded its outlook in August.   In the FX market, at the global level, not much changed for the CEE region last week. Higher EUR/USD, improving sentiment in Europe and low gas prices should remain supportive for FX in the region. However, all eyes will be on the Hungarian forint this week as it faces an NBH meeting and rating risks. We believe the forint will find a way to maintain its current strong values at the end of the week despite higher volatility. A deterioration in the outlook should not be a major surprise for the market and we also expect the hawkish NBH to dampen the current market speculation on an early rate cut, which should be positive for the forint. On the other hand, positioning is on the long side according to our estimates though if everything goes according to plan, we could test 390 EUR/HUF. Elsewhere, we see the Czech koruna still near 24.00 EUR/CZK and the Polish zloty should go below 4.70 EUR/PLN. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

Overall The Rising Trend Of The EUR/USD Pair Is Still In Place

Paolo Greco Paolo Greco 23.01.2023 09:42
On Friday, the EUR/USD currency pair continued to move more sideways than upwards, but overall the rising trend is still in place, and the European currency soared with renewed force tonight and in the morning. The pair simply took a little break last week before a new "take-off," in theory. We are not the only ones puzzled by this; a sizable number of specialists are also questioning what is motivating the market, which keeps buying the euro currency. Nothing significant occurred on Monday night that could have caused the euro to increase significantly. As a result, the overall situation is unchanged: the pair frequently exhibits growth for no apparent reason. We've already mentioned that the euro may now be supported by one or two factors. The first is the highly likely narrowing of the ECB-Fed rate differential in the coming months. The second is a technical upward trend correction following a slump of approximately two years. However, it should also be acknowledged that the euro is expanding too quickly and in excess. The outcomes of the Fed and ECB meetings, which will be held in a week and a half, are in reality already known to the market. We think that these occurrences may cause the market's sentiment to shift. However, we must reiterate that the market will act regardless of the underlying and macroeconomic context if it chooses to purchase the euro and sell the dollar. Just that there are times when the macroeconomics and "foundation" don't correspond with the direction of movement. So, all you need to do is pay closer attention to technical analysis, which depicts market activity flawlessly. What will this week's trading bring? In terms of macroeconomics or "foundation," this week won't be the most interesting. There won't be many truly significant stories or happenings. We should begin by listening to a few more remarks from Christine Lagarde. Last Thursday and Friday, the ECB's president spoke, although she offered no essentially novel information. Monetary policy, it should be understood, is like the Titanic in the Atlantic. If Lagarde speaks five times in two weeks, she simply cannot surprise market participants every time because she shifts the direction of her movement extremely slowly. Therefore, just one performance out of five or ten can cause a market shift. But it's also impossible to dismiss the ECB president's statement as "unimportant." Lagarde will present this week on Monday, Tuesday, and Friday. Tomorrow will also see the release of business activity indices for the EU services and industrial sectors in addition to Lagarde's speeches. Serious changes in their values shouldn't be anticipated based on the forecasts. All three indicators are predicted by experts to remain below the "waterline" of 50.0, therefore a big response to these findings is not anticipated absent significant departures from expectations. All of the events scheduled for this week, following the European Union, are listed above. It turns out that traders can, in theory, focus only on the "method" for the next five days. And all that is saying at this point is that neither a sell signal nor a condition for the pair to decline exists. On the 4-hour TF, all indications are pointing upwards, and on the 24-hour TF, the price is above all of the Ichimoku indicator's lines. Such a movement might theoretically continue for as long as you like. Although we are not opposed to the euro's expansion, we think there should also be corrections. It should be remembered that nearly all of the Fed's monetary policy committee members indicated last week that they were prepared to continue tightening monetary policy. Although it appears to be a "hawkish" aspect, the dollar showed little sign of reaction. It is therefore far from certain that the dollar will appreciate, even if supportive elements for the US currency emerge this week. As of January 23, the euro/dollar currency pair's average volatility over the previous five trading days was 79 points, which is considered "normal." So, on Monday, we anticipate the pair to fluctuate between 1.0813 and 1.0971. The Heiken Ashi indicator's downward reversion will signal the beginning of a new phase of corrective activity. Nearest levels of support S1 – 1.0864 S2 – 1.0742 S3 – 1.0620 Nearest levels of resistance R1 – 1.0986 Trading Suggestions: The EUR/USD pair is attempting to move north once more. Until the Heiken Ashi indicator turns down, you can continue holding long positions with goals of 1.0971 and 1.0986. After putting the price below the moving average line and setting a target price of 1.0742, you may start opening short positions. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 07:00 2023-01-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332947
US Inflation Rises but Core Inflation Falls to Two-Year Low, All Eyes on ECB Rate Decision on Thursday

The Attention Is Set To Remain On The Latest Set Of Earnings Reports

Michael Hewson Michael Hewson 23.01.2023 10:16
After two weeks of strong gains, European markets gave back some of this year's early momentum with a modest pullback last week, with some suggesting that we may well have seen the peaks in the short term, in a manner similar to what we saw last year. US markets  US markets had an altogether more mixed week with the Dow seeing its worst week since early December while the Nasdaq 100 finished the week higher.   While there may be some logic in the argument that we may have seen the peaks in US markets, given how they have performed in the last few months, there is less of an argument when you look at markets in Europe, which look set to open higher later this morning..   Valuations in Europe are lower to begin with, and on an income/dividend basis much more compelling, compared to the US, with the FTSE100 and DAX both trading on forward dividend yields of 3.77% and 3.36% respectively.   Nonetheless financial markets appear to have a rising conviction that central banks are on the cusp of a significant pivot on monetary policy sometime later this year, a view that appears to be getting additional traction now that a number of Fed policymakers appear comfortable with the idea of another step down in the central banks rate hiking cycle to 25bps next week.   This view continues to be reflected in the US bond market, where yields continued to make fresh multi week lows, with the US 2 year closing lower for the third week in a row, as has the 10-year yield.   The performance of the US dollar was no less nuanced, posting a fresh 8-month low, as various European Central Bank officials continued to make more hawkish noises. The pound also held up well last week, closing higher for the 4th week in succession against the US dollar.   As we look ahead to a new week most of the attention is set to remain on the latest set of earnings reports, as investors look to decide whether the current strong run of gains can continue, and how much further central banks are prepared to go to get a handle on inflation.   Last week markets appeared to take some comfort from the fact that companies were focusing much more on maintaining their margins, and cutting costs, as well as jobs, amidst uncertainty over the global economic outlook.   This comfort appears to be predicated on an assumption that any economic slowdown will prompt a pause first and foremost in the central bank's rate hike plans, followed by some rapid rate cuts. Of course this assumes that these aforementioned central banks will be happy to start cutting rates when inflation is still well above target.   This seems highly unlikely, and while markets appear to have become conditioned to this sort of mindset since the financial crisis took rates sharply lower, it is by no means the given markets appear to think that it is.   Unemployment is still low, not only in US but in the UK and Europe as well, and having heard last week from the likes of Fed governor Lael Brainard, who is normally considered dovish, that inflation in her view still remains way too high, it is difficult to envisage a scenario where rate cuts this year are likely at this point.   ECB President Christine Lagarde was also at it, saying that inflation is still way too high and markets are underestimating the ECB's resolve to drive prices back towards their 2% inflation target. While the ECB did step down to a 50bps hike in December, there were a number on the governing council who wanted another 75bps hike.   When the ECB met last month, Lagarde more or less pre-committed the ECB to at least another 3 50bps rate hikes at the next 3 meetings, in a move that saw the euro push higher, but thus far has failed to see it follow through.   This would suggest that markets are unconvinced the ECB will be able to follow through on such guidance given the risks it might pose to the borrowing costs of the more highly indebted members of the euro area.   As we look ahead to a new week, the main focus will once again be on the US economy and this week's Q4 GDP numbers, as well as the December core PCE deflator inflation numbers, which are due on Thursday and Friday.     EUR/USD – still finding the air quite thin anywhere near to the 1.0900 area and support around the 1.0770/80 area. Could see a deeper fall towards 1.0720. The key resistance sits at 1.0950 which is a 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110.   GBP/USD – ran out of steam just shy of the December peaks at 1.2440, last week, but closed near the highs of the week. Has managed to hold above the 1.2300 area for the last two days. Above 1.2450 could see a move towards 1.2600. We need to hold above the 1.2000 area for further gains to unfold or risk a return to 1.1830.   EUR/GBP – held above the 50- and 100-day SMA last week at the 0.8720 area, before squeezing back to the 0.8775/85 area. We need to see a move through 0.8800 to retarget the 3-month highs of earlier this month. The next support below 0.8720 targets 0.8680.   USD/JPY – last week's rebound from the 127.00 area has thus far struggled to maintain traction above the 130.20 area, although we did overshoot briefly to 131.60 after the BoJ decision. We need to see a move through the highs last week to open up 132.50. We currently have support at 128.30.     FTSE100 is expected to open 12 points higher at 7,782   DAX is expected to open 73 points higher at 15,106   CAC40 is expected to open 23 points higher at 7,019   Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

For The First Time Since Last April The EUR/USD Pair Is Above 1.09

Ipek Ozkardeskaya Ipek Ozkardeskaya 23.01.2023 10:20
The week started slowly in Asia, as many markets were closed due to the Chinese New Year holiday. But those that were open benefited from the positive vibes from the US markets last Friday.  US equities rally, led by tech stocks  The S&P500 rallied 1.89% and flirted with the 200-DMA again, and closed the week a stone's throw from the ceiling of the 2022-to-date bearish trend.   Nasdaq did even better. The index rallied 2.86%, boosted by a well-deserved 8.50% rally from Netflix - which not only announced better-than-expected results in the Q4, but also a mouth-watering beat on the subscription growth end, with 7.7 mio new subscribers – a number that we thought we would hear only during a pandemic!   Google, on the other hand, jumped 5.72%, but for a less glamorous reason. The company said it will fire 6% of its workforce, which is around 12'000 jobs globally. Investors heard 'yes, that will clearly improve the cloud profitability!'   In total, Amazon, Microsoft and Google will be cutting 40'000 jobs.   Fed's quiet period  The quiet period for Federal Reserve (Fed) officials will help us digest what has been said over the past weeks.   In summary, we know that the Fed will further slow the size of its rate hikes in the coming months. $  But the fact that the Fed will raise by only 25bp next meeting doesn't mean that it won't continue hiking the rates. The rates will likely go above 5% in the Q1.  Focus on earnings  Microsoft, Johnson&Johnson, General Electric,Texas Instruments, Intel, Tesla Mastercard, Visa, Chevron and American Express are among companies that will go to the earnings confessional this week.  Big Tech earnings projections are down by about 5% since October.   Yet, expectations went sufficiently low that there is plenty of room for a positive surprise, as has been the case with Netflix.   FX & energy  The dollar kicked off the week under pressure. The EURUSD already hit the 1.09 mark early in the session, for the first time since last April, and is just a couple of pips away from the major 50% retracement on 2021-2022 selloff.   PMI data due tomorrow could confirm that the European economies took a softer hit thanks to mild start to the winter, and cheaper energy prices as a result of it.   And sufficiently strong PMI data, combined to the negative pressure in the US dollar into the Fed meeting, could help the EURUSD take a chance on the 1.10 resistance in the coming sessions.   In energy, crude oil posted its second straight week of gains on Friday, as the Chinese reopening story and prospects of higher global demand, and around 1 mbpd gap between supply and demand outweighed the recession fears.   The latest rebound in European nat gas prices, and the fact that we now have cold and snow in Europe could also tilt the balance further to the upside.   The barrel of American crude spent last week above the 50-DMA, now around $78pb, but couldn't clear the 100-DMA, which stands around $82pb.   The next target for the oil bulls is a move above the $82pb, for a potential extension of gains toward the $87/88 range.  
Bitcoin Extends Rally, Microsoft & Tesla Will Report Earnings This Week

Bitcoin Extends Rally, Microsoft & Tesla Will Report Earnings This Week

Swissquote Bank Swissquote Bank 23.01.2023 10:29
US stocks, and Bitcoin rallied on Friday, boosted by gains in tech stocks on surprisingly strong Netflix results, Google’s job cut announcement and dovish hints from Federal Reserve (Fed) members. Earnings This week, the quiet period for Federal Reserve (Fed) officials will help us digest what has been said over the past weeks and focus on earnings!Microsoft, Johnson&Johnson, General Electric,Texas Instruments, Intel, Tesla Mastercard, Visa, Chevron and American Express are among companies that will go to the earnings confessional this week. Big Tech earnings projections are down by about 5% since October. Yet, expectations went sufficiently low that there is plenty of room for a positive surprise, as has been the case with Netflix. Forex In the FX, the US dollar kicked off the week under pressure. The EURUSD already hit the 1.09 mark early in the session. Cable advanced to 1.2450. The barrel of American crude posted its second straight week of advance, though the 100-DMA hasn’t been cleared… just yet! Watch the full episode to find out more! 0:00 Intro 0:45 US stocks reverse losses 2:29 Bitcoin extends rally 3:14 Digesting Fed expectations into the FOMC meeting 4:40 Microsoft & Tesla will report earnings this week 6:07 EURUSD hits 1.09; sterling, Loonie are also better bid against USD 8:13 Crude oil eyes $82pb resistance Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Microsoft #Tesla #earnings #Fed #expectations #USD #EUR #GBP #CAD #crude #oil #Bitcoin #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The South America Are Looking For Alternatives To The US Currency

The South America Are Looking For Alternatives To The US Currency

Jakub Novak Jakub Novak 23.01.2023 12:38
Today's announcement that Argentina and Brazil are once again in the early stages of beginning negotiations on the formation of a single currency for financial and commercial activities came as the demand for risky assets continued to increase. The idea of a unified currency will undoubtedly encounter many political and economic challenges. South America The two major economies in South America have been debating ways to coordinate their currencies for many years, frequently as a response to the dominance of the dollar in the area. There has not been much advancement in practice as a result of the ongoing macroeconomic imbalances in both nations and the sporadic political barriers to this concept. In a joint essay published in the Argentine newspaper Perfil on the eve of their meeting on Monday in Buenos Aires, Brazilian Luiz Inacio Lula da Silva and Argentine Alberto Fernandez noted that the development of regional trade can be aided by the exchange of their respective currencies. "By removing obstacles and resolving disputes, we hope to modernize and simplify the regulations governing the promotion of regional currencies. We also choose to keep talking about the idea of establishing a common South American currency that can be used for financial and business transactions, cutting expenses," the declaration read. Many developing nations and markets are looking for alternatives to the US currenc Numerous analysts have remarked that many developing nations and markets are looking for alternatives to the US currency and that Argentina has recently struggled with the highest inflation in more than three decades. It is evident that Brazil's economy, like those of many other nations, will grow slowly this year, but the new Lula administration aims to considerably increase public spending, making it possible for it to keep its election pledges and causing another inflationary spike in the area. It has started by Argentina The conversations were started by Argentina, according to the Brazilian government's delegate. However, they are still in their very early stages, and no completion date has been established. Brazilian Finance Minister Fernando Haddad revealed to reporters in Buenos Aires that Argentina is striving to revive its trade, which has been steadily declining recently owing to high inflation, and that one of the proposals being discussed is a single currency for financial and commercial operations. "Argentina is one of the nations with which we are in communication to develop exports, therefore we are examining several prospects that will allow us to increase trade." Argentine Economy Minister Sergio Massa stated in an interview that Argentina and Brazil will extend invitations to other Latin American nations to join, but he did not want to "offer false hopes" due to the lengthy nature of the two nations' commercial integration. EUR/USD Regarding the technical analysis of EUR/USD, there is still demand for the single currency, and there is a potential that monthly and annual highs will continue to be updated. Staying above 1.0870 will cause the trading instrument to increase to the 1.0930 region, which is what is needed to achieve this. Above this point, you can easily reach 1.0970 and update 1.1000 in the near future. Only the collapse of support at 1.0870 will put more pressure on the pair and drive EUR/USD to 1.0820, with the possibility of dropping to a minimum of 1.0760 if the trading instrument declines. GBP/USD Regarding the technical picture of GBP/USD, the pound's growth is still going strong. Buyers must sustain their advantage by staying over 1.2390. However, only the breakdown of resistance at 1.2440 will make it more likely that the recovery will continue to the 1.2500 region, after which it will be feasible to discuss a more abrupt move of the pound up to the 1.2550 region. After the bears seize control of 1.2390, it is feasible to discuss the pressure on the trading instrument. The GBP/USD will be pushed back to 1.2340 and 1.2250 as a result, hitting the bulls' holdings. Relevance up to 09:00 2023-01-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332979
The USD/JPY Price Seems To Be Optimistic

The Japanese Yen Fell And USD/JPY Reached Level Of 130, The EUR/USD Pair Lost Its 1.09 Level And Agian Is Around 1.0880

Kamila Szypuła Kamila Szypuła 23.01.2023 13:44
The US dollar fell today on the possibility of less aggressiveness from the Fed. Poor trading conditions are likely to continue as many major hubs in Asia are closed for Lunar New Year celebrations. Two very important data will be published in the US this week: first look at US GDP in Q4 on Thursday followed by Core PCE on Friday. USD/JPY The Japanese yen fell towards 130 to the dollar, moving further back from multi-month highs as the Bank of Japan remains committed to its ultra-low interest rate policy despite rising inflation and increasing market pressure. Last week, the central bank countered speculation about another policy adjustment by keeping interest rates very low and leaving its yield control policy unchanged. Meanwhile, traders are eyeing the BOJ meeting in March for a potential move as well as April when a new BOJ governor will step in. The USD/JPY pair started the week below 129.50, but rose quickly and passed the 130.00 level. At the time of writing, USD/JPY is trading at 130.3640. EUR/USD The euro hit a nine-month peak against the dollar on Monday as comments on European interest rates signalling additional jumbo rate rises contrasted with market pricing for a less aggressive Federal Reserve. The euro is also being supported by an easing of recession fears amid a fall in natural gas prices. ECB Governing Council member Klaas Knot said on Sunday: "expect us to raise rates by 0.5% in February and March, and that we will not be done by then, and the next steps will be taken in May and June." His colleague Olli Rehn he noted that he saw grounds for significant interest rate hikes. The ECB's hawkish expectations coupled with increased bets on a slowdown in the pace of US Federal Reserve (Fed) tightening are helping to reduce the monetary policy divergence between the two central banks, which in turn favors the EUR/USD pair's rally. EUR/USD pair has lost its traction and pulled away from the multi-month it set above 1.0900 earlier in the day. Read next: British Pub Earnings Will Suffer Significantly| FXMAG.COM GBP/USD Economic affairs in the UK are somewhat calmer with attention being paid to the current round of industrial action hitting the UK and the perceived unfreezing of UK-EU relations. The British currency recently fell 0.32% to $1.2359 and lost more against the euro. The core CPI, which excludes energy, food, alcohol and tobacco and which some economists consider a better guide to inflation trends, remained unchanged at 6.3%. Market prices point to a 70% chance of a 50 basis point rate hike at the Bank of England's February meeting. Sterling pulled back from a seven-month high against the dollar on Monday, which hit during the Asian hours. GBP/USD turned and fell towards 1.2350 during the European trading hours on Monday. AUD/USD The RBA did not rule out another rate hike at its February meeting as mentioned in previous minutes and remains divided between no change and a 25 basis point increase, Wednesday's inflation printout could bring more clarity. On a positive note for the Australian dollar, commodity prices are projected to remain elevated throughout 2023, mainly based on China reopening and coal exports to European countries. AUD/USD is hovering around 0.6980-85, defending early week gains on a weak Monday morning in Europe. The pair of the Australian failed to stay above $0.70, but is trading close to this level, so a re-breakout cannot be ruled out. Source: investing.com, finance.yahoo.com
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Upward Trend Of The EUR/USD Pair Is Still Present

InstaForex Analysis InstaForex Analysis 24.01.2023 08:03
Investors are stubbornly buying stock market instruments and bringing confusion to the related currency market. Yesterday, the S&P 500 gained 1.19% and the euro gained 15 pips. There is a double divergence on the daily chart, but the market's desire to change this technical pattern is obvious. The 1.0990 target is getting closer. The eurozone business activity indicator for January will be released this afternoon, the forecast is 50.2 points against 49.8 in December. In the US, this indicator may also show growth (the forecast is 45.0 vs. 44.7 previously), but manufacturing PMI is expected to weaken to 46.0 from 46.2 in December, while in Germany the Manufacturing PMI is expected to rise to 47.9 from 47.1. The euro can take advantage of this divergence. On the four-hour chart, the upward trend is still present - the price is above the indicator lines and the Marlin is in a rising position. The closest signal to a downtrend will be when the price crosses the support of the MACD line, below 1.0824 Relevance up to 03:00 2023-01-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333047
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

Oscar Ton Oscar Ton 24.01.2023 08:05
Technical outlook: EURUSD carved an intraday high at 1.0926 on Monday before reversing sharply to 1.0850 during the New York session. The single currency pair has pulled back since then and is trading close to 1.0880 at this point in writing.Prices should ideally stay below the 1.0926 high and turn lower towards the 1.0770 initial support on lower timeframes. It would confirm that the bears are back in control. EURUSD might be extremely close to resuming lower towards 0.9535 and further. The large-degree corrective rally, which began from 0.9535, looks complete and calls for a turn lower from current levels. If not a trend reversal, we can expect a meaningful correction towards 1.0370 and 1.0050 levels going forward. A break below 1.0480 adds to further confidence in the bearish move. EURUSD faces strong resistance around the 1.0900-1.1000 zone as marked on the daily chart. The bears will remain inclined to be back in control and drag prices lower towards 1.0370 in the near term. Also, note that 1.0050 is the Fibonacci 0.618 retracement of the above rally between 0.9535 and 1.0926 levels. Hence, the probability remains high for a bullish reversal if prices drop to those levels. Trading idea: Potential bearish move against 1.1000 Good luck!     Relevance up to 04:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309715
The Price Of EUR/USD Pair Will Develop Sideways Movement

Analysis Of The Chart Of The Euro To US Dollar Pair

Torben Melsted Torben Melsted 24.01.2023 08:21
Relevance up to 06:00 2023-01-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309727
EUR/USD Pair Has Potential For The Downside Movement Today

The Upward Movement Of The EUR/USD Pair May Persist In The Near Future

Paolo Greco Paolo Greco 24.01.2023 08:26
M5 chart of EUR/USD EUR/USD did not show any particularly interesting movements on Monday. The pair was rising at night, falling at the European trading session, staying flat at the US one. The only event that was interesting was a formal one. The new speech of European Central Bank President Christine Lagarde, who will speak five times in two weeks, did not give any new information. Lagarde basically said everything she could last week. She made it clear that the ECB's monetary approach will not be adjusted in the coming months, the rate will continue to rise at 0.5% for at least two more meetings. So there was nothing for traders to react to. There will not be many interesting events this week, but it absolutely does not mean that the price will stand in one place and wait for the Federal Reserve and ECB meetings, which will take place next week. Thus, for the time being, technique is top priority. There were no signals on Monday. During the US trading session, the pair fell to 1.0868 and the critical line, which together formed a support area. However, EUR did not rebound or cross this mark so there were no signals. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 10,300, whereas the number of short positions fell by 2,300. Thus, the net positions decreased by 8,000. Now the number of long positions is higher than the number of short positions opened by non-commercial traders by 127,000. From a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 52,000 (711,000 vs. 659,000). Read next: The Japanese Yen Fell And USD/JPY Reached Level Of 130, The EUR/USD Pair Lost Its 1.09 Level And Agian Is Around 1.0880 | FXMAG.COM H1 chart of EUR/USD EUR/USD maintains a bullish sentiment on the one-hour chart, staying above the lines of the Ichimoku indicator. Thus, the upward movement may persist in the near future, despite the flat last week. As we can see, there is still no way for the euro to correct, and traders prefer to buy the pair or not to do anything at all. On Tuesday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137 and also Senkou Span B lines (1.0679) and Kijun Sen (1.0845). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 24, Lagarde will deliver a speech in the EU, but the market has already shown that it already has all the necessary information and is not ready to work out all of Lagarde's speech. Traders will pay more attention to the indexes of business activity in the services and manufacturing sectors in the US and EU but those are not very important either. The market will only react to these reports if the results significantly deviate from the forecasts. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 06:00 2023-01-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333053
The RBA Is Expected To Raise Rates By 25bp Next Week

Forex: AUD Has Cemented Its Position As The Most Popular Long Trade In 2023

ING Economics ING Economics 24.01.2023 09:52
The market is focused on the US growth story and the dollar is more and more influenced by data prints. Today's PMI numbers should help limit downside exposure for the dollar. The euro remains supported by ECB officials fighting speculation of a 25bp hike. Hungary's central bank tests market sensitivity on an upcoming rate cut Some improvement in the market's sentiment around the health of the service sector in the US should help limit downside exposure for the dollar USD: Data-related risks are back Risk assets have started the week on the front foot, with equities rising yesterday in Europe and the US while Chinese markets are closed for the whole week. The dollar remained moderately offered. It’s become increasingly clear that larger swings in the dollar are now driven by data releases given the market's heightened sensitivity to the US growth story ahead of next week’s Federal Open Market Committee (FOMC) meeting. Preliminary PMIs will be released across developed markets today, and despite the surveys not being as highly regarded as the ISM in the US, that elevated sensitivity to data likely makes today’s releases a risk event for the dollar. Consensus expectations are centred around a modest recovery in the service index and in the composite survey. Some improvement in the market’s sentiment around the health of the service sector in the US should help limit downside exposure for the dollar. In that case, DXY may hold around 102.00 today unless PMIs in Europe surprise to the upside. Richmond Fed manufacturing data is the other release in the US calendar today. In the rest of G10, AUD has cemented its position as the most popular long trade in 2023, breaking decisively above 0.7000 yesterday. Tonight’s fourth-quarter CPI data in Australia will be key, as evidence of sticky inflation may force a hawkish repricing across the AUD curve (which currently embeds 40bp of extra Reserve Bank of Australia tightening) and add steam to the AUD/USD rally. CPI figures are released also in New Zealand tonight, and we see a larger risk they could show a deceleration in price pressures compared to Australia. AUD/NZD may retest the recent 1.0950 highs soon as the NZD curve has more room for a dovish repricing. Francesco Pesole EUR: Reality check Given that part of the recent EUR strength has relied on a re-rating of growth expectations in the eurozone thanks to lower energy prices, today’s PMIs will likely be a reality check on the sustainability of this driver for the common currency. Consensus expectations are moderately upbeat and signal that the PMI services index could return above 50.00 for the first time since July. Still, it will now take quite a good deal of positive news to push another big idiosyncratic euro rally. It seems more likely that EUR/USD could test 1.1000 on the back of rising market risk appetite weighing on the safe-haven dollar, if anything. At the same time, the effective pushback by ECB officials against speculation around 25bp hikes is likely limiting downside risks for the pair. President Christine Lagarde has one last chance to deliver any remark today before the quiet period kicks in ahead of next week’s meeting. A mere reiteration of her recent rhetoric, however, seems highly likely at this stage. Francesco Pesole GBP: Limited upside room against the euro PMIs may look a bit grimmer in the UK compared to the eurozone today, which could hinder the modest rebound in EUR/GBP seen over the past two trading sessions. The pair may struggle to climb above 0.8830-0.8850 for now. Still, the pound should be able to count on a generalised alignment in market expectations around a 50bp hike by the Bank of England next week (45bp priced in at the moment), which suggests a smaller scope for a correction.  Francesco Pesole HUF: Central bank assesses progress at home and abroad This week's highlight in the region is the National Bank of Hungary (NBH) meeting today. The central bank has made it clear that it wants to see a tangible and permanent improvement in risk sentiment. This means an improvement on the geopolitical side and on internal issues such as the Rule of Law, the current account deficit, and inflation. While we have seen some progress on all of these issues, in our view it is not enough for the central bank. However, after the progress in the EU story and lower-than-expected inflation, markets are already looking for indications of the NBH cutting rates, which are the highest in the CEE region. We expect the central bank to confirm its intention to keep interest rates high for longer today. However, we concede that the current situation could be tempting for the central bank to test the market by sending a dovish message. Increasingly, the market is seeing signs of speculation of a too-early interest rate cut. If the NBH resists the temptation and confirms the hawkish tone, we expect the current speculation to cool down and the forint could get back on track. In addition, yesterday's reaction to Fitch's downgrade of the rating outlook to negative could slightly clear long positioning and clear the way for further forint appreciation. In that case, we expect that the forint could test 390 EUR/HUF soon. Otherwise, the current positioning favours a rather asymmetric reaction negatively towards EUR/HUF 400. Frantisek Taborsky Read this article on THINK TagsHungary FX Daily Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

European Markets Have Started To Lose Some Of Their Early Year Momentum

Michael Hewson Michael Hewson 24.01.2023 11:32
US markets started the week very much on the front foot yesterday, with the S&P500 closing above the 4,000 level and the Nasdaq 100 leading the way higher with its second successive 2% daily gain.   The outperformance in tech appears to point to a growing conviction on the part of investors that the Fed will soon have to look at cutting rates before the end of the year, although to look at bond markets yesterday, yields also moved higher, as money flowed out of treasury markets.   With a lot of tech companies starting to announce job cuts, as well as other measures to rein in costs, and inflationary pressures showing further signs of easing, it would appear that US investors are starting to think in terms of the next move higher, despite concerns over lower profits   Given the uncertain economic backdrop this comes across as a bit of a leap of faith, and its also notable that while US markets have started to gain momentum in the past few days, European markets have started to lose some of their early year momentum.   While US markets surged higher yesterday it is notable that today's European market open is likely to be a much more tepid affair, suggesting perhaps that investors in Europe don't share the same enthusiasm about the economic outlook, despite the reopening of the Chinese economy, which may help to provide a demand boost.   This increase in optimism is likely to be reflected in today's flash PMI numbers for January, which have already seen a pickup in economic activity in the past few months due to the sharp declines in energy prices from the peaks in August and September.   In Germany manufacturing PMI fell to 45.1 in October, but has recovered since then, albeit is still very much in contraction territory. Services have seen a similar pattern, dropping to two-year lows of 45, before showing small signs of a recovery. We expect to see a further improvement in today's January numbers to 48 for manufacturing and 49.5 in services.     In France, we've seen a similar pattern in manufacturing, although services have been more resilient due to the energy price subsidies provided by the French government to cushion French households from the worst effects of higher prices. France manufacturing is expected to improve to 49.5 from 49.2, and services to 49.8 from 49.5.   In the UK, manufacturing has struggled over the past 3 months and looks set to continue to do so, while services have been slightly more resilient. As we head into 2023 the challenges for business will be whether we see new investment, and a pick-up in economic activity, after the rising pessimism seen at the end of last year. Manufacturing is expected to remain subdued at 45.5, while services could slip back from 49.9 to 49.5.   Public sector borrowing in December is expected to remain high on the back of rising debt interest and energy price support with expectations of a small fall from November's £22bn to £18bn.   US manufacturing and services are expected to remain weak at 46 and 45 respectively.      EUR/USD – a marginal new high at 1.0927 yesterday, before slipping back again. The main resistance remains at the 1.0950 area which is 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110. Support remains back at the 1.0780 area.   GBP/USD – ran out of steam just below the 1.2450 area yesterday slipping back towards the 1.2320 area. Has managed to hold above the 1.2300 area for the last three days. Above 1.2450 could see a move towards 1.2600. A move below 1.2290 could see a move towards 1.2170.   EUR/GBP – slid back from the 0.8815 area but while above the 50- and 100-day SMA which acted as support last week the bias remains for a return to the recent highs at 0.8890. The next support below 0.8720 targets 0.8680.   USD/JPY – has squeezed back above the 130.20 area, with a move through 131.60 and last week's high potentially targeting a return to the 132.50 area in the short to medium term. Support currently at the 128.20 area as well as the lows last week at 127.20.     FTSE100 is expected to open 20 points higher at 7,804   DAX is expected to open 47 points higher at 15,150   CAC40 is expected to open 23 points higher at 7,055   Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
The AUD/USD Pair’s Downside Remains Off The Table

The Aussie Pair Is Above 0.70$, GBP/USD Pair Lost Its Level Of 1.24$

Kamila Szypuła Kamila Szypuła 24.01.2023 12:56
The dollar traded near a nine-month low against the euro and lost its recent gains against the yen on Tuesday as investors weighed the risk of a US recession with the Federal Reserve's monetary policy outlook. USD/JPY The Japanese yen gained slightly against the US dollar today after Jibun Bank's composite PMI was 50.8 in January from 49.7 previously. The manufacturing component was the same as last month's 48.9, but the services component was 52.4, above the previous reading of 51.1. These are diffusion ratios, and an index above 50 is seen as positive for the economy. The dollar fell to 127,215 yen last week, the weakest since May, before the Bank of Japan's policy review, as investors assumed the BoJ would begin to end its stimulus program. However, the BJ left the policy unchanged, giving the dollar some respite. Analysts believe BOJ change will come sooner rather than later as policy makers make tweaks to their yield curve control mechanism. USD/JPY drops towards 129.00 but rebounded and trades above 130.00 again. EUR/USD The eurozone showed resilience in late 2022 with plenty of positive data that so far seemed to carry over to 2023. The hawkish rhetoric of ECB policymakers continues to strengthen the euro while optimism about avoiding recession is growing. The euro, on the other hand, gained almost 0.8% last week, which was boosted by a wave of officials from the European Central Bank. ECB President Christine Lagarde also reiterated on Monday that the central bank will continue to raise interest rates rapidly to curb inflation, which is still more than five times higher than the 2% target rate. PMIs in the euro zone were higher than expected. Only Germany's Manufacturing PMI fell from 47.1 to 47.0. EUR/USD lost grip and fell towards 1.0850 after the release of mixed PMI data from Germany and the euro zone. Ahead of the US S&P Global PMI survey, the US dollar index has been stable above 102.00. The EUR/USD pair is trading close to 1.0870 at the time of writing. Source: investing.com GBP/USD The British pound was lower on Tuesday after data showed economic activity weakened further in January, underlining the risk that Britain could slip into a recession in 2023. After an impressive December services PMI report, markets were hoping for another encouraging reading in January given a slightly brighter outlook now that inflation seems to be headed in the right direction. This was not to be the case as the new year brought with it a sustained decline in private sector business activity in the UK. The flash UK PMI Composite was 47.8 (December: 49.0). lowest in 24 months. In contrast, the UK industrial production index was 46.6 (December: 44.4). The highest in 6 months. UK Services PMI Business Activity Index at 48.0 (December: 49.9). The Bank of England is still expected to raise its key interest rate for the tenth consecutive time on Feb. 2 after its next scheduled meeting. The cable pair also lost amid emerging reports. GBP/USD pair trades below 1.2400 again and is now at 1.2318 AUD/USD The Australian dollar was nearing a five-month high from last week at 0.7063 as the US dollar comes under increasing pressure. While the CPI is the main target of the RBA's mandate of targeting 2-3% over the business cycle, the Producer Price Index (PPI) may also play a role. The PPI will be released this Friday and if it accelerates in the fourth quarter, it could be a problem for CPI this quarter. Companies face higher costs. It's also worth noting that the Australian and New Zealand dollars hit multi-month highs on Tuesday as investors refocused on risky assets, easing recession fears and a less aggressive Federal Reserve. The pair of the Australian Dollar, despite not maintaining previous imports, remains above 0.70. The Aussie Pair is currently trading at 0.7023. Source: investing.com, fiance.yahoo.com, dailyfx.com
Bank of England raised the interest rate, UK unemployment data go out tomorrow

The EUR/USD Pair Continues To Rise In The Positive Area

InstaForex Analysis InstaForex Analysis 25.01.2023 08:14
The euro closed Tuesday with slight gains, some other counter-dollar currencies closed the day with losses. Investors are gently probing for further growth (Forex), but the stock market is not stable. Yesterday, the S&P 500 closed the day almost flat (-0.07%), the Russell 2000 was down 0.22%, whereas PMIs came out good. There was a new divergence on the daily chart. Nonetheless, it is just an expectation of a renewed divergence, which might be broken. Therefore, the uptrend is still present, and the target is 1.0990. On the four-hour chart, the price has once again moved away from the support of the MACD line, the Marlin oscillator continues to rise in the positive area. It is still in an uptrend. I expect the price to reach the target level of 1.0990. Consolidation under the MACD line, below 1.0845, will be the first signal for a reversal Relevance up to 03:00 2023-01-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333163
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD Pair Is Still Trading Close To The Intraday High

Oscar Ton Oscar Ton 25.01.2023 08:20
Technical outlook: EURUSD rallied through the 1.0902 high during the Asian session on Wednesday, potentially completing a corrective rally after having tested 1.0926 on Monday. The single currency pair is still trading close to the intraday high at this point in writing as the bears remain inclined to be back in control soon. the price is looking lower from here going forward. EURUSD produced a Pinbar candlestick pattern on the daily chart on Monday after printing the 1.0926 high. The interim resistance still holds well and a follow-through lower could produce an Evening Star reversal. If the structure unfolds accordingly, the currency pair could be well on its way towards 1.0370 and 1.0050 at least. EURUSD remains supported at 1.0766, followed by 1.0481. A break lower will be required to confirm a bearish reversal ahead. Also, note that the Fibonacci 0.618 retracement of the entire rally between 0.9535 and 1.0926 is passing through 1.0050. A high probability remains for a bullish reversal if prices reach there. We shall review the wave structure then. Trading idea: Potential bearish turn against 1.1000 Good luck!     Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309913
FX Daily: Testing the easing pushback

The EUR/USD Pair Should Start A New Decline Soon

Torben Melsted Torben Melsted 25.01.2023 08:23
EUR/USD is completing the corrective wave from 1.0835 and should soon start a new descent towards the ideal corrective target area between 1.0437 - 1.0500 to complete wave 4 and set the stage for the next impulsive rally in wave 5. However, for now, it's the correction in wave 4 that is interesting for us. The instrument continues to follow its path as closely as possible. Correction is always hard to read as all possible combinations are available and especially the b-wave wave within a correction is the most difficult to read.   Relevance up to 06:00 2023-01-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309917
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The EUR/USD Pair Maintains A Bullish Sentiment

Paolo Greco Paolo Greco 25.01.2023 08:41
M5 chart of EUR/USD EUR/USD did not show any interesting movements on Tuesday. Moreover, the movements were almost an exact copy of the previous day. The euro tried to settle below the critical line, but failed and so it returned to the area just above the Kijun-sen line. Macro data were released yesterday, some of which were worth mentioning, however, I have already warned you that the market would only react if the actual values significantly differed from projections. There was no such thing, so traders did not react to the PMIs on the manufacturing and services sectors in the US and EU. Furthermore, traders certainly did not hear anything new from European Central Bank President Christine Lagarde's speech. Thus, the euro remains near its local highs and is still unable to start a bearish correction. There was a buy signal on Tuesday. The Kijun-sen line and 1.0868 level should be considered as an area. The price fell to this area at the European trading session and stayed in it for most of the day. When it finally left this area, half of the US session had already passed. Therefore, it was up to traders to decide if they wanted to open a long position. In any case, there was no loss on this transaction. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 10,300, whereas the number of short positions fell by 2,300. Thus, the net positions decreased by 8,000. Now the number of long positions is higher than the number of short positions opened by non-commercial traders by 127,000. From a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 52,000 (711,000 vs. 659,000). H1 chart of EUR/USD EUR/USD maintains a bullish sentiment on the one-hour chart, staying above the lines of the Ichimoku indicator. Thus, the upward movement may persist in the near future, despite last week's flat. As we can see, there is still no way for the euro to correct, and traders prefer to buy the pair or not to do anything at all. On Wednesday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137 and also Senkou Span B lines (1.0799) and Kijun Sen (1.0854). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events or reports in the EU and the US for today. If the pair spent the first two days moving sideways, then there is a high probability that we will witness the same thing today. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders.     Relevance up to 05:00 2023-01-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333173
The EUR/USD Pair Chance For The Further Downside Movement

The EUR/USD Market Did Not React To Economic Indicators From The Eurozone

Paolo Greco Paolo Greco 25.01.2023 08:44
The EUR/USD currency pair is gradually increasing. On Tuesday, the European currency continued to "bask in the sun" above the moving average line while the British pound started another round of downward adjustment. The pair cannot even slightly drop below the moving average, let alone experience a correction or something more significant, as we have constantly highlighted. The technical picture and our findings are therefore unchanged from Tuesday. The market is still solely looking north, and there is currently essentially no correlation with the pound. And it doesn't happen very often. In the European Union, three business activity indices were released yesterday. And because there was no market response to them, we will not even consider them. We would have alerted traders to the fact that one or more indices had experienced a major increase or decrease. However, since the market has not given these statistics any consideration, we don't think it's worthwhile to concentrate on them. It should be highlighted that recent relationships between the euro and its macroeconomic and fundamental background are illogical. Many reports are disregarded, and many reports are just used as justification for opening new long positions. As a result, the "foundation" and macroeconomics lose their essential substance. If the market is just engaged in purchasing euros, what use is it to analyze this or that report? Any news, message, or report can be evaluated from various perspectives. One of the major drawbacks of basic analysis is that every occurrence can be regarded as having both a positive and negative meaning. We make an effort to avoid adjusting the news to the movement of the pair, therefore we blatantly admit that the market now gives reports, speeches, and other events very little consideration. It would be more accurate to state that there is currently only one betting factor in the market, which is honestly already beginning to annoy me. The ECB is expected to keep tightening monetary policy practically indefinitely, according to the market, but the Fed has run out of options. While the ECB rate is currently being increased by 1.25% for three meetings, the Fed rate is very readily capable of rising to 5.5%. There is just a 0.25% difference. Does this mean that the euro is expanding exponentially as a result of this 0.25%? ECB members' remarks simply serve to perplex traders. Even more unpleasant than the subject of trading is one more issue. These are the ECB representatives' remarks regarding the same rates. The chairman of the ECB delivered three speeches last week, and members of the monetary committee who are also the central bankers of their respective nations also delivered multiple speeches. Rates will increase at a noticeable rate going forward, and almost everyone agreed. This makes sense and is to be expected; otherwise, it cannot be. Recall that the ECB debated tightening in various ways for a very long time last year but was unable to make a decision. He is currently far behind the Fed as a result. No one will comprehend his refusal if he delays raising the rate for a moment. There is just no need to slow the rate of growth with off-scale inflation at this point because the European Union recession has not yet started. As a result, the ECB simply lacks formal justification for tightening monetary policy by 0.5%. We believe that even a single rise of 0.75% would not be harmful. Members of the ECB are aware of this. What do we ultimately have? All of the ECB officials keep repeating their mantra about high inflation and hiking interest rates, and the market "digests" all of this by giving us more long positions in the euro currency. Nevertheless, there is nothing new that we discover every day. The market appears to be simply buying more euros by taking advantage of all formally "bullish" factors. Why sell the euro if you can ride the rising trend? We appear to be witnessing an inertial increase. As of January 25, the euro/dollar currency pair's average volatility over the previous five trading days was 76 points, which is considered "normal." So, on Wednesday, we anticipate the pair to fluctuate between 1.0804 and 1.0956. The Heiken Ashi indicator's upward reversal will signal the restart of the upward momentum. Nearest levels of support S1 – 1.0864 S2 – 1.0742 S3 – 1.0620 Nearest levels of resistance R1 – 1.0986 Trading Suggestions: The EUR/USD pair is still moving upward. Now is a good moment to think about opening new long positions with goals of 1.0956 and 1.0986 following the Heiken Ashi indicator's upward turn or when the price is recovering from a move. With goals of 1.0804 and 1.0742, short trades can be opened after the price is fixed below the moving average line. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. The short-term trend and the direction in which you should trade at this time are determined by the moving average line (settings 20.0, smoothed). Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 05:00 2023-01-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333169
The German economy underperformed in the Q4 of 2022, GDP declined

The Fall In Energy Prices Caused An Increase In German IFO Business Sentiment, Eyes On The Bank Of Canada Rate Decision

Michael Hewson Michael Hewson 25.01.2023 09:24
European markets were somewhat of a mixed bag yesterday after the lates flash PMI numbers painted a patchy outlook for certain parts of the economy in the UK and Europe.   US markets also underwent a mixed finish with the Dow finishing higher and the Nasdaq 100 lower,  due to caution ahead of the release of key earnings announcements after the close last night, with the main focus on Microsoft's Q2 numbers being of particular interest. These saw the software giant record revenues of $52.7bn, which was slightly below expectations, with profits of $2.32c a share.   As expected, personal computing and gaming revenue was disappointing, falling short of forecasts at $14.24bn, however this was offset by strong cloud revenue of $27.1bn. Windows OEM revenue fell 39%, while Xbox content and services saw a decline of 12%. On guidance Microsoft was rather pessimistic suggesting that Azure growth would slow, and that new business was already becoming more difficult. Microsoft also said subscriptions were also likely to slow, and that revenues would remain flat in Q3.   Looking ahead to today's European session the pessimistic outlook to last night's earnings numbers looks set to see a slightly lower open.   With UK inflation seeing a step-down last week to 10.5%, it remains painfully high for a lot of people, and on the RPI measure is even higher. In December, the ONS took the decision to pull the release for PPI inflation due to problems with some of the calculations, with respect to diesel prices as well as the food prices calculation.  This is significant as PPI can act as a leading indicator as to what is coming down the line when it comes to inflationary, as well as disinflationary forces. Prior to the ONS pulling the numbers in December there had been evidence that factory gate prices had been falling sharply with the last recorded October numbers seeing a slowing in inflationary pressure from the peaks in the summer.   If we get a further sharp slowdown in the annual numbers, this ought to give confidence that the headline numbers will also see similar falls in the coming months. Annualised input numbers in October came in at 19.5%, down from 20.8%, while output prices for October came in at 17.2%. Monthly input price estimates for today's December numbers are for a decline of -0.8%.   With energy prices continuing to fall over the winter, we've started to see gradual improvements in economic activity across the euro area. This improvement has been reflected in the better-than-expected German manufacturing numbers yesterday and was also responsible for a better than forecast improvement in German IFO business sentiment in December to 88.3.   This trend is expected to continue in today's January numbers with another improvement to 90.3, with the current assessment also set to improve to 94.9, and expectations set to rise to 85.3, from 83.2.   It was back in October that the Bank of Canada set the cat amongst the pigeons when it raised rates by a less than expected 50bps to 3.75%, in a move that suggests that central banks were starting to wake up to the possibility that too aggressive rate rises could do more harm than good.   They then followed that with another 50bps rate rise in December, to 4.25%, as concern grew that raising rates too high could create problems in the housing market.   With today's decision coming a week before next week's Federal Reserve decision, a lot of people are looking at the Bank of Canada for a steer in terms of whether we could see a step down from the Fed. It is widely anticipated that the BoC will announce another step down to 25bps, after headline inflation fell back to 6.4% from 6.8% in December. Median core prices however have remained sticky, remaining at 5% in November and up at the highs of the year, which in turn may mean the Bank of Canada could decide to err towards 50bps.     EUR/USD – currently range trading between the highs this week at 1.0927, and wider resistance at the 1.0950 area which is 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110. Support remains back at the 1.0780 area.   GBP/USD – continues to struggle below the 1.2450 area and slipped back to towards the 1.2250/60 area. Above 1.2450 could see a move towards 1.2600. A move below 1.2250 could see a move towards 1.2170.    EUR/GBP – having found support above the 50- and 100-day SMA last week the bias remains for a return to the recent highs at 0.8900. The next support below 0.8720 targets 0.8680.   USD/JPY – found resistance just above 131.00 yesterday, before slipping back. A move through 131.60 and last week's high potentially targets a return to the 132.50 area in the short to medium term. Support currently at the 128.20 area as well as the lows last week at 127.20.    FTSE100 is expected to open 5 points higher at 7,762   DAX is expected to open 25 points lower at 15,067   CAC40 is expected to open 10 points lower at 7,040   Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

Ipek Ozkardeskaya Ipek Ozkardeskaya 25.01.2023 09:27
Trading in the US was eventless, except for the wild moves that marked the opening bell at the NYSE.  The S&P500 swung around the 4000, without any major moves up or down, as investors remained undecided faced with mixed company earnings, and mixed economic data.  Both US services and manufacturing PMI came in better than expected in January, but both remain in the contraction zone. While the Richmond Manufacturing index fell to -11, significantly lower than -5 expected by analysts.   In summary, the data confirmed a certain slowdown in US economic activity, but it didn't point to a free fall.   The US 2-year yield fell for the second straight session, as the soft data kept the Federal Reserve (Fed) doves at a soft and warm spot.   But at the current levels, the swap market suggests around 48 bp rate increase over the next two FOMC meetings. This means that the present activity in the swap market gives around 8% probability for no rate hike at all after the Fed's February meeting.   And if that's what keeps the S&P500 bid around the 4000 mark, it's worrying.  Earnings, earnings  The S&P500 could or could not get a boost from Microsoft at today's session, as Microsoft announced better-than-expected results yesterday after the market close, but the results were not all rosy. The revenue – which grew at its slowest pace since 2016 - slightly missed expectations, but the earnings beat estimates. The Intelligent Cloud segment grew 18%, as the Azure services grew 31% - slower than the past quarter but better than expected with the prospects of being further boosted by the ChatGPT deal. The shares rallied 5% in the afterhours, but gains were mostly given back.   S&P500 futures are down -0.40% at the time of writing.  Today, it's Tesla's turn to go to the earnings confessional after the bell, and nobody can tell you with confidence what will happen to the share price once the results are freshly out of the oven.   Tesla is doing very well, the company announced record car deliveries quarter after quarter, but the record deliveries weren't enough to meet the market expectations over the past three quarters. And unfortunately, the expectations make the market price, and missing them is no good thing for the share price.  In the FX  The US dollar remains under the pressure of soft data, and worryingly softening Fed expectations, while the euro got the boost that we were hoping for at yesterday's PMI release.   The EURUSD is again testing the 1.09 level to the upside this morning. And the gently widening divergence between the hawkish European Central Bank (ECB) expectations and the dovish Fed expectations remains supportive of a further advance. But be careful, the pair is about to step into the overbought market, which could slow the rally into the 1.10 target.  Across the Channel, the numbers were not as enchanting as on the main continent, and no one is surprised I guess to see the services PMI plunge to 48 in January with all the strikes going on. The manufacturing PMI on the other hand contracted less than expected but a new report suggested that the number of UK firms facing collapse jumped by more than a third at the end of last year.   Cable plunged below its year-to-date ascending channel, and the euro-pound is bought without much hesitation at the 50, 100-DMA levels, and should continue pressuring higher on a broadly stronger euro.   In Canada, the Bank of Canada (BoC) is preparing to announce its final 25bp hike. The dollar-CAD puts more weight into clearing the 1.3350 support, but crude oil is not helping, as the price of a barrel of American crude continues bumping its head against the solid $82pb wall, the 100-DMA, without being able to break it to the upside.   The API data showed almost 3.4-million-barrel build in the US inventories last week, hinting that the more official EIA data could also disappoint the bulls at today's read.   But the medium term outlook for crude oil remains positive, therefore, price pullbacks remain interesting dip buying opportunities as long as the 50-DMA support, which stands a touch below the $78pb mark, holds. 
The Hungarian Central Bank Confirmed Its Commitment To Keeping Conditions Tight For A Longer Period

The Hungarian Central Bank Confirmed Its Commitment To Keeping Conditions Tight For A Longer Period

ING Economics ING Economics 25.01.2023 09:44
The Bank of Canada is facing a hike/no-hike dilemma today. Our view is that it will deliver the last 25bp hike of the cycle now, but retain some flexibility to avoid sounding too dovish. The CAD impact may be slightly positive. Elsewhere, there are no key data releases in the US, while the German Ifo index will be watched closely after yesterday's strong PMIs USD: No key US data today Yesterday’s PMIs painted a less dramatic picture of the US service sector compared to the latest ISM survey and triggered a positive reaction in the dollar. However, markets quickly sold the USD rally, confirming a rather pronounced bearish bias despite encouraging data. It does appear investors are happily buying the dip in EUR/USD around the 1.0850 handle at the moment, and that could prove to be a short-term floor for the pair. There are no data releases to highlight today and no Fed speakers due to the pre-FOMC blackout period. Markets have cemented their view that next week’s move will be a 25bp hike, but are still reluctant to fully price in another 25bp of tightening: the futures and swap market are embedding a 4.90% peak rate. This signals the perceived balance of risks is tilted to the dovish side ahead of next week’s FOMC. Should this narrative gain more traction this week, the dollar may remain gently offered. However, a sharper decline in the dollar may not be on the cards until other large event risks (European Central Bank, Bank of England meetings) are past us. Francesco Pesole EUR: 1.0850 emerging as a short-term floor A below-consensus reading in German manufacturing was the only flaw in an otherwise convincing set of PMIs in the eurozone yesterday. The eurozone composite PMI index moved back into expansionary territory (i.e. above 50.00) for the first time since June 2022, endorsing the ongoing re-rating of the growth outlook in the region. As mentioned in the USD section, 1.0850 has emerged as a buy-the-dip area in EUR/USD over the past two sessions. Good data out of the eurozone is likely keeping most investors on the bullish side of the euro for now, and downside risks for EUR/USD appear contained. A test of 1.1000 by the end of the week is looking more likely, although a decisive break higher is not our base case before the ECB. Today, the focus will be on the Ifo indices out of Germany. All three gauges (business climate, current assessment, and expectations) are expected to improve. Looking at the ECB pricing ahead of next week's meeting, it now seems very plausible that markets will not question a 50bp hike, although another half-point move in March is not fully priced in (around 80% implied probability). The degree of ECB President Christine Lagarde’s commitment to another 50bp move will be the key driver of the market reaction next week. Francesco Pesole CAD: BoC to hike one last time Once a hawkish stand-out, the Bank of Canada is facing a hike/no-hike dilemma today. This is, at least, what market pricing seems to suggest, with 17bp of tightening priced in for today’s announcement. Economists’ consensus is leaning more in favour of a 25bp move, which is also ING’s view. As discussed in our BoC preview, a still-tight jobs market is partly offsetting the decline in headline inflation and signs of economic slowdown, and probably suggests this is the right time to deliver the last 25bp hike of the cycle. Should the BoC surprise with a hold, there’s a good chance the bank will keep the door open for a move in March, which would match the market’s current pricing, and ultimately fail to hit the Canadian dollar. A 25bp hike but a strong signal that rates have peaked and growing concerns on the economic outlook (new economic projections are released today) could prove to be a more dovish outcome than a “hawkish hold”, as markets price in more rate cuts in the second half of the year. This is, however, hardly a desirable outcome for a central bank that is still fighting inflation, and our impression is that the BoC will want to retain some ambiguity around future moves for now. The impact on CAD may be positive but rather limited in the end. USD/CAD remains on track for a move to 1.30 in the coming months, in our view, but USD weakness should be the primary driver of such a move. Francesco Pesole HUF: Forint strongest since the middle of last year The Hungarian central bank yesterday confirmed its commitment to keeping conditions tight for a longer period and that it has taken a patient approach to monetary policy. Moreover, the NBH reiterated its intention to continue withdrawing liquidity from the market via the one-week discount bill and the long-term deposit tender. More interestingly, the NBH raised the reserve requirement ratio for banks to 10% effective from April. Overall, it has sent a very clear signal that the hawkish mode will last for an extended period of time and the central bank is not going to allow any hasty moves. The result is a forint slightly below 390 EUR/HUF at the end of yesterday's trading, higher rates at the short end of the IRS curve and FX implied yields climbing higher. The forint is thus the strongest since the middle of last year and we believe it could still benefit from yesterday's decision. Added to this is the higher EUR/USD level compared to last week and yesterday's renewed drop in gas prices back below €60/MWh. On the other hand, we may see some profit-taking today after the forint's multi-day rally and ahead of Friday's risky sovereign rating review from S&P. Overall, we expect the forint to stabilise around 390 EUR/HUF for now. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

The Aussie Pair Is Gaining Strong Positive Traction Agian, USD/JPY Drops Below 130.00

Kamila Szypuła Kamila Szypuła 25.01.2023 13:27
The dollar gained on Wednesday during limited trading. Traders broadly expect the Fed to raise interest rates by 25 basis points next Wednesday, down from the 50 bp hike in December. Earlier, investors will look at the US economic growth data for the fourth quarter, which will be released on Thursday. Moreover, a drop in global energy prices and a resulting slowdown in inflation in advanced economies has spurred speculation the Fed and other central banks might soon stop raising interest rates. USD/JPY Spot prices struggle to capitalize on the move and held steady at 130.00 through the early European session. USD/JPY is trading below this level. EUR/USD The chances of a bigger interest rate hike by the ECB are growing rapidly. As reported by Bloomberg, ECB policymaker Gediminas Simkus reiterated on Tuesday that the ECB should continue raising interest rates by 50 basis points in the face of mounting wage pressure. The euro gained thanks to optimism about the euro zone's economic prospects. As for the future of the euro, economists at CIBC Capital Markets said the improving macroeconomic situation and further policy tightening by the ECB herald the strength of the euro in 2023. During the Asian trading hours, the EUR/USD pair rose until it broke above the 1.0900 level. The momentum fails to sustain and the pair trades below that level at around 1.0870. Read next: The Department Of Justice's Lawsuit Against Google | FXMAG.COM AUD/USD The Aussie pair is gaining strong positive traction for the fourth day in a row and is recovering from 0.7100 for the first time since mid-August during the Asian session on Wednesday. The Australian dollar rose to a more than five-month high on Wednesday after higher-than-expected inflation data, bolstering the case for further interest rate hikes. Australian headline inflation (CPI) continues to pick up, as does the preferred trimmed CPI, on both a month-on-month and year-on-year basis. Australia is set to benefit from the Chinese reopening now that the Chinese government has stated that the nation has already reached a peak in infections and hospitalization rates. The reopening has resulted in increased purchases of Australia’s top export, iron ore, as prices have trended higher. The daily AUD/USD chart shows this pair in an uptrend. The pair managed to record gains over the course of three consecutive days. The AUD/USD pair performed well in the early stages of 2023, driven in large part by the continued downtrend of the dollar. Today, the pair gained above 0.7100, but failed to hold and is below this level again. GBP/USD Details of the UK Producer Price Index (PPI) for January may be of interest to GBP/USD investors ahead of Thursday's key US Q4 GDP and next week's Fed meeting. Sterling fell against the dollar and euro on Wednesday after data showed British manufacturers unexpectedly lowered prices in December, suggesting inflation could be easing ahead of next week's Bank of England policy meeting. The news that UK factories have lowered prices is likely to ease the burden on Bank of England policymakers who need to consider how far to raise interest rates in the fight to bring down inflation. The market expects the BoE to raise interest rates for the tenth time since late 2021 as it fights inflation. Markets are currently evaluating a 75% chance of a 50 point rate hike. The cable pair is still trading below 1.2400, close to the 1.2300 level. Source: finance.yahoo.com, investing.com
The Euro May Gradually Climb To The Target Level

The Euro May Gradually Climb To The Target Level

InstaForex Analysis InstaForex Analysis 26.01.2023 08:03
The euro rose 29 pips yesterday. It takes 70 pips more to reach the target level of 1.0990. Apparently, the price will have time to cover that distance before next week's Federal Reserve meeting. The following optimistic events can lift the euro to the target level of 1.1200, but if the Fed is not optimistic, we expect the traditional price reversal according to the technical picture, i.e. the divergence, which is brewing on the daily chart. And so far this is our main scenario. On the weekly chart, the price reached the Fibonacci level of 138.2%. This is a strong level from which the price reversed in September 2019, in March 2017, in June 2016 and earlier. On the four-hour chart, yesterday's pattern was repeated - the price reversed up from the MACD indicator line. The Marlin oscillator is slowly rising. I expect the euro to gradually climb to the target level of 1.0990   Relevance up to 03:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333283
The Euro Will Probably Continue Its Upward Movement In The Near Future

The Euro Will Probably Continue Its Upward Movement In The Near Future

Paolo Greco Paolo Greco 26.01.2023 08:25
M5 chart of EUR/USD EUR/USD did not show any interesting movements on Wednesday. The euro is still trading near its local highs and cannot enter a bearish correction. Even without any fundamental and macroeconomic background, traders do not wish to lock in profits on long positions, which would lead to at least a small pullback down. Thus, the uptrend persists, as the price continues to be above the Ichimoku indicator lines. The upward movement looks more sideways, but at the same time, there is a slight upward bias. The nature of the movement isn't the best right now. Not much action this week either, but there will be three central bank meetings next week. Maybe this is one of the reasons why traders are being cautious right now. There were three trading signals yesterday. All of them were in the area of 1.0845-1.0868. The movement itself was very weak, so the pair could not go even 15 pips in the right direction for the first two times. Therefore, you should have opened only one long position. You could earn using that one position since there were no sell signals by the end of the day. You could manually close the long position in the evening, which brought a profit of about 30 pips. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 10,300, whereas the number of short positions fell by 2,300. Thus, the net positions decreased by 8,000. Now the number of long positions is higher than the number of short positions opened by non-commercial traders by 127,000. From a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 52,000 (711,000 vs. 659,000). H1 chart of EUR/USD The technical picture on the one-hour chart remains unchanged. We can see that the pair maintains the bullish sentiment, located above the lines of the Ichimoku indicator. Therefore, the euro will probably continue its upward movement in the near future, despite the flat last week. As we can see, there is still no way for the euro to correct, and traders prefer to buy the pair or not to do anything at all. On Thursday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137 and also Senkou Span B lines (1.0799) and Kijun Sen (1.0864). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No major events or reports in the European Union. Meanwhile, we have the relatively important GDP report and durable goods data in the US. Under certain circumstances, the market reaction might follow that data. But if in fact the values and forecasts coincide, it will be minimal. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 05:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333291
Unraveling UK Inflation: The Bank of England's Next Move

GBP/USD Pair Is Struggling To Extend Previous Highs, EUR/USD Pair Continued Its Gains

Kamila Szypuła Kamila Szypuła 26.01.2023 12:06
The Bank of Canada's interest rate decision appears to have put sentiment risk back as markets hope other central banks will follow suit. The BoC announced a pause in interest rate hikes to assess the impact of the recent hikes on the Canadian economy. Given that the BoC was the first major central bank to raise interest rates, market participants seem to see yesterday's announcement as a sign that the Federal Reserve and the ECB may follow suit. The dollar fell to an eight-month low against its peers on Thursday as a dismal US corporate earnings season fueled recession fears ahead of many central bank meetings next week. The Fed's policy-setting committee will begin a two-day meeting next week and markets have priced in a 25 basis point (bp) rate hike, down from the central bank's 50bp and 75bp hikes recorded last year. USD/JPY The Japanese yen gained against the US dollar on Wednesday, taking advantage of the US dollar's significant weakness. Despite minor recent changes by the Bank of Japan towards policy normalization, the BoJ remains the most dovish developed central bank. USD/JPY is down for the third day in a row and touches a new weekly low around 129.00 during the Asian session on Thursday. Fresh speculation that high inflation could lead the Bank of Japan (BoJ) to be more hawkish later this year continues to support the JPY. Bets were lifted by data released last week that showed Japan's nationwide core inflation hit 4% in December - its highest annual print since December 1981. Although USD/JPY fell in the Asian session, in the European session the pair gained and traded close to 129.90. AUD/USD Trade was a bit weak as Australia was closed for the holidays. The Australian dollar's rally against the US dollar is gaining momentum on the back of rising optimism over China's reopening and rising commodity prices. AUD/USD has been trading nicely in an uptrend since October. Earlier this month, the pair rose above a key resistance. The Australian pair is doing quite well and trading above 0.7100 during the European trading session. EUR/USD EUR/USD continued its gains from yesterday, holding above 1.09 after opening in Europe. The euro gained strength against the dollar yesterday as the domino effects of the Bank of Canada's interest rate decision swept through the market. ECB Governing Council member Gabriel Makhlouf said on Wednesday: "We must continue to raise interest rates at our meeting next week - taking a similar step to our December decisions," and added that the same should happen at the next March meeting. EUR/USD remains stable at around 1.0900 during the European session. Traders refrain from placing new EUR/USD bets ahead of critical US GDP releases. Read next: Musk Intends To Cut Costs In Tesla On Everything| FXMAG.COM GBP/USD The Bank of England is set to raise interest rates by half a point to 4.0% to tackle double-digit inflation, while markets are split on how much further rates will rise beyond that. Britain's inflation rate moved further away from October's 41-year high. Meanwhile, the risk of the UK slipping into recession continued to weigh on sentiment after the latest PMI survey showed the UK business economic activity fell. GBP/USD is struggling to extend previous highs at around 1.2400 during European trading hours. The US dollar is licking its wounds with weaker US Treasury yields amid dovish Fed betting. Source: investing.com, finance.yahoo.com, dailyfx.com
Collapse of Black Sea Grain Initiative Rattles Market: Impact on Ukrainian Grain Exports

Forex: The South African Reserve Bank Meet Today And A Gawkish Statement Today Could Be Enough To Push The USD/ZAR Pair Back To The 16.90

ING Economics ING Economics 26.01.2023 10:17
Notable yesterday was the dollar selling off after the Bank of Canada said it was ready to pause/end its tightening cycle. Some in the market could be thinking the Fed is of a similar mindset. At the margin that suggests the dollar could go into next week's Fed meeting on the offered side. Today the focus is US 4Q GDP data and a rate decision in South Africa USD: Dollar can stay offered Trade-weighted measures of the dollar continue to edge lower. The catalyst for modest weakness over the last 24 hours has been the Bank of Canada's (BoC's) decision to pause and perhaps end its tightening cycle. The move saw US yields tick modestly lower and weigh on the dollar as investors considered whether the Federal Reserve was on the verge of adopting a similar position - perhaps at the 22 March FOMC meeting. Next week's Fed hike of 25bp looks locked in.  This all fits with the narrative of easing pricing pressures and a mild US recession, which could actually see the Fed easing and a weaker dollar stimulating Rest of World (RoW) growth. And the re-weighting of portfolios to RoW assets remains a key story for 2023.   For today, the data focus is on US 4Q GDP data. Our team forecasts a slightly below-consensus number and is mainly driven by lower imports and inventory building - not necessarily 'good' growth. We will also see the advanced goods trade balance for December which is expected to have widened again. Additionally, we will see the volatile durable goods orders for December and also the weekly initial jobless claims which so far are showing no signs of easing in labour market supply pressures. We are not sure that DXY is ready to break below support at 101.30 just yet. And we see next week's FOMC meeting as an upside risk to the dollar. But for the time being, expect DXY to stay offered in a 101.30-102.00 range. Chris Turner EUR: ECB blackout period finally arrives After a few wobbles, it looks like markets have finally got the message from the European Central Bank that it will be hiking by 50bp at both the February and March meetings. A further 40bp of tightening is then priced over the summer. We look for just one more 25bp hike in May which will take the deposit rate to 3.25%. The ECB now goes into a blackout period ahead of next Thursday's policy meeting - suggesting these tightening expectations may not move much further. With the market pricing a 50bp easing cycle by the Fed in the second half of the year, this combination leaves EUR/USD at the highs of the year above 1.09. As we mentioned on Monday, investors may struggle to push EUR/USD through the 1.0950/1000 area ahead of next week's FOMC/ECB risk events - though it looks like EUR/USD will stay bid.  One note of caution to the EUR/USD really, however, is that the EUR/USD risk reversal - the price investors pay for a euro call over a similar euro put option - is no longer shifting away from euro puts and in favour of euro calls. Perhaps this is a function of where the EUR/USD spot is. Yet this could suggest that investors and corporates see 1.10 as the top of a multi-month trading range. Chris Turner GBP: Peak rates? Sterling has been holding its own against the euro and the dollar. The biggest event risk for sterling over the coming months is when the Bank of England calls time on the tightening cycle. We are looking for a 50bp hike next week and then a 25bp hike in March to conclude the cycle at 4.25%. But presumably, at some point, the BoE will have to signal the top and we have already seen investors lose conviction over a peak in the cycle at 4.50%. The peak is now priced at around 4.37%. There is probably substantial short sterling positioning on the crosses in expectation of the turn in the BoE cycle. This makes for a bumpy ride. But overall we are happy with our end 1Q23 forecast for EUR/GBP at 0.89, which will probably leave cable trading towards the lower end of a 1.20-1.24 range. Look out for UK January CBI retail sales figures today - likely to confirm a downtrend on the back of weak consumer confidence and squeezed real incomes. Cable to trade well within a 1.2350-1.2450 range. Chris Turner ZAR: 50bp hike should help the rand Today sees the South African Reserve Bank meet to set interest rates. The majority of forecasters are looking for a 50bp hike to 7.50%, though a few are looking for a 25bp hike. Like many, the SARB is dealing with above-target inflation - now at just over 7% year-on-year versus the SARB's 3-6% target range. Markets price this hike as the last in the cycle and price the policy rate pretty flat at near 7% over the next three years.  Peak interest rates are music to the ears of bond investors and one of the best-performing asset classes this year is the EM local currency government bond index, currently up 4.2% year-to-date. South Africa still has a near 3% weighting in such an index, meaning that the rand should be a beneficiary should investors add to positions in EM local currency bonds. However, the rand has been underperforming this year and one would have expected the huge reversal in USD/CNY to be dragging USD/ZAR much below 17.00. That has not happened, perhaps because of the weak domestic demand outlook in South Africa amid ongoing challenges in energy supply. Yet a softer dollar environment and the China reopening story should remain a bullish cocktail for the rand and a hawkish SARB statement today could be enough to push USD/ZAR back to the 16.90 area. Medium-term, we are becoming a little more bullish on the rand. Chris Turner   Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

Analysis Of The EUR/USD Pair: There Is Growth

InstaForex Analysis InstaForex Analysis 27.01.2023 08:04
Yesterday, the euro failed to move towards the 1.0990 target and rolled back to Wednesday's initial positions. If today's U.S. consumer income/expenditure data is close to the forecast, the 1.0990 target will be much closer. Consumer spending for December is expected to be down 0.1%, while income is expected to be up 0.2% after a 0.4% gain in November. As before, the probability of forming a divergence between the price and the Marlin oscillator with the consequent reversal of the price into a medium-term decrease remains. On the four-hour chart, the price returned above the MACD indicator line after a brief (and false) move below it. The same false movement was made by the Marlin oscillator yesterday. Currently, there is growth. Expect the day to close above Wednesday's closing level.   Relevance up to 03:00 2023-01-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333409
The Price Of EUR/USD Pair Will Develop Sideways Movement

The Bears Of EUR/USD Remain Poised To Firm Their Grip Further

Oscar Ton Oscar Ton 27.01.2023 08:10
Technical outlook: EURUSD rallied through the 1.0929 highs on Thursday before finding resistance and pulling back again. The single currency pair is seen to be trading close to 1.0870 at this point in writing as the bears remain poised to firm their grip further. A drag below 1.0770 will add confidence to the bearish outlook in the near term. Ideally, prices should stay below 1.0929. EURUSD seems to have terminated its rally, which had begun from the 0.9535 low in September 2022, at the 1.0929 high. If the above scenario is correct and holds well, prices should reverse lower from here and drag towards 1.0400 at least. A bullish reversal from 1.0700 could resume the uptrend though. The instrument is looking lower for the moment. EURUSD remains well supported at 1.0481, while resistance is strong around 1.0929 as seen on the daily chart. A minimum drag below 1.0481 is now required to confirm a further bearish move. The potential targets remain towards 1.0400 and down to 1.0050 levels respectively. A high probability remains for a bullish turn from 1.0050 levels since it is the Fibonacci 0.618 retracement of the entire rally. Trading idea: Potential bearish drop against 1.1000 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310293
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

An Even More Complex Correction Of The EUR/USD Pair Could Take Place

Torben Melsted Torben Melsted 27.01.2023 08:18
EUR/USD moved a bit closer to the ideal target at 1.0933. However, topping at 1.0929 is more than enough to fulfil the 1.0933 target. We expect wave B to be complete and will look for a decline in wave C over the coming days/weeks into the corrective target area between 1.0437 - 1.0500 to complete wave 4. That said we still have to remember that even if we see the expected corrective decline to the 1.0437 - 1.0500 area, an even more complex correction could take place, but for now, we will be looking for a break below minor support at 1.0835 as confirmation that wave B has completed and wave C is in motion.   Relevance up to 06:00 2023-01-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310311
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The Entire Movement Of EUR/USD Pair Still Looks More Like A Flat

Paolo Greco Paolo Greco 27.01.2023 08:28
M5 chart of EUR/USD EUR/USD did not show any interesting movements on Thursday. The price was still moving slightly above the critical line, and the entire movement still looks more like a flat than a trend. The pair surged at the beginning of this week, which many regarded as resumption of the uptrend. Actually, the price has simply moved into a horizontal channel just above the previous one. Therefore, we are dealing with a non-standard flat. Yesterday, there were some interesting reports in America. As we mentioned in our fundamental articles, all the four reports, which could interest the traders at least a little bit, were better than forecasts, some of them were much better. However, the U.S. currency failed to benefit from it. In particular, the GDP report showed the economy growing at 2.9%, not 2.6% as forecasted. But the market still refuses to buy the dollar. Thursday's trading signals were average. There were two signals near the 1.0864-1.0868 area, which could be taken as a rebound, but it was so inaccurate... Thus, traders could open a short position first and then a long position. Loss was made on the first trade, as the price failed to pass even 15 points in the right direction, and a small profit was made on the second trade, which made it possible to offset the loss on the first trade. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 10,300, whereas the number of short positions fell by 2,300. Thus, the net positions decreased by 8,000. Now the number of long positions is higher than the number of short positions opened by non-commercial traders by 127,000. From a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 52,000 (711,000 vs. 659,000). H1 chart of EUR/USD The technical picture on the one-hour chart remains unchanged. We can see that the pair maintains the bullish sentiment, and is located above the lines of the Ichimoku indicator. However, the pair was mostly flat, whether there was macro data or not. Thus, the euro can not rise, but it is not willing to fall as well. It looks like everything will be decided next week. We have set the last digestible value of the Ichimoku indicator lines, because it can merge during a flat and can also be very weak. On Friday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137 and also Senkou Span B lines (1.0825) and Kijun Sen (1.0854). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 27, the EU will host another speech by European Central Bank President Christine Lagarde, of which there have been 4 or 5 over the past two weeks, and there will be several reports in America, not the most important ones. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 05:00 2023-01-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333417
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

Jakub Novak Jakub Novak 27.01.2023 08:38
Analysis of transactions and tips for trading EUR/USD The test of 1.0902 occurred when the MACD line was just starting to move below zero, which was a pretty good signal to sell. It led to a price decrease of around 20 pips. Sometime later, another test took place, but this time it was at 1.0861 and has led to a price increase of about 30 pips. No other signals appeared for the rest of the day. The strong US GDP report boosted dollar up on Thursday, halting the bull market for EUR/USD. Most likely, this momentum will continue today as nothing could affect market volatility, not even the upcoming data on the M3 monetary aggregate and private sector lending in the eurozone. Of course, ECB President Christine Lagarde's speech could bring back risk appetite, but it will be much later in the week. More exciting reports await in the afternoon, namely the core PCE index, the Fed's preferred inflation figure, the change in spending levels and personal income, the consumer sentiment index, and inflation expectations index from the University of Michigan. Good readings will raise dollar demand further, which will lead to a decline in EUR/USD, similar to that of yesterday's. For long positions: Buy euro when the quote reaches 1.0890 (green line on the chart) and take profit at the price of 1.0925. Growth could occur if the economic data for the Euro area comes out better than expected. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0852, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0890 and 1.0925. For short positions: Sell euro when the quote reaches 1.0852 (red line on the chart) and take profit at the price of 1.0816. Pressure will increase if the upcoming US data exceeds expectations. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0890, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0852 and 1.0816. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.       Relevance up to 06:00 2023-01-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333425
China Restricts Gallium and Germanium Exports, Heightening Global Tech War

FX Daily: US pessimism softens ahead of a busy week

ING Economics ING Economics 27.01.2023 09:15
Markets' concerns about the US growth picture seemed to have eased, paving the way for a modest recovery in the dollar. Next week could, however, see a larger upside USD correction as the FOMC appears to have more room to surprise on the hawkish side compared to the ECB. Elsewhere, SEK is benefitting from good eurozone data, but domestic figures have lagged A 50bp hike by the ECB next week looks like a done deal, and we expect President Christine Lagarde to maintain a hawkish tone USD: Gearing up for an upside correction? The year started quite poorly for the US growth story, but the past couple of weeks have – at least – not given reasons to be even more pessimistic. Yesterday, growth figures in the US were slightly above consensus, and durable goods orders came in strong. We recommend reading our US economist’s note on those releases though, as a deeper look tells a different story than what the headline figures suggest. The week ends with December data on personal income and spending, as well as the PCE deflator, which are all expected to have decelerated.  The dollar did find some support yesterday after markets read US data as encouraging, and should enter a week packed with less bearish momentum. There is probably more room for the FOMC to surprise on the hawkish side compared to the ECB next week, and we could see an upside correction in the dollar materialise. For today, we can expect some consolidation around 102.00 in DXY. Francesco Pesole EUR: Still counting on the 1.0850 floor We have highlighted over the past few days how levels around 1.0850 in EUR/USD seemed to have formed a buy-the-dip floor for the pair. Yesterday’s price action added evidence that this is indeed the case, and we may have to wait for some more sizeable downshifting in USD bearishness in the run-in or after the FOMC meeting next week to witness a decisive break to the downside in EUR/USD. There are no market-moving data releases in the eurozone today, and some focus may only be on Spanish growth numbers this morning. Our economics teams published the ECB preview yesterday. A 50bp hike next week looks like a done deal, and we expect President Christine Lagarde to maintain a hawkish tone and push back against rate cut speculation. The recent communication hiccups however suggest the impact on the euro may not be too pronounced. Francesco Pesole SEK: Dealing with softer domestic data Sweden’s jobs and retail sales were released this morning and came in on the weak side. Unemployment ticked higher to 7.5% and retail sales were down 8% year-on-year in January. Earlier this week, the Economic Tendency index had pointed to a deterioration in the growth picture at the start of the year (while surveys in the eurozone were quite upbeat), although consumer confidence rebounded. SEK has not experienced much weakness as the data flow seemed to deteriorate, even though markets are no longer fully pricing in a 50bp hike by the Riksbank at the 9 February meeting. The solid growth story in the eurozone is probably offsetting the repricing lower in rate expectations. We recently published a scenario analysis for EUR/SEK in 2023. Our core view is that a gradual descent towards 10.50 will materialise by the third quarter. Francesco Pesole HUF: Rating decision will determine the future path of the forint The calendar in the CEE region is empty for Friday and it will be more interesting after the end of trading today. In Hungary, S&P will publish a rating review that will have the market's attention more than usual. A week ago, Fitch – surprisingly for us – downgraded the rating outlook from stable to negative, which highlights the question of whether Hungary has made sufficient progress in negotiations with the European Union for rating agencies. It is the slower absorption of EU funds that seems to have been the main reason for Fitch's decision. S&P has already held a negative outlook since last August and it was the inflow of EU funds that was the main risk of the latest review. Moreover, we expect S&P's new forecast to be revised to the downside in both GDP growth and the fiscal outlook. While we see downgrade risks high, our base case is for an unchanged rating today. With Fitch's recent decision, we think today's review will attract a lot of market attention and will be key for the future development of the forint. Given the heavy long positioning, we can expect an asymmetric reaction in the 385-395 EUR/HUF range. Frantisek Taborsky Read this article on THINK TagsSEK HUF FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Assessing 'Significant Upside Risks to Inflation': Insights from FOMC Minutes

Federal Reserve: Back to 25bp hikes as slowdown fears mount

ING Economics ING Economics 27.01.2023 09:19
Last year saw the most aggressive policy tightening path in four decades, but Fed officials have laid the groundwork for more modest 25bp hikes in February and March. Recessionary forces are building though and inflation looks set to slow sharply from here, implying rates cuts will be on the agenda later in the year US Federal Reserve Chair Jerome Powell 25bp with more still to come Having raised the Fed funds target range by 425bp in 2022, including 75bp and 50bp moves, expectations are firmly centred on the Federal Reserve opting for a more modest 25bp interest rate increase on Wednesday – taking the target range to 4.5-4.75%. While inflation is still well above target and unemployment is at a cycle low, there are signs that the economy is responding to tighter monetary policy and the Fed will be cognisant of fears that hiking rates too hard and fast risks toppling the economy into recession. Officials certainly appear to be backing "standard" 25bp increases from now on after enacting their most aggressive hiking cycle for 40 years, but most are warning that there is still more work to be done. Consequently, we expect to hear that ongoing interest rate hikes are "appropriate" with the balance sheet shrinking strategy remaining in place. Scenarios for the Federal Reserve meeting Source: ING   Officials are unlikely to switch to a “data dependency” narrative just yet, fearing that adopting too dovish a line could fuel market expectations for eventual rate cuts. In turn, this could lead to an unwanted loosening of financial conditions that contribute to inflation staying higher for longer. Conversely, signalling 25bp but then hiking by a more aggressive 50bp would generate a large risk-off reaction with sharply higher borrowing costs. The majority of the committee would likely consider this too risky an option given the potential to intensify recessionary forces that could end up excessively dampening inflation. With no new Federal Reserve forecasts at this meeting, the accompanying press conference is likely to re-affirm that it is appropriate to move in smaller 25bp steps from now on and we are not at the endpoint yet. The Fed could over and/or under-hike other rates for technical reasons, but likely won't Apart from the headline funds rate range of 4.25% to 4.50%, the Fed will also adjust higher the rate on the reverse repo facility and on excess reserves. These are currently at 4.3% and 4.4% respectively, and are often seen as the tighter corridor within which the effective fed funds rate sits (currently 4.33%). There is constant speculation on the likelihood of the Fed deciding to under-hike the rate on the reverse repo facility, to bring it to flat to the fed funds floor (it’s currently 5bp over). The logic would be to encourage less use of this facility, which routinely takes in US$2tr in excess liquidity on a rolling daily basis. However, in all probability, repo would simply trade down to the same area, without a material effect on volumes. There is a similar argument to instead over-hike the rate on excess reserves, say by 30bp (instead of 25bp). The idea here would be to encourage a downsize in the use of the reverse repo facility in place of an upside in bank reserves (higher relative remuneration). This would allow the Fed to better manage bank reserves, ensuring that it doesn't fall too fast, as it gradually ratchets its balance sheet lower through the ongoing soft quantitative tightening programme (as it allows $95bn of bonds per month to roll off the front end). In all probability, it won’t do this either. It is already a 10bp spread between the reverse repo window and the excess reserves one, and widening that to 15bp might not make a material difference. That said, a spread of 20bp just might, and is something the Fed could consider down the line i.e. under-hiking the reverse repo rate and over-hiking the rate on excess reserves. On this occasion, there would be quite a surprise if it did anything along these lines, at least not at this juncture. The Fed could also upsize the quantitative tightening agenda, but likely won't either The Fed has also been quite quiet on the balance sheet roll-off programme. It seems that’s the way it likes it – churning away quietly in the background, and not causing too many market ripples. The big question in this space is whether the Fed could consider outright selling some bonds off its books, and thereby engage in a harder version of quantitative tightening. It would be huge if it did. There is certainly an appetite for bonds in the market if the recent Treasury auctions are anything to go by. However, such selling of bonds outright would likely be a step too far at this juncture, as it would likely generate a tantrum. But it's always there should the Fed start to feel that the fall in longer-dated market rates is acting contrary to its hiking efforts on the front end. Even a mention that it is looking at this down the line would have a material effect. Not expected, but these are potential market movers that we need to cross off as the meeting outcome unfolds. Importantly, any mention of potentially upsizing the bond roll-off in the future or considering any bond selling (e.g. of the longer-dated mortgage portfolio) would signal it was uncomfortable with where longer-dated market rates are at. But the outlook is darkening and the peak is close We think that the Fed will probably hike once more on 22 March, but that will mark the top for the policy rate. We are concerned that signs of a slowdown will spread and intensify with a recession our baseline forecasts. Residential construction has fallen in each of the past six months, industrial production has been down for the past three months and retail sales have dropped by 1% or more in both November and December. Unfortunately, business surveys offer no hint of a turn with both the manufacturing and service sector ISM indices in contraction territory and the Conference Board’s measure of CEO confidence at the most depressed level since the Global Financial Crisis – a clear signal that businesses will be focusing more on cost-cutting rather than revenue expansion this year. At the same time, the heavy weighting of shelter and vehicles within CPI and clear signs of softening corporate pricing power mean that inflation will be close to 2% by the end of this year. Rents have topped out in most major cities while vehicle prices are now falling, with the National Federation of Independent Businesses survey on price intentions pointing to a sharp slowdown in core inflation through the second quarter into the third quarter of this year. As for the jobs market, while headline payrolls growth remains impressive there are flashing warning lights with the temporary help component reporting falling employment numbers in each of the past five months. This is concerning because this grouping of workers is typically easier to hire and fire by the nature of the position so they tend to lead broader shifts in payrolls. Worryingly, the declines are getting bigger each month, suggesting the momentum in the jobs market is souring. In an environment of weak activity, falling inflation, and mounting job losses, we doubt the Fed will raise rates beyond March with rate cuts the order of the day from the third onwards. FX: Things are getting interesting It has been pretty much one-way traffic for the dollar bear trend since early November. Clear signs of easing US price pressures and a slowing economy have upended the prior narrative of a Fed forced to tighten into a recession. Risk assets have rallied strongly. Data shows that the EUR/USD six-hour reaction to last year’s Federal Open Market Committee (FOMC) decisions triggered moves of anywhere between +/- 0.7%. And the FX options market has a 90 pip range priced for EUR/USD over the period which covers both the Fed and the ECB meetings next Wednesday/Thursday.  We were about to say that an expected 25bp rate hike from the Fed and a relatively unchanged statement would have little impact on FX markets. Yet we have just seen FX markets move on the Bank of Canada’s decision to halt its tightening cycle at 4.50%. The dollar was marked lower on this decision, presumably on the minority view that the Fed could also be ready to call time on its tightening cycle. This suggests that the FOMC meeting could prove more interesting than the market has priced. Our base case would assume that EUR/USD continues to trade near 1.08/1.09 after the FOMC meeting. Any suggestion that the Fed was virtually done tightening could send EUR/USD through 1.10. While aggressive Fed push-back against the 50bp of 2023 easing already priced by the market could briefly send EUR/USD to 1.07. In the bigger picture, we expect EUR/USD to head higher this year – perhaps to the 1.15 area in the second quarter – this will be the time when US inflation is falling more sharply and China re-opening is providing a tailwind to the pro-cyclical currencies, including the euro. Read this article on THINK TagsUS Recession Interest rates Federal Reserve Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Despite The Improvement In The Outlook Due To Falling Energy Prices, The Economic Environment In Britain Remains Difficult

Four Bank of England scenarios for February’s meeting

ING Economics ING Economics 27.01.2023 12:35
Persistently high wage and service-sector price inflation points to another 50bp rate hike from the Bank of England next Thursday. If we're right, then we expect one final 25bp rate hike in March, marking the top of this tightening cycle Governor of the Bank of England, Andrew Bailey Four scenarios for the Bank of England meeting Market pricing based on spot values on 27 January Source: ING   The Bank of England looks more likely to follow the European Central Bank than the Federal Reserve next Thursday, and we expect a 50 basis point rate hike for the second consecutive meeting. While the minutes of the December meeting appeared to open the door to a potential downshift to a 25bp move in February – and this meeting looks like a closer call than markets are pricing – the reality is that the recent data has looked relatively hawkish. Wage growth is persistently high, looking both at the official numbers and the BoE’s own business surveys. Headline inflation came in a little lower than the Bank projected back in November, but services CPI – seen as a better gauge of domestically-driven inflation – has come in above expectations. Still, if we get a 50bp hike on Thursday then it’s likely to be the last. BoE officials have hinted previously that much of the impact of last year’s rate hikes is yet to hit, and cracks are forming in interest-rate-sensitive parts of the economy. Headline inflation should begin to come down more rapidly from March too, as the impact of last year's energy bill surges drop out, and core goods/food pressure begins to ease more noticeably.  We expect one final 25bp hike in March, taking the Bank Rate to a peak of 4.25%. The key question for Thursday is whether the Bank itself acknowledges its work is nearly complete. We suspect it’s more likely to keep its options open. Here's what we expect: 1 The vote split December’s meeting saw the number of policymakers voting for a 75bp hike drop from seven to one, and the committee’s two most dovish officials opted for no rate hike at all. The lesson then and throughout 2022 was that the committee tends to move by consensus, and that means that the vote split is unlikely to be particularly narrow, even if the meeting is a tough one to call. Either we’ll get a similar number of officials voting for 50bp again, or we’ll see the vast majority scale back their vote to 25bp, akin to the kind of shift we saw in December. Our base case is that we see six of the nine policymakers voting for a 50bp hike, one for 25bp and two for no change. How each official has voted on interest rate decisions since 2021 Dr Swati Dhingra joined the committee in August 2022 and began voting in September Source: Bank of England, ING 2 New forecasts Calmer markets and scaled-back rate hike expectations since the mini-Budget crisis last year mean we shouldn’t be surprised to see the Bank upgrade its growth forecasts. Lower gas prices should theoretically help too, though this is a little more awkward for the BoE given that the government hasn’t yet cancelled plans to increase household bills in April, even if such a move now looks unlikely. That also means we’ll have to take the new inflation forecasts with a slight pinch of salt, and our own view is that headline CPI will end the year 1pp lower if April's planned increase is scrapped and consumer bills return to levels consistent with market pricing from the third quarter.  Still, it's the medium-term story that matters more. Keep an eye on the so-called ‘constant rate’ inflation forecasts, where the Bank assumes the Bank rate will remain unchanged from now on. If these show inflation at, or very close to, 2% in a couple of years' time, then that would be a sure-fire sign that policymakers think we’re close to the peak for Bank Rate. 3 Guidance on future policy decisions Governor Andrew Bailey hinted recently that current market pricing, which sees a peak for Bank Rate at 4.4%, is in the right ballpark. That suggests little reason for the Bank to rock the boat too much on Thursday with new forward guidance, and we suspect it will want to keep options open. The Bank will likely repeat that it’s prepared to act ‘forcefully’ in future if required (though we learnt in December’s minutes that 50bp hikes classify as ‘forceful’). We also doubt Bailey will be willing to be drawn on whether the Bank could pivot back to a 25bp hike in March, nor indeed whether that would be the last move in the cycle. Where he may be tempted to push back is on policy easing, especially now markets are almost pricing in one 25bp rate cut by the end of this year. Chief Economist Huw Pill’s recent emphasis on the UK sharing the worst bits of the US and eurozone’s inflation problems – structural labour shortages with the former, the energy crisis with the latter – feels like a line we’ll hear a lot over the coming months as officials try to dampen expectations of policy easing. Sterling rates to tighten to euro, and a more inverted curve The sterling rates curve still trades with a remnant of the risk premium that appeared in the run-up to the September budget debacle, making it one of the few markets where we think rates are unjustifiably high. Things have changed since then, however. Markets have come around to our more benign view on the terminal rate in this cycle, now implying hikes will stop around 4.25%. Instead, the discrepancy is to be found in longer maturities where the curve implies the Bank rate will remain elevated longer than at other central banks. Read next: Ukraine Is Calling For More Sanctions Against Russia| FXMAG.COM What markets expect from the Bank of England over the coming months Source: Refinitiv, ING   That markets taking a more hawkish view of BoE policy than signalled, for instance in its forecast, is nothing new. What’s changed is the way participants look at inflation risk. This has prompted yield curves to take a much more benign view of Fed and ECB policy. Each country is different but we find the treatment of sterling rates increasingly at odds with that of the dollar and euro. As a result, we expect the differential between 5Y sterling and euro swap rates to shrink to 75bp. This convergence should also be helped by the worsening of UK economic surprise indices, just as their eurozone equivalent goes from strength to strength. The spread between euro and sterling swap rates is likely to narrow Source: Refinitiv, ING   We also think the GBP curve is due to flatten further. One likely driver is the market's growing confidence that the BoE, like the Fed, will soon be in a position to cut rates, although we wouldn’t expect this before 2024. Another less probable driver would be if the BoE feels the need to tighten policy more than expected in the coming meetings. We very much doubt that longer rates would follow the short end higher, pricing instead a growing risk of rate cuts down the line to cushion the economic hit. We think the GBP curve is due to flatten further Source: Refinitiv, ING GBP: Temporary strength The BoE’s broad trade-weighted measure of sterling has bounced around 6% since the dark days of September and will marginally ease the BoE’s fears of imported inflation. Given that a 50bp hike is not fully priced for Thursday, sterling could enjoy some limited and temporary strength should the BoE indeed hike 50bp. Depending on the post-FOMC state of the dollar, that could briefly send GBP/USD back into the 1.24/25 range and EUR/GBP back to the low 0.87s. However, the challenges facing sterling have not gone away. Large twin deficits, weak growth and what throughout the year should be building expectations that falling prices – especially from March/April onwards – will provide room for the BoE to cut rates around the turn of the year. In terms of a profile, we think a continued narrowing in GBP rates premium to the EUR can push EUR/GBP higher through the year towards the 0.90/91 area. GBP/USD should be supported by the better EUR/USD trend, but will probably struggle to hold any gains to the high 1.20s – potentially seen in the second quarter. Read this article on THINK TagsInterest rates Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Alphabet Reports Strong Q2 2023 Results with Growth in Advertising and Cloud Services - 24.07.2023

The Aussie Pair Is Holding Above 0.7100, The Major Currency Pairs Are Waiting For US PCE Report

Kamila Szypuła Kamila Szypuła 27.01.2023 13:15
The dollar strengthened on Friday, moving away from multi-month lows against the euro and sterling as investors began to focus on the many important central bank meetings next week. The US Federal Reserve, European Central Bank and Bank of England are due to make interest rate decisions next week as they assess what policy adjustments may be needed to fight rampant inflation in a challenging global economic environment. In today's expected audience session, the core US PCE data for December will be released. This is the Fed's preferred measure of inflation and price pressures are expected to ease further. USD/JPY Annual inflation in Japan's largest city, Tokyo, continues to climb, with the base rate hitting 4.3% in January, the highest level in more than four decades. The USD/JPY pair in the European session is trading close to 130.00, at 129.96. Earlier, the couple managed to break the level of 130.00 but failed to maintain it. The couple is waiting for the publication of the US PCE report. EUR/USD The US dollar draws support from the mostly upbeat US macro data released on Thursday, which in turn is seen as a key factor putting some pressure on EUR/USD. Expectations for a more hawkish nature of the European Central Bank (ECB) should additionally contribute to limiting deeper losses. It is worth recalling that several ECB officials supported additional interest rate hikes in the coming months to fight stubbornly high inflation. Today European Central Bank (ECB) President Christine Lagarde is set to speach. The frequency of Lagarde's speeches in recent times has almost reduced her impact on the financial markets and the euro, which leads me to believe that today's forecasts may not have a significant impact. However, the market's attention will remain focused on key risks related to the central bank's events next week. The Fed will announce its policy decision at the end of its two-day meeting on Wednesday. This will be followed by the ECB monetary policy meeting on Thursday, which in turn will play a key role in determining the next stage of the EUR/USD directional move. The EUR/USD pair broke above 1.09 in the morning but fell again. Currently, the EUR/USD pair is trading in the range of 1.0875-1.0880. Read next: Ukraine Is Calling For More Sanctions Against Russia| FXMAG.COM GBP/USD Given the volatility of the market, the GBP/USD pair may witness a further sideways move ahead of the US PCE price index for December. British Finance Minister Jeremy Hunt's willingness to accelerate growth is unimpressive to GBP/USD buyers as the Chancellor defends his position on a tax hike despite heavy criticism from other Conservatives. Alternatively, the growing calls for Brexit solutions, at least from Irish diplomats, appear to be helping the GBP/USD pair bearish. Investors expect the British economy's slowdown to end the Bank of England (BoE) tightening cycle soon. The Cable pair (GBP/USD) broke above 1.24 at the beginning of the day, but similarly to the EUR/USD pair, it failed to hold and fell. Currently, the GBP/USD pair is trading in the range of 1.2360-1.2370. AUD/USD The Australian dollar, tied to sentiment, rose cautiously on Thursday after US GDP data boosted Wall Street's risk appetite. In the fourth quarter of 2022, the US economy grew by 2.9% q/q. This is more than the consensus of 2.6%. The Australian dollar traded at around $0.71, hovering near its highest in almost eight months as rising inflation in the country fueled bets on further central bank policy tightening. Annual inflation in Australia rose 7.8% in December, the largest increase since 1990 and above market forecasts of 7.5%. The Aussie pair is holding above 0.7100 despite having dropped earlier. Source: investing.com, finance.yahoo.com, dailyfx.com
The US PCE Data Is Expected To Confirm Another Modest Slowdown

The US PCE Data Is Expected To Confirm Another Modest Slowdown

Michael Hewson Michael Hewson 27.01.2023 13:26
European markets have struggled for direction this week, finishing the day modestly higher after two days of minor losses.   US markets on the other hand finished the day strongly higher, with the Nasdaq 100 leading the way higher on the belief, rightly or wrongly, that the US economy is heading for a soft landing whatever the Fed does next week.   Yesterday's Q4 GDP numbers showed the US economy expanded by 2.9%, while weekly jobless claims fell again to 186k from 192k the week before.   If there are any concerns that the US economy is on the brink of a recession it's certainly not being reflected in the economic data, which still looks solid, as we look towards next week's Federal Reserve rate meeting.   Today we get a look at the latest personal spending numbers for December, after seeing a sizeable slowdown in the November numbers to 0.1%, after a strong October showing of 0.9%.   If we get a similar weak reading today, and all the forecasts suggest we might, then that would suggest a rising caution amongst US consumers about how the economy is evolving as we head into 2023. We've already seen US banks setting aside hefty loan loss provisions in their most recent earnings numbers, a move which might suggest rising unease that consumers are becoming more frugal with their spending, or that a slowdown might result in credit losses.   Expectations are for December personal spending to decline by -0.1%, which seems somewhat conservative given that retail sales showed a decline of -1.1% a couple of weeks ago.   Whatever numbers we get today it seems almost certain that we will see the Federal Reserve raise rates by another 25bps next week, and judging by the rally in US stocks yesterday, the market has increasingly priced in that outcome instead of what might have been a 50bps move.   The big concern is what markets aren't pricing, and while the Bank of Canada earlier this week signalled a pause in its rate hiking cycle, that doesn't mean the Fed will follow a similar path, even though markets appear to be pricing exactly that sort of outcome.   While yesterday's GDP numbers increasingly appear to support the prospect of a soft landing, the labour market data also suggests that the Fed has the headroom to continue to be much more aggressive.   Today's PCE Core Deflator inflation data is expected to confirm another modest slowdown from 4.7% to 4.4%, and the lowest reading since October 2021. It would also support the case for a more modest 25bps next week, however as we get nearer to the end of the Fed's rate hiking cycle there is some divergence with respect to what might come next.   Judging by the bond market reaction which saw yields move higher there may be a realisation that rates are likely to remain higher for longer, while the strong close for stocks might suggest the market believes rate cuts might not be too far away.   That seems doubtful if last night's Tokyo CPI is any guide, after inflation there surged to a new 42 year high at 4.4%, well above expectations of 4%. This suggests that global inflation is likely to be stickier than markets are currently pricing.   We'll soon see who is right when Fed chair Powell speaks next week, but if markets think a pause is coming, they could be in for a bit of a wake-up call.   EUR/USD – another fairly tight range yesterday with resistance at 1.0927 and the highs this week, as well as wider resistance at the 1.0950 area which is 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110. Support remains back at the 1.0780 area.   GBP/USD – made another attempt to move towards the 1.2450 resistance area yesterday, before slipping back. We need to see a move through the 1.2450 area to target further gains towards 1.2600. A move below 1.2250 could see a move towards 1.2170.    EUR/GBP – the failure to make progress through the 0.8850 area has seen the euro slip back. Also have resistance at the previous highs at 0.8900. Still have support above the 50- and 100-day SMA which we saw last week at the 0.8720/30 area. Below 0.8720 targets 0.8680.   USD/JPY – needs to break through the 131.00 area to target a move back towards 132.60. While below the risk is for further declines towards the lows at 127.20. We have interim support at the 128.20 area initially.   FTSE100 is expected to open 13 points higher at 7,774   DAX is expected to open 44 points higher at 15,176   CAC40 is expected to open 3 points higher at 7,099   Email: marketcomment@cmcmarkets.com   Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

The S&P500 Rallied Past Its 2022 Bearish Trend Top

Ipek Ozkardeskaya Ipek Ozkardeskaya 27.01.2023 13:36
eur to usd, eur usd, eur/usd, convert eur to usd, 1 eur to usd, eur vs usd, 100 eur to usd, euro to usd, what is euro?, what is dollar?, what is us dollar? US equities rallied on Thursday, boosted by a decent rally in Tesla and Chevron stocks, and a better-than-expected GDP read in the US.   The latest US GDP update was a strong beat. The US economy grew 2.9% in Q4, down from 3.2% printed a month earlier, but significantly better than the 2.6% penciled in by analysts.   But be careful! The US growth number was good, but not necessarily for good reasons.   Inventory adjustments and government spending were the main boosters of the GDP in the latest quarter, while domestic purchases increased just around 0.2%, down from 2% printed in Q1.   Plus, the housing sector took a massive 27% hit on annual basis, business inventories grew around 0.6% versus 6% printed a quarter earlier, and trade with other countries was good, but not because Americans exported more, but because they imported less.   In summary, the latest GDP data was boosted by government spending and inventory adjustments, but the growth engines, which are consumption and investment - that hint at the health of the future economy did quite poorly.   So what do you make of the data?  In one hand, slowing demand is great news for the Fed because their aggressive tightening policy hammers demand, and that should further ease inflation and further soften the Fed's policy. And all that, with the weekly jobless claims headed further down as a sign that the jobs market is still not feeling the pinch of the higher rates and the slower demand – although IBM announced it will cut 3900 jobs, and SAP 3000 this week. But oops, IBM is down 4.5% after the news. Too bad.  On the other hand, weaker demand is not great news, as it means that your favorite companies will be selling less stuff and will be making less money.   But there is always this hope that the Chinese could fill in the gap this year, thanks to the pandemic savings that will be flowing into the stuff that Chinese like to buy the most in the coming months. In this sense, Burberry and Swatch shares look nothing less exciting than the tech stocks during the pandemic. And that despite the war and a global cost-of-living crisis.  Focus on US PCE  The US will reveal another gauge of inflation, the PCE data, that is closely watched by the Federal Reserve (Fed). A slower than expected core PCE would be a cherry on top for closing a week where the S&P500 rallied past its 2022 bearish trend top, and which could soon confirm a cup and handle pattern above the 4100 mark.  But beware, Intel slumped 10% in the afterhours trading after revealing a worse-than-expected quarterly loss due to a steeper than expected fall in PC chip sales, and giving a weaker-than-expected forecast for the current quarter.  Aussie shines  The US dollar is better bid on the back of a strong GDP report, while gold is down from the $1950 resistance.   The EURUSD is again below the 1.09 mark, while Cable consolidates below 1.24, with a clear resistance forming into the 1.2450 mark.   The AUDUSD on the other hand extends gains above 71 cents level as the heated inflation report this week boosted the Reserve Bank of Australia (RBA) hawks. The 50-DMA crossed above the 200-DMA, confirming a golden cross formation on the daily chart, while the market remains strongly short the Aussie, meaning that if the Aussie gains further momentum to the upside, we could see a short covering that could further emphasize the bullish trend.   
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

The Euro Has A High Probability Of Growing Further This Year

Jakub Novak Jakub Novak 27.01.2023 13:51
According to a survey of analysts, the European Central Bank's decision to raise interest rates by 50 basis points is already final, so the euro has a high probability of growing further this year. By May of this year, the cost of borrowing will likely have increased by another half-point due to the fight against ongoing inflation. Many respondents believe that the deposit rate will remain at 3.25% for the next year or until the economy starts to deteriorate, at which point it will be reduced by a quarter point. These modifications won't likely occur until June 2024. ECB policy meeting More than half of the analysts surveyed think that policymakers will continue to face the strongest pricing pressure in recent memory despite the 250 basis point rate hike, the ECB's most aggressive tightening of monetary policy. Next week's ECB policy meeting, which will be the first in 2023, is very probably going to result in a half-point rate increase. This was stated repeatedly by ECB President Christine Lagarde in January. Polls also indicate that although oil prices are down, eurozone inflation is steadily declining, and the Federal Reserve is considering a less aggressive rate hike in its cycle, regulators will still be inclined to tighten policy following the February meeting. Lagarde speech Lagarde will give another speech today, and she and her hawkish colleagues will undoubtedly hint that the interest rate will be raised by the same amount in March as it was in February. A more gradual approach is preferred by some of the 26 members of the Governing Council, but just four out of the 46 economists questioned think it is likely to happen. Signals for the March meeting will be the main topic of discussion in February. The possibility exists that even a small dovish reading by the markets, brought on by a softening of the phrasing, could induce a decline in the value of the euro. Read next: The Aussie Pair Is Holding Above 0.7100, The Major Currency Pairs Are Waiting For US PCE Report| FXMAG.COM Even while inflation may now be in the single digits, it is still higher than the ECB's target rate of 2% and closer to 10%. Numerous experts predict that the Governing Council's largest challenge will be to strike a balance between lowering overall inflation and the base, which is falling more slowly than expected because it ignores energy prices. Next week, the ECB is anticipated to provide additional information regarding its plans to shrink its bond portfolio by 5 trillion euros. The procedure will start with officials allowing partial debt payback and not reinvesting the revenues, as they currently do. EUR/USD Regarding the technical analysis of EUR/USD, there is still demand for the single currency, and there is a potential that monthly and annual highs will continue to be updated. To do this, the trading instrument must remain above 1.0860, which will cause it to move to the vicinity of 1.0930. You can easily get through this point to reach 1.0970 when an update to 1.1007 is imminent. Only the collapse of support at 1.0860 will put more pressure on the pair and drive EUR/USD to 1.0805, with the possibility of dropping to a minimum of 1.0770 if the trading instrument declines. GBP/USD Regarding the GBP/USD technical picture, the demand for the pound is declining. Buyers must sustain their advantage by remaining over 1.2350. The only way to increase the likelihood of a further recovery to the area of 1.2430 and, ultimately, a greater movement of the pound up to the region of 1.2490 and 1.2550, is for the resistance at 1.2440 to fail. After the bears seize control of 1.2350, it is feasible to discuss the pressure on the trading instrument returning. The GBP/USD will be pushed back to 1.2285 and 1.2170 as a result, hitting the bulls' positions   Relevance up to 09:00 2023-01-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333447
The USD/JPY Price Reversed From The Lower Limit

Forex Weekly Summary: USD/JPY Ended At 129.80, AUD/USD Closed Above 0.71

Kamila Szypuła Kamila Szypuła 28.01.2023 14:29
The US dollar was flat in trading this week. Next week's economic calendar is filled with high-impact events such as the Fed on Wednesday or the BoE and ECB on Thursday. And if the major central banks aren't enough, there will be an NFP report on Friday, and given the stance taken by the Fed on Wednesday, this jobs report could be even more important than usual as the FOMC monitors the data for signs of a slowdown from massive rate hikes from last year. USD/JPY USD/JPY started the trading week at 129.2700. Then it increased and exceeded the level of 130.00. On Tuesday, USD/JPY crossed the 131.00 level and recorded the highest trading level of the week at 131.0650. The level above 131.00 was not maintained and the pair fell below 130.00 again. Following this decline, USD/JPY hit a week-high trading low close to 129.00, 129.0400 to be exact. The pair then increased and broke above 130.00 again, but USD/JPY failed to hold above that level and ended the week at 129.8000. GBP/USD The Cable pair (GBP/USD) started the week trading quite high at 1.2399 and rose to a week high of 1.2446. The GBP/USD pair then declined and hit a trading low of 1.2274 on Tuesday. After that, the GBP/USD pair rose and traded above 1.2350. The cable pair ended the week just below 1.2400 at 1.2395. The British pound is gearing up for the week ahead which includes the Bank of England (BoE) and Federal Reserve interest rate decisions respectively. The BoE suggested another hike of 50 basis points, which is confirmed by prices in the money market. At the last meeting the majority voted for 50 bp, but taking into account new economic data, votes may be divided between 50 bp and 25 bp. The BoE is likely to remain unchanged - this would likely cause a bearish reaction on the pound. EUR/USD The major pair (EUR/USD) is holding above 1.08 and this week's trade was extremely favorable for the pair. The EUR/USD pair started the week trading at 1.0874. The EUR/USD pair then rose. Weekly trading was mostly above the 1.0860 level. EUR/USD peaked above 1.09 at 1.0930. The week's trading low for the pair was below 1.0850, while the EUR/USD record low was at 1.0841. EUR/USD ended the week at 1.0874. The market's attention will remain focused on the key risks related to the central bank's events. The Fed will announce its policy decision at the end of its two-day meeting on Wednesday. This will be followed by the ECB monetary policy meeting on Thursday, which in turn will play a key role in determining the next stage of the EUR/USD directional move. AUD/USD The Australian pair (AUD/USD) performed best on Wednesday in the major currency pairs. AUD/USD started the week trading at 0.6971. Then the Aussie pair rose and passed the 0.70 level, maintaining this level in the following trading days. On the first day of trading, AUD/USD traded below 0.70 and thus recorded the lowest trading level of the week at 0.6965. The highest trading level of the Australian pair was above 0.7100, at the level of 0.7138. The Aussie Pair finished the week just above 0.7100. Australia’s annual inflation jumped 7.8% in the December quarter, the biggest increase since 1990 and above market forecasts of 7.5%. The strong reading was more than twice the pace of wage growth and cemented expectations that the Reserve Bank of Australia will hike interest rates by 25 basis points in February. Source: investing.com, finance.yahoo.com
The Price Of EUR/USD Pair Will Develop Sideways Movement

The Price Of EUR/USD Pair Will Develop Sideways Movement

InstaForex Analysis InstaForex Analysis 30.01.2023 08:03
Last Friday, the euro was down 22 points. The trading volume was below the average, which suggests that big players have a wait-and-see attitude ahead of the Federal Reserve meeting on Wednesday. Such an observation would indicate a likely strong move right on the day of the announcement of the Fed meeting results. I believe that the euro will move downward, since the Fed still maintains its monetary policy, including the verbal one, more hawkish than that of the European Central Bank meeting. An extended divergence is gaining strength on the daily chart. We can talk about breaking the downtrend in the medium-term once the price has settled under the MACD indicator line (1.0718). By this time, the Marlin oscillator has already moved into negative territory. The first target will be the support at 1.0595, which is the December 5 high, coinciding with the Fibonacci correction level of 23.6% of the growth since last September 28. On the four-hour chart, the price settled below the MACD line, but it is still held by the balance line, which indirectly confirms the wait-and-see attitude of speculators. Divergence pressure is weakening, the oscillator signal line may briefly return to the green zone, the price will develop sideways movement under the MACD line (1.0892).   Relevance up to 04:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333546
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The Potential For A Bullish Turn Of The EUR/USD Pair Remains High

Oscar Ton Oscar Ton 30.01.2023 08:29
Technical outlook: EURUSD dropped to the 1.0837 lows on Friday during the New York session, just managing to test previous short-term support at 1.0835. The single currency pair has since found support and is seen to be trading close to 1.0875 at this point in writing. A meaningful top might be already in place around 1.0929 over the last week as the bears are willing to hold prices lower. EURUSD should ideally stay below 1.0929 to keep the bearish momentum intact. The larger-degree rally which began in September 2022 from 0.9535 looks mature and complete at 1.0929. If the structure holds well, we should witness a meaningful pullback towards 1.0400 and down to 1.0100 going further. EURUSD is facing intraday resistance close to 1.0900, while support is seen through 1.0835. A break below 1.0835 will confirm and accelerate a move further towards 1.0750 and 1.0480 in the next few trading sessions. Also, note that 1.0100 is close to the Fibonacci 0.618 retracement of the above rally, hence the potential for a bullish turn remains high from there. Trading idea: A potential bearish move against 1.1000 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310490
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The EUR/USD Pair May Announce A New Bullish Momentum

Ralph Shedler Ralph Shedler 30.01.2023 08:32
The EUR/USD pair continues to move sideways in the short term as the Dollar Index moves somehow sideways as well. It's trading at 1.0868 at the time of writing above Friday's low of 1.0837, indicating that the buyers are still very strong. Fundamentally, the German Prelim GDP may report a 0.0% growth, while Spanish Flash CPI is expected to increase by 4.9%. Still, the fundamentals should have a big impact only tomorrow. The US CB Consumer Confidence is expected to jump to 109.2 from 108.3, while Chicago PMI could come in better compared to the previous reporting period as well. Only better than expected US data and poor Eurozone figures could save the greenback from the downside. EUR/USD Exhausted Sellers! EUR/USD is trapped between the 1.0845 and 1.0926 levels, so only escaping from this range could bring us great trading opportunities. Now, it challenges the 1.0867 historical level after finding resistance at the weekly pivot point of 1.0880. Technically, the price is also trapped between the median line (ml) and the upper median line (uml) of the descending pitchfork. This is seen as a potential flag, as a bullish pattern. EUR/USD Forecast! A valid breakout above the pivot point (1.0880) and above the upper median line (uml) validates further growth up to the range's resistance of 1.0926. Coming back to test and retest 1.0845 may announce a new bullish momentum.   Relevance up to 07:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310498
Analysis Of The Euro To US Dollar Pair Situation - 30.01.2023

Analysis Of The Euro To US Dollar Pair Movement

Torben Melsted Torben Melsted 30.01.2023 08:39
EUR/USD traded in a very narrow range between 1.0835 - 1.0900 last week, but it should just be a matter of time before support at 1.0835 breaks and confirms that wave C of 4 is well underway towards the ideal target near 1.0481. Once the correction in wave 4 completes, we will be looking for a new impulsive rally towards at least 1.1625 and possibly even closer to resistance near 1.2350. Relevance up to 07:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310504
The EUR/USD Pair Maintains The Bullish Sentiment

The EUR/USD Pair Maintains The Bullish Sentiment

Paolo Greco Paolo Greco 30.01.2023 08:47
M5 chart of EUR/USD EUR/USD did not show any interesting movements on Friday. The price was striving for the critical line, and when it reached this line, it failed to overcome it. Thus, the flat pattern persisted and the price continued to move above the Ichimoku indicator lines (we registered them in the last "pre-flat" position), so there are no changes in the technical picture. There are reasons to expect that this week trading will be very volatile, which suggests that the flat will finish. But in our fundamental articles we have already analyzed this point. I think that the "signs" of all the forthcoming events are very serious, but the reaction to them may be quite different from what everyone expects now. In other words, the outcome of the European Central Bank and Federal Reserve meetings has already been worked out "in advance" and if there are no surprises, the market reaction will be very restrained. We also expect that the market will come to the conclusion that it is simply unreasonable to buy the euro. Speaking of Friday's trading signals, it was difficult. During the European session, the pair showed a desire to move logically, so there was a buy signal near 1.0868. The position was closed by the Stop Loss without incurring any loss because the price failed to reach the target level. At the US trading session, the pair started the "roller coaster ride" near the 1.0854-1.0868 area, which resulted in a whole series of false signals. Traders could work off one more, any signal, which surely closed in a loss. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 9,500, whereas the number of short positions fell by 2,000. Thus, the net positions decreased by 7,500. Now the number of long positions is higher than the number of short positions opened by non-commercial traders by 134,000. So now the question is: how long will the big players increase their longs? From a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 52,000 (732,000 vs. 680,000). H1 chart of EUR/USD The technical picture on the one-hour chart remains unchanged. We can see that the pair maintains the bullish sentiment, and is located above the lines of the Ichimoku indicator. However, the pair was mostly flat, whether there was macro data or not. Thus, the euro can not rise, but it doesn't want to fall as well. This week, traders will have enough reasons to complete the flat. On Monday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137 and also Senkou Span B lines (1.0825) and Kijun Sen (1.0846). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 30, there are no important and interesting events planned in the European Union and the United States, all the most interesting is in the second half of the week. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 07:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333562
The Euro May Attempt To Resume An Upward Movement

The Euro May Attempt To Resume An Upward Movement

Jakub Novak Jakub Novak 30.01.2023 08:55
Analysis of transactions and tips for trading EUR/USD The test of 1.0890 occurred when the MACD line was already far from zero, so the upside potential was limited. Sometime later, another test took place, but this time the MACD line was in the overbought area, which was a good signal to sell. This resulted in a price decrease of around 40 pips. No other signals appeared for the rest of the day. Statements from ECB President Christine Lagarde had no impact on the market last Friday, while data on core PCE in the US, which matched forecasts, sent dollar higher. For today, the only report worth watching is Germany's GDP data for Q4, which might be worse than expected. That could bring back pressure on EUR/USD. However, there are no statistics scheduled to be released in the afternoon, so euro may attempt to resume an upward movement ahead of the Fed meeting this week. For long positions: Buy euro when the quote reaches 1.0885 (green line on the chart) and take profit at the price of 1.0925. Growth could occur if the economic data from Germany exceeds expectations. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0855, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0885 and 1.0925. For short positions: Sell euro when the quote reaches 1.0855 (red line on the chart) and take profit at the price of 1.0816. Pressure will return if the attempt to rise above 1.0885 fails. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0885, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0855 and 1.0816. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader   Relevance up to 07:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333574
The EUR/USD Pair Has A Potential For The Breakout Mode

The EUR/USD Pair Has A Potential For The Breakout Mode

Peter Jacimovic Peter Jacimovic 30.01.2023 09:04
Technical analysis: EUR/USD has been trading sideways at the price of 1.0860 inside of the downside channel. I see potential for the breakout mode in the next period. Trading recommendation: Due to the strong upside trend in the background and potential for the breakout of the downside channel, I see further upside continuation. Watch for the potential breakout of the downside channel to confirm further rally towards upside objective at 1.1045 Stochastic oscillator is showing fresh upside momentum, which is strong sign that buyers are in control. Key support is set at the price of 1.0835   Relevance up to 08:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310523
Metals Market Update: Decline in LME Copper On-Warrant Stocks, Zinc and Lead Surplus Continues, Nickel Market in Supply Surplus

FX Daily: Stress testing the consensus view

ING Economics ING Economics 30.01.2023 10:11
The week ahead sees several key event risks for FX markets - largely in the form of central bank meetings in the US, eurozone, and other parts of Europe. Fresh communication from central bankers will stress test investors' view that the peak in tightening cycles is close at hand. A Fed push-back against 2H23 easing expectations could support the dollar USD: Action kicks off tomorrow The dollar starts the weak in very narrow ranges and not far from the lows of the year. This week will stress test the consensus view amongst investors that i) the Federal Reserve will start to acknowledge easing price pressures and soon end its tightening cycle, ii) China reopening will support global growth and iii) that lower energy prices mean improved European growth prospects. Our macroeconomists discuss many of those themes in their week ahead preview, including links to full previews for this week's FOMC, European Central Bank and Bank of England meetings. Our FX contribution to the FOMC preview outlines a scenario where the dollar could sell off and EUR/USD trade over 1.10 were the Fed to hugely surprise by suggesting that any additional hikes, after this week's 25bp increase, would be data dependent. That seems unlikely. More likely is the Fed pushing back against the 50bp of easing priced into the second half of the year and the dollar enjoying a brief rally. In addition to Wednesday's FOMC meeting, the US data calendar contains two important pieces of US data. The first is Tuesday's release of the fourth quarter Employment Cost Indicator (ECI) - one of the Fed's preferred gauges of price pressures in labour markets. This had spiked to 1.4% in the first quarter of last year from the previous three months, but is expected to drop back to 1.1% in the fourth quarter from 1.2% in the third. Any upside surprise here could see expectations swing toward a more hawkish FOMC outcome. And Friday sees the US January jobs report. ING's US economist, James Knightley, sees the headline job creation starting to dip. And assuming there are no upside surprises in the average earnings figures, we assume this data release would continue to support the benign, dollar-bearish environment. Clearly, it is a busy week for FX with arguably most of the volatility coming between the FOMC meeting outcome on Wednesday evening and the ECB/BoE decisions and press conferences on Thursday lunchtime. In the background, this week also sees the reopening of Chinese markets after the Lunar New Year public holiday. Investors are very bullish on China reopening prospects and will need to be fed more supportive data points this week. Here, tomorrow sees the Chinese PMIs for January, where sizable rebounds are expected - and required to support bullish positioning. Our game plan sees the dollar staying supported into Wednesday's FOMC meeting (e.g. DXY holding support down here at 101.30/50), but any FOMC-inspired rally in DXY to the 102.50/103.00 area proving temporary. Chris Turner EUR: Drifting into Wednesday/Thursday As above, Wednesday/Thursday could prove the most volatile period of the week. Our core view for the ECB meeting is that the central bank will stay hawkish and push back against the easing priced in for 2024. That should see two-year EUR:USD swap differentials continue to narrow and be positive for EUR/USD. We had cited this narrowing in swap differentials as a major factor when revising our EUR/USD forecasts substantially higher.  Before Thursday's ECB meeting, today sees the release of January economic confidence readings for the eurozone. These are expected to have improved marginally, but any upside surprises would feed the narrative of lower energy and strong fiscal stimulus ensuring that recessions if seen, are mild.  Expect EUR/USD to drift in a 1.08-1.09 range - probably into the US ECI data release tomorrow. Chris Turner GBP: Bank of England could be supportive As we discuss in the BoE monetary policy preview, a 50bp rate hike could prove mildly supportive for sterling. Our base case of a 50bp hike is not fully priced by the market. And with wage pressures remaining firm and base effects not expected to see CPI rolling substantially lower until the second quarter, it looks too early for the BoE to be sounding the all-clear on inflation. Depending on the state of the dollar after the FOMC meeting, GBP/USD could be pressing 1.2500 by the end of the week. Chris Turner CEE: Czech National Bank to confirm stable rates After a busy two weeks in Poland and Hungary, the main focus will shift to the Czech Republic. But first, today, we will see the final GDP number for Poland for last year. On Tuesday, fourth quarter GDP for the Czech Republic will be released. On Wednesday, we'll see the Czech Republic's state budget for January and PMI numbers across the region. We expect sentiment to improve in Poland, to be unchanged in the Czech Republic, and to deteriorate in Hungary. The Czech National Bank is scheduled to hold its first meeting of the year on Thursday. We expect rates and the FX commitment to remain unchanged. The main focus will be on the central bank's new forecast and outlook for January inflation. Thus, given the risk of higher inflation in the first quarter, we expect the tone to remain unchanged with the Bank citing "higher rates for longer" and warning that it does not "rule out a rate hike at subsequent meetings". However, we expect that rates will remain stable at least until the second quarter. In Hungary, S&P on Friday decided to downgrade the rating by one notch to BBB- with a stable outlook, highlighting the impact on the economy due to Covid-19, the Ukrainian war, and delays in EU money flows. The FX market in the region this week will, of course, be driven mainly by the global story and high volatility will not be a surprise. However, overall global conditions should remain positive for the region. Moreover, gas prices are testing new lows again, which is always good news for CEE. On the local front, we expect the Hungarian forint to absorb the negative shock of the downgrade and move back towards 395 EUR/HUF. In our view, the Czech koruna has the heaviest long positioning at the moment and therefore we see no room for the CNB meeting to support a move lower. On the contrary, we believe the koruna is overvalued and should move back towards 24.0 EUR/CZK. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Major Currency Pairs Are Waiting For Central Banks Decisions, USD/JPY Pair Rose Above 130.00,

Kamila Szypuła Kamila Szypuła 30.01.2023 13:15
The dollar weakened on Monday to near an eight-month low ahead of a series of central bank meetings this week. The US Federal Reserve is likely to continue to ease the pace of monetary policy tightening at its upcoming meetings and plans to raise interest rates by 25 basis points at its next two policy meetings. USD/JPY USD/JPY pair struggled to hold significant gains above the psychological 130.00 level. The strength of the yen was limited by dovish comments from the BoJ president. BoJ Governor Kuroda continues to maintain his lenient stance on monetary policy. This comes as investors grow optimistic that rising inflation will result in a hawkish move away from the BoJ. Any further hawkish change from the BoJ seems unlikely with Governor Kuroda at the helm and could happen when the governor steps down in April. Driven by the risk associated with key central bank events, investors seem reluctant to bet on an aggressive bear market around the USD/JPY pair. In addition, comments from BoJ chairman Kuroda Haruhiko that the central bank must continue its easing policy and keep the inflation target at 2% limit the gains for the JPY. USD/JPY Pair started the week at 129.8040 and then increased. Currently, the pair is holding above 130.00. EUR/USD Higher Spanish inflation data supported the euro. The euro surged above $1.09 in late January, hovering around its highest level since April last year as investors awaited multiple central bank meetings this week as they digested stronger than expected Spanish inflation figures. The European Central Bank is due to raise interest rates by 50 basis points on Thursday, bringing borrowing costs to their highest level since 2008, while investors will also be on the lookout for signs of slowing the pace of monetary policy tightening at its March meeting. Read next: Glovo Planned To Lay Off 250 Workers Worldwide, The Middle East Is Already Suffering From A Water Shortage| FXMAG.COM EUR/USD pair gained traction and climbed above 1.0900 during the European session, but failed to hold and fell to 1.0893. GBP/USD The cable price (GBP/USD) was similar to the EUR/USD rate, i.e. it rose above 1.24 in the European session, but it did not hold and fell to 1.2384. The slight selling pressure around the US dollar ahead of key central bank policy announcements this week appears to be helping the pair push higher. GBP/USD traders can expect interest rate decisions from both sides of the pair this week, with the US Federal Reserve and Bank of England expected to make February moves on Wednesday and Thursday respectively. The Bank of England is to raise its base rates by half a percentage point. That would take them to 4%, the highest level since the 2008 financial crisis, with further increases expected. However, there have been some objections to the interest rate setting by the Monetary Policy Committee and it seems that a smaller hike is still on the table. AUD/USD AUD/USD prices have fallen to a three-day low of around 0.7075 in the last hour, although any significant drop still seems elusive. The Aussie pair has lost its momentum above 0.7100 but is not falling significantly and is trading at 0.7076. The Australian remains supported by expectations of further policy tightening from the Reserve Bank of Australia amid soaring inflation and China's swift reopening after Covid restrictions have boosted the global economic outlook. Australia's annual inflation rose 7.8% in December, the RBA has already raised the cash rate by a total of 300 basis points at eight consecutive meetings in 2022, bringing borrowing costs to a 10-year high of 3.1%. Source: investing.com, finance.yahoo.com, dailyfx.com
The German economy underperformed in the Q4 of 2022, GDP declined

Germany’s Economy Declines In Q4, Eurozone GDP Is Expected To Slow

Kenny Fisher Kenny Fisher 30.01.2023 14:27
The euro is in positive territory on Monday. EUR/USD is trading at 1.0907 in the European session, up 0.36%. It was a quiet week for the euro, which continues to hug the 1.09 line. I expect to see stronger volatility this week, as the eurozone releases GDP and inflation data, followed by the ECB rate announcement on Thursday. German GDP declines in Q4 Germany’s economy posted a rare decline in the fourth quarter. GDP came in at -0.2% q/q, down from 0.4% in Q3 and shy of the forecast of zero. On an annualized basis, GDP slowed to 1.1%, down from the Q3 read of 1.3%, which was also the forecast. The markets are braced for more bad news out of the eurozone on Tuesday. German retail sales for November are expected to drop by 4.3% y/y, after a decline of 5.9% in November. Eurozone GDP is expected to slow to 1.8% y/y in Q4, compared to 2.3% in Q3. The ECB will be keeping a close eye on this week’s GDP and inflation data, ahead of a key rate decision on Thursday. The central bank has adopted a hawkish stance but is still playing catch-up with inflation, which is currently at 9.2%. The markets are expecting 50-basis points at the upcoming and March rate meetings, but there is uncertainty as to what happens after that. The ECB would love to ease up on rates, but the paramount consideration is curbing high inflation. The cash rate stands at 2.50%, and the markets are forecasting a terminal rate in the range of 3.25%-3.75%, meaning that there is plenty of life left in the current rate-tightening cycle.   EUR/USD Technical EUR/USD is testing support at 1.0907. Below, there is support at 1.0837 1.0958 and 1.1028 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Rates Spark: Nothing new on the dovish front

The Pressure On The Euro Is Gradually Getting Bigger

InstaForex Analysis InstaForex Analysis 31.01.2023 08:08
On Monday, the euro tried to trade wide, i.e. it tried to go up using the CPI growth in Spain in January to 5.8% y/y against 5.7% y/y earlier, but the German GDP contraction by -0.2% q/q and the manufacturing activity growth by the Dallas Fed in January from -20.0 to -8.4, made the euro close the day with 18 points decrease. The main events will be held tomorrow and on Thursday. The Federal Reserve is expected to raise rates by 0.25% tomorrow and the European Central Bank is expected to raise rates by 0.50% on Thursday. We don't know which way the euro will move. Although, it is quite interesting that market participants have already taken these central bank meetings into account (and not only in the prices, but psychologically). As the ECB's intentions look clear and understandable now, while the US central bank's intentions are still vague, Fed Chairman Jerome Powell's comments will keep investors in the mood to buy the dollar. From the technical side, the pressure on the euro is gradually getting bigger. The divergence on the daily chart is too long and this weakens its influence on the price prospect, but if the signal line of the Marlin oscillator will move into the red zone, the probability of consolidating below the MACD indicator line will increase, and this is a start to a medium-term decline. The first target is the 1.0758/87 range, the second target is the MACD line 1.0727, further to 1.0660. On the four-hour chart, the price settled under the balance and MACD indicator lines, while Marlin is in a stable downward position. The probability of the price decline is much higher than the probability of its growth. Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333687
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The Outlook Of The EUR/USD Pair Price

Torben Melsted Torben Melsted 31.01.2023 08:10
EUR/USD is again testing support at 1.0835. A break below here will confirm that wave B is complete and wave C lower to the ideal target area between 1.0437 - 1.0500 is in progress. Short-term we see minor resistance near 1.0873, which ideally will cap the upside for the expected break below support at 1.0835 for the final decline in wave C of 4 towards the 1.0437 - 1.0500 area, from where wave 5 higher can take over. Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310703
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

Oscar Ton Oscar Ton 31.01.2023 08:22
Technical outlook: EURUSD dropped through 1.0839 during the New York session on Monday before pulling back. The currency pair had earlier rallied through 1.0911 which was an intraday resistance zone as discussed. The single currency pair is seen to be trading close to 1.0840 at this point in writing as the bears have successfully carved a lower high at 1.0911. Prices ideally stay lower from here on. EURUSD has completed its larger-degree rally, which had begun from the 0.9535 low in September 2022 at 1.0929. A high probability remains for a meaningful pullback of a similar degree towards 1.0400 and 1.0100 in the next few weeks. The bulls might remain inclined to be back in control thereafter and push prices above 1.0929. EURUSD is well placed to find intraday resistance around 1.0880 and it might be taken as yet another opportunity to add short positions. Only a consistent break above 1.0929 will negate the above bearish outlook bringing back the bulls under control. Watch out for the Fibonacci 0.618 retracement around 1.0100 for a potential turn going forward. Trading idea: Potential bearish acceleration against 1.1000 Good luck!     Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310712
Forex: Euro against US dollar - forecast on April 24th, 2023

The Euro May Fall If The ECB Does Not Tighten Its Rhetoric

Paolo Greco Paolo Greco 31.01.2023 08:33
The EUR/USD currency pair began the week as uninteresting as possible. However, it is evident from the illustration above that the pair has been trading in this manner for several weeks. It is merely on the flat and close to the local maximum. There has emerged a paradoxical situation where traders are unable to make additional acquisitions and are unwilling to sell or fix profits on long positions. However, there should still be a solution to this problem. And this week is probably not the best time. This week will be filled with activities and macroeconomic reports. We don't want to say it again, as analysts and experts have only been discussing rates for the past two weeks. This matter is, in our opinion, already resolved. The ECB will increase its rate by 0.5%, while the Fed will do so by 0.25%. We allocate 2% of the chance to a "surprise" of some kind. It is hard to plan for every scenario, but an improbable turn of events should never be fully ruled out. So, we're getting ready for the most likely situation. Additionally, it asserts that the market has already completely factored in both the ECB rate increase and the Fed rate increase. It turns out that only Jerome Powell or Christine Lagarde can deliver unexpected news. However, Ms. Lagarde has talked five or six times recently, and Mr. Powell and his colleagues covered all of their ground two weeks ago. Simply put, none of these individuals had any new facts to modify their statements. One would anticipate that monetary policies would be modestly modified if new inflation reports had been published over the previous week. However, there were no noteworthy reports, so there is also no justification for changing the tone. A surprise from the ECB is still possible. 95% of what is mentioned above is accurate. There is one "but," though, and it cannot be entirely disregarded. The ECB meeting will take place on Thursday, while a new report on inflation in the European Union will be revealed on Wednesday. Thus, Lagarde's rhetoric could still vary slightly. There are some pretty clear-cut explanations for this. The truth is that news of Spain's accelerating inflation broke yesterday. Since they essentially have no impact on market mood, we typically do not take into account certain macroeconomic statistics of specific EU member states. However, the rising inflation in Spain raises the possibility that the rest of Europe may follow the lead. After all, forecasts for the Spanish CPI pointed to a new fall. And given that the ECB frequently increases rates and that oil and gas prices have decreased noticeably recently, a reduction was the most plausible scenario. However, the effect of declining energy prices has already been seen. Either the ECB rate is increasing too slowly, it is increasing slowly, or it is generally an accident. Whatever it was, there is a chance that European inflation may either slow down only slightly (0.1–0.2%) or not at all. And in this instance, we shall get the most crucial answer: by how much does the ECB have the option of raising the key rate? Keep in mind that everyone now believes that the next three meetings will increase by 1.25%. What will happen then? The ECB will have to propose tougher measures to restrain price growth if inflation stops decreasing. The euro currency could gain a new growth component if it achieves this. The euro may fall if the ECB does not tighten its rhetoric in response to Wednesday's poor data, as market players will realize that the European regulator cannot raise the rate as much as necessary. As of January 31, the euro/dollar currency pair's average volatility over the previous five trading days was 67 points, which is considered "normal." So, on Tuesday, we anticipate the pair to trade between 1.0819 and 1.0953. A new round of downward movement will be signaled by the Heiken Ashi indicator reversing downward. Nearest levels of support S1 – 1,0864 S2 – 1.0742 S3 – 1.0620 Nearest levels of resistance R1 – 1.0986 Trading Suggestions: The EUR/USD pair is still moving upward. In the case of a price recovery from the moving average or when the Heiken Ashi indicator reverses upwards at this time, long positions with targets of 1.0953 and 1.0986 might be taken into consideration. With targets of 1.0819 and 1.0742, short positions can be opened after the price is fixed below the moving average line. The flat is still going at this point, which is something to consider. Explanations for the illustrations: Channels for linear regression - allow us to identify the present trend. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333693
Technical Outlook Of The Main EUR/USD Currency Pair

Central Bank Meetings Will Determine The EUR/USD Pair's Future Direction

InstaForex Analysis InstaForex Analysis 31.01.2023 08:48
Yesterday, traders received several signals to enter the market. Let us take a look at the 5-minute chart to figure out what happened. Earlier, I asked you to focus on the level of 1.0853 to decide when to enter the market. The euro fell to 1.0853 amid the weak German data. After that, the pair formed a false breakout and a buy signal, which caused the euro to rally back to 1.0889, which made it possible to gain about 30 pips. A false breakout down at 1.0889 gave a sell signal, but the downside movement was only about 15 pips. In the afternoon, a breakout and the retest to 1.0889 gave a buy signal, but the bulls didn't reach the monthly highs. As a result, the upward movement was about 15 pips. First of all, let us focus on the futures market and changes in the COT report. According to the COT report from January 24, the number of both long and short positions increased. Traders who were encouraged by the European Central Bank's officials last week continued to build up their long positions, as they expect aggressive moves from the central bank, as well as less aggressive policy from the Federal Reserve, which may revise the key interest rate hike. Quite weak fundamental data on the US economy, especially a decline in retail sales in December, pointed to the worsening of the overall situation in the country. It means that further monetary policy tightening may lead to even more negative results. Central bank meetings will take place this week, which will determine the pair's future direction. The COT report unveiled that the number of long non-commercial positions rose 9,464 to 237,743, while the number of short non-commercial positions jumped 2,099 to 103,394. At the end of the week, the total non-commercial net position was up 134,349 versus 126,984. All this suggests that investors believe in further growth in the euro but they are still waiting for a clearer picture from central banks on future interest rates. The weekly closing price rose to 1.0919 vs. 1.0833. Conditions for opening long positions on EUR/USD: Several data on eurozone countries will be released today, which may keep the bullish momentum had it not been for the Fed meeting. We will find out the results tomorrow, as well as gloomy forecasts on the growth rate of the European economy. We are expecting figures on the eurozone GDP growth rate for the fourth quarter of 2022. The same data from Germany turned out to be disappointing so we shouldn't expect anything good from the overall eurozone figure. German and Italian unemployment rates as well as consumer price indexes will probably take a back seat. Therefore, I expect a correction from the euro before tomorrow's Fed decision. In case the market reacts negatively to the decision, which is very likely, bulls should prevent the pair from going below the support at 1.0840, which was formed last week. A false breakout at this level will trigger longs on the uptrend and encourage the rebound to 1.0873, and the bears' MAs are located there. A breakout and a downward test of this level will allow the pair to reach 1.0909, and give an additional buy signal with the target at 1.0956. The farthest target is located at a new monthly high of 1.1003. A breakout of this level may continue the bullish trend. It will be wise to lock in profits at this level.If the euro/dollar pair declines and buyers fail to protect 1.0840 during the European session, the euro may show a deeper correction. Only a false breakout of this level around the next support at 1.0806 will lead to a buy signal. It is also possible to go long just after a bounce off the low of 1.0770 or even lower – from 1.0735, expecting an upward correction of 30-35 pips within the day. Conditions for opening short positions on EUR/USD: The bulls did not even reach the monthly highs yesterday, which clearly shows that traders are cautious before the key central bank meetings. The bears have a good chance of entering a bearish correction, especially considering the data that will be released today. The main goal is to protect the resistance level of 1.0873, which was gained yesterday. A false breakout below this level after we receive disappointing eurozone data, which would take the euro to the lower limit of the sideways channel at 1.0840, would be the best time to sell. It is unlikely that there will be a serious struggle for it, because this level has been tested twice. A breakout and settlement below this area as well as an upward test will give an additional sell signal. This will affect bulls' stop orders and push the pair to 1.0806, and will be the first correctional downward movement that may affect the bullish trend. Expect a move beyond that level only if we receive strong U.S. economic data in the afternoon. If the euro/dollar pair increases during the European session and bears fail to protect 1.0873, bulls will keep control over the market. In the event of this, traders should avoid selling the asset until the price hits 1.0909. A false breakout of this level will give a sell signal. Traders may also go short after a rebound from the high of 1.0956, or even higher - from 1.1003, expecting a decline of 30-35 pips. Signals of indicators: Moving Averages Trading is performed below the 30- and 50-day moving averages, which points to the possibility of entering a bearish correction. Note: The author considers the period and prices of moving averages on the one-hour chart which differs from the general definition of the classic daily moving averages on the daily chart. Bollinger Bands In case the pair falls, the lower limit of the indicator located at 1.0820 will act as support. In case of growth, the upper limit of the indicator at 1.0910 will act as resistance. Description of indicators Moving average (a moving average determines the current trend by smoothing volatility and noise). The period is 50. It is marked in yellow on the chart. Moving average (a moving average determines the current trend by smoothing volatility and noise). The period is 30. It is marked in green on the graph. MACD indicator (Moving Average Convergence/Divergence - convergence/divergence of moving averages). A fast EMA period is 12. A slow EMA period is 26. The SMA period is 9. Bollinger Bands. The period is 20. Non-profit speculative traders are individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions are the total number of long positions opened by non-commercial traders. Short non-commercial positions are the total number of short positions opened by non-commercial traders. The total non-commercial net position is a difference in the number of short and long positions opened by non-commercial traders   Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333689
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

Ahead Of The EUR/USD Pair There Is Many Reports From The Eurozone And The US

Jakub Novak Jakub Novak 31.01.2023 08:39
Analysis of transactions and tips for trading EUR/USD The test of 1.0885 occurred when the MACD line was just starting to move above zero, which was a pretty good signal to buy. Accordingly, it resulted in a price increase of around 25 pips. No other signals appeared for the rest of the day. Lower-than-expected Q4 GDP data from Germany led to a sell-off in EUR/USD on Monday afternoon. Most likely, this momentum will continue today as GDP data for the whole Euro area, as well as Germany and Italy's unemployment figures, are expected to show decreases. Meanwhile, price indices from Germany and France are unlikely to affect the pair's direction. In the afternoon, the US will release a report on consumer confidence, which, if shows an increase, could prompt another decline in EUR/USD. The Chicago PMI report, on the other hand, will be of little interest to the market. For long positions: Buy euro when the quote reaches 1.0860 (green line on the chart) and take profit at the price of 1.0895. Growth could occur if the economic data from the eurozone exceeds expectations. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0834, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0860 and 1.0895. For short positions: Sell euro when the quote reaches 1.0834 (red line on the chart) and take profit at the price of 1.0805. Pressure will increase if economic reports from the Euro area turn out to be weaker than expected. Slowing inflationary pressures in Germany and Italy could also prompt a price decrease. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0860, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0834 and 1.0805. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333715
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

The EUR/USD Pair: The Dollar Must Be Supported By The News

InstaForex Analysis InstaForex Analysis 31.01.2023 09:00
The wave analysis of the euro/dollar pair's 4-hour chart hasn't changed much recently and is still complex. Although its amplitude is more appropriate for the impulse section of the trend, the upward section of the trend has a strong corrective and is too extended. The wave pattern a-b-c-d-e that we were able to obtain features a wave e that is far more complex than the other waves. Since the peak of wave e is substantially higher than the peak of wave C, if the wave analysis is accurate, then this pattern's development may be nearly finished. I'm still expecting the pair to fall because we're expected to develop at least three waves in this scenario. The demand for the euro either increased or stayed consistently high throughout the first few weeks of 2023, and the pair was only able to deviate marginally from previously established levels during this time. Failure to surpass the 1.0953 level, which corresponds to the Fibonacci ratio of 161.8%, will be interpreted as a sign that the market is prepared to lower demand for the pair. Unfortunately, there is still a delay in developing the trend correction section. EUR/USD On Monday, the euro/dollar pair decreased by 20 basis points, and the amplitude was low in the morning. As I previously mentioned, the amplitude has decreased significantly recently. However, in my opinion, this is a typical market response to a background of zero news. In January, the market actively countered its forecasts. We may say that the US inflation report catalyzed a new decline in the US dollar, as the majority then decided to slow the Fed's rate of tightening policies once more. However, several weeks have gone by since then, and even in the context of a corrective slowdown, demand for the US dollar is not increasing. Since corrections are a natural component of any trend segment, I think the market's behavior is extremely peculiar. It must take place nonetheless. However, for this to happen, the dollar must be supported by the news. This is how the activity should go in an ideal situation. Without news, the market can boost demand for US dollars, but with news context, it will be simpler and easier. A recession is likely to occur in 2023 I am thus anticipating speeches from Christine Lagarde this week that is "dovish" and rhetoric from Jerome Powell that is "hawkish." Since analysts and economists now believe that the European economy is weak and that a recession is likely to occur in 2023, which may force the central bank to reduce the interest rate increase step again, it will undoubtedly be simpler to wait for the first one. Given that Christine Lagarde has repeatedly warned that the rate will rise due to high inflation, such a turn of events may come as a surprise to the market. This suggests that we won't likely wait for either the first or second possibility. The chance for the dollar, therefore, rests on Friday's labor market data and the European inflation report, from which you should take the lowest value. Conclusions in general I draw the conclusion that the upward trend section's development is about finished based on the analysis. As a result, given that the MACD is signaling "down," it is now possible to consider sales with targets close to the predicted mark of 1.0350, or 261.8% per Fibonacci. The potential for complicating and extending the upward section of the trend remains quite strong, as does the likelihood of this happening. The market will be ready to finish the wave e when a move to break through the 1.0950 level fails. The wave analysis of the downward trend section notably becomes more intricate and lengthens at the higher wave scale. The a-b-c-d-e pattern is most likely represented by the five upward waves we observed. After the development of this section is complete, work on a downward trend section can start.   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333703
China Restricts Gallium and Germanium Exports, Heightening Global Tech War

FX Daily: Bracing for volatility

ING Economics ING Economics 31.01.2023 09:18
There are some important data to watch today: the Employment Cost Index in the US, GDP in the eurozone and CPI in France. We think the dollar can stay broadly supported into tomorrow’s FOMC, but the euro could outperform other G10 currencies on the back of rebounding inflation. In the Czech Republic, we will see the last numbers before Thursday's CNB meeting The dollar may stay broadly supported going into tomorrow's FOMC meeting USD: Some support going into the Fed meeting European data and global risk sentiment drove G10 FX dynamics yesterday. A weak start to the week for risk assets kept the dollar supported, especially during the US session, and signalled some market cautiousness ahead of multiple risk events: the FOMC tomorrow, ECB and Bank of England on Thursday, and US payrolls on Friday. Today, the last few pieces of US data before the Fed decision will be watched quite closely. Particular interest will be on the Employment Cost Index (ECI), which is expected to have eased from 1.2% to 1.1% in the fourth quarter. This is a key input in the Fed’s policy equation, and we could see investors shift between pro-hawkish/dovish positions ahead of the FOMC if the ECI surprises on either side. Our view for tomorrow is that the Fed still has an interest in hanging on to a hawkish rhetoric and pushing back against speculation of an early peak and – above all – rate hikes in 2023. The net result for the dollar may be positive. The US calendar also includes the Conference Board Consumer Confidence index – which may have rebounded in January – and the Dallas Fed Services index. We think the dollar can hold on to yesterday’s gains going into the FOMC meeting, and high-beta currencies could remain key underperformers in a risk-off environment. Volatility looks likely to pick up quite markedly during the remainder of the week. Francesco Pesole EUR: Inflation headaches before ECB meeting European rates markets had to deal with a surprising acceleration in Spanish inflation yesterday, which reinforced expectations of multiple 50bp hikes by the ECB. At the same time, the growth picture seems to have deteriorated, as Germany recorded negative growth in the fourth quarter. Eurozone-wide GDP figures will be released today, and are expected to show a 0.1% quarter-on-quarter contraction. However, it seems more likely that CPI figures out of France this morning will have a bigger impact on the euro. After all, a rebound in inflation is a more concerning development for the ECB than soft growth data which were heavily impacted by energy prices. In the section above, we discussed how the dollar may stay broadly supported going into the FOMC meeting. The euro, however, may show more resilience than other G10 peers (especially high-beta currencies) given the shift in the inflation narrative in the eurozone which can surely fuel ECB hawkish speculation. EUR/USD may hover around the 1.0850 handle until tomorrow’s FOMC.  Yesterday, we published our scenario analysis for this week’s ECB meeting: the recent hiccups in communication have heightened the risk that markets have lost some trust in President Christine Lagarde’s guidance. Investors may keep tracking data (EZ-wide CPI data are released tomorrow) more closely than they track Lagarde’s remarks, and the ECB meeting may not have a big impact on the euro after all. Our commodities team just revised their gas price forecasts, now expecting TTF to stay below 80 EUR/MWh throughout 2023. This is a bullish scenario for eurozone sentiment and the euro in the medium term. Francesco Pesole GBP: Standing by before 'super Thursday' There are no key data releases in the UK before Thursday’s Bank of England meeting. Markets are currently pricing in 46bp (our call is for 50bp) at this meeting and an additional 25bp in March. We expect a broadly neutral impact on the pound, and GBP/USD moves may be mostly dictated by the FOMC reaction. EUR/GBP may hold below 0.8800 until “super Thursday” (ECB and BoE meetings), although inflation figures in the eurozone mean the balance of risk is tilted to the upside for the pair. Francesco Pesole CEE: Czech economy pulled down again by automotive Today in the region we will see the first estimate of GDP for the fourth quarter of last year in the Czech Republic. We expect a 0.8% QoQ decline, below market expectations. This would confirm a shallow recession in the Czech economy. Looking ahead, the outlook for the first quarter of this year also does not look good despite better numbers across the region and from the eurozone. Yesterday, the Czech Republic's largest carmaker announced production cutbacks at some of its factories due to chip shortages. The news comes just a week after the country's third-largest manufacturer made the same announcement. This marks the beginning of difficult times for the industry, which is mainly driven by the automotive sector. The situation is dangerously reminiscent of the end of 2021 when chip shortages and automotive production curbs dragged the industry into its biggest slump since the Covid-19 lockdowns. This may also be a piece of the puzzle for the Czech National Bank (CNB) meeting this week, however we will have to wait a few months for proof in hard data. For the koruna, a weaker economic number could be a trigger to correct recent gains and return to 24.00 EUR/CZK. We also see interesting developments in Hungary following the downgrade of the country's sovereign rating. The weakening of the forint that we mentioned yesterday did not materialise and, on the contrary, the currency ended roughly unchanged at the end of the day. It confirmed that the strengthening of the forint is not short-lived and its strengths are of a more permanent nature. In the long term, we expect further strengthening. For now, we see yesterday's market reaction as a possible clearing of long positions while attracting new buyers and consolidating around 390 EUR/HUF. Frantisek Taborsky Read this article on THINK TagsFX Dollar Czech National Bank Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
RBA Pauses Rates, Australian Dollar Slides 1.3% on Economic Concerns; ISM Manufacturing PMI Expected to Remain Negative

Weak Performance For EU Q4 GDP, The UK Economy Is Also Expected To Experience A Weak Quarter

Michael Hewson Michael Hewson 31.01.2023 13:10
European markets struggled for direction yesterday, after German Q4 GDP showed a surprise contraction of -0.2% and core CPI in Spain rose to a record high of 7.5%, pushing yields across the bloc sharply higher. With the ECB due to meet later this week and expected to raise rates by 50bps, yesterday's weakness appears to have been driven by concern that the EU economy might not be as strong as thought, and inflation a lot stickier.   US markets also continued their own Jekyll and Hyde behaviour with the Nasdaq 100 posting its biggest one-day loss this year, as the strong rally of last week gave rise to a more tempered approach as the Federal Reserve gets set to kick off its two-day meeting later today.   Yesterday's surprise increase in Spanish core inflation for January to record highs also appears to have raised concerns that high prices might not come down as quickly as thought, and growth a lot slower, despite the recent sharp falls in energy prices. With Asia markets also sliding back this morning, markets here in Europe look set to open lower as we come to the end of what has been a strong month.   Later today we should get a better idea of whether the contraction in the German economy in Q4 was a localised issue, or symptomatic of more widespread economic weakness across the EU.   The French economy is expected to slow in Q4, down from 0.2% in Q3, to 0%, while the Italian economy is expected to contract by -0.2% in Q4. This is expected to translate into a similar weak performance for EU Q4 GDP which is forecast to show a contraction of -0.1%.   The UK economy is also expected to experience a weak quarter, however we won't know the actual numbers on that until next week, but recent lending data has already shown that consumers have already started to rein back on their spending, although we did see a bit of a pickup in November.   Read next: The Government Pension Fund Global Suffers Losses| FXMAG.COM   Net consumer credit in November more than doubled from 700k in October, to £1.5bn. This may well have been driven by a surge of holiday bookings judging by the recent November GDP numbers, which showed a strong performance from the travel sector. This resilience may well extend into December with an expectation of £1.1bn.   Mortgage approvals on the other hand, have slowed sharply since the summer months, and are expected to remain subdued in December, with expectations of a fall from 46.1k to 45k.   In the US the latest consumer confidence numbers for January are expected to see another gain to 109, after a surprise surge in December saw this indicator rise sharply to 108.3 from 101.40. This rise in consumer confidence is a little puzzling given that retail sales in the US for both November and December showed sharp declines.   One indicator that is likely to be of particular interest to the Federal Reserve as they convene their latest meeting today is the employment cost index for Q4 which is expected to slow from 1.1% from 1.2% in Q3. This is another key indicator for the Federal Reserve after last week saw core PCE fall to its lowest levels in over a year.  An upside miss on the ECI would be bad news for any sort of dovish expectations from tomorrow's decision.   EUR/USD – we saw another failed attempt to push above the 1.0900 area before slipping back again. The main resistance remains at the 1.0950 area which is 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110. Support remains back at the 1.0780 area.   GBP/USD – has continued to struggle above the 1.2400 area after last week's failure to move through the 1.2450 resistance area. We need to see a move through the 1.2450 area to target further gains towards 1.2600. A move below 1.2250 could see a move towards 1.2170.    EUR/GBP – the failure to make progress through the 0.8850 area last week has seen the euro slip back. Key support remains at the 50- and 100-day SMA which we earlier this month at the 0.8720/30 area. Below 0.8720 targets 0.8680.   USD/JPY – needs to break through the 131.00 area to target a move back towards 132.60. While below 131.00 the risk is for further declines towards the lows at 127.20. We have trend line support at the 129.00 area initially.   FTSE100 is expected to open 18 points lower at 7,767   DAX is expected to open 50 points lower at 15,076   CAC40 is expected to open 22 points lower at 7,060     Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
Further Upward Price Movement Of The AUD/USD Pair Is Expected

AUD/USD Pair Remains Under Strong Selling Pressure, The EUR/USD Pair Has Been Falling But Remains Above 1.08$

Kamila Szypuła Kamila Szypuła 31.01.2023 14:48
The US dollar was on an upward trend against its major trading partners early Tuesday ahead of a busy schedule of data releases for markets. The Fed is coming soon. The US central bank is expected to raise interest rates again to fight inflation. However, fears seem to be growing that the price of victory here may be a recession. USD/JPY The Japanese yen (JPY) continues to be supported by fresh speculation that high inflation could lead the Bank of Japan to adopt a more hawkish stance later this year. Also, the overall weaker tone around stock markets further reinforces the safe haven for the JPY. This, along with the underlying bearish sentiment around the US dollar, puts some downward pressure on USD/JPY. The pair lost in the earlier trading hours but is trading above 130.10 again. EUR/USD The euro fell to USD 1.08 in the last session of January, but remains close to nine-month highs. Investors await the ECB's monetary policy decision on Thursday, with the central bank expected to raise interest rates by 50 basis points, bringing borrowing costs to their highest level since 2008. At the same time, data indicating an unexpected growth in the euro area in Q4 2022 by 0.1%, beating market forecasts of a decrease of 0.1%, and fresh CPI data for France and Spain, showing an increase in inflation in January, gave hope that The ECB will soon end its tightening cycle. On the negative side, retail sales in Germany fell by 5.3%MoM in December, much worse than expected. The EUR/USD pair has been falling since the morning, even significantly in the European session, but remains above 1.08 and trades at 1.0850. Read next: The Government Pension Fund Global Suffers Losses| FXMAG.COM GBP/USD The cable continued its decline in the early hours of the Asian session, falling below the 1.2350 level. GBP/USD saw a slight rebound to trade just above the 1.2350 level heading into the European open where the dollar bull returned pushing GBP/USD towards the 1.23000 handle. The GBP/USD pair remains under bearish pressure and is currently trading at 1.2321. The rally on the GBP/USD pair appears to have lost momentum, however, given the key risk events, the move could be due to market participants repositioning ahead of the storm. With the focus on central banks, there is still a real possibility of a policy divergence between the FED and the BoE, which should benefit the cable in some way. The Fed is expected to raise interest rates by 25 basis points while the Bank of England by 50 basis points as it fights persistent inflation. ING strategists said they expected BoE's decision to have a broadly neutral impact on the pound against the dollar. AUD/USD AUD/USD remains under strong selling pressure for the second day in a row on Tuesday and drops to more than a week low ahead of the North American session. The Australian dollar fell towards $0.70, retreating further from recent highs after data showed the country's retail sales fell much more than expected in December as heightened inflationary pressures and higher interest rates dampened consumer spending. Still, Australians are supported by expectations that the Reserve Bank of Australia will continue to fight inflation, expectations for a 25 basis point rate hike in February and China's swift reopening after Covid restrictions have boosted the global economic outlook. Source: investing.com, finance.yahoo.com, dailyfx.com
Rates Spark: Yields are looking up again

The Cable Pair (GBP/USD) May Drop On The Fed Meeting

InstaForex Analysis InstaForex Analysis 01.02.2023 08:12
Slightly weaker UK economic indicators and the upcoming strike in England with potential participation of 500,000 people weakened the pound by 27 points yesterday. So far we see only preconditions for the price reversal, even the leading Marlin oscillator on the daily chart stays in the positive (growing) area. Actually the price is developing in the upper half of the 1.2155-1.2420 range, above the MACD indicator line (1.2227). Overcoming the MACD line will not ensure the price reversal, because support at 1.2155 (high on November 24) is located below it. Consolidating under the line will open the way to the target level of 1.1933. Further, falling to 1.1737 is possible. On the four-hour chart, price declines under the indicator lines, settling under them since Monday. The Marlin oscillator is also in the negative territory since Monday. Expect GBP/USD to decline on the Fed meeting.   Relevance up to 03:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333822
Small factors combine to pressure credit

The EUR/USD Pair Is Waiting For The Fed Meeting

InstaForex Analysis InstaForex Analysis 01.02.2023 08:16
Here comes day X - the Federal Reserve will announce its monetary policy with a likely 0.25% rate hike. Next the markets are expecting another 0.25% hike and a short-term ceiling of 5.00% and then a rate cut. Investors are expecting the European Central Bank to raise the rate by 0.50% at tomorrow's meeting, another 0.50% at the next meeting and further 0.25% to the 3.75-4.00% level. In such a situation, the rhetoric of the central bank may be the deciding factor, so after today's "X" day, tomorrow's "Y" day will be just as important. To the previously described plans of the Fed and the ECB, we should also consider that the ECB has given the markets a clearer action plan than the Fed, so the US central bank can affect the exchange rate from this side as well, if desired. The problem is that the Biden administration, unlike the Trump administration, has given no hint of the desired dollar exchange rate. We still believe that the White House has not changed its attitude towards the national currency, otherwise, we would have heard some rumors by now. Therefore, our main scenario remains the same - the dollar will strengthen as a result of the important central bank meetings. On the weekly chart, the price paused at the 138.2% Fibonacci level. As you can see, this is a very strong level. The Marlin oscillator turns down from the overbought zone. On the daily chart, there were almost no changes over the past 24 hours, although there was an unsuccessful attempt to attack the upper boundary of the target range 1.0758/87. On the four-hour chart, the price remains under the balance line indicator, the Marlin oscillator is progressing in the area of the downtrend. We expect the euro to fall on the Fed meeting.   Relevance up to 03:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333824
EUR/USD Pair Has A Potential For Short-Term Rally

EUR/USD Pair Has Most Likely Completed Its Larger-Degree Rally

Oscar Ton Oscar Ton 01.02.2023 08:26
Technical outlook: EURUSD rallied through the 1.0875 lower high during the late New York session on Tuesday. Please note that the 1.0870-90 zone was marked as intraday resistance in our discussion earlier. Prices did respond in a bearish manner and could resume lower from here towards 1.0400 in the near term. The instrument is seen to be trading at 1.0865 at this point in writing as the bears prepare to firm their grip. EURUSD has most likely completed its larger-degree rally, which began from the 0.9535 low, at the 1.0929 high last week. The currency pair has also dropped through the 1.0800 low since then and is currently producing a pullback. Immediate resistance is seen at 1.0913, followed by 1.0930; while support comes in around 1.0770, followed by 1.0481 levels respectively. A turn here will target 1.0770 followed by 1.0481 levels, confirming the bears are back in control. Also, note that the Fibonacci 0.618 retracement is seen passing through 1.0100 (for the entire rally between 0.9535 and 1.0930). We expect a bullish reversal if prices manage to drop lower and reach 1.0100 potential support. Bearish pressure is likely to remain in the near term. Trading idea: Potential bearish move against 1.1000 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310913
ECB cheat sheet: Difficult to pull away from the Fed

Tips For Trading The EUR/USD Pair In Short And Long Positions

Jakub Novak Jakub Novak 01.02.2023 08:40
Analysis of transactions and tips for trading EUR/USD The test of 1.0834 occurred when the MACD line was just starting to move below zero, which was a pretty good signal to sell. Accordingly, it resulted in a price decrease of around 25 pips. Shortly after, a test of 1.0805 took place, which led to a rebound of about 30 pips. No other signals appeared for the rest of the day. GDP data from the eurozone was good, which indicates that the region had managed to avoid a recession. However, euro did not rise, ignoring also Germany and Italy's unemployment figures. Price increased only in the afternoon, when the US released a weak report on consumer confidence. The upward movement brought the market back into balance. Today, Germany and Italy will release data on their manufacturing activity indices, followed by a report on eurozone consumer price index. The latter may affect the direction of euro and prompt a rise in quotes provided that underlying prices show a decrease. The eurozone unemployment rate will not be of much interest. More important is the Fed meeting in the afternoon, where interest rates could be raised by 0.25%. That will weaken dollar and cause a sharp rise in euro, especially since other data relating to employment and manufacturing activity will be of little interest. Dovish stance of the Fed will also return risk appetite. For long positions: Buy euro when the quote reaches 1.0882 (green line on the chart) and take profit at the price of 1.0910. Growth could occur if the economic data from the eurozone exceeds expectations. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0852, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0882 and 1.0910. For short positions: Sell euro when the quote reaches 1.0852 (red line on the chart) and take profit at the price of 1.0823. Pressure will increase if economic reports from the Euro area turn out to be weaker than expected. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0882, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0852 and 1.0823. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader Relevance up to 06:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333850
Rates Spark: Nothing new on the dovish front

The EUR/USD Pair Is Still Moving Sideways

Paolo Greco Paolo Greco 01.02.2023 08:42
M5 chart of EUR/USD EUR/USD did not show any interesting movements on Tuesday. The pair seesaws around the flat. In general, the pair's movements are unappealing, which is very difficult to work out. This week should be volatile and trendy, but as of Wednesday morning we haven't observed anything like that. Macroeconomic and fundamental backgrounds will start to appear this afternoon. Yesterday, the EU published its GDP report for the fourth quarter, which turned out to be unexpectedly positive and showed a 0.1% growth of the European economy instead of a contraction. As we can see, this report did not help the euro in any way and there was no reaction to it. So, all we can do is wait. At least we have to wait for today's US ISM index and the results of the Federal Reserve meeting in the evening. Yesterday's trading signals were not good, but what else should we expect from the flat? In the beginning, the pair bounced from the critical line, and then it went down to 1.0806. This signal was manageable and it gained 20 pips. The rebound from 1.0806 was also a good buy signal, afterwards the pair returned to the Kijun-Sen line and spent the rest of the day in the 1.0846-1.0868 area. The profit was 20-30 pips. But the Senkou Span B line was located between the critical line and 1.0806, so the entire thing could be considered as one area. Consequently, we couldn't open any deals at all. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 9,500, whereas the number of short positions fell by 2,000. Thus, the net positions decreased by 7,500. Now the number of long positions is higher than the number of short positions opened by non-commercial traders by 134,000. So now the question is: how long will the big players increase their longs? From a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 52,000 (732,000 vs. 680,000). H1 chart of EUR/USD The technical picture on the one-hour chart remains unchanged. The pair is still moving sideways, and the Ichimoku indicator lines are starting to intersect more often. Volatility is weak. I expect more active movements in the second half of the week, but at the same time, let me remind you that volatility may increase, but that doesn't mean the pair would move in a trend. On Wednesday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137, and also Senkou Span B (1.0825) and Kijun Sen (1.0866). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On February 1, the EU will release reports on inflation, unemployment and the manufacturing PMI. In the U.S., we can look forward to the ISM index and the Federal Reserve meeting. There will be enough important events to keep the pair in one place. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 05:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333836
The EUR/USD Pair Consolidated In The Downward Trend Area

The Euro (EUR) Currency Is Significantly Overbought

Paolo Greco Paolo Greco 01.02.2023 08:52
The EUR/USD currency pair began the week as uninteresting as possible. The trading on Monday and Tuesday was essentially the same. Volatility has long lagged behind expectations, and recent movements can only be defined as flat. As a result, there is nothing noteworthy happening right now on the market. Furthermore, figuring out this "nothing intriguing" is quite challenging. What should you do with a pair that is stuck in one spot? If you can still open intraday trades on a lower time frame to earn 10–20 points, what should you do on a 4-hour time frame? Simply observe and wait. By the way, it doesn't take long to wait. The Fed will already make the meeting's first results public tonight. Since reports regarding another slowdown in the rate of a key rate increase have been constantly exaggerated for more than a month, one could claim the market is already familiar with them. It should be noted that Fed officials do not use rumors or expectations as a guide for action. In other words, although inflation has decreased to 6.5%, the target level is still being missed. How can inflation expectations be calculated using the rate? This week, the Spain consumer price index stopped falling. Many other nations around the world may see a stop to the decline. What if the Fed now reduces its rate to 0.25% and it turns out that inflation is no longer decreasing because the cost of gas and oil has started to rise once more? Will the Fed be protected from such a situation, or will it choose to "go with the flow"? After all, nothing prevents raising the rate for a longer period than initially anticipated. Therefore, it is likely that the rate will increase by 0.25% after all, and the market has long "determined" this outcome "in advance." However, this does not mean that the market will disregard this event. There are two ways to use the euro currency: logically and illogically. Let's return to the technique once more. Since November 3, the euro has increased by 1200 points in value. This means in less than three months. We experienced one correction of 250 points during these three months. Do you think it's excessive? The euro currency is significantly overbought, in our opinion. Although it may have outstanding long-term potential and increase over the next one to two years, its current growth rate and regression pattern are, to put it mildly, odd. As a result, we only advocate for the necessity of adapting at this time. And how does this fit into the fundamental background? It's very easy. If the euro has been increasing by significant amounts in recent weeks, the Fed's rate hike will be slowed down for a reason that has already been determined. The 0.5% ECB rate increase has the same factor. As a result, the market has no motivation to purchase euros once more. This means that rather than a lack of response, we may witness a backlash in the form of a decline in the euro/dollar pair. The ECB's monetary policy will be significant until the euro currency shows at least some correction (we are anticipating a 300–400 point drop). The most widely accepted scenario at present is that the European regulator will raise rates by 1.25% for three sessions, but nobody knows what will happen after that. Lagarde claims that the ECB will continue to raise rates "to the bitter end," but no one is certain of the condition of the European economy in three to four months. The GDP data released yesterday for the fourth quarter of 2017 showed negligible growth of 0.1% q/q. If you compare it to the expectations from a few months ago, this is simply an excellent value. However, the European economy is still slowing down and may soon enter a slight recession. Therefore, in our opinion, the ECB won't suddenly raise rates. It can settle for inflation of 3% to 4% while establishing a more secure, longer-term target to bring it down over the next few years. In this scenario, one of the key reasons for supporting the euro will be gone. As of February 1, the euro/dollar currency pair's average volatility over the previous five trading days was 70 points, which is considered "normal." So, on Wednesday, we anticipate the pair to move between 1.0789 and 1.0929. A new round of downward movement will be signaled by the Heiken Ashi indicator reversing downward. Nearest levels of support S1 – 1.0742 S2 – 10620 S3 – 10498 Nearest levels of resistance R1 – 1.0864 R2 – 1.0986 Trading Suggestions: The EUR/USD pair has finally consolidated below the moving average. Until the price is fixed above the moving average, you can maintain short positions with targets of 1.0789 and 1.0742. After the price has secured above the moving average line, you can start trading long with targets of 1.0929 and 1.0986. The flat is still going at this point, which is something to consider. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 05:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333832
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

FX Daily: Peak? What peak?

ING Economics ING Economics 01.02.2023 09:20
Everything is pointing to the fact that today's well-telegraphed 25bp hike by the Fed will be the penultimate move before ending the cycle. However, Chair Powell and the FOMC may see little interest in sounding materially less hawkish just yet. Ultimately, a push-back against a pivot and rate-cut speculation could hit risk assets and lift the dollar today Federal Reserve Chair Jerome Powell USD: Hawkish Fed can lift the dollar The dollar enters FOMC day after having shown some resilience over the past few sessions, which was likely the consequence of some defensive positioning ahead of key central bank meetings, which kept risk assets capped. Still, the last important piece of data before the Federal Reserve announcement – yesterday’s Employment Cost Index – offered more reasons to think the Fed is indeed close to the peak. Labour costs eased for a fourth consecutive quarter in 4Q, moving from 1.2% to 1.0%, the same levels as the fourth quarter of 2021. This is likely easing some concerns in Washington about inflation stickiness, and underpins a scenario where slowing price pressures favour less hawkish rhetoric. The question is whether such unwinding in the hawkish narrative will already emerge in today’s FOMC announcement. We doubt that. As discussed in our FOMC preview, we expect a 25bp rate hike today, which is the consensus view and is fully priced in by the swaps market. We think that Fed Chair Jerome Powell and his colleagues simply have little interest in sending strong signals that they are indeed close to the peak, which only risks generating a premature fall in interest rates. A reiteration that ongoing rate increases remain appropriate, inflation is high and that the jobs market remains tight despite slowing growth, seems to us the most likely content of today’s communication “package” by Powell. He will most likely be asked about the current market pricing for around 50bp of easing in the second half of the year. Using the same rationale, Powell still has all the interest in pushing back against rate cut speculation. In practice, we suspect the Fed will end up cutting more than 50bp as the US economic slack deepens, but that is not a story for today’s announcement. So, we are in the camp of expecting Powell to maintain his hawkish rhetoric despite this appearing less appropriate given the backdrop of slowing inflation and growth. This outcome may ultimately have some negative implications for risk and give the dollar some support, as bets on a pivot, and potentially on rate cuts, are scaled back. Any communication missteps or deliberate dovish tilts, on the other hand, can surely revive that dollar bear trend that appears to have halted lately. We also have some US data to watch today: ISM manufacturing, ADP payrolls and JOLTS jobs openings. Substantial surprises on those releases are likely needed to drive major dollar moves ahead of such a big event like the FOMC. Francesco Pesole EUR: Inflation surprise already priced in? EUR/USD will inevitably be heavily impacted by the post-FOMC reaction today. In line with our view for a positive impact on the dollar, we think the 1.0800 support could be heavily tested after the Fed announcement. Before that, however, all eyes will be on the eurozone inflation figures, which should show more stickiness than previously thought after evidence of persistent price pressure in Spain and France. We suspect much of this inflation story has now been priced in, and a still quite hawkish pricing for European Central Bank tightening (150bp of hikes by June) suggests the room for further increases in rate expectations – and by extension, for another big ECB-driven EUR rally - has shrunk for now. We think that EUR/USD will ultimately come out weaker from these two days of central bank activity (here’s our ECB market preview). An exploration of the 1.0700-1.0750 range is surely possible in the near term, even though the longer-term outlook keeps pointing to a dollar decline and EUR/USD strength. Francesco Pesole GBP: Downside risks from a hawkish Fed Stronger ECB rate expectations are likely to be blamed for the strengthening in EUR/GBP beyond the 0.8800 level. As discussed in the EUR section above, we think there is now less scope for the ECB to push the euro even higher, which means more fuel to the EUR/GBP rally may be mostly a function of risk sentiment rather than monetary policy divergence. Indeed, since the pound tends to be more sensitive to global risk sentiment than the euro, the risks are skewed to the upside for EUR/GBP today given our baseline scenario for a hawkish Fed weighing on risk assets. Cable may drop to the 1.2200 mark today. Francesco Pesole SEK: Krona undermined by domestic woes The Swedish krona has been a negative standout in the G10 space over the past few days, as unstable risk sentiment offered a breeding ground for rising bearish bets linked to a worsening domestic outlook in Sweden. We analyse this theme in more detail in “Sweden: Krona increasingly pricing in domestic woes”. In short, EUR/SEK is currently 2.5% overvalued in the near term as markets appear to be pricing in the increasing likelihood of a pessimistic scenario for the Swedish property market and the economy. Since we don’t believe the risk of a black swan scenario in Sweden has materially increased, we think that SEK will recover gradually over the coming months. Looking at the very short-term however, SEK’s sensitivity to risk sentiment still puts it in a vulnerable position today ahead of the Fed announcement. EUR/SEK is currently trading around 3% below its historic highs (11.68 in 2009), and risks that those levels will be tested in the short-term (although not our base case) have admittedly risen lately. We still target sub-11.00 levels before the summer, as recently discussed in our EUR/SEK scenario analysis. Francesco Pesole Read this article on THINK
Saxo Bank Podcast: A Massive Collapse In Yields, Fed's Tightening Cycle And More

Euro Rebounds On Stronger GDP Read, All Eyes On Fed Decision

Swissquote Bank Swissquote Bank 01.02.2023 10:29
Weak economic data ran to the rescue of the equity bulls on Tuesday. The S&P500 rallied almost 1.50%, while Nasdaq jumped more than 1.50%. The Federal Reserve (Fed) President Jerome Powell will be thrown to the spotlight today, to potentially shoot a couple of doves down to the ground. But there is always a hope that the falling price and wages inflation will get the Fed to the pivot point. US  The US dollar failed to consolidate and extend gains as the weaker economic data keeps strengthening the Fed doves’ hands. EUR/USD The EURUSD eased as low as 1.08 yesterday, but the pair found buyers on the back of a strong looking GDP data from the Eurozone. China Elsewhere, today’s PMI data from China, released by Caixin, were not as rosy as the one compiled by China Federation and released yesterday. Crude Oil And the barrel of American crude tipped a toe below the 50-DMA yesterday, as the API data revealed another big build in US inventories last week. The more official EIA data is due today, and the expectation is a 1 mio barrel decline, leaving room for further weakness in oil prices. Watch the full episode to find out more! 0:00 Intro 0:36 Equities extend gains on weak US data 2:01 GM, Spotify, Exxon Mobil & Snap posted mixed earnings 5:05 What does Powell think of weak data?! 8:04 Euro rebounds on stronger GDP read, but how strong was the read? 9:25 US crude tips a toe below 50-DMA on large inventory build Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #FOMC #meeting #Spotify #Snap #GM #Exxon #earnings #China #PMI #EUR #GDP #ECB #crude #oil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Turbulent Times Ahead: Poland's Central Bank Signals Easing Measures

India's Adani Group May Have Passed A Key Test, Positive EU CPI Report

Kamila Szypuła Kamila Szypuła 01.02.2023 12:10
Recently, there has been a lot of talk about the impact of the Hindenburg Research report on India's Adani group. It seems that the company will cope with the current problems. Another positive is the report on inflation in the euro zone, CPI fell again. In this article: Headline-topping news India's Adani group may have passed a key test The 9th International Conference on Financial Markets EU CPI drop The European Union, 20-country region underwent a major price surge in 2022 after the Russian invasion of Ukraine pushed energy and food costs up across the bloc. However, the latest data provide further evidence that inflation has started to ease. Inflation in the euro zone fell for the third month in a row in January due to a significant drop in energy costs. According to preliminary data published on Wednesday, headline inflation in the euro zone amounted to 8.5% in January. In December this indicator amounted to 9.2%. Energy remained the biggest cost driver in January, but fell once again from previous levels. Now investors of the EUR/USD pair will counter at the Fed meeting and will await tomorrow's decision of the ECB. Euro zone inflation dips for a third straight month as energy prices continue to fall https://t.co/Fy81jgxCKf — CNBC (@CNBC) February 1, 2023 India's Adani group may have passed a key test The world's third richest man completed a $2.4 billion stock sale in a Hindenburg short sale attack. India's Adani group may have passed a key test by raising $2.5 billion in the face of a short-selling attack, but its response to the allegations and results of regulatory probes will shape its outlook, analysts and investors say. Most of the conglomerate's shares fell Wednesday, bringing losses to $84 billion after last week's Hindenburg Research report. Moreover, looking at India, the country is set to be the world's fastest-growing major economy in the year to March 2024 as the post-pandemic retail boom and recent bank balance sheet repairs attract new investment, fueling demand for everything. From @Breakingviews: Gautam Adani completed a $2.4 billion share sale amid Hindenburg’s short-seller attack. His group now faces refinancing challenges. Local lenders may step up, but funding will be pricier with more strings attached, says @ShritamaBose https://t.co/WMdi9lLFf9 — Reuters Business (@ReutersBiz) February 1, 2023 Read next: Intel's Cost Reduction Also Includes Executive Compensation | FXMAG.COM The 9th International Conference on Financial Markets In 2020, the world was stopped by the COVID-19 pandemic, which highlighted the importance of cooperation, flexibility and readiness for unforeseen challenges both in everyday life and in the economy. The year 2022 brought new trials. The war in Ukraine started by Russia has led to turbulence in various sectors, from energy to financial. The 9th International Conference on Financial Markets "Strengthening Recovery, Developing Resilience", co-organized by the Ministry of Finance of the Republic of Lithuania and the Lithuanian Banking Association, brings together high-level decision makers and business practitioners for leadership and ideas exchange on topical topics related to financial markets and more. The forum will discuss the needs of the EU and Baltic capital markets and the actions required. In addition, the further development of capital markets for the Baltic States and an overview of the implementation of digitization and innovation in the sector will be discussed. The Director of the IMF European Department, Alfred Kammer, will participate in a panel discussion at the International Financial Markets conference, focused on capital markets in the Baltics, their challenges and the need for action. Registration: https://t.co/KkDPKQTRM3 pic.twitter.com/F4w5t7Px01 — IMF (@IMFNews) February 1, 2023
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

If German Numbers Remain Weak, The ECB Will Have To Consider Easing Up On Rates

Kenny Fisher Kenny Fisher 01.02.2023 12:52
It has been a quiet week for EUR/USD which continues to say close to the 1.09 line. The lack of activity could change in a hurry in the North American session, with the Fed rate announcement. Eurozone inflation slides in January Eurozone inflation is expected to be 8.5% in January, down from 9.2% in December and below the consensus of 9.0%. The key driver behind the decline was energy prices, which rose 17.2% in January, compared to 25.5% in December. Core CPI remained at 5.2%, a notch above the consensus of 5.1%. On a month-by-month basis, Core CPI fell by 0.8%, compared to a 0.6% gain in November and below the forecast of -0.2%. Today’s inflation report is the final key event ahead of the ECB rate decision on Thursday. It’s practically a given that the central bank will raise rates by 50 basis points, bringing the cash rate to 3.0%. After that, the pace of monetary tightening will depend largely on the strength of the eurozone economy and inflation levels. The ECB will be pleased with the drop in headline inflation but concerned that the core rate has been stickier. Germany, the locomotive of the bloc, released dismal numbers this week. Retail sales crashed, with a decline of 5.3% while GDP came in at -0.2%. If German numbers remain weak, the ECB will have to consider easing up on rates with modest hikes of 25 basis points rather than 50-bp moves. The markets are forecasting a terminal rate in the range of 3.25%-3.75%. All eyes are on the Federal Reserve, which is widely expected to raise rates by 25 basis points. This would bring the benchmark rate to 4.75%. Inflation in the US fell to 6.5% in December, marking six straight months of de-acceleration. It appears that inflation has peaked, although the Fed won’t be using the “P” word for fear of an excessive reaction from the markets. The Fed has been more hawkish about rate levels than what the markets have priced in, and if Jerome Powell reiterates this hawkish stance, the markets could be in for a cold shower which would be bullish for the US dollar. Read next: India's Adani Group May Have Passed A Key Test, Positive EU CPI Report| FXMAG.COM EUR/USD Technical EUR/USD is testing support at 1.0878. Below, there is support at 1.0826 1.0921 and 1.1034 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Metals Market Update: Decline in LME Copper On-Warrant Stocks, Zinc and Lead Surplus Continues, Nickel Market in Supply Surplus

USD/JPY Pair Drop Below 130.00, GBP/USD Is Trading Below 1.2330, The Australian Dollar Remains Generally Up

Kamila Szypuła Kamila Szypuła 01.02.2023 13:28
As investors price the Fed nearing the end of its rate hike cycle, the dollar index is far from its 20-year high of 114.78. Investors said Fed Chairman Jerome Powell's words would be watched closely. Aside from the main event of the Fed meeting, investors will also focus on the ISM manufacturing and job vacancies data due for release on Wednesday for further guidance on the state of the US economy and labor market. Moreover, the ECB and the Bank of England are expected to raise interest rates by 50 basis points (bps) on Thursday. USD/JPY USD/JPY has struggled to gain any significant traction and has fluctuated between small gains and small losses throughout the early part of Wednesday's European session. Spot prices remain below mid 130.00 as investors appear reluctant and eagerly await outcome of two-day FOMC meeting. USD/JPY pair trades below 130.00, at 129.7970. Driven by the risk associated with key central bank events, investors seem reluctant to bet on an aggressive bear market around the USD/JPY pair. In addition, comments from BoJ chairman Kuroda Haruhiko that the central bank must continue its easing policy and keep the inflation target at 2% limit the gains for the JPY. EUR/USD On Tuesday, flash readings of gross domestic product (GDP) in the euro zone in the fourth quarter (Q4) increased by 0.1% q/q against 0.0% expected and 0.3% earlier. The year-over-year printouts also showed a rosy picture for the block as it surged above the 1.8% market consensus to 1.9%, down from 2.3% previously. However, retail sales in Germany fell by 5.3%MoM in December, much worse than expected. According to data from the European Union's statistical office, Eurostat, headline inflation in the euro area fell sharply in January, while the core index remained unchanged from the previous month. Investors said that data on inflation in the euro zone are unlikely to influence Thursday's monetary decision of the European Central Bank (ECB). On Thursday, the bloc's central bank will raise interest rates by 50 bps as traders look to see if officials signal they are likely to maintain a similar pace of hikes at the March meeting, or suggest a slowdown in policy tightening. EUR/USD was little changed after the release, with the pair finding and now stuck below 1.0900. Source: investing.com Read next: India's Adani Group May Have Passed A Key Test, Positive EU CPI Report| FXMAG.COM GBP/USD Fed policy makers emphasized the need to keep interest rates at a higher level for a longer period of time in order to lower inflation. This, in turn, suggests that the Fed will continue to sound hawkish, which in turn provides some support for the US dollar and acts as wind in the sails for the GBP/USD pair. As such, investors will look to the accompanying monetary policy statement and remarks by Fed Chairman Jerome Powell at the post-meeting press conference for clues on the path ahead of interest rate hikes. This will play a key role in influencing USD price dynamics and provide a significant boost to the GBP/USD pair. Then focus will shift to Thursday's Bank of England (BoE) meeting. The cable pair was trading close to 1.2300 during the morning trading hours. It then rose above 1.2330 before falling back and trading at 1.2325. AUD/USD The Aussie pair was rising today and traded above 0.7070 in the European session. The next upward move is likely to remain limited ahead of the key US central bank risk. Overall, the Australian dollar remains generally up. Source: finance.yahoo.com, investing.com
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The Price Of The EUR/USD Pair Overcame The Target Level

InstaForex Analysis InstaForex Analysis 02.02.2023 08:04
So, the Federal Reserve raised the rate by the expected 0.25%. Markets didn't seem to be enough, the dollar index fell by 0.94%, the euro gained 126 points. The speech of Fed Chairman Jerome Powell was pretty tough, he says it would be premature to declare victory against inflation, that history cautions strongly against prematurely loosening policy. The logic behind yesterday's rally is not quite clear. Perhaps investors didn't believe Powell and are counting on a sooner end to the rate hike cycle. Investors are also waiting for the European Central Bank rate hike of 0.50% today. Anyway, the price overcame the target level of 1.0990 and now it has an equally ambitious target of 1.1200. As for the strong dollar policy, which we mentioned in yesterday's review, probably the time for a decisive offensive has not come yet. The euro may very well miss 1.1270, a correction of 62% of the entire decline since January 2021. On the four-hour chart, the price has settled above both indicator lines, above 1.0990, the Marlin oscillator is in a strong rising position, it may slow down for a resumption of growth after the ECB meeting.   Relevance up to 03:00 2023-02-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333950
The EUR/USD Pair Edged Lower As Expected

Analysis Of The EUR/USD Pair Situation After The Fed Meeting

Torben Melsted Torben Melsted 02.02.2023 08:11
The FED hiked rates by 25 bps overnight, but the tone was somewhat dovish, which was unexpected. That cut the correction in wave 4 short, meaning that we only saw EUR/USD test 1.0802 and quickly push back above support at 1.0835 just to kick off much higher after the press conference where Powell was pretty dovish. The quick regain of support at 1.0835 opened the way for a strong rally in wave 5 towards 1.11 and likely closer to 1.1398 as the next upside target. Support is now seen at 1.0933 and then 1.0872, which we expect will be able to protect the downside for a continuation higher to 1.11 and 1.1398 in the days ahead.   Relevance up to 06:00 2023-02-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311087
Small factors combine to pressure credit

The Euro May Rise Further, As The Dovish Rhetoric Of The ECB Is Not Expected

Paolo Greco Paolo Greco 02.02.2023 08:26
M5 chart of EUR/USD EUR/USD continued to grow quietly during the whole third trading day of the week. Naturally, late in the evening, when the results of the US central bank meeting were announced and Federal Reserve Chairman Jerome Powell's speech took place, volatility increased. The euro grew even more. We don't want to talk about the logic of the movement. Yesterday, the euro rose after the market found out that EU inflation fell and also due to Powell's hawkish rhetoric. Once again we are facing the same situation when the fundamental or macroeconomic background does not matter for the traders. They just use any excuse to open long positions. Yesterday, according to all canons of technical and fundamental analysis, the euro was supposed to start a powerful fall. And that seems to be the reason why it didn't. EUR demonstrated some growth even despite Powell's words about the necessity to keep raising rates and refusing to pause on aggressive monetary policy. What else is there to talk about? The results of the Fed meeting may not be analyzed at all. But traders got lucky with yesterday's trading signals. At the very beginning of the European session, there was a buy signal at 1.0865-1.0868, and the pair managed to rise 40 points till the Fed meeting, which traders could get on a single deal. It was also possible to place the Stop Loss at breakeven before the results of the meeting were announced, hoping for higher profit. In this case, traders could earn about 100 pips. Anyway, the day turned out to be successful in terms of trading. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 9,500, whereas the number of short positions fell by 2,000. Thus, the net positions decreased by 7,500. Now the number of long positions is higher than the number of short positions opened by non-commercial traders by 134,000. So now the question is: how long will the big players increase their longs? From a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 52,000 (732,000 vs. 680,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD left the sideways channel, in which it was for three weeks. At least something positive from yesterday. The euro may rise further, as I don't expect the dovish results of the ECB meeting. But ironically, the euro might fall today. When no one is expecting it anymore. Anyway, be careful, because there is no logic in the pair's movements now. On Thursday, the pair may trade at the following levels: 1.0806, 1.0868, 1.0938, 1.1036, 1.1137, 1.1185, 1.1234, and also Senkou Span B lines (1.0847) and Kijun Sen (1.0917). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On February 2, the results of the European Central Bank meeting will be announced today and there will be as many as two speeches from ECB President Christine Lagarde. Judging from yesterday's events, the euro will rise in any case, but there is no logic in the pair's movements, so we can see absolutely any movement. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 05:00 2023-02-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333962
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

The MPC Is On The Horns Of A Dilemma But The ECB Will See Another 50bps Rate Hike

Michael Hewson Michael Hewson 02.02.2023 08:51
Having seen the Federal Reserve hike rates yesterday evening by 25bps and signal that they are far from done, equity markets reacted by rallying strongly with the Nasdaq 100 surging to its highest levels since early September.   For all of Fed chair Jay Powell's insistence that more rate hikes were coming, and that the Fed was not looking at cutting rates this year, his failure to push back emphatically on direct questions about market expectations of rate cuts this year, as well as the loosening of financial conditions has created an even greater divergence between market pricing on rates, and the Fed's expectations of how the economy is likely to evolve. To borrow a line from Cool Hand Luke, "what we've got here is a failure to communicate".    Long story short, the market thinks the inflation job is done, even if the Fed hasn't arrived at that conclusion yet. Consequently, this goes a long way to explaining why US markets closed strongly higher and yields and the US dollar plunged to 9-month lows, with the euro hitting 1.1000 for the first time since April last year. Last night's rally in the US looks set to translate into a higher European open as we now look towards the Bank of England and the European Central Bank to outline their messaging when it comes to the timeline of their own rate hiking cycle.   Starting with the Bank of England, the MPC is on the horns of a dilemma as the UK economy continues to struggle with double digit inflation, although the economy may well not be as bad as perhaps was thought at the end of last year, which could prompt a modest tweak to some of its economic forecasts.   The slide in energy prices in recent months has alleviated some of the pressure on wage packets, when it comes to petrol prices, however with food price inflation still at 16%, they will also be acutely aware that a weak pound will make headline inflation much sticker than it needs to be if they show any indication, they are going soft when it comes to hit its inflation target.   There will be the usual concerns about the impact on mortgage costs from another 50bps move but 5-year gilt yields have barely moved since the lows set back in November, although 2-year yields are higher.   Whatever we get today we are likely to see a split again, with the likes of Tenreyro and Dhingra likely to be the most averse to another hike given that they voted for no change in December.   The likes of Catherine Mann are likely to push for another 50bps, while the rest of the committee are expected to split between 25bps and 50bps, from the current 3.5%. If we do get 50bps will the Bank of England signal it is done, and signal a pause, or will they move by 25bps and signal there is more to come. With core prices looking sticky and wages rising at over 7% any procrastination on the MPC's part when it comes to forward guidance could well do more harm than good.   Whatever we get from the MPC today history has taught us it's unlikely to help the pound in the short term given the Bank of England's propensity to talk the pound lower whenever they meet. There is also the fact that the pound has been under pressure on the back of the belief that the Bank of England is much closer to the end of its rate hiking cycle than the ECB.     After the Bank of England, it is the turn of the European Central Bank and here there is little doubt that we will see another 50bps rate hike later today. It is what comes next that is likely to dominate the discourse today.   When the most recent ECB minutes were released, it became apparent that a raft of ECB governing council members wanted a much more aggressive approach, pushing for a 75bps move.   In the wake of the recent Davos Economic Forum ECB President Lagarde doubled down on her December messaging of multiple successive rate hikes, saying that inflation is still way too high, and markets are underestimating the ECB's resolve to drive prices back towards their 2% inflation target. This hawkish message is unlikely to be softened despite the recent fall in headline inflation to 8.5%, given core prices have remained steadfast at record highs of 5.2%.   When the ECB met in December, Lagarde more or less pre-committed the ECB to at least another 3 50bps rate hikes at the next 3 meetings, in a move that has seen the euro push higher and which has finally seen it break above the 1.1000 level, although that has mainly come about as a result of the market reaction to last night's Fed decision, rather than any intrinsic euro strength.   This would suggest that markets are still not convinced the ECB will be able to follow through on the number of hikes indicated given the risks it might pose to the borrowing costs of the more highly indebted members of the euro area.   EUR/USD – finally pushed through the 1.0930 area and the 1.0950 area which is 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. Yesterday's move through 1.0950 now opens up a move towards 1.1110. Support now comes in at 1.0920.   GBP/USD – the recent lows at 1.2260 remain a key support after another failure last week at the 1.2450 resistance area. A move below 1.2250 could see a move towards 1.2170.    EUR/GBP – edging back towards the recent highs just below the 0.8900 area. A move through these highs could trigger a move towards 0.9000. Key support remains at the 50- and 100-day SMA which we saw earlier this month at the 0.8720/30 area. Below 0.8720 targets 0.8680.   USD/JPY – slipped below trend line support at 129.00 from the recent lows at 127.20, raising the prospect of a retest of those lows, and potentially on towards 126.50. Resistance now at 129.30.   FTSE100 is expected to open 30 points higher at 7,791   DAX is expected to open 102 points higher at 15,282   CAC40 is expected to open 35 points higher at 7,112   Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
Issue on the US debt ceiling persists, Joe Biden goes back to the US

FX Daily: A more relaxed Fed powers the rally

ING Economics ING Economics 02.02.2023 10:20
The dollar has broken to new lows for the year after a relaxed-sounding Fed Chair Powell said there were the first clear signs of disinflation. He also failed to push back too aggressively on lower bond yields. Attention turns to Europe, with rate meetings in the eurozone, the UK, and the Czech Republic. Expect European FX to remain bid and the dollar offered The dollar broke to new lows for the year after the Fed's press conference USD: Phlegmatic Powell offers little pushback against the rally The dollar was relatively unchanged on the release of last night's FOMC statement, but Fed Chair Powell's press conference comments sent it around 1% lower across the board. Listening to the press conference, a few things that stood out to us were: for the first time, we can see the disinflation process has started, a refusal to push back against the softening in financial conditions in the form of lower bond yields and higher equities, a data-dependent approach to what the Fed may do with their dot plots in March (lower the expected peak in the tightening cycle?) a near Goldilocks scenario where inflation can come down, while unemployment does not have to rise US rates softened on the press conference, with pricing for the Fed funds rate in December 2023 being cut by 10bp to 4.40%. In fact, one can argue that if US rates are not going to be cut as much as the market expects later this year, it will be because of decent growth, rather than sticky inflation. No wonder equity markets liked the press conference and the dollar softened as investors chased growth stories. As we mentioned in the FOMC review, lower volatility in the rates space will be feeding into lower FX volatility. The MOVE index, an index of implied volatility across the US Treasury curve has dropped back to levels last seen in March 2022. Assuming no major fireworks from today's ECB/BoE meeting or tomorrow's US jobs report, lower volatility will support the carry trade. Here, we like the Mexican peso where high risk-adjusted carry and, unlike the CEE high yielders, positive real interest rates should keep the peso very much in demand. Positioning is probably the biggest factor preventing a further dollar decline right now, but the benign macro story does favour DXY continuing to drift lower to the 100 area. Chris Turner EUR: Too early for the ECB to soften its hawkish stance The European Central Bank announces its policy decision at 1415CET today and President Christine Lagarde holds her press conference at 1345CET. A 50bp hike is widely expected as is a hawkish message that will support market pricing of a further 75-100bp of tightening into the summer. Please see our ECB preview here and also the key factors that will drive FX and rates markets here. Our rates strategists think that Lagarde could push back against 2024 easing expectations and see eurozone rates rise in the five-year part of the curve.  EUR/USD opens in Europe above 1.10 - powered by last night's benign FOMC meeting and press conference. Two-year EUR:USD swap differentials have narrowed into 108bp - the narrowest advantage for dollar rates since late 2021. As we discussed in our EUR/USD forecast revision article, a sharp narrowing in rate differentials stands to become a bigger driver of EUR/USD this year and should carry it to the 1.15 area in the second quarter. For the shorter term - there is not much resistance now until the 1.12 area. But buy-side positioning is the longest in the euro since the summer of 2021 meaning that the rally could prove hard work. The EUR/USD story is positive, however. Chris Turner The Danish central bank (DN) is set to follow the ECB with a rate hike today. There has been increasing speculation that the DN will hike by 10bp less than the ECB to widen the EUR-DKK rate gap. EUR/DKK is trading around 7.4400, so it currently has a cushion against the lower bound of the peg band (which is around 7.4360). With inflation running at 8.7% in Denmark, we think there is a higher chance that the DN will prioritise fighting inflation for now and follow the ECB with a 50bp hike, which should keep a cap on EUR/DKK for now. After all, the prospect of another 50bp ECB hike in March means that the DN will likely have another chance to under-deliver relatively soon, should EUR/DKK come under fresh pressure and FX intervention start to appear unsustainable.  Francesco Pesole GBP: Again, too soon for the BoE to go soft on inflation 1300CET should see the Bank of England hike the Bank Rate 50bp to 4.00%. Governor Andrew Bailey holds a press conference at 1330CET. Please see our full BoE preview here - including voting patterns for the nine MPC members. Some market participants see a pattern of the BoE hiking forcefully and having a hawkish statement, but treading more dovishly in the press conference. On balance, we think Governor Bailey will not want to push back against expectations for further hikes to 4.25/4.50% this summer but may push back against the cut starting to be priced for December. Benign global conditions are supportive for the risk-sensitive sterling and suggest GBP/USD could make a run at the 1.2450/2500 area this week. EUR/GBP has drifted higher again. On balance, we would favour continued outperformance given the greater scope for convergence in eurozone and sterling rates at the shorter end of the curve. EUR/GBP may end the quarter near 0.89, but push up to the 0.90/91 area later in the year. Chris Turner CZK: CNB to confirm wait-and-see approach Today, the Czech National Bank meeting is on the agenda in the region. We expect rates and the FX commitment to remain unchanged, so the main focus will be on the central bank's new forecast and the governor's press conference. With strong rate cut expectations priced in, the main question for today will be what the CNB's expectations are for January inflation, which will set the inflation path for this year. In general, the new forecast should show a higher inflation trajectory compared to the November version, but at the same time, the koruna is more than 3% stronger compared to CNB expectations. The Czech koruna has reached its strongest levels in more than a decade in recent weeks and is, in our view, the most overweight currency position held by investors in the region at the moment. We believe the main driver right now is falling gas prices and improving sentiment in Europe rather than local factors. However, the central bank plays an important role in determining the koruna. Thus, any hint of an end to the FX intervention regime would likely lead to a sharp depreciation. Overall, however, we believe that the CNB and the koruna do not have too much to offer at the moment. Although gas prices may push to stronger levels in the short term, we think the koruna is too strong currently and rather expect a return to the 24.00 EUR/CZK level. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
US Inflation Eases, but Fed's Influence Remains Crucial

Powell Admitted That The US Economy Is Mow In An Era Of Disinflation

Jakub Novak Jakub Novak 02.02.2023 10:53
Euro rose above 1.1000 after the Fed signaled a change in their stance on monetary policy. Their statements during yesterday's meeting were more dovish compared to December, with interest rates increasing by only 25 basis points to a range of 4.5%-4.75%. Powell was not objectively dovish At first, markets did not react much to the news as everyone was waiting for the speech of Jerome Powell. But when the Fed Chairman confirmed that they will no longer be aggressive in terms of interest rates, risk appetite surged. The decision was kind of in line with what everyone was expecting, that is, a more optimistic view of inflation and the economy. Of course, Powell was not objectively dovish, but neither was he overly hawkish, which was enough for the market. Speaking to reporters on Wednesday, Powell said they are forecasting "a couple more" rate hikes, but are ready to adjust their plans if price pressures eased faster than expected. When asked about easing conditions in financial markets that could complicate the central bank's path to return to its 2.0% inflation target, he did not sound particularly concerned. The 25 basis point hike The 25 basis point hike that was made yesterday was another step towards policy normalization after a half-point rate hike in December and four giant hikes of 75 basis points before that. Most likely, the soft inflation data in recent months has been persuasive enough for the Fed to consider suspending their rate hike campaign. Although the committee continues to cite high prices, the hint of two more 25 basis point hikes confirms market expectations of a final rate hike of 5.25%. Powell During the press conference, Powell admitted that the US economy is now in an era of disinflation with cooling price pressures. He stressed that more data is needed before they can declare victory, but did not specify how much they need to ensure that inflation is on the right track.  EUR/USD In terms of the forex market, demand for euro surged, but buyers need to protect 1.1000 in order to maintain the chance of rising above 1.1050. Possible price levels in such a situation are 1.1090 and 1.1125. In the event of a decline, EUR/USD could move below 1.1000 and head towards 1.0960 and 1.0920. GBP/USD For GBP/USD, the sideways trend persists, so buyers need to return above 1.2420 to regain their advantage. Only the breakdown of this resistance level will strengthen the hope of a rise towards 1.2470, after which it will be possible for the pair to reach 1.2540. If pressure returns and sellers take control of 1.2350, the pair will fall to 1.2290 and 1.2230.   Relevance up to 08:00 2023-02-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333996
Deciphering the Economic Puzzle: Unraveling Britain's Mixed Signals

The UK economy could show a good chance of a shallow recession

Jakub Novak Jakub Novak 02.02.2023 11:00
Market players are expecting another surge in pound as the Bank of England is likely to raise interest rates today due to the persistently high inflation in the UK. The bank has no other choice but to do it, especially with the current actions of the government. Rate hike Most likely, the Bank of England will raise rates by half a percentage point to 4%, which is the highest since 2008. They will also release forecasts for inflation and economic growth, possibly indicating the chances of a shallow recession. The recent strikes and demonstrations in the UK Another data to be expected is the review on wage growth, which is actually the reason for the recent strikes and demonstrations in the UK. Its figure could determine whether inflation will remain high as another record hike will force companies to raise prices and consumers to expect further increases in their incomes. GBP/USD  Of course, there is a chance that the central bank will take a different path, increasing rates by only 25 basis points. That would lead to a decline in demand, pushing GBP/USD down rather sharply. In terms of the forex market, the sideways trend in GBP/USD persists, so buyers need to return above 1.2420 to regain their advantage. Only the breakdown of this resistance level will strengthen the hope of a rise towards 1.2470, after which it will be possible for the pair to reach 1.2540. If pressure returns and sellers take control of 1.2350, the pair will fall to 1.2290 and 1.2230. EUR/USD For EUR/USD, demand has surged, but buyers need to protect 1.1000 in order to maintain the chance of rising above 1.1050. Possible price levels in such a situation are 1.1090 and 1.1125. In the event of a decline, the pair could move below 1.1000 and head towards 1.0960 and 1.0920.   Relevance up to 08:00 2023-02-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333998
Long-Term Yields Soar Amidst Hawkish Fed: Will They Reach 5%?

The ECB Interest Rate Hike Of 50bp Has Already Been Taken Into Account Investors Await Guidance About March Meeting

Jakub Novak Jakub Novak 02.02.2023 13:18
The European Central Bank will increase interest rates by 0.5 percent once more today, but investors will be more focused on any indications of how the cost of borrowing will change following this week's meeting. Figures from Tuesday may change the officials' minds The Federal Reserve System's decision to slow down the rate of interest rate hikes yesterday had a beneficial effect on the positions of the European currencies. If investors do not learn about the ECB's more aggressive strategy in the spring of this year, the bull market could easily change today. Without a new supply of the euro, it will be challenging to maintain current highs, as the second consecutive increase in interest rates by 50 basis points has already been factored into current prices. The pricing figures from Tuesday may change the officials' minds, despite their frequent warnings about high inflation during January and their insistence on continuing the previous pace of rate increases. Since, as I mentioned above, inflation is declining, but at the same time other indicators suggest that additional actions from the ECB may be necessary to suppress the strongest price jump in the eurozone in the last generation, the issue of whether there will be a third 0.5% increase in March or the ECB will still follow the Federal Reserve System is currently the subject of intense debate. The president of the European Central Bank will undoubtedly argue at today's meeting that core inflation is still high. The speeches ahead  In Frankfurt, the ECB will deliver its announcement at 14:15. President Christine Lagarde will speak right away, half an hour after pledging that she and her colleagues will "keep the course" in the fight against inflation. Joachim Nagel, the president of the Bundesbank, and Francois Villeroy de Galhau, the representative of France, have already endorsed two additional measures to raise the rate by half a percentage point beginning with today's meeting. In other words, there is still at least one more meeting in March where the hawks can also get a 0.5% rate increase. The emphasis is now on the language of the ECB statement and Lagarde's statements, which will be studied for signals as other council members argue for a more gradual approach. By May of this year, the ECB deposit rate is anticipated to reach a peak of 3.25%. A further 50 basis point increase is anticipated by economists for next month, followed by a pause in aggressive policy in May. The economic outlook The economic outlook has improved, but it is still uncertain because demand is still declining as a result of the increasing cost of living. Households are probably not significantly impacted by a large decline in natural gas costs at the wholesale level. This won't result in immediate economic growth; it will only help the ECB get inflation back to normal more quickly. Regarding the ECB's effort to reduce its balance sheet, the regulator decided in December to gradually begin selling off its about 5 trillion euro worth of bonds. The total balance is anticipated to decline by 15 billion euros per month from March through the end of June, and the future rates will be adjusted as appropriate. EUR/USD  Regarding the EUR/USD technical picture, the demand for the euro has grown and might continue. To do this, the trading instrument must maintain a price above 1.1000, which will cause it to break through near 1.1050. Above this point, you can quickly reach 1.1090 and have the potential to update to 1.1125. Only if the 1.1000 support fails will the pressure on the pair rise, pushing the EUR/USD to 1.0960 with a possible drop to a minimum of 1.0920 in the case of a decline in the trading instrument. GBP/USD Regarding the technical picture of the GBP/USD, trading continues within the channel. Buyers need to return over 1.2420 to restore their advantage. The only way to increase the likelihood of a further recovery to the area of 1.2470 and, ultimately, a stronger movement of the pound up to the area of 1.2540, is for this resistance to break. After the bears seize control of 1.2350, it is feasible to discuss the pressure on the trading instrument. The GBP/USD will be forced back to 1.2290 and 1.2230 as a result, hitting the bulls' positions.   Relevance up to 08:00 2023-02-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334000
Impact of Declining Confidence: Italian Business Sentiment in August

USD/JPY Pair Is Trading At 128.48 The Aussie Pair Is Above 0.71$

Kamila Szypuła Kamila Szypuła 02.02.2023 13:53
Jerome Powell had a lot to say during the press conference after yesterday's FOMC decision to raise the Federal Funds rate by 25 basis points. He stressed that the inflation risk persisted despite favorable disinflation observed in most sectors. The European Central Bank (ECB) and Bank of England (BoE) will meet later today and both banks are expected to raise their interest rates by 50bps. USD/JPY The dollar slide against the Japanese yen, dropping to as low as 128.07, its lowest in two weeks. Prior to the FOMC event, USD/JPY rose, approaching the falling resistance of the trendline, and then fell. USD/JPY rebounded after finding an intermediate cushion around 128.20 in the Asian session. Considering the risk sentiment in the market, the downtrend is intact. Now the USD/JPY pair is holding above 128.35. As the Bank of Japan keeps the 10-year Treasury yield at 0.5%, the falling US equivalent continues to narrow the interest rate differential, indicating continued declines in the USD/JPY pair. EUR/USD EUR/USD hit a 10-month high at 1.1033 today. EUR/USD pulled back slightly after reaching its highest level since early April at 1.1033 during the Asian trading hours on Thursday. The pair's technical outlook points to overbought conditions in the short term, but market participants may bet on further strengthening of the euro if the European Central Bank (ECB) repeats its hawkish message. The ECB will raise the main interest rate by 50 bp. The decision itself is largely priced in and is unlikely to receive a significant backlash. Some ECB policymakers have advocated a further 50 basis point hike at the next meeting, and the euro could gain strength if a policy statement or ECB President Christine Lagarde confirms such an action. Additionally, EUR/USD could maintain its bullish momentum if the ECB refrains from being optimistic about the inflation outlook. The EUR/USD pair fell below the 1.1000 level but slightly and is trading at 1.0991. GBP/USD GBP/USD drops towards 1.2300 during European trading hours. Sterling remains under slight downward pressure as investors wait for the BOE decision on interest rates. Despite strong selling pressure around the US dollar late Wednesday, GBP/USD's gains remain contained, especially against EUR/USD. On Thursday, the BOE is expected to raise its key rate by 50bps to 4% from 3.5%, but the GBP/USD pair could extend the decline nonetheless. At this point, a BOE rate hike of 25 basis points would be a dovish surprise and weigh heavily on sterling. Read next: Santander Bank Polska Shareholders Can Expect A Solid Dividend ,The ETH Liquid Staking Narrative Is Already Going Strong| FXMAG.COM AUD/USD The Australian dollar appreciated past $0.71 to its strongest levels in nearly eight months, as the US Federal Reserve reduced the size of its rate hike and said it has made progress in the fight against inflation. The aussie also remains supported by expectations that the Reserve Bank of Australia will press on with its fight against inflation and by China’s rapid reopening from Covid curbs. From a technical point of view, the daily chart of AUD/USD suggests that the pair will continue to rise. Source: investing.com, finance.yahoo.com
EUR/USD Pair Has A Potential For Short-Term Rally

The EUR/USD Price Should Go Below The Support Range

InstaForex Analysis InstaForex Analysis 03.02.2023 08:03
The meetings of the Federal Reserve, the European Central Bank and the Bank of England are now over. Their results are very confusing, we cannot determine the reason why the dollar index is regaining positions - either on its own strength or on the weakness of the European currencies. Yesterday's collapse by a figure and a half is leaning more towards the second reason. If that's the case, in order to gain a solid signal for a euro reversal, moderately positive U.S. employment data should come out today, and weak euro area retail sales data (December forecast -1.3%) is expected on Monday. In addition to the U.S. jobs data, the ISM Services PMI for January will be released today with a forecast of 50.4/5 versus 49.6 in December. Good data will confirm the dollar's strength. But so far, the reversal signal is weak from the technical side. So far, only a false breakout above the target level of 1.0990 speaks in favor of a reversal. To confirm the signal, the price should go below the support range of 1.0758/87. The Marlin oscillator is more inclined to move in this way, but it also remains in the green zone. On the four-hour chart, the price settled below the MACD indicator line, the Marlin oscillator has entered the area of the downtrend. This is the first sign of the price's intention to reach the target at 1.0758/87. We're looking forward to tonight's US macro data.   Relevance up to 03:00 2023-02-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334078
Rates Spark: Balancing data and risk factors

Lagarde's Comments Put Pressure On The Euro (EUR)

InstaForex Analysis InstaForex Analysis 03.02.2023 08:11
The European Central Bank increased the interest rate by 50 points at this year's first meeting, while announcing a 50-point hike at the next meeting in March. Despite such hawkish results of the February meeting, the euro came under pressure. The single currency retreated from a multi-month price peak (1.1034) and returned to the area of the 9th figure. Anomalous, at the first glance, market reaction is due to several factors. Spring is near If you assess the February meetings of the Federal Reserve, Bank of England and ECB, you can take note of one general characteristic. On the one hand, central banks declared the continuation of a hawkish course, but on the other hand, they made it clear that aggressive monetary policies are coming to an end. That's why the dollar was under attack at the end of the Fed meeting, the pound was under pressure by the end of the BoE meeting, and the euro was losing ground by the results of the ECB meeting. At the same time, traders actually ignored the fact that the central banks announced further steps to monetary tightening. For example, ECB President Christine Lagarde without any vague wording, which is considered "straightforward", announced that the ECB intends to raise interest rates by another 50 basis points during the next meeting in March. According to her, the disinflationary process hadn't begun, despite the slowdown in the overall consumer price index (core inflation continues to show an uptrend). It would seem that such straightforward hawkish verbal signals should have served as a springboard for the euro. But instead of growth to the resistance level of 1.1090 (the upper line of the Bollinger Bands indicator on the weekly chart), the price turned 180 degrees and was marked in the area of the 8th figure, followed by the retreat to the area of the 9th price level. Why did this happen? First of all, Lagarde, while announcing monetary tightening in March, questioned the further growth of interest rates. According to her, after the March decision "the ECB will evaluate the subsequent path of monetary policy." At the same time, market expectations (in particular, currency strategists at Danske Bank and a number of other large conglomerates) are more hawkish. The assumed scenario includes a 50-point hike in March and a 25-point increase at the next meeting (by 50 points according to some other analysts). Therefore, Lagarde's "wrap-up" sentiment was negatively received by EUR/USD bulls. The single currency was under pressure as traders took the ECB's message as a sign that the central bank nears the end of its rate hike cycle. In my opinion, the market adequately assessed the situation and correctly perceived the signals of the ECB. Secondly, the ECB head emphasized her stance on problematic aspects - in particular, she said that economic activity in the European region has slowed down noticeably. At the same time, "high inflation and tighter financing conditions, these headwinds dampen spending and production,". Such comments put pressure on the euro. Nevertheless, despite the euro's negative response, the EUR/USD pair did not collapse into the area of 7-6 figures, but only retreated from the multi-month price high to the base of the 9th price level. The underlying reason for such stress tolerance is that Lagarde tried to maintain a balance in her rhetoric. On the one hand, she announced a "guaranteed" 50-point hike in March, on the other hand, she questioned further steps towards tightening. On the one hand, Lagarde complained about the slowdown in economic activity; but then she also admitted that the European economy has been more resilient than expected. Moreover, according to forecasts, the economy will show signs of recovery in the coming quarters. At the same time, the ECB head pointed to the optimism of entrepreneurs (obviously referring to the PMI and ifo indices), stable gas supplies to Europe and reduced interruptions. Conclusions Figuratively speaking, the scales are back in equilibrium again: The Fed put pressure on the dollar, and the ECB put almost as much pressure on the greenback. The bulls couldn't conquer the 10th figure, the bears couldn't pull the price down to the 7th figure (and even failed to get a foothold at the 8th price level). Now everything will depend on the values of the key macroeconomic indicators, first of all, in regards to inflation. If core inflation in the European region persistently climbs up, the ECB may raise the rate not only in March but also at the next meeting. The US faces a similar situation: the Fed chief has declared a hawkish course, "tying" the scope of monetary tightening to the dynamics of key inflation indicators. Each inflation report and each inflation component (both in the US and Europe) will be viewed through the prism of further central bank actions. Following the Fed and ECB meetings, the pair remained in the 1.0850-1.0970 range within which it has been trading for several weeks. In my opinion, in the mid-term perspective, the pair will fluctuate in the given price range, alternately pushing back from its limits, reacting to the current information flow.   Relevance up to 01:00 2023-02-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334072
ECB cheat sheet: Difficult to pull away from the Fed

The Euro Should Enter The Long-Awaited Bearish Correction

Paolo Greco Paolo Greco 03.02.2023 08:18
M5 chart of EUR/USD EUR/USD did nothing but fall on Thursday. We have been waiting a long time for the euro to collapse and I said that the market had already worked out the rate hike in February and March. So, if the pair did not rise the day before, we would say that everything progressed logically. However, don't forget that the euro rose on Wednesday evening due to Federal Reserve Chairman Jerome Powell's hawkish speech. If you only look at the results of the meetings and the market's reaction, it is very difficult to understand traders. Essentially, traders were getting rid of the currency whose central bank signaled its willingness to keep raising rates. I believe that the euro can and should enter the long-awaited bearish correction. If it continues to rise after the events of the last two days, it makes no sense to speak about the logic of the market movements at all. Yesterday's movement was very good, but too impulsive. The market ignored the technical benchmarks because it was too focused on the important fundamental background. Therefore, the pair failed to reach 1.1036, and there was no sell signal. Thus, we failed to catch the beginning of the fall yesterday, and the first signals were formed in the US trading session after the outcome of the European Central Bank meeting. I believe that traders should not have entered the market during this period of time since there was a high probability of sharp and frequent reversals and high volatility. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 9,500, whereas the number of short positions fell by 2,000. Thus, the net positions decreased by 7,500. Now the number of long positions is higher than the number of short positions opened by non-commercial traders by 134,000. So now the question is: how long will the big players increase their longs? From a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 52,000 (732,000 vs. 680,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD left the sideways channel and managed to show two powerful turns of movement. First, it rose, then fell. As of Friday morning, the price is between the lines of the Ichimoku indicator, but today won't be a peaceful day. The US will release important macro data, which can trigger a new "storm" in the currency market. On Friday, the pair may trade at the following levels: 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137, 1.1185, 1.1234, as well as Senkou Span B (1.0847) and Kijun Sen (1.0917). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On February 3, the EU will only release its services PMI. In the US, we can look forward to the NonFarm Payrolls, unemployment and the ISM non-manufacturing index. Volatility may remain high today. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 05:00 2023-02-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334088
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The EUR/USD Pair Is Back Below The Former Resistance At 1.0933

Torben Melsted Torben Melsted 03.02.2023 08:25
EUR/USD broke strongly above the former top at 1.0933 after the Fed's decision to hike only 25 bps and a follow-up with a dovish press conference. However, the spike was almost as strong as the break was. After peaking at 1.1033 EUR/USD has turned lower with the same force and back below the former resistance at 1.0933 which now opens a possible alternative count that sees the dip from the peak at 1.0933 to 1.0802 as wave A and the rally to 1.1033 as wave B of an expanded flat and wave C lower to the possible target area between 1.0437 - 1.0500 as being in motion. For us to dismiss the alternative count, we need a direct break back above minor resistance at 1.1002 which would call for a continuation higher to 1.1393. Only time will tell, but it's a good reminder that 4 waves can be very complex and hard to read in real-time and we always need to keep the options and possible alternative scenarios open.   Relevance up to 07:00 2023-02-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311272
The EUR/USD Pair Has A Potential For Drop

The EUR/USD Pair Has A Potential For Drop

Oscar Ton Oscar Ton 03.02.2023 08:34
Technical outlook: EURUSD rose through 1.1025 post-FOMC's decision on Wednesday only to find resistance. In less than 24 hours, the single currency pair slipped back below the 1.0900 handle, giving away all gains. This was expected as per the wave structure and a meaningful retracement should be on its way going forward. Ideally, the 1.1025 resistance should hold well for the month of February. EURUSD has now potentially confirmed a top at 1.1025 and has carved an engulfing bearish pattern on the daily chart. The larger-degree wave structure, which began from 0.9535 in September 2022, looks complete now. A corrective drop should be seen breaking below the 1.0481 initial support in the next few trading sessions. EURUSD's potential to drop remains up to 1.0100 which is marked by a rectangle on the daily chart presented here. Also, note that the Fibonacci 0.618 retracement of the entire rally between 0.9535 and 1.1025 is seen passing through 1.0100. A high probability remains for a bullish reversal if prices drop through those levels. Trading idea: A potential bearish move against 1.1100 Good luck!     Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311278
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

ING Economics ING Economics 03.02.2023 08:45
EUR/USD is trading close to 1.0900 after the Fed and ECB meetings, as markets showed little faith in the (modest) attempts by Powell and (fierce) attempts by Lagarde to stay hawkish. Markets’ doubts on ECB guidance may be a larger short-term driver, and delay another big EUR/USD rally to 2Q, when rate differentials may swing meaningfully in favour of the EUR Markets are doubting today's hawkish lines by Christine Lagarde today (pictured) and the ECB on Wednesday Why markets are doubting hawkish communication EUR/USD is trading close to 1.0900 at the time of writing, the same levels observed before Wednesday’s FOMC announcement. Remember, the pair touched a 1.1033 10-month high before the ECB meeting triggered a correction. The recurrent theme of these two days of central bank activity has been the diffidence by markets around the reiteration of hawkish rhetoric. Take the Fed: the message that “ongoing rate increases remain appropriate” was out-shadowed by: Mentions that the disinflation process has started A lack of an explicit pushback against dovish rate expectations An open-ended approach to the direction of Dot Plot adjustments in 2023 Those details, which emerged during Chair Powell’s press conference, triggered a dovish-surprise market reaction, with risk assets climbing and the dollar falling. On paper, the European Central Bank went the extra mile to cement its hawkish message, saying it intends to hike by another 50bp in March following today’s 50bp move. However, the market reaction also went in the opposite direction, with European bonds rallying (bunds -22bp, BTPs -39bp) and the euro falling. This reaction boils down to Lagarde essentially failing to convincingly justify the ECB’s tightening plans,as: The ECB also stated that the inflation outlook is no longer facing upside risk but is now more balanced The reiteration of a meeting-by-meeting approach seemed to clash with a commitment to another 50bp hike in March Lagarde refrained from providing direction on the size or pace of increases after March, offering a breeding ground for speculation on the dovish side Dovish bets on the Fed look more appropriate than on the ECB We think that markets' ongoing dovish repricing of the Fed’s rate expectations has more solid foundations compared to those of the ECB. First, because yesterday’s comments by Powell signalled no urgency to push back against the loosening of financial conditions, while Lagarde explicitly warned markets against not trusting the ECB hawkish guidance. Second, because the Fed’s higher policy rates inevitably leave more room for a readjustment lower by the end of the year, especially given the deteriorating growth outlook and ongoing decline in inflation. We currently estimate 125bp of tightening by the ECB and no cuts in 2023, while we expect only one more 25bp hike by the Fed and 100bp worth of cuts in 2H23. EUR/USD and short-term rate differential Source: ING, Refinitiv EUR/USD: Patience before another big rally All those considerations lead us to reiterate our core view that the EUR-USD rate differential is still more likely to swing in favour of the euro (largely on the back of falling USD short-term rates) this year. However, another big rate-driven EUR/USD rally may not be a story for this quarter, as the March meetings may see the Fed push back against rate cut speculation and the ECB still struggles to sell its tightening plans to the market.   The second quarter of this year is when the ECB-Fed divergence may emerge more distinctly, as we expect the ECB to deliver another 25bp and strongly signal rates won’t be cut for some time, while an acceleration of the slowdown in the US economy and inflation will heavily challenge any pledge by the Fed to keep rates at 5.0% for long. We target 1.15 in EUR/USD in 2Q23, and 1.12 in 4Q23.   Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
TikTok Bans Are Gathering Momentum In The US

Facebook’s Best Rally In Almost A Decade, BoE’s Tightening Cycle May End Soon

Swissquote Bank Swissquote Bank 03.02.2023 10:19
Yesterday was, again, a fantastic day of trading for equities, as the less hawkish than expected tone from the European Central Bank (ECB) and the Bank of England (BoE) meetings joined the optimistic vibes from the Federal Reserve (Fed) Chair Jerome Powell’s ‘disinflationary process’ mention a day before, and all that combined with Facebook’s best rally in almost a decade painted the market in the green. S&P500 The S&P500 gained around 1.50%. Nasdaq 100 jumped more than 3.5% and entered bull market as Meta jumped more than 23%. Earnings But today will probably not be as fantastic as yesterday, as Apple, Amazon and Google announced earnings after the bell yesterday, and they all disappointed. US jobs data Maybe, the again-important US jobs data could temper the earnings-triggered weakness – if of course the NFP number, and more importantly the wages growth are sufficiently soft to keep the Fed doves in charge of the market. Rates Elsewhere, the European Central Bank (ECB) and the Bank of England (BoE) raised their rates by 50bp yesterday, but Lagarde sounded much less aggressive than the December meeting. Read next: USD/JPY Pair Is Trading At 128.48 The Aussie Pair Is Above 0.71$| FXMAG.COM Euro The EURUSD sold off. But I believe that the euro’s recovery hasn’t ended just yet, as we see the end of the tunnel for the Fed – as the Fed rates approach the 5% mark, while we don’t yet see the end of the tightening tunnel for the ECB. Watch the full episode to find out more and find the link to our latest blog article : www.swissquote.com/blog 0:00 Intro 0:50 Stocks rally on dovish central bank expectations, and Facebook… 2:10 … but Apple, Amazon and Google dampen the mood. 5:38 What kind of US jobs data could cheer up investors? 6:42 BoE’s tightening cycle may end soon 8:21 ECB’s Lagarde sounded less aggressive than last December, but euro should do fine… Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #NFP #wages #jobs #data #ECB #BoE #Fed #FOMC #meeting #Powell #disinflation #Meta #Apple #Google #Amazon #earnings #USD #EUR #GBP #Bailey #Lagarde #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

FX Daily: Eyes back on data after Fed and ECB communication troubles

ING Economics ING Economics 03.02.2023 11:06
Markets questioned the hawkish message by both the Fed and the ECB this week, but we think Powell gave more reasons to reasonably fuel dovish expectations. Still, the ECB communication hiccups mean that EUR/USD may struggle to break higher before the end of the first quarter. Today, eyes on payrolls and ISM services: the dollar likely faces downside risks ECB President Christine Lagarde and Fed Chair Jerome Powell USD: Downside risks from data today The dollar has essentially erased all the post-FOMC losses after markets questioned the hawkish rhetoric by the ECB and European rates went on a huge rally yesterday. We analyse what the last two days of central bank meetings have meant for EUR/USD in this note.   It’s been quite clear that markets have doubted both Fed Chair Jerome Powell’s and ECB President Christine Lagarde’s attempts to hang on to hawkish communication, although dovish bets on the Fed appear more strongly founded at this stage. This is both because Powell seemed more relaxed about the easing in financial conditions and did not convey urgency in pushing back against rate cuts, and because the Fed has taken rates into a much more restrictive territory which inevitably leaves a larger room for easing in 2023. What is clear is that markets will continue to focus heavily on data. With volatility abating after the key Fed and ECB announcements and some of those defensive trades (due to the imminence of key risk events) being unwound, today’s non-farm payrolls release in the US brings mostly downside risks for the dollar, in our view. After all, a tight jobs market has already been factored in by the Fed (Powell even admitted inflation might fall without hurting employment), but it’s really the declining inflation story that is suggesting a peak in Fed funds rates is imminent. Accordingly, markets may focus more on the wage growth figures rather than the headline employment print. Any evidence that wage growth is losing pace and/or that hiring is slowing down materially would likely fuel rate cut expectations further, and hit the dollar. US 2-year rates are currently trading 10bp above the psychological 4.00% mark: a break below may exacerbate a dollar slump. Should such dollar weakness materialise, we think that high-beta currencies may emerge as key winners thanks to the positive impact on risk assets. ISM service numbers will also be closely watched after the latest release was a key driver of the negative re-rating in US growth. Francesco Pesole Read next: Starbucks Revenues Are High Despite High Costs| FXMAG.COM ECB: Dealing with unclear communication Should today’s payrolls trigger a dollar contraction, the euro may emerge as a laggard in the G10 space. Markets are strongly questioning the ability of the ECB to keep hiking at a “stable” pace (as the ECB said in its statement) beyond the March meeting. Here are the review notes from our economics team of yesterday’s statement and press conference. As our ECB watcher puts it, Lagarde’s press conference brought more fog than clarity. And we think it is indeed the communication hiccups in Frankfurt that is driving EUR/USD weakness. We remain of the view that at least 75bp of extra tightening will be delivered by the ECB, which still puts EUR/USD in a position for a big rally in the second quarter – when US short-term rates may come off more steadily. The ECB communication troubles may cap EUR/USD before then. Today, the balance of risks is still tilted to the upside for EUR/USD as US jobs data will be the key driver. The question is how comfortable markets are with re-testing 1.1000: we suspect a break above that level is a bit premature unless US figures come in very weak. Francesco Pesole GBP: BoE close to the peak The Bank of England hiked rates by 50bp yesterday, but offered a number of signals that it is indeed close to the peak. As discussed in our economics team’s reaction piece, a key hint that the MPC is laying the groundwork for the end of its tightening cycle is that it has dropped its pledge to raise rates “forcefully” (i.e. by 50bp). Incidentally, the BoE’s two-year inflation projection – a key driver of policy decisions – is now well below target. We still doubt this was the last hike of the cycle, and expect another 25bp move at the next meeting in March. Markets are torn around a move in either March or May, but are still fully pricing in an additional 25bp of tightening. The pound was slightly weaker after an initially positive reaction to the BoE statement. In practice, it appears that the BoE is not diverging much from market expectations, which means that it may be up to data in the UK to drive any large swings in the pound rather than surprises from the BoE. With markets doubting the ECB's hawkishness, EUR/GBP may manage to stay below 0.9000 for now, although a break higher seems highly likely over the coming months. Francesco Pesole CZK: CNB continues to support FX but is not a decisive factor The Czech National Bank (CNB) left rates and the FX intervention regime unchanged yesterday, in line with expectations. However, there was still room for a hawkish surprise. During the press conference, the Governor said that the record-strong koruna is not a problem for the economy and on the contrary, it is a welcome inflation-fighter. He thus implicitly confirmed that the intervention regime will be with us for a long time despite the fact that the CNB last intervened in September last year. Moreover, he told reporters that current expectations of significant rate cuts this year are wrong and rates will remain at higher levels for longer. However, the main driver at the moment, in our view, are global factors – falling gas prices and a higher EUR/USD – and the CNB is more of a complementary factor for the positive koruna. Moreover, the koruna still offers decent and stable carry. Thus, the main enemy at the moment is the market positioning, which was already the longest in the CEE before the CNB meeting in our view. Thus, the koruna may test 23.70 levels in the short term but the EUR/CZK move lower is limited in our view and the koruna will be rather stable compared to CEE peers. Frantisek Taborsky Read this article on THINK TagsFX EURUSD Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

Most European Emerging Market Currencies Ended The Year On A Positive Note

Enrique Díaz-Álvarez Enrique Díaz-Álvarez 28.01.2023 09:36
2022 was one of the most challenging years for FX strategists for some time, with a number of significant economic developments leading to massive volatility in currencies. The US dollar  The most noteworthy move in FX was the sharp rally in the US dollar against almost every other currency worldwide. The US Dollar Index rose to its highest level in two decades in late-September, and at one stage was trading approximately 19% higher year-to-date – one of its most significant periods of appreciation in many years. We attribute the extent of this rally to two main factors. Firstly, we witnessed a general deterioration in risk sentiment throughout much of last year, as sky-high inflation rates caused investors to fret about the possibility of economic downturns and recessions. So far, macroeconomic data has held up reasonably well under the circumstances, though most market participants expect 2023 to bring a slowdown in global activity. The G10 are still in the midst of raising rates Investors also spent much of 2022 ramping up expectations for Federal Reserve interest rate hikes. The Fed led the way with one of its most rapid tightening cycles in many decades last year, raising rates by a total of 425bps between its March and December meetings. Indeed, almost every other major and emerging market central bank hiked interest rates at a very aggressive pace in 2022 in an attempt to combat multi-decade high inflation rates. While many EM central banks have already brought their tightening cycles to an end, most of those in the G10 are still in the midst of raising rates, albeit at a slower pace. Among the major currencies, the ‘best of the rest’ in 2022 was the Swiss franc (-1.3% versus the USD), buoyed by the rather dramatic policy U-turn from the Swiss National Bank. The franc was followed some way behind by the euro. The common currency was one of the better performers in the second half of the year, as investors bet that the worst-case energy scenarios would be avoided, while the European Central Bank took a hawkish turn. The antipodean currencies (AUD and NZD) and Canadian dollar traded around the middle of the pack. The Canadian dollar was actually one of the best performers in H1 2022, although it faltered in the second half of the year amid the drop in oil prices and a policy shift from the Bank of Canada, which appeared to end its hiking cycle in December. Read next: Intentional Depreciation Of The Currency - Devaluation| FXMAG.COM European currencies Most of the remaining major European currencies (particularly SEK and NOK) struggled last year, partly due to their high-risk status and correlation to the economic cycle in Europe. Sterling crashed to a record low against the US dollar in late-September as investors fled UK assets following Liz Truss’ mini-budget misstep. A dramatic reversal in almost all of the tax cuts, and a general stabilisation in UK financial markets did, however, lift the pound back above its pre-budget levels in trade-weighted terms. Japanese yen Meanwhile, the Japanese yen ended near the foot of the G10 performance tracker, underperformed only by the Swedish krona. The yen appeared to lose its safe-haven status in accordance with the Bank of Japan’s ultra-dovish monetary policy stance. The BoJ was the only major central bank in the world to not raise interest rates last year, although we are beginning to see tentative signs of a shift away from this position. Overall, most emerging market currencies fared better than the majors in 2022, a historical rarity during periods of Federal Reserve policy tightening. The MSCI Emerging Market Currency Index ended the year down only 4.3%, versus a 7.2% move lower in the inverse of the US Dollar Index. We attribute this to two primary factors. For the most part, central banks in developing countries raised interest rates at a more aggressive pace than among the majors last year. Elevated commodity prices also kept these currencies well bid, as emerging market economies tend to be more reliant on commodity production than the developed ones. The clear outperformers were those in Latin America, led by the Brazilian real (+5.6%) and Mexican peso (+5.3%), which actually ended the year higher on the US dollar. Asian currencies Rather uncharacteristically, most Asian currencies, with only a handful of exceptions, sold-off quite sharply against the US dollar last year, including the ordinarily stable Indian rupee (-10.1%). This underperformance partly had to do with the Chinese government’s insistence on maintaining the country’s highly-controversial, and heavily criticised, zero-covid strategy. We have begun to see signs of a softening in authorities' stance towards the virus in recent weeks, with a number of the stringent measures now removed. Elsewhere, most European emerging market currencies ended the year on a positive note, reversing some of their losses as markets believed that the worst-case energy scenarios would be avoided. The worst performer of all the currencies that we cover was the Ghanaian cedi, which ended the year almost 40% lower on the dollar, followed by the Turkish lira. Best performing currencies in 2022*: Brazilian real +5.6% Mexican peso +5.3% Peruvian sol +5.1% Russian ruble +1.3% Singapore dollar +0.7% Worst performing currencies in 2022*: Ghanaian cedi -38.9% Turkish lira -28.9% Colombian peso -15.9% Swedish krona -13.2% Hungarian forint -13.1% *of those covered periodically by Ebury’s Market Strategy team Written by: Enrique Diaz-Alvarez, Matthew Ryan (CFA), Roman Ziruk, Itsaso Apezteguia, Eduardo Moutinho, Michal Jozwiak – Ebury’s Market Analysts This article is part of the Ebury report
FX Daily: Time for the dollar to pause?

The Message From The ECB Caused The Euro To Fall Sharply

Kenny Fisher Kenny Fisher 03.02.2023 12:56
The euro is catching its breath on Friday after some sharp swings over the past two days. EUR/USD is trading quietly at the 1.09 line. Fed, ECB send euro on a wild ride This week’s central bank rate announcements sent the euro on a roller-coaster ride. The Fed’s 25-basis point hike pushed the euro higher by 1.16%, while the ECB hike of 50-bp sent the euro down by 0.76%. The end result is that the euro is back to where it started the week, just below the 1.09 line. The Fed rate decision sent the US dollar broadly lower, as investors were heartened by Jerome Powell saying that the disinflation process had begun and that he expected another couple of rate hikes before the current rate-hike cycle wrapped up. The markets are expecting inflation to fall faster than the Fed is thinking and are counting on some rate cuts this year, even though Powell said yesterday that he does not expect to cut rates this year. The markets were looking for a dovish bend to Powell’s remarks and once they found it, stocks went up and the US dollar went down. The ECB meeting came a day after the Fed decision, and the rate hike of 50-bp was expected. Still, the euro fell sharply, perhaps due to a confusing message from the ECB. On the one hand, in its policy statement, the central bank signalled another 50 bp hike in March and kept the door open for additional hikes after March. At the same time, ECB President Lagarde said in a press conference that rate moves would be determined on a “meeting by meeting” basis seemed to veer away from the message in the policy statement. The ECB continues to have trouble communicating with the markets, which will only add to market volatility as investors try to figure out the central bank’s plans. The week wraps up with the US employment report. The Fed has said that the strength of the labour market is a key factor in its rate policy, so today’s release could have a strong impact on the movement of the US dollar. Nonfarm payrolls fell from 256,000 to 223,000 in December and the downturn is expected to continue, with an estimate of 190,000 for January. The ADP payroll report showed a decline in December, but unemployment claims and JOLT job openings both moved higher, making it difficult to predict what we’ll get from nonfarm payrolls. The markets will also be keeping a close look at hourly earnings and the unemployment rate.  Read next: Japanese Startup Aerwins Technologies Will Be On NASDAQ| FXMAG.COM EUR/USD Technical 1.0921 is a weak resistance line, followed by 1.1034 There is support at 1.0878 and 1.0826 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Rates Spark: Crunch time

Today's ECB Policymakers Comments Seem To Help The EUR/USD Pair, The Australian Dollar Fall Against Strong US Dollar

Kamila Szypuła Kamila Szypuła 03.02.2023 14:06
The dollar rose slightly on Friday, maintaining some momentum after jumps in the previous session after a series of decisions by central banks in Europe. The rise in the USD can be attributed to some shift in trading position ahead of the closely watched US monthly employment report. Trading was relatively limited as markets awaited the latest US employment data later in the day, which could change US Federal Reserve policy. Weekly initial jobless claims in the US released on Thursday indicated strength in the labor market and boosted expectations for strong non-farm payrolls (NFP). USD/JPY The US dollar gained on the last day of the week and looks set to continue its bounce from the nine-month low recorded on Thursday, which is seen as a tailwind for USD/JPY. The Japanese yen, on the other hand, continues to benefit from expectations that high inflation could result in a more hawkish stance from the Bank of Japan (BoJ) later this year. Bets were lifted by Japan's nationwide core inflation, which hit its highest annualized level since December 1981. This is seen as another factor keeping USD/JPY in check, at least for now. The USD/JPY pair traded high around 128.80 at the beginning of the day, but fell in the following hours. Currently, the USD/JPY pair is trading below 128.40. EUR/USD Yesterday, the European Central Bank raised interest rates by half a percentage point on Thursday, but the euro fell below 1.0900 after ECB comments. During the ECB press conference, President Christine Lagarde acknowledged that the outlook for the eurozone has become less worrying for growth and inflation.  The ECB noted the likelihood of another similar rate hike next month, the meeting and its aftermath were in line with market expectations. Early Friday, ECB policymaker Gediminas Simkus said an interest rate cut this year was not likely. With a similarly hawkish accent, policymaker Peter Kazimierz noted that he did not see the March interest rate hike as the last one. These comments seem to help EUR/USD contain losses for now. The euro posted slight gains against the US dollar on Friday, thanks in part to news that the eurozone economy saw some gains last month. The EUR/USD pair in the European session is trading above 1.09 again at around 1.0940. Read next: Japanese Startup Aerwins Technologies Will Be On NASDAQ| FXMAG.COM GBP/USD The Bank of England raised interest rates for the tenth time but hinted that its tightening cycle may be coming to an end, while Federal Reserve Chairman Jerome Powell said in a press conference following the Fed's 25 bp rate hike that the process of "disinflation" in the United States seemed to be in progress. Moreover, BoE President Andrew Bailey said that inflation will continue to fall this year and faster in the second half of 2023. In fact, the central bank forecast that the annual CPI inflation in the UK will fall from the current 10.5% to around 4% in 2020. toward the end of the year. This, in turn, has fueled speculation that the current cycle of rate hikes may be coming to an end and weakening the pound sterling. GBP/USD gained momentum during the European trading hours and went positive above 1.2250 during the day. Currently, the GBP/USD pair is on the border of the level. AUD/USD The Australian dollar falls below $0.71, pulling back slightly from nearly eight-month highs on overall dollar strength. Despite this, Australians continue to be supported by expectations that the Reserve Bank of Australia will continue to tighten its policy. Currently, Aussie Pair is trading at around 0.7060. Source: investing.com, finance.yahoo.com
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

Forex Weekly Summary: EUR/USD, GBP/USD And AUD/USD Fell Sharply, USD/JPY Ended Above 131.00

Kamila Szypuła Kamila Szypuła 04.02.2023 12:45
The dollar jumped on Friday after data showed that US employers created many more jobs in January than economists had expected, potentially giving the Federal Reserve more leeway to hold interest rate hikes. The dollar recently rose 1.12% to 102.92 on the day against a basket of currencies, the highest since Jan. 12 and is on track for its best day since Sept. 23. USD/JPY USD/JPY started the trading week at 130.4790. For a day and a half, the pair traded in the range of 129.80-130.45. Subsequently, the USD/JPY pair started its decline below the lower limit and dropped below the 129.00 level. Trading below 129.00 lasted until Friday where in the US session the USD/JPY pair sharply rebounded to above 131.00 and thus ended the trading week at 131.15. The final level was just below the week's high of USD/JPY at 131.1940. The difference between the highest and the nanny level of trading is quite large, because the pair reached the lowest level at 128.1160. EUR/USD The EUR/USD pair started the trading week at 1.0875. For a day and a half, the pair traded below 1.0900. After that, the EUR/USD pair rose above 1.0900 and reached a weekly high of 1.1030. Trading above 1.0900 continued until Friday, where in the US session the EUR/USD pair fell sharply below 1.0800 and thus ended the week of trading at the week's low at 1.0798. The European Central Bank (ECB) raised its key interest rates by 50 basis points as expected and said it intends to make another 50 basis point hike in March, comments from ECB President Christine Lagarde weighed on the euro. Early Friday, ECB policymakers Gediminas Simkus and Peter Kazimierz said an interest rate cut this year was not likely. Read next: The UK Economy Expects A Decline And Is Gearing Up For Recession| FXMAG.COM GBP/USD The Cable Pair started the week at 1.2404. For the next two days, the GBP/USD pair traded around 1.2300 until it broke out at 1.2400, after reaching the weekly high, the pair traded just below this level. The drop below 1.2300 came closer to Friday where the GBP/USD pair plummeted below 1.2100. GBP/USD ended the week at 1.2056, which is the lowest trading level of the week, the lowest since Jan. 6 and its worst day since Dec. 15. The Bank of England, as widely expected, raised its key rate by a further 50 basis points to 4%, its highest level since autumn 2008, indicative of more sustained price pressures. However, the BoE removed the wording that "they will respond with force if necessary." Moreover, BoE President Andrew Bailey said that inflation will continue to fall this year and faster in the second half of 2023. In fact, the central bank forecast that the annual CPI inflation in the UK will fall from the current 10.5% to around 4% in toward the end of the year. This, in turn, has fueled speculation that the current cycle of rate hikes may be coming to an end and weakening the pound sterling. AUD/USD The AUD/USD pair started trading at 0.7111. The pair then traded in the 0.7000-0.7075 range. On Thursday, the pair managed to break above 0.7100 and record a weekly high of 0.7156. Closer to Friday, the couple began their decline. The Aussie Pair ended the week at its lowest level of trade for the week, at 0.6924. The Australian awaits the RBA's interest rate decision on Tuesday 7 February. With the December quarter 2022 CPI print showing headline inflation is still running strong at 7.8 per cent, expectations are for a further increase in the cash rate. Source: finance.yahoo.com, investing.com
Forex: Euro against US dollar - technical analysis - May 18th

The Reversal Of The EUR/USD Pair To A Medium-Term Decline May Be Confirmed

InstaForex Analysis InstaForex Analysis 06.02.2023 08:04
Friday was spent assessing the problem we had in the morning. Why did the dollar index rise? Some believe that market participants have reconsidered how much they trust the Federal Reserve's words and that they don't see rate hikes coming to an end anytime soon, as the American economy shows good growth through the employment indicators. Nonfarm payrolls added 517,000 jobs in January against expectations of 185,000, the December figure was revised upward by 37,000. Unemployment fell from 3.5% to 3.4% with the economically active population rising from 62.3% to 62.4%. Average wages rose 0.3%. In addition, the services PMI rose from 49.2 to 55.2. But we don't quite share the same opinion. The U.S. base rate remains and will remain the highest (4.75%) even if the world central banks agree to wind up the cycle of rate hikes. The reason for such a sharp U.S. dollar reversal (read: falling markets) is due to the difference in economic growth between the U.S. and Europe, although some parameters in the U.S. are formally worse than in Europe (e.g., industrial production). As for the fall of the stock market, it is falling for several reasons: the base rate has become relatively high, which pressures the overcredited business and investors only needed a reason to leave such a risk, inflation is still unsteady, institutional investors can not buy the stock market due to lack of external support from the Fed (QE), individuals are leaving the stock market, as they have to spend on current life the financial backing they received back in the days of Covid. Also, investors are already ready to face the new global crisis based on numerous signs of it, including such a funny one as the "cardboard box index". The euro lost 113 pips on Friday, falling just short of the target support at 1.0758/87. Right below it is the MACD line. Consolidating under the range and the MACD line will confirm the reversal to a medium-term decline. You can take a break both today and tomorrow following the sharp movements on Thursday and Friday. On the four-hour chart, the price has settled and is moving below the balance and MACD indicator lines, the Marlin oscillator has relatively deeply penetrated the area of the downtrend, it can still fall further, but in order to brace for a breakthrough of 1.0758, it is better to unload a bit and rise. Relevance up to 03:00 2023-02-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334207
ECB cheat sheet: Difficult to pull away from the Fed

The Key Issue For The EUR/USD Pair This Week Is The Representatives Of The ECB And The Fed

InstaForex Analysis InstaForex Analysis 06.02.2023 08:09
The EUR/USD pair started the trading week rather quietly, without any gap, almost at the level of Friday's closing. This suggests that Friday's trading fuse has come to naught: the bears managed to pull the price under 1.0800, but further prospects for the downward movement were questionable. However, the quiet start of the trading week does not indicate that the pair will continue to move in the horizontal channel. On the contrary, we've got plenty of volatility ahead of us: bears will try to build on their success (or at least hold their positions within the frame of the 7th figure), while the bulls will be trying to take revenge to win back their lost positions. Every fundamental event will be used by traders to their advantage. Let's look at the main news of the week. Monday On Monday, February 6, markets will focus on European Central Bank President Christine Lagarde's speech. She will take part in a meeting with the president of the European Council, the head of the European Commission and the president of the Eurogroup. There are rarely any specific messages or intentions at this level of meetings, but given Lagarde's previous stance, she may repeat the hawkish signals indicating a willingness to raise rates at the March meeting by 50 points. This message won't have any impact on the euro (as it was mentioned at the ECB's February meeting). However, if the ECB head hints at further rate hikes, that's when the bulls will get a strong reason to launch a counterattack. Tuesday If Lagarde is the main newsmaker on the first trading day, then on Tuesday, February 7, traders will focus on her colleague Federal Reserve Chairman Jerome Powell. He will participate in a discussion hosted by the chairman of the Economic Club of Washington. The event is quite narrowly focused, so Powell is sure to comment on the latest Nonfarm. Let me remind you that the U.S. labor market data, released last Friday, turned out to be a pleasant surprise: the unemployment rate fell to a 53-year low (3.4%), and the indicator of employment growth jumped by 517,000(!). While the wage indicator (in annual terms) continued to show a downtrend. The latest figures allow Powell to be more confident not only about the March 25-point hike, but also about the longer term prospects. As of today, there is a 66% chance of a 25-point rate hike in May (according to the CME FedWatch Tool). But if Powell sounds indecisive in the face of strong Nonfarm (e.g. calling for inflationary growth), the dollar bulls will get a major blow and their position will shake considerably, even in the EUR/USD pair. Wednesday The economic calendar is not very eventful on Wednesday, February 8. The tone of the trades will be set by the Fed members, who will speak during the US trading session. You should pay attention to the stance of John Williams, head of the New York Fed. He has a permanent right to vote in the Committee and is considered one of the most influential members of the Fed. Ahead of the February meeting, Williams said that slowing rate hikes "makes sense" as "the Fed is nearing the end of its policy tightening cycle". If he reiterates that the end is near, the dollar will be under pressure. Actually, that was the reason why the greenback fell across the entire market after the Fed's February meeting: Powell made it clear that the central bank does not intend to exceed the previously declared target (5.25%), and possible calibration of the final point is only possible in the downward direction. If Williams voiced a similar position, the dollar will be under pressure. Also on Wednesday, the other Fed officials, Michael Barr (centrist) and Christopher Waller (predominantly hawkish), will speak. Read next: Elon Musk Was Found Not Guilty In The Tweets Case| FXMAG.COM Thursday Thursday's main report is Germany's inflation data. According to preliminary forecasts, the consumer price index will show an uptrend in January. The CPI may move up after two months of decline and post a reading of 8.9% (y/y). The harmonized consumer price index should similarly reflect an uptrend, coming in at 10.0% (after falling to 9.6%). If the real numbers match the forecasts (not to mention the greenback), the euro will receive substantial support. Let me remind you that last week's report on the growth of pan-European inflation turned out to be very contradictory: amid slowing overall inflation, the core index remained at a record high of 5.2%. The German figures may either reinforce concerns about price pressures in the European region or weaken the ECB hawks' position (the latter looks unlikely). Friday At the end of the trading week, two Fed members, Christopher Waller and Patrick Harker, will speak during Friday's U.S. session. They are considered as representatives of the "hawkish wing" of the Fed, so their comments may provide additional support to the greenback. There is also an important report on the Consumer Sentiment Index from the University of Michigan. It is a very important leading indicator of future consumer spending. According to preliminary projections, the index is expected to rise again (for the third month in a row), rising to 65.0 points (the highest since last April). Conclusions The forthcoming week is not full of important macroeconomic events. The key point is the ECB and Fed representatives (especially Lagarde and Powell) who are likely to assess the latest reports through the prism of future prospects. In addition, the German inflation report may lead to increased volatility in the EUR/USD pair. In general, at the moment, there are no signals that would indicate which position we should prioritize. Obviously, the "Nonfarm factor" has already played itself out for the most part, hence it is risky to enter selling. At the same time, Powell's more hawkish mood might encourage a bearish momentum: in that case, the pair might test the support at 1.0720 (the bottom line of the BB on the daily chart). But the alternative scenario in which the Fed chief (and his colleagues) remain cautious in spite of the strong Nonfarm is not excluded. In that scenario, bulls might seize the initiative (especially if Lagarde sounds hawkish and German inflation exceeds expectations). In this case, the price is likely to return to the range of 1.0850-1.0950. Relevance up to 02:00 2023-02-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334201
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The EUR/USD Currency Pair Finally Displayed A Reasonable Movement

Paolo Greco Paolo Greco 06.02.2023 08:13
  On Friday, the EUR/USD currency pair finally displayed a movement that could be characterized as reasonable and did not require decoding. Several significant reports that were released in the United States on Friday all performed better than expected. Some - a lot. Therefore, the strengthening of the US dollar was ultimately justified, and we did not need to "search for" the causes of such a movement. Remember how the market responded illogically to the Fed and ECB meetings a day or two earlier? Both central banks increased interest rates and maintained their "hawkish" stance. And as a result, the dollar fell first, followed by the euro. Naturally, we clarified that the market had already determined the meetings' well-known outcomes. Therefore, everything is rational. But despite what it may seem like, this conclusion is far from obvious. Back to the reports from Friday. With a forecast of 185–190 thousand, there were 517 thousand non-farms in January. With growth predicted to reach 3.6%, the unemployment rate dropped to 3.4%. With growth forecasts of 50.4-50.6, the ISM business activity index for the services sector improved from 49.2 points to 55.2 points. After such a collection of facts, wages ceased to be of interest to anyone. These statistics have demonstrated that the American economy is in a better state than some analysts have claimed. A recession may be avoided even at the current, high level of the Fed rate. On the one hand, it releases the Fed from its restrictions, which is excellent for the dollar. However, because the Fed has almost achieved the rate's high value, it is already irrelevant for the US dollar. However, a strong economy is preferable to a weak one. As a result, the US dollar may continue to benefit. Formally, the euro may continue to increase in the months to come. After all, compared to the Fed rate, the ECB rate may exhibit a more significant increase in 2023. However, the pair should now adjust lower by a few hundred points. The upward trend will then resume without any opposition. What surprises await us in the upcoming week? Let's now take a look at the week's schedule of events. Let's assume right away that there won't be many significant publications or events. Regarding the number of significant events, last week set a milestone, but it won't be this way every week. On Monday, the European Union will host the next address by ECB President Christine Lagarde, who has spoken five or six times in the past two weeks. We don't anticipate anything interesting from her because it's obvious that she can't make a big deal out of everything at every performance. Additionally, a retail sales report (not the most crucial report) will be released. And that's it for this week. There will also be speeches by Luis de Guindos and Isabelle Schnabel, both of the ECB Monetary Committee, but these are only side events. Additionally, following the European regulator's meeting last week. As a result, macroeconomics and the foundation are largely absent in the European Union this week. This suggests that although volatility may drop significantly, the pair may still move south. The CCI indicator last week hit the overbought level, which happens very infrequently and is a hint for a trend reversal. This is a significant technical point. Additionally, there was a consolidation below the moving average line, changing the local trend from upward to negative. However, the price is still above the crucial line on the 24-hour TF, so this resistance can stop the decline in quotes. Or at the very least, make it wait. In theory, since the underlying background no longer prevents it, now will be a favorable time to fall. We anticipate a further 300–400 point decrease in the value of the euro. Additionally, it will be seen that new figures on inflation or GDP will be published, based on which it will be feasible to predict how central banks will act in March. As of February 6, the euro/dollar currency pair's average volatility over the previous five trading days was 118 points, which is considered to be "high." So, on Monday, we anticipate the pair to trade between 1.0677 and 1.0913. The Heiken Ashi indicator's upward reversal will signal a round of corrective movement. Nearest levels of support S1 – 1.0742 S2 – 1.0620 S3 – 1.0498 Nearest levels of resistance R1 – 1.0864 R2 – 1.0986 R3 – 1.1047 Trading Suggestions: Below the moving average, the EUR/USD pair has been consolidated. Until the Heiken Ashi indication turns up, you can continue to hold short positions with targets of 1.0742 and 1.0677. After the price is fixed back above the moving average line, long positions can be initiated with a target of 1.0986. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones Relevance up to 05:00 2023-02-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334211
Rates Spark: Nothing new on the dovish front

The EUR/USD Pair Could See A Dip Into The Support Area

Torben Melsted Torben Melsted 06.02.2023 08:20
With the break below minor support at 1.0835, it was clear that wave 4 still was in progress in form of an expanded flat correction. We will be looking for more downside progress in wave C of 4 towards at least 1.0762 and possibly even closer to 1.0650. If wave C extends, we could see a dip into the support area between 1.0437 and 1.0500, but the odds for that outcome seem low. Short-term resistance is seen at 1.0876 and a break above here will indicate waves C and 4 being complete and wave 5 unfolding towards 1.1100 and possibly higher.   Relevance up to 06:00 2023-02-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311438
EUR: German IFO Data and Central Bank Hawkishness Impact Euro/USD Range Trade

FX: Timing the dollar decline

ING Economics ING Economics 06.02.2023 08:51
The dollar is around 10% off the highs seen in late September, and understandably the view is that the dollar bull cycle – which started summer 2021 – is well and truly over. Consensus expects the dollar to weaken further this year, and we agree Dollar bear trend could pick up speed in the second quarter At the heart of the bearish dollar view is the call that the Fed will shift to a reflationary stance in the second half of 2023, US short-dated yields will fall and those yield differentials will move against the dollar. This story should be particularly acute for EUR/USD, where sticky core inflation in the eurozone means that the European Central Bank will not be considering rate cuts until late 2024. At the same time, lower natural gas prices have seen the eurozone terms of trade improve markedly and justify fundamentally higher levels of the euro. Assuming that the China reopening story continues to evolve positively, we think this confluence of factors can drive EUR/USD steadily higher throughout 2023. Most of the gains, however, may come in the second quarter, when US inflation is seen falling quite sharply. Sustained EUR/USD gains beyond 1.15 may be harder to achieve in the second half – especially if US debt ceiling negotiations are pushed to the limit. Some would argue that the US debt ceiling is a bullish factor for the dollar – prompting a flight to quality. Yet the evidence from 2011 proves the contrary. Only were the US very close to an unthinkable sovereign debt default – i.e. extreme risk aversion – would the dollar derive any brief benefit. Read next: Elon Musk Was Found Not Guilty In The Tweets Case| FXMAG.COM USD/JPY should continue to fall throughout the year. Bank of Japan meetings will prove positive event risks for the yen as investors second-guess how quickly a new BoJ governing team will unwind the current very dovish settings. We target 120 here and the yen should outperform on the crosses whenever the benign investment conditions are challenged. Sterling is trading on a slightly steadier footing as the UK government attempts to restore fiscal credibility. The marginally better global investment environment is also helping the risk-sensitive pound. Sterling may hold its gains through the first half of the year as the Bank of England stays hawkish. But clearer signs of easing labour market and price pressures in the second half of 2023 will see conviction build of a forthcoming BoE easing cycle. EUR/GBP may well be ending the year nearer 0.90/91.  TagsFX Dollar   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Gold Trading Analysis: Technical Signals and Price Movements

FX Daily: Three key themes for this week

ING Economics ING Economics 06.02.2023 09:40
Three threads are influencing market sentiment at the start of this week. First, Friday's very strong US jobs data, which now puts more pressure on Powell to sound less relaxed on lower rates. Second, the setback in US-China diplomatic relations, and possible negative impact on sentiment. Third, speculation on the next BoJ governor. USD may find support Reports suggest Masayoshi Amamiya has been approached to become the next Bank of Japan governor USD: Upside risks this week Three key themes are highly influencing the market mood at the start of this week: 1) Friday’s very strong US jobs data; 2) US-China tensions over the Chinese air balloon; 3) reports about the next Bank of Japan (BoJ) governor. The January jobs report in the US on Friday smashed expectations, showing a half-million increase in employment and the jobless rate falling to 3.4%. As highlighted by our US economist here, such a strong print surprisingly – but clearly – signals employers are still willing to hire despite multi-month falls in industrial production, residential construction output and disappointing consumer spending. One silver lining is that the wage growth slowed from a revised 4.8% to 4.4% year-on-year, a signal that firms are able to hire without offering meaningfully higher salaries despite the very tight labour supply. Still, this is clearly an inflationary jobs market on paper, and a 25bp hike by the Fed looks highly likely now. Fed Chair Jerome Powell in last week’s post-FOMC press conference outlined a potential “goldilocks” scenario where inflation declines without a material rise in unemployment. We’ll see how much confidence he has in this scenario tomorrow as he speaks at the Economic Club of Washington. A rate protest after the post-FOMC market reaction may signal the Fed is not as relaxed as it may have sounded last week about loosening financial conditions. More Fedspeak is scheduled for the rest of the week. The data calendar is rather quiet in the US this week, which leaves geopolitical themes more space to drive market sentiment. Hopes of an improvement in US-China relations have plummeted after the US shot down a Chinese air balloon which they claim contained spy equipment. China has reiterated it was a civilian aircraft that had strayed off course and reached US airspace, and has threatened retaliation. This looks like a major setback in what may have been an important bullish driver for global risk sentiment in 2023, as Beijing’s relationships with the West appeared on track for some relaxation at the same time as China’s reopening of the economy was happening. A rebound to the 6.85-6.90 area in USD/CNY could signal markets are effectively moving to discount more negative trade implications for China, which would buck the recent bullish trend on Chinese sentiment. Finally, USD/JPY briefly traded above 132.00 in early Asian trading after reports that Bank of Japan deputy governor Masayoshi Amamiya was approached by the government to become the next BoJ governor. He was largely seen as leaning on the dovish side and more likely to favour a continuation of Haruhiko Kuroda’s loose policy rather than deploying those structural changes to the yield curve control markets have been speculating on. It is too early to draw conclusions on this, and both data and market dynamics may have a bigger say on potential BoJ policy changes than the new governor: for now, however, markets may be more reluctant to add bearish Japanese government bond (JGB) positions, and USD/JPY could find some support.   All in all, these three themes appear to be pointing primarily at upside risks for the dollar this week. We think DXY could consolidate around the 103.00 mark until new first-tier data in the US are released next week and could reignite the re-rating of US growth and Fed rate expectations. Francesco Pesole EUR: ECB hangover effect This is also set to be a much quieter week in the eurozone. The big rally in EZ bonds after ECB President Christine Lagarde failed in her rate protest last week is another signal that the ECB has lost its grip on the rate market, and this is not great news for the euro. As discussed in our latest EUR/USD note, this could mean that another large EUR/USD may need to wait until the second quarter, when US short-term rates look more likely to drop and markets may gradually align with a “higher-for-longer” narrative by the ECB. Comments by ECB officials are the most interesting risk events to follow in the eurozone this week. We’ll hear from Robert Holtzmann this morning and from François Villeroy, Isabel Schnabel, Klaas Knot and Luis de Guindos over the next few days. Given the ongoing correction and soft momentum in EUR/USD, support around 1.0730-1.0750 in the pair would already be a welcome development for EUR bulls. Remember that the euro is highly exposed to a worsening in Chinese sentiment. We think that any rebound may lose steam around the 1.0870-1.0900 area. Elsewhere in Europe, the Riksbank will announce policy on Thursday. We expect a 50bp rate hike as inflation remains high and wage negotiations should boost wage growth, but the recent deterioration in the economic outlook and housing market instability warns against much more tightening beyond this point. EUR/SEK still faces upside risks this week, even though we remain bearish on the pair in the medium term. Francesco Pesole GBP: Growth data in focus this week Growth data is the highlight of this week’s UK calendar. Our economist expects the British economy to have narrowly avoided a technical recession in the fourth quarter. Still, a 1Q23-2Q23 recession is more than possible, although that could be milder than previously expected thanks to lower energy prices. Today, we’ll hear from Bank of England’s Catherine Mann and Huw Pill, who may start to address the market’s perception that last week’s 50bp hike was a dovish one, and that the BoE is very likely close to the peak in rates. Governor Andrew Bailey will testify before Parliament later this week. So, growth data and BoE speakers will be the two domestic inputs for the pound this week, although global risk sentiment, geopolitical developments and a supported dollar may work against any positive domestic news. Cable may heavily test 1.2000 soon. Francesco Pesole CEE: Inflation numbers as opportunity to reassess dovish expectations This week, we start with hard data from the economy in the CEE region. Today, we will see industrial production in the Czech Republic, which we estimate accelerated slightly in December. Tomorrow, we will see the same figure in Hungary, but there we expect a decline in the annual growth rate. The National Bank of Poland will meet on Wednesday and the National Bank of Romania on Thursday. In both cases, we expect rates to remain unchanged, in line with market expectations. Thus, the main focus this week will be on the inflation prints published on Friday. In Hungary, we expect inflation to increase from 24.5% to 25.5% YoY in January, above market expectations. In the Czech Republic, we forecast an increase from 15.8% to 17.6% YoY, also above market expectations. Also on Friday, the Czech National Bank will release the minutes from last week's meeting and the full new forecast, including the alternative scenario, which is currently the board's preferred path. In the FX market, generally good conditions persist for the CEE region, however, we may see a delayed negative reaction to Friday's downward slide in EUR/USD, especially in the case of the Hungarian forint and the Czech koruna at the start of the week. Nevertheless, we expect a rather quieter week. Friday should be more interesting as we expect inflation numbers to provide an opportunity for the market to reassess current dovish expectations, which should support the falling interest rate differential and support FX. Overall, however, we expect more of a stabilisation around current levels. We see a range of 23.80-24.00 EUR/CZK for the koruna, 388-390 EUR/HUF for the forint and 4.68-4.70 EUR/PLN for the zloty. Frantisek Taborsky Read this article on THINK TagsFX Dollar Bank of Japan Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Commodities Feed: US announces SPR purchase

US Crude Oil Is Back Into Last Year’s Bearish Trend, The Latest US Jobs Data Will Likely Support The USD Bulls

Swissquote Bank Swissquote Bank 06.02.2023 11:52
Very strong US jobs data released last Friday hit the Federal Reserve (Fed) doves, sent equities lower, the US yields and the US dollar higher.And the latest US jobs data will likely support the US dollar bulls this week, as we don’t have much on the economic calendar that could temper Friday’s monstrously strong NFP read, and remind us that the US economy is still slowing. Japan Plus, the fresh selling pressure on the Japanese yen will likely give an extra hand to the Fed hawks, on weekend news that the potential new Bank of Japan (BoJ) Governor, Masayoshi Amamiya will be dovish. In the light of the latest macroeconomic developments, a revision to medium term outlook is necessary. Forex • The dollar-yen’s latest jump above the 130 mark could be sustainable in the short to medium run.• The EURUSD traders may be happy to call it a good trade and retreat to the sidelines. • Cable could sink into bearish consolidation zone. Adani Elsewhere, the Adani selloff enters the third week, and things go from bad to worse as in increasing number of banks don’t accept Adani holdings as collateral anymore. US vs China The Chinese spy balloon that was flying over some strategic points in the US renewed tensions between US and China, and that could throw a floor under the gold’s selloff. Curde Oil And US crude is back into last year’s bearish trend, with however risks of tight supply, and Chinese reopening hanging in the air. Read next: The US Judge Denied The FTC's Request, Giving The Meta An Important Victory| FXMAG.COM Watch the full episode to find out more! 0:00 Intro 0:31 That monstrously strong US jobs data shakes market dynamics 2:39 Next thing to watch! 3:48 Equities dive 5:33 USDJPY to extend gains above 130 6:59 EURUSD to pause rally 8:30 GBPUSD to slip below 1.20 9:43 XAU boosted by US-China’s ballooned tensions 10:14 US crude slips into last year’s bearish trend Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #NFP #wages #jobs #data #Fed #FOMC #inflation #expectations #Powell #USD #EUR #GBP #JPY #XAU #US #China #spy #balloon #Adani #selloff #crude #oil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
InstaForex's Ralph Shedler talks Euro against Japanese yen

USD/JPY Pair Is Trading Above 132.00, The Aussie Pair Is Near 0.6900

Kamila Szypuła Kamila Szypuła 06.02.2023 14:35
The US dollar surged against its major trading partners early Monday ahead of a weak week of economic data and speeches by Fed officials resumed. The week starts calmly on Monday without key data. The US Monthly Employment Report (NFP) released on Friday showed that the economy added 517,000 jobs in January. jobs, significantly exceeding the consensus estimate. Moreover, the unemployment rate unexpectedly fell to 3.4%, the lowest level since May 1969. USD/JPY The prevailing risk-avoiding environment – as indicated by the generally weaker tone in equity markets – provides a safe haven for the Japanese Yen (JPY) and acts as a headwind for USD/JPY. The yen came under pressure during the Asian session after it was reported that the Japanese government had approached Bank of Japan (BoJ) Deputy Governor Masayoshi Amamiyi as a possible successor to Governor Kuroda. Market participants are of the opinion that Lieutenant Governor Amamiya will continue the policy of Governor Kuroda. The Japanese government has since dispelled rumors that it had approached Amamiya with a new BoJ governor to be announced in February. So USD/JPY started the week with a pattern above 132.00. Over the course of the day, the pair moved back below 132.00 but has now recovered and is trading at 132.1530. EUR/USD Rising tensions between the United States and China add to the bleak mood. On Friday, President Joe Biden postponed US Secretary of State Blinken's upcoming trip to China after a suspicious Beijing observation balloon that was flying in US skies was shot down. In terms of data, European figures were disappointing. On the one hand, Germany published December's factory orders, which fell by 10.1%YoY, much worse than expected. On the other hand, retail sales in the euro zone fell by 2.7% MoM in January. Moreover, we are likely to hear more aggressive statements from Lagarde, citing higher core inflation and growth forecasts. The EUR/USD pair stopped trading below 1.0790. At the beginning of the week, the EUR/USD pair is holding above 1.0765. Read next: Adani Group Company's Crisis Is Gaining Momentum, Finland Is The Happiest Country| FXMAG.COM GBP/USD The British pound has not enjoyed a good reputation lately. The economic data was not strong enough to support sterling against its rivals, while the ongoing strikes and the threat of more in the coming weeks hit the mood. On Friday, the Office for National Statistics (ONS) will release preliminary GDP data for Q4. Growth in the UK stalled in the fourth quarter of last year and may have reversed, fueling further recession fears. The GBP/USD pair tried to break above 1.2050 on Monday. Currently, the GBP/USD pair is trading above 1.2060. AUD/USD The Australian dollar collapsed on Friday after soaring US non-farm payrolls (NFP) data pushed the US dollar higher. Investors are cautious ahead of this week's decision by the Reserve Bank of Australia, which is expected to raise interest rates by 25 basis points for the ninth consecutive time. Annual inflation in Australia rose 7.8% in December, the largest increase since 1990 and above market forecasts of 7.5%. The Aussie pair in the early hours of trading tried to catch up and climbed above 0.6940 but failed to maintain momentum and the Aussie Pair trades below that level again near 0.6900. Source: wsj.com, finance.yahoo.com
Forex: Euro against US dollar - forecast on April 24th, 2023

The EUR/USD Pair Is Expected To Resume Lower Again

Oscar Ton Oscar Ton 07.02.2023 08:06
Technical outlook: EURUSD dropped through the 1.0709 lows late in the New York session on Monday before finding mild bids. The bears might not be done yet as they prepare to drag further towards the 1.0481 initial support in the near term.The single currency pair is seen to be trading close to 1.0740 at this point in writing and is expected to resume lower again sooner than expected. EURUSD is now looking to produce a larger-degree corrective decline against the 1.1025 high recorded last week. The meaningful initial support is seen at 1.0481 and a break lower will confirm the termination of its initial leg lower. Prices could pull back thereafter and resume lower towards 1.0100-20 to complete the corrective decline. EURUSD would remain well supported in the 1.0100-20 range since it is the Fibonacci 0.618 retracement of its earlier rally between 0.9535 and 1.1025 levels respectively. Alternatively, if the price continues to drop below 0.9860, it could confirm a potential continuation below the 0.9535 lows. Either way, the instrument is looking lower at least towards the 1.0100-20 range in the medium term. Trading idea: Potential bearish move against 1.1025 Good luck!   Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311595
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

It Is Possible For The EUR/USD Pair To Enter A Bullish Correction

InstaForex Analysis InstaForex Analysis 07.02.2023 08:20
Yesterday, the euro managed to overcome the support of the 1.0758/87 target range as well as the MACD line, which has already been embedded. Now the nearest target is 1.0660, followed by 1.0595. The range of these levels represents the consolidation of December. Traditionally, there is a correction after a sharp downtrend, afterwards, the pair will enter growth in the medium-term. It is possible for the pair to enter a bullish correction from the range of 1.0595-1.0660. On the four-hour chart, the price has settled under the lower limit of the 1.0758/87 range, the signal line of the Marlin oscillator slightly turned up, and this range will probably be tested. I expect EUR/USD to fall further   Relevance up to 03:00 2023-02-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334319
Technical Outlook Of The Main EUR/USD Currency Pair

The Euro To US Dollar (EUR/USD) Pair Is Still Moving Lower

Paolo Greco Paolo Greco 07.02.2023 08:22
As predicted yesterday, the EUR/USD currency pair continued to decline on Monday, albeit with less volatility. Given that neither the US nor the EU released any significant macroeconomic information or basic background yesterday, the movement on Monday best satisfies the definition of "inertial." Thus, the euro's value continued to decline entirely as a result of last week's events, notably the outcomes of the Fed and ECB meetings and the American media's publications on Friday. This movement could finish today and an upward correction could start because we predicted it would last for another one or two days. We continue to anticipate that the European currency will continue to decline. A downward trend is the most likely course of action given the pair's recent extreme overbought condition. Additionally, sales signs are also beginning to emerge. The pair was fixed below the moving average line on the 4-hour TF, which is noteworthy. Today, the price can already pass the crucial threshold on the 24-hour TF. When these two signals are merged, the pair can fall by hundreds of points. Additionally, we must keep in mind that there won't be much in the way of macroeconomic and fundamental background this week. There won't be any significant reports, and Christine Lagarde's address didn't reveal any new information. What additional information could there possibly be given that practically all ECB officials have recently stated the necessity of continuing to tighten monetary policy? Since the regulator would have already started a modest slowdown if it wanted to stop its tightening, there is now no question that the rate will increase by at least 0.75%. There will be at least two more increases of 0.5% and 0.25% if it does not slow down at the February meeting. The ECB's planned tightening of monetary policy, however, is a "double-edged sword." Since the market is already prepared for such an event, quotes can already reflect it. Therefore, rhetoric with a longer-term view is needed from Christine Lagarde, Luis de Guindos, or Isabelle Schnabel. If they give any indication or make it clear that they intend to raise the rate in the second half of 2023, this might lead to a new round of buying of the euro since the Fed rate will have undoubtedly risen by then. Read next: USD/JPY Pair Is Trading Above 132.00, The Aussie Pair Is Near 0.6900| FXMAG.COM Can the inflation rate rise again? Another option is to approach the issue differently. Both in the United States and the European Union, inflation has been slowly declining over the past few months. A lot of individuals, who have grown accustomed to this phenomenon, think that the consumer price index will now decline (at some rate or another) until it reaches 2% or such. A year is implied. The fact that inflation has been falling in recent months as a result of lower energy transport prices is not surprising. The impact of this occurrence will eventually stop having an impact on prices, and inflation may then stop accelerating. In a few months, this will likely occur. It is also important to keep in mind that the effects of a rapid rate increase by the ECB and the Fed may eventually "fade into the background." If the rate has increased to 4.75% (in the US), it does not follow that inflation will continue to decline indefinitely. The Fed will need to decrease the key rate quickly to stop inflation. In general, we think that the monetary policies of the Central Bank may be changed more than once in 2023. As a result, making long-term predictions is useless. To make them, too many aspects must be taken into account. By the way, the armed confrontation in Ukraine is still going on and has not ended. Everyone is aware of the terrible effects it had on the pound and the euro last year. This year, history might repeat itself. As of February 7, the euro/dollar currency pair's average volatility over the previous five trading days was 121 points, which is considered "high." So, on Tuesday, we anticipate the pair to move between 1.0614 and 1.0856. The Heiken Ashi indicator's upward reversal will signal a round of corrective movement. Nearest levels of support S1 – 1.0742 S2 – 1.0620 S3 – 1.0498 Nearest levels of resistance R1 – 1.0864 R2 – 1.0986 R3 – 1.1047 Trading Advice: The EUR/USD pair is still moving lower. Until the Heiken Ashi indicator turns up, you can maintain short positions with a target price of 1.0620. After the price is fixed back above the moving average line, long positions can be initiated with a target of 1.0986. Explanations for the illustrations: Channels for linear regression - allow us to identify the present trend. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.         Relevance up to 05:00 2023-02-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334321
Forex: Euro against US dollar - technical analysis - May 18th

The EUR/USD Pair Is In A Downtrend Without Any Correction

Paolo Greco Paolo Greco 07.02.2023 08:30
M5 chart of EUR/USD. On Monday, the EUR/USD pair was bearish. In spite of the empty macroeconomic calendar, traders found a reason to sell the instrument. Yet, a couple of weeks ago, there was the opposite situation. Nevertheless, the eurozone saw the release of several macro reports. Thus, its services PMI rose to 46.1 in January, and retail sales dropped by 2.7% in December. However, the market showed no reaction to the results. The decline in EUR/USD came in the North American session. No macro releases were scheduled for the day in the United States. ECB President Lagarde's speech did not contain any new information or hints. No trading signals were generated on Monday. Technically, there were two signals made. The first one was produced at the close of the market on Friday. The second one was formed on Monday night. Neither of them should have been priced. So, no positions were opened. Unfortunately, a good price movement on Monday was missed. COT report: The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since September. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. In the reporting week, non-commercial traders opened 9,500 long positions and 2,000 short ones. The net non-commercial position grew by 7,500. The number of long positions exceeds that of short ones by 134,000. It now remains to be seen how long large traders will be bullish. From the technical point of view, a bearish correction should have already occurred. Traders will unlikely stay bullish for another 2 or 3 months. Even the net non-commercial position shows that it is time for a correction. In total, there are 52,000 more long positions now among all groups of traders (732,000 vs 680,000). Read next: USD/JPY Pair Is Trading Above 132.00, The Aussie Pair Is Near 0.6900| FXMAG.COM H1 chart of EUR/USD. According to the H1 time frame, the pair is in a downtrend without any correction. On Monday, volatility somewhat decreased. The pair may tumble by 200-300 pips today. The tightening factor was priced by the market in December and January. On Tuesday, important levels are seen at 1.0485, 1.0581, 1.0658-1.0679, 1.0736, 1.0806, 1.0868, and 1.0938 as well as Senkou Span B (1.0856) and Kijun-sen (1.0871). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Don't forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On February 7, the ECB's Isabel Schnabel and the Fed's Jerome Powell will deliver speeches. However, both policymakers are unlikely to share some new information since both central banks held their board meetings only last week. Therefore, the market will pay little attention to the officials' speeches. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.   Relevance up to 06:00 2023-02-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334325
Small factors combine to pressure credit

The Potential Downside Of The EUR/USD Pair Is Becoming Very Limited

Torben Melsted Torben Melsted 07.02.2023 08:34
The expanded flat correction in wave 4/ that has unfolded since the 1.0925 peak is now close to completion. We could still see EUR/USD drop to 1.0650, but the potential downside is becoming very limited. Hence, the bottom and the completion of wave 4/ could be seen anytime now. Short-term we will need a break above minor resistance at 1.0799 as confirmation that wave 4/ has completed and wave 5/ has taken over for a rally towards 1.1108 as the next upside target.   Relevance up to 06:00 2023-02-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311611
Federal Reserve preview: A final hike as US recession fears mount

FX Daily: The dollar comeback hinges on Powell, again

ING Economics ING Economics 07.02.2023 09:24
The current market enviornment resembles last week's pre-FOMC one: the dollar is regaining ground as markets position themselves for a hawkish tone from Powell. The difference is that, today, strong jobs gains give Powell an extra incentive to push back against lower rates. The dollar recovery may run a little longer. Expect ECB hawkish comments as well. Source: Shutterstock   We have published our latest FX views and forecasts in the February edition of FX Talking: "Soft landing, hard landing, no landing?" USD: Powell's second hawkish attempt can support the dollar One week ago, we were observing how the dollar had regained the favour of the market as investors were positioning for a reiteration of the hawkish rhetoric by Fed Chair Powell after the FOMC meeting. As we now know, Powell actually conveyed the message of being relatively relaxed with loosening financial conditions last Wednesday. Today, however, we are looking at a market environment that highly resembles last week’s pre-FOMC one. Markets have been squaring short-dollar positions in the past two sessions as expectations have grown that Powell will deliver a hawkish speech at the Economic Club in Washington today. The key difference with last week is that Fed hawkish bets are now backed by a shockingly strong January jobs report (we recommend looking at our economics team’s note on the US labour market published yesterday). Let’s assume that a goldilocks scenario where inflation declines without seriously harming employment is becoming a more central scenario for the Fed. Well, even so, it seems a rather appropriate time for Powell to deliver one last hawkish “hurrah” today. In a way, many are seeing at least some degree of protest against the market reaction to last week’s FOMC as necessary. Yesterday, Atlanta Fed chief Raphael Bostic said that strong job gains could mean a higher peak rate. Indeed, it looks like markets have already positioned themselves for some pushback against easing rate expectations, but the surprise strength of the US jobs report gives Powell ample room to sound more hawkish than expected. Ultimately, the ongoing upward correction may run a little longer before losing steam. Incidentally, the overall environment is doing little to lure markets back into risk assets and away from the safe-haven dollar. US-China tensions are a source of concerns and likely weighing on global sentiment, and the eurozone cannot count on a supportive data flow to keep the growth re-rating process going. It looks like only another under-delivery (i.e. dovish surprise) by Powell can hurt the dollar today. Francesco Pesole EUR: ECB hawks to the rescue EUR/USD has pressed lower and may re-test the 1.0700 support today. There isn’t a whole lot driving the euro slump from the domestic side. In what is now becoming an increasingly common occurrence, ECB members appear to be rushing to the rescue in the week after the ECB meeting. The goal is simple: convince markets the hawkish bias is untouched, hoping to regain some of the market’s trust that President Lagarde seems to have lost. We’ll hear from three ECB hawks - Schnabel, Knot and Kazimir – and one “dove” – Villeroy – who recently aligned its view with the broader ECB message on further tightening. All in all, a slew of hawkish comments and rate protests should be on the cards today. This could give some modest support to the euro, but we believe this evening’s speech by Powell will have broader and longer-lasting implications for EUR/USD. A contraction to the 1.0600-1.0650 area by the end of this week is now looking increasingly likely. A pushback against the dovish market reaction is also what we have seen from BoE officials so far, with Caroline Mann (a hawk) firmly ruling out the peak rate has been reached. Today, we’ll hear from MPC members Ramsden, Pill and Cunliffe. With the rate protest coming from both the UK and the eurozone, EUR/GBP may hover around 0.8900-0.8950 for now.   Francesco Pesole AUD: RBA deliver hawkish hike The Reserve Bank of Australia raised rates by 25bp, in line with consensus, and signalled more rate increases are on their way. As we expected, sticky inflation has forced the RBA to sound more hawkish and to push rate expectations higher. Here is our economist’s review of the meeting. Markets are now pricing in a peak rate at 3.9% from around 3.6% before the announcement, but we think this is still underestimating how far the RBA will go. Our projections see rates hit 4.1% in the second quarter, and a potential first rate cut only in the fourth quarter. We continue to see AUD as the most attractive currency in G10 in the months ahead. Indeed, recent deterioration in US-China relations are a concern, but Australia still seems on track to easing trade tensions with Beijing, and the room for further hawkish repricing in RBA rate expectations means that 0.75 in AUD/USD could be reached during a soft-USD environment in 2Q22. Francesco Pesole CEE: The US dollar brought pain to the region The EUR/USD decline hit CEE FX hard yesterday. The US Dollar may cause pain to the region for a while longer and the local calendar has little to offer today. This morning's data showed Hungary's industrial production for December and the Czech Republic will release retail sales. Later today the Czech National Bank (CNB) will release FX reserve statistics including FX transactions for December. However, we don't suspect the CNB has intervened in this period. In our view, we may have last seen the central bank in the market in late September. However, we think the total intervention bill has reached CZK25.6bn since mid-May last year, roughly 16% of the CNB's FX reserves, and today's numbers won't change that. On the FX front, the key will be which direction EUR/USD goes and regional factors won't do much about it. After yesterday's 1.9% depreciation, the main focus today will be on Hungarian forint. Yesterday's move has certainly eased the pressure on heavy long positioning, but that may not mean the end of the upward journey. In our view, the Hungarian forint has gone too far and our model linked to EUR/USD indicates levels more around 392 EUR/HUF. However, the US dollar move will be decisive factor today. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ECB cheat sheet: Difficult to pull away from the Fed

EUR/USD Drop Below 1.0700$ And GBP/USD Drop To 1.967$, The Aussie Pair Holds Above 0.69

Kamila Szypuła Kamila Szypuła 07.02.2023 14:48
The US dollar was mixed against its major trading partners early Tuesday - up against the euro and pound, down against the yen and the Canadian dollar. Today, Fed head Powell will speak. Powell will have to reconcile last week's decision by the Federal Open Market Committee to slow the pace of interest rate hikes with the exceptionally strong employment data for January released on Friday. In addition to Powell, Fed Vice Chairman for Supervision, Michael Barr, is set to speak at 14:00 ET. For the rest of the week there will be Fed officials. USD/JPY USD/JPY is rising after the US Fed raised interest rates by 25 basis points last week, and Chairman Powell said the central bank could deliver a few more rate hikes to bring inflation down to target. Additionally, reports that Bank of Japan Vice Governor Masayoshi Amamiya could replace the current Haruhiko Kuroda as central bank governor provided some support for USD/JPY as the BoJ's ultra-easy policy is expected to continue. USD/JPY is under some selling pressure on Tuesday and pulls some of the previous day's gains down to around 133.00, a monthly high. After the pair fell below 132.00, it is currently holding just above 132.0190. EUR/USD The EUR/USD pair extended its decline to a new three-week low below 1.0700 as demand for the US dollar prevails ahead of US Federal Reserve (Fed) President Jerome Powell's speech. Investors await speeches from ECB officials and FOMC chairman Jerome Powell. During the European morning, Germany published data on industrial production in December, which fell by 3.1% over the month and by 3.9% a year earlier, much worse than expected. The United States will publish a balance of trade in goods and services in December, which is expected to show a deficit of USD 68.5 billion. Continuing its decline, EUR/USD dropped below 1.0700 to 1.0694 and looks set to drop further. Read next: The Court In Munich Decided In Favor Of BMW| FXMAG.COM GBP/USD Sterling hit a new monthly low against the US dollar on Tuesday as investors expect the Bank of England (BoE) to end and possibly reverse its monetary tightening cycle soon, while the US Federal Reserve may hold interest rates higher for longer. Investors await further comments from the Bank of England and preliminary UK Gross Domestic Product (GDP) data. GBP/USD came under bearish pressure again and hit a month-low below 1.2000 on Tuesday. Despite a slight improvement in risk sentiment, the US dollar holds its ground and weighs heavily on the GBP/USD pair. AUD/USD The Australian dollar rose high after the RBA raised its cash rate target to 3.35% from 3.10%. Since the first increase in May 2022, a total of 325 basis points have been added. The Australian dollar gained above $0.69, bouncing back from monthly lows following the RBA decision. The RBA said in an accompanying statement: "The board expects further rate hikes will be needed in the coming months to ensure inflation returns to target and that this period of high inflation is only temporary." Following the RBA decision, the Aussie Pair holds above 0.69 but the pair has lost momentum and is closer to 0.6900 than close to 0.6930. Source: finance.yahoo.com, investing.com
Saxo Bank Podcast: A Massive Collapse In Yields, Fed's Tightening Cycle And More

Fed Policymakers Expect To Deliver A Couple More Interest Rate Increases

Jakub Novak Jakub Novak 07.02.2023 15:20
Market participants are waiting for another speech by Fed Chair Jerome Powell, especially his comments on the recent labor market report. Federal Reserve Bank of Atlanta President Raphael Bostic said yesterday that a strong January jobs report raised the possibility that the central bank would have to lift interest rates higher than previously anticipated. Economy If the economy keeps growing, "It'll probably mean we have to do a little more work," Bostic said. "And I would expect that that would translate into us raising interest rates more than I have projected right now." According to Bostic, his base case remains for rates to reach 5.1%, in line with the median of policymakers' December forecasts, and stay there throughout 2024. A higher peak could be reached through an additional quarter-point hike beyond the two currently envisioned. GDP Notably, the latest GDP data for the 4th quarter turned out to be well above economists' forecasts and was revised upwards. This allows policymakers to believe that the US economy is relatively strong. Thus, it will be able to survive much higher interest rates than the current ones. This is necessary in order to quickly bring inflation back to the Fed's target of 2.0%. After that, it will be possible to start cutting rates and pumping up the economy with cheap money, developing business, investments, and companies. In January, the economy added 517,000 new jobs, and the unemployment rate dropped to 3.4%, the lowest level since May 1969. Last week, the Federal Open Market Committee raised the short-term federal funds rate by 25 basis points, or 0.25%, to a target range of 4.50% to 4.75%. This move was taken immediately following the December meeting, when the rate was raised by only 0.5%, after four aggressive hikes by 75 basis points before. Raphael Bostic  Raphael Bostic also said that officials needed to understand whether the jobs report was "anomalous" or not. The committee could consider returning to the 50 basis-point increase if necessary. The president of the Federal Reserve Bank of Atlanta did not rule out that economic figures for the next quarter could be stronger than expected, adding that the focus was on an imbalance of supply and demand. Fed Chairman Jerome Powell According to Fed Chairman Jerome Powell, policymakers expect to deliver a couple more interest rate increases before putting their aggressive tightening campaign on hold. He also warned that in order to further ease price pressures, the labor market would have to suffer a bit.  EUR/USD  From a technical point of view, the EUR/USD pair is trading under strong downward pressure. Nobody believes that the European Central Bank will keep its monetary policy tight. To halt the slide, the price needs to consolidate above 1.0720. In this case, the pair will most likely rise to the 1.0770 area. A breakout of this level will make it possible to climb to 1.0800 and then 1.0830. If the price breaks through the support level of 1.0720, the volume of short positions will increase further. Thus, the EUR/USD pair will dip to 1.0680 and probably the low of 1.0650. GBP/USD  As for the GBP/USD pair, after two days of losses, it entered a sideways range. To regain control of the market, buyers need to push the price above 1.2070. If the price breaks through this resistance level, the pair will be able to recover to the 1.2140 area. In this case, the British pound may extend gains, heading for the 1.2200 area. Alternatively, the trading instrument will come under pressure again if bears take control of 1.2010. This will bring the GBP/USD pair back to the levels of 1.1950 and 1.1880. Relevance up to 12:00 2023-02-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334397
Expect the ECB to keep increasing rates at the short-term, at least until the summer

German Industrial Production Decreased, Which Is Bad News For The Rest Of The Eurozone

Kenny Fisher Kenny Fisher 07.02.2023 15:28
The euro has fallen for three straight sessions and has extended its losses on Tuesday. Earlier in the day, EUR/USD fell below the 1.07 line for the first time since Jan. 23. Eurozone data disappoints German and eurozone numbers have been soft this week, adding to the euro’s woes. Eurozone retail sales fell 2.7% in December, worse than the estimate of -2.5% and well off the November read of 1.2%. German Industrial Production came in at -3.2% in December, down from 0.4% in November and below the expectation of -0.6%. Germany is the locomotive of the bloc but the engine is stuttering, which is bad news for the rest of the eurozone. GDP in Q4 contracted by 0.2%, retail sales for December slumped by 5.3% and Manufacturing PMI remains mired in contraction territory. The US dollar received a much-needed boost from the January nonfarm payroll report, as the 517,000 gain crushed expectations. There are no major releases out of the US today, but Fed Chair Powell will participate in a panel discussion. If Powell strikes a hawkish tone, the US dollar could extend its gains. There are a host of Fed members speaking this week, and if they reiterate the “higher for longer” stance that the Fed continues to embrace, the US dollar could continue to move north. How will the Fed react to the stellar employment report?  Fed member Mary Daly called the employment release a “wow number” and said that the Fed’s December forecast of a peak rate of 5.1% was a “good indicator” of Fed policy. With the benchmark rate currently at 4.5%-4.75%, we’re likely looking at two more rate hikes, exactly what Jerome Powell said at the FOMC meeting last week. The spike in job creation has raised hopes that the Fed can pull off a “soft landing” and there is even talk on Wall Street of a “no landing” which would mean that a recession could be avoided. Read next: EUR/USD Drop Below 1.0700$ And GBP/USD Drop To 1.967$, The Aussie Pair Holds Above 0.69| FXMAG.COM EUR/USD Technical 1.0758 is a weak support line, followed by 1.0633 There is resistance at 1.0873 and 1.0954 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
ECB cheat sheet: Difficult to pull away from the Fed

The EUR/USD Pair Is Trying To Break Through The Range Again

InstaForex Analysis InstaForex Analysis 08.02.2023 08:15
Yesterday, the euro consolidated under the MACD indicator line on the daily chart. It nearly closed the day at the opening level, but the shadows worked out the target levels of support and resistance. However, the lower shadow did not reach 1.0660, but it is possible to be mistaken in calculating the level. The main thing is that the upper shadow has retested the MACD line, thus meeting the minimum technical requirement for renewing the downtrend, to the next target support at 1.0595. The signal line of the Marlin oscillator is reversing upward, which may be a sign that price will once again return to the 1.0758/87 range. Probably, with an attempt to go above it (a false breakout). On the four-hour chart, the price rolled back a bit after crossing 1.0758, now it is trying to break through the range again. The ascending Marlin oscillator is helping it in this process. But the oscillator, when it reaches the zero line, will get weaker, so the price, once again feeling the strength of the resistance, will turn down. If Marlin, after all, penetrates into the green zone, the price will climb above 1.0787, and the growth will end at the last line of the bears' defense at 1.0840, the MACD line.   Relevance up to 03:00 2023-02-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334454
All Eyes On Capitol Hill, Jerome Powell Will Appear Before The Senate Banking Committee

The Fed Chief Made It Clear That Friday's Jobs Report Would Not Change The Central Bank's Approach To Future Interest Rate Hikes

InstaForex Analysis InstaForex Analysis 08.02.2023 08:29
The EUR/USD pair suddenly fell, having tested the 6th figure. Although traders failed to hold steady in this price area, market participants are showing growing interest in the U.S. currency. The greenback was not only supported by Friday's strong Nonfarm Payrolls report, but also by Federal Reserve Chairman Jerome Powell, who sounded some rather hawkish signals on Tuesday. The Fed chief spoke at the Economic Club in Washington, D.C., where he commented on the latest economic data and also spoke on inflation. Powell's ambivalent message The pair initially surged by nearly 100 points amid the general weakening of the U.S. dollar. It reacted this way because Powell mentioned that the disinflationary process has begun in America. He did however clarify that the process, in particular, is observed in goods but hasn't kicked in the service sector yet. The market interpreted these words against the greenback, as Powell's rhetoric was "final" in the context of a possible hawkish rate hike. Such assumptions were reinforced after the Fed chief reacted rather calmly to January's Nonfarm payrolls, making it clear that Friday's jobs report would not change the central bank's approach to future interest rate hikes. In the backdrop of such conclusions, the EUR/USD jumped from 1.0690 to the target of 1.0770 within an hour. But Powell's follow-up rhetoric allowed the bears to test the 6th figure again. Long, long way to go After acknowledging the fact that the U.S. began the disinflationary process, Powell noted that it may take a long time for the consumer price growth rate to slow down. As part of his speech, he highlighted that getting inflation down to 2% will take a "significant period of time." In this context, he used phrases that were different in form (but identical in meaning) - that the Fed would take "a considerable period of time" and that it was "still early in the process" in general. But in the end, Powell was very specific about the timing, which is uncharacteristic of him, stating that inflation in the U.S. won't slow down until 2024. He said the following verbatim: "My guess is it will take certainly into not just this year, but next year to get down close to 2%." Powell expanded on this point by making two other important points. First, he said that interest rates will continue to rise. Since rates have not yet reached an acceptable level for fighting inflation (without specifying what level of the rate is "acceptable"). Secondly, he reassured the markets that the Fed would have to hold policy at a restrictive level for "some time". Again, Powell also did not specify how long the Fed intends to keep the rate at the peak level. However, despite the wording (except for the reference to 2024), Powell made it clear that the U.S. central bank is not going to curtail its hawkish strategy in the foreseeable future. In practice, that means the Fed will increase the rate by 25 points not only in March, but probably at the next two meetings as well. Investors now place a 71% probability of a 25-point rate hike at the Fed's May meeting, according to the CME's FedWatch tool. The likelihood of another round of hikes at the June meeting is estimated at 35% (which is not insignificant given the slowdown in U.S. inflation). Conclusions Despite the fact that bears failed to settle in the area of the 6th figure, bearish sentiment still dominates the pair. As a matter of fact, Powell ruled out the end of the current tightening cycle (thereby, denying the rumors) and announced further steps in the direction of the range of 5.25-5.50%. At the same time, the European Central Bank did not ally itself with the euro at the end of its February meeting. ECB President Christine Lagarde, while announcing the realization of the 50-point scenario in March, simultaneously cast doubt on further rate hikes. According to her, after the March decision "we will then evaluate the subsequent path of our monetary policy,". Euro-area headline inflation has decelerated for the third straight month, and at a fairly brisk pace (it came in at 8.5% in January against a forecast of 9.0%). If the core CPI in February-March repeats the trajectory of the headline inflation, a "post-March" rate hike will be highly questionable. From a technical point of view, the pair is between the middle and bottom lines of the Bollinger Bands indicator, as well as under the Tenkan-sen lines. According to Tuesday's results, the bears were unable to push through the support level of 1.0700 (bottom line of the Bollinger Bands on the D1). If the bears overcome this barrier, the next target will be 1.0600, which corresponds to the upper limit of the Kumo cloud on the same chart.   Relevance up to 00:00 2023-02-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334448
The EUR/USD Pair Edged Lower As Expected

The EUR/USD Pair Edged Lower As Expected

Torben Melsted Torben Melsted 08.02.2023 08:35
EUR/USD edged lower as expected and almost touched our target at 1.0650 as the low was seen at 1.0669. This is close enough to complete wave C/ of 4/ and we are now looking for wave 5/ higher towards 1.1391 and maybe even higher than that. We also acknowledge that as long as minor resistance at 1.0767 is able to cap the upside a final decline lower to test our 1.0650 target remains a possibility. It's not necessary, but can't be excluded. Only a break above minor resistance at 1.0767 will confirm that wave 4/ has been completed and wave 5/ higher to 1.1391 is in motion.   Relevance up to 06:00 2023-02-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311795
The EUR/USD Pair Consolidated In The Downward Trend Area

The EUR/USD Currency Pair Has Pulled Off The Lows

Oscar Ton Oscar Ton 08.02.2023 08:40
Technical outlook: EURUSD dropped through the 1.0670 low during the early New York session on Tuesday before finding support. The single currency pair has pulled off the lows since then and is seen to be trading close to 1.0730 at this point in writing. The price action has produced a Doji on the daily chart with room still left on the south side towards the 1.0481 initial support. EURUSD's drop from 1.1020 still looks corrective, so the instrument is unfolding its initial leg lower. Intraday pullbacks remain possible but prices should likely stay below the 1.1020 swing high. A larger-degree corrective decline could be underway towards 1.0500 and up to the 1.0100-20 area before the trend resumes higher again. The bears eyeing below 1.0481 in the near term to confirm a deeper correction. EURUSD might target the Fibonacci 0.618 retracement of the rally between 0.9535 and 1.1020-25 which is seen passing through the 1.0100-20 range as projected on the daily chart. A high probability remains for a bullish turn if prices reach those levels. A potential Fibonacci convergence could be seen close to the 1.0100-20 mark, which will be displayed in the coming sessions. Trading idea: A potential bearish drop against 1.1025 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311803
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The EUR/USD Pair Reacted Quite Violently To The Fed Chairman's Speech

Paolo Greco Paolo Greco 08.02.2023 08:43
M5 chart of EUR/USD On Tuesday, EUR/USD was bearish for most of the day. The decline was systematic and slow, which is not surprising since the market has already recovered from last week's events. However, when Federal Reserve Chairman Jerome Powell started his speech at the economic forum in Washington, the market reacted rather wildly. In fact, Powell said nothing new. He only reiterated that it could take a long time for inflation to return to 2%. He also repeated his earlier rhetoric that the Fed rate would continue to rise and that the "period of high rates" would take long. So we did not hear anything new, but the pair reacted with a 100 pip growth and suddenly a 100 pip drop. I believe that the correction against the four-day decline started, and Powell's speech was just the catalyst. Generally speaking, Powell's stance remains hawkish, so it would be logical to see a new strengthening of the dollar. As for trading signals, at the European trading session, the pair rebounded twice from 1.0736, afterwards it fell to 1.0669. Traders could earn about 40 pips on this deal. You could have opened two deals, but the first one closed at Stop Loss breakeven. The rebound from 1.0669 could also be priced, and no matter when you closed the position, there was still a profit of at least 30 pips. COT report The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since September. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. In the reporting week, non-commercial traders opened 9,500 long positions and 2,000 short ones. The net non-commercial position grew by 7,500. The number of long positions exceeds that of short ones by 134,000. It now remains to be seen how long large traders will be bullish. From the technical point of view, a bearish correction should have already occurred. Traders will unlikely stay bullish for another 2 or 3 months. Even the net non-commercial position shows that it is time for a correction. In total, there are 52,000 more long positions now among all groups of traders (732,000 vs 680,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD continues to fall sharply. I already warned you that the first days of the week could be moved by momentum, and yesterday the market showed that it is ready to start a bit of a bullish correction. So we might see an uptrend before the end of the week. Macroeconomics and fundamentals are still scarce. On Wednesday, important levels are seen at: 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, and also Senkou Span B lines (1.0917) and Kijun Sen (1.0850). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On February 8, there are no important events in the EU and the US. The Fed will have a new batch of speeches and the stance is unlikely to differ from what Powell said. We reiterate: the market clearly understands what to expect from the Fed in the coming months. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 06:00 2023-02-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334462
Gold Trading Analysis: Technical Signals and Price Movements

FX Daily: Dodged bullet

ING Economics ING Economics 08.02.2023 09:14
Jay Powell did not rock markets as he acknowledged more strong data can imply a higher peak rate but still appeared to be hanging on to the disinflation story. The dollar still faces moderate upside risks this week, but stabilisation looks more likely today. Separately, Poland may confirm stable rates, with the zloty set to further underperform the region Jerome Powell at the Economic Club of Washington USD: No hawkish surprise by Powell Yesterday’s speech by Federal Reserve Chair Jerome Powell did not include the hawkish surprise some had feared. Ultimately, Powell probably delivered the minimum amount of pushback against dovish speculation required by the strong January jobs report. As we observed yesterday, there was ample room to surprise on the hawkish side, but it clearly seems that Powell is reluctant to drop his relatively sanguine stance on the disinflation narrative. Risk assets probably dodged a bullet yesterday, and the dollar momentum softened for the first time in three days. So, what now for the dollar? We think markets may feel relatively comfortable with the current pricing for a 5.15% peak rate for now, even though risks are skewed towards another 10bp of tightening being added into the curve. This means that the dollar’s upward correction may have a bit more to run, but we doubt this will morph into a sustained USD uptrend from this point on. If nothing else because Powell and other Fed speakers indicated that more evidence from the data is needed to shift to more hawkish guidance. So once again, it will all be about data. Today, the US calendar is rather quiet on this front but there is plenty of Fedspeak. We’ll hear from John Williams, Lisa Cook, Raphael Bostic, Neel Kashkari and Christopher Waller. There is room for the general Fed rhetoric to stay on the hawkish side and while we think the absence of key data can favour some stabilisation in the dollar today, risks are skewed towards another small leg higher in the greenback. Francesco Pesole EUR: EUR/USD mostly a dollar story Yesterday’s decision by the European Central Bank to cut rates on government deposits to encourage fund withdrawals should not have strong implications for the euro for the moment. The policy discussion remains much more central, with Isabel Schnabel delivering hawkish statements yesterday and warning against the risk of inflation becoming entrenched in the medium term. The process of hawkish re-tuning by ECB officials after last week’s market reaction to President Christine Lagarde's press conference looks likely to continue, although it appears to have been largely factored in by markets. There is only one speaker scheduled today, Klaas Knot (a hawk) and no interesting data releases in the eurozone. EUR/USD broke below 1.0700 yesterday before rebounding. We think that further explorations below 1.0700 are possible in the coming days, but it looks like they will mostly depend on dollar moves. Francesco Pesole GBP: Don't read too much into a weaker EUR/GBP Yesterday’s comments by MPC member Jon Cunliffe were mostly focused on paving the way for a “digital pound”, rather than on monetary policy. Despite being a rather interesting discussion for the future, this is not impacting the pound’s exchange rate at the moment. EUR/GBP is pressing through the 0.8900 support this morning, but we doubt this is the start of a longer downtrend in the pair. The Bank of England’s pushback against dovish rate speculation is happening in tandem with the ECB and we don’t see a key catalyst for the two currencies to dramatically diverge in the current environment. The UK data calendar is empty today, and there are no scheduled BoE speakers. Tomorrow, Governor Andrew Bailey will testify to parliament.  Francesco Pesole PLN: NBP to confirm stable rates Today we have a meeting of the National Bank of Poland (NBP) on the agenda. We expect rates to remain unchanged, as they have for the last four meetings. This is in line with market expectations and it is hard to expect any surprises. However, more interesting will be Governor Adam Glapiński's press conference, which we will see tomorrow. Looking ahead, the key to the next steps in monetary policy will be the inflation number for January, which will not be released until next week. Markets are currently pricing in the first rate cut for the September NBP meeting and nearly 100bp by year-end. We do not expect a rate change this year, but today's meeting is unlikely to change those expectations and we will have to wait until next week. In the FX market, the Polish zloty has moved to its weakest level since last October following the US dollar rally, and it is hard for us to find reasons to be positive at the moment, at least until the Court of Justice of the European Union's decision on FX mortgages. Until then, we cannot rule out EUR/PLN touching 4.80. In the short term, the rise in PLN market rates and improvement in the interest rate differential should stop further depreciation for now. Unless we see more pressure from the US dollar side, we believe the zloty will erase some of the recent losses and return to the 4.72-74 EUR/PLN range. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Is Gold Ready to Shine Again? US CPI and Fed Policy Insights

Gold’s Upside Is Likely Limited, Yesterday’s Speech From The Fed Chair Powell Was Hawkish

Swissquote Bank Swissquote Bank 08.02.2023 11:09
Another hawkish speech from the Federal Reserve (Fed) Chair Jerome Powell turned into a risk rally yesterday. Equities gained, and the bond yields fell. Fed Yet, yesterday’s speech from the Fed Chair Powell was hawkish. He said that the Fed may hike the rates more than what’s priced in if the jobs market remains unexpectedly strong. Stocks market The S&P500 still eased when Powell said they need ‘substantial evidence’ that inflation slowed, but finally, the index erased gains and ended the session by 1.30% higher. Nasdaq jumped more than 2%. The US 2-year yield eased and the US dollar first jumped, then eased. Zoom and Microsoft In individual stock news, Zoom jumped 10% on news that it will lay off 15% of its workforce, while Microsoft jumped 4% after the company unveiled its new ChatGPT-powered Bing! Forex The EURUSD tipped a toe below its latest bullish trend base, and below its 50-DMA yesterday, and the pair is just at the edge of bullish trend again this morning, with no guarantee that it won’t slide further. Cable rebounded before hitting its 200-DMA, at 1.1950, and is back above the 1.20 mark this morning. Read next: The Decline In Tech Valuations Continues To Hit SoftBank| FXMAG.COM Curde Oil BP shares price jumped nearly 8% to above our mid-term 500p target, after reporting report profit, dividend raise and share buyback, while crude oil jumped more than 4% as API revealed a 2-mio-barrel decline in US stockpiles. Watch the full episode to find out more! 0:00 Intro 0:28 Jerome says one thing, investors hear another thing 1:36 Market update 3:30 One bad, two good news 5:02 Zoom jumps 10% 5:37 Why Microsoft’s AI could be longer-lived than metaverse craze? 7.27 FX update 8:28 BP rallies on profits, oil jumps on US inventories 9:37 Gold’s upside is likely limited Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Powell #speech #inflation #jobs #USD #EUR #GBP #XAU #crude #oil #earnings #Dell #Zoom #layoffs #Microsoft #ChatGPT #Bing #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

Fed Officials Signaled That The Central Bank Still Has A Lot Of Work To Do

Jakub Novak Jakub Novak 08.02.2023 11:26
Euro continues to slump as risk appetite declined after Fed officials made another hawkish comment on Tuesday. Minneapolis Fed President Neel Kashkari said the explosive growth in jobs this January indicates that the central bank still has a lot of work to do as it is becoming increasingly difficult to get inflation back to 2.0%. Economy In short, interest rates will continue to rise and it is likely that it will peak at 5.4% instead of the previously expected 4.75%. Kashkari said they have a target and they know that raising rates can curb inflation, but it is not enough yet so they need to aggressively raise rates and cool the labor market to see a serious impact on the overheated economy. The labor market On Friday, the US Department of Labor reported that non-farm payrolls rose by 517,000 in January, almost triple the economists' expectations. It is the largest growth in the first month since 1946, not to mention it came despite the attempts of the Fed to use higher interest rates to correct the situation. Officials have repeatedly noted that there is an imbalance in the labor market with supply and demand. Average hourly pay also rose 4.4% in January. Kashkari's statement  Kashkari's statement that rates should be raised to 5.4% puts him in a more aggressive position compared to his fellow policymakers, who indicated in December that they see the peak at around 5.1%. The Fed has raised the benchmark federal funds rate eight times after inflation reached its highest level in more than 40 years. The most recent increase took place last week, which was by a quarter of a percentage point, the smallest since the policy tightening cycle began. However, inflation, although falling, is still well ahead of the Fed's target. Thus, policymakers continue to signal further increases at upcoming committee meetings. An example of this is Atlanta Fed President Raphael Bostic, who made a similar suggestion a day earlier. Read next: The Decline In Tech Valuations Continues To Hit SoftBank| FXMAG.COM EUR/USD Talking about the forex market, there is quite a lot of pressure on EUR/USD as no one believes that the ECB will be able to maintain its hawkish policy. To stop the bear market, traders must keep the quote above 1.0720. That will spur a rise to 1.0770 and possibly, to 1.0800 and 1.0830. In case of a decline below 1.0720, pressure will increase, which will lead to a further fall to 1.0680 and 1.0650. GBP/USD In GBP/USD, the sideways trend remains, so buyers need to push the quote above 1.2070 to regain their advantage. Only the breakdown of this resistance will push the pair to 1.2140, after which it will be possible to head towards 1.2200. But in the event that pressure returns and bears take control of 1.2010, the pair will plunge to 1.1950 and 1.1880.   Relevance up to 08:00 2023-02-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/334492
Bank of England is expected to hike the rate by 25bp. Kelvin Wong talks Euro against British pound

The GBP/USD Pair Climbed To Around 1.2100, The EUR/USD Pair Is Above 1.0700

Kamila Szypuła Kamila Szypuła 08.02.2023 13:18
The dollar fell as Powell spoke. The dollar fell Wednesday after Federal Reserve Chairman Jerome Powell refused to significantly tighten his tone on inflation in a closely watched speech, despite last week's strong employment data. USD/JPY The yen tumbled earlier this week as robust US jobs data suggested the Fed had more room for interest rate hikes. Recently, Japan's central bank countered speculation about another policy adjustment by keeping interest rates very low and leaving its yield control policy unchanged. As things stand, it seems that the market is having a hard time assessing the way forward as strong US data brings constant warnings of more hikes, which usually support USD valuations. At the same time, Japan is considering nominations for the top BoJ position for April, as the likelihood of policy normalization at the ultra-dovish Bank of Japan by the new incumbent cannot be ruled out. In the morning, the USD/JPY pair started rising towards 131.30. USD/JPY traded above 131.00 for the following hours of trading but fell below in the European session and is now trading at 130.6910. EUR/USD EUR/USD rebounded towards 1.0750 on Wednesday after falling below 1.0700 late Tuesday but struggled to gain further momentum. In the absence of high-impact data releases, investors will pay close attention to comments from Fed officials. Currently, the EUR/USD pair has fallen below this level, but slightly to the level of 1.0740. On Tuesday, mixed comments from European Central Bank (ECB) officials made it difficult for the euro to gain an advantage over its rivals. ECB politician Francois Villeroy de Galhau said they are not very far from the peak of inflation. On a hawkish note, policymaker Joachim Nagel reiterated that further significant interest rate hikes would be needed, adding that ECB rates were not restrictive yet. Finally, Isabel Schnabel, member of the Executive Board of the ECB, took a neutral tone. Federal Reserve Chairman Jerome Powell said US interest rates may need to be raised while the process of "disinflation" appears to be underway. Read next: Douyin Wants To Enter The Food Delivery Industry| FXMAG.COM GBP/USD At the end of Tuesday, FOMC Chairman Jerome Powell also confirmed good labor market data and reiterated that they will probably have to make further rate hikes. On an optimistic note, Powell said he expected 2023 to be "a year of significant decline in inflation." This remark made it harder for the US Dollar Index to maintain its upward momentum and helped GBP/USD recover some of its losses this week. From the UK's perspective, the strike action remains a concern for the government and civil servants are planning to carry out another strike on March 15. Chancellor of the Exchequer Jeremy Hunt will present his fiscal plan on the same day and will be under additional pressure to possibly reassess inquiries about the pay settlement. Overall, it is bearish for the pound as strike action disrupts the UK economy and challenges UK leadership. GBP/USD pair gained momentum and climbed to around 1.2100 on Wednesday. Currently, the GBP/USD pair is trading above 1.2090$. AUD/USD The Aussie pair is defending support at 0.6950 with the US Dollar generally subdued so far. The Aussie pair surged above 0.6990 today but failed to maintain momentum and is currently trading above 0.6980. Yesterday the RBA raised rates by 25 bp. Source: finance.yahoo.com, investing.com
Rates Spark: Crunch time

The EUR/USD Pair Has Two Unsuccessful Attempts To Rise Above The Resistance Level

InstaForex Analysis InstaForex Analysis 09.02.2023 08:03
The EUR exchange rate changed a bit at the end of yesterday, there was a weak test of resistance 1.0758. The current support is the balance indicator line on the daily chart. The Marlin oscillator is in no hurry to perform its leading role, lying in the horizon and waiting for a signal from the price. By its nature, the price settles under the resistance of the price level and the MACD line, as a consequence, we might receive a signal to strengthen the decline. The targets are the levels: 1.0660, 1.0595. On the four-hour chart, the signal line of the Marlin oscillator has approached the zero line, the oscillator is released from the oversold area, and now it is ready for a new decline. Here we also see two unsuccessful attempts to rise above the resistance 1.0758. In case we suddenly encounter a sudden breakout, the MACD line near 1.0815 could be the limit of the correction.   Relevance up to 03:00 2023-02-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334586
FX Daily: Euro’s attractiveness on the rise

The EUR/USD Pair Is Now On The Way To Completing Its First Bearish Wave

Oscar Ton Oscar Ton 09.02.2023 08:17
Technical outlook: EURUSD slipped through 1.0709 late on Wednesday before finding interim support. The single currency pair is seen to be trading close to 1.0730 at this point in writing as it continues to drift within a 90-pip range before breaking out. The bears are still left with some more room to drag towards 1.0540 at least. Ideally, they are aiming to break below the initial support at 1.0481. EURUSD has completed its higher-degree rally between 0.9535 and 1.1020-25 as seen on the daily chart presented here. The instrument is expected to produce a meaningful corrective decline towards 1.0480 and up to 1.0100-20 levels in the next few weeks. Once complete, the bulls might be back in control pushing prices above the 1.1020-25 area. EURUSD is now on the way to completing its first bearish wave, which started from the 1.1020-25 zone earlier. It is expected to terminate just below the 1.0500 handle, taking out support at 1.0481 before producing a pullback rally. The third wave lower is then expected to terminate close to the 1.0100-20 area, which is the Fibonacci 0.618 retracement of the earlier rally. Trading idea: Potential bearish move against 1.0100-20 Good luck! Relevance up to 04:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311993
Rates Spark: Nothing new on the dovish front

The EUR/USD Pair Should Correct For A Bit

Paolo Greco Paolo Greco 09.02.2023 08:28
M5 chart of EUR/USD On Wednesday, EUR/USD traded mainly sideways. Fundamental and macroeconomic backgrounds were completely absent on this day, so traders had nothing to react to. I've said before that this week could be boring. In fact, besides the sharp surge during Federal Reserve Chairman Jerome Powell's speech on Tuesday evening, we haven't seen any normal moves yet. First, the pair was falling by momentum, then it just stopped falling and now it is trading sideways. So this kind of movement may persist till the end of the week since the amount of reports and events will obviously not increase. I still believe that the pair should correct for a bit (or trade flat for a while), and after that it will go back to falling. The euro is still overbought and a new uptrend will be formed after a significant bearish correction. Speaking of Wednesday's trading signals, it was not appealing at all. Since the pair was flat for most of the day, the signals were formed accordingly. All of them are near 1.0736. Since all of them were false, traders could try to use only the first two. You could receive about 15 points on the short position, and nothing on the long position, since the price passed 15 points to the upside and the Stop Loss has triggered at breakeven. Not the best trading day, but it could've been much worse. COT report The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since September. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. In the reporting week, non-commercial traders opened 9,500 long positions and 2,000 short ones. The net non-commercial position grew by 7,500. The number of long positions exceeds that of short ones by 134,000. It now remains to be seen how long large traders will be bullish. From the technical point of view, a bearish correction should have already occurred. Traders will unlikely stay bullish for another 2 or 3 months. Even the net non-commercial position shows that it is time for a correction. In total, there are 52,000 more long positions now among all groups of traders (732,000 vs 680,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD continues to fall. I already warned you that the first days of the week could be moved by momentum, afterwards there were several attempts to correct, but so far the pair is trading more flat than a correctional movement. On Thursday, important levels are seen at: 1.0485, 1.0581, 1.0658-1.0669, 1.0762, 1.0806, 1.0868, 1.0938 and also Senkou Span B (1.0917) and Kijun Sen (1.0804). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events in the EU and the US on February 9, unless you consider the trivial Jobless claims report. Today, the pair may remain inside the 1.0669-1.0762 channel. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 05:00 2023-02-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334594
Small factors combine to pressure credit

Analysis Of The EUR/USD Pair Movement

Torben Melsted Torben Melsted 09.02.2023 08:31
As long as minor resistance at 1.0767 is able to cap the upside, a final spike lower to 1.0650 can't be excluded, but the odds are decreasing for this outcome. So, we will keep our eyes on the minor resistance for confirmation that waves C and 4 have been completed and wave 5 is in progress for a rally towards 1.1391. A failure to break above 1.0767 followed by a break below minor support at 1.0709 will call for the final spike to 1.0650 to complete waves C and 4. Relevance up to 07:00 2023-02-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/312023
FX Daily: Riksbank needs to stay hawkish today

FX Daily: Riksbank needs to stay hawkish today

ING Economics ING Economics 09.02.2023 08:56
The Riksbank should hike by 50bp today, in line with expectations. We think it is necessary to sound hawkish to help restore confidence in the krona, despite a deteriorating economic and property market backdrop. Meanwhile, high-beta FX is on the rise this morning, but the rally may be premature given the scope for more hawkish Fed rate repricing Stefan Ingves is the Governor of the Swedish Central Bank USD: May be too early to jump back on short-dollar bets After only moderately hawkish remarks by Federal Reserve Chair Jerome Powell on Tuesday, other Fed officials delivered more aggressive comments on the prospects for tightening yesterday. Christopher Waller, Lisa Cook, John Williams and Neel Kashkari all pointed at either the need for rates to go beyond 5.0% or reiterated the higher-for-longer narrative. All this prevented a recovery in risk sentiment yesterday and helped the dollar build a temporary floor. This morning, European and US equity futures point to a positive open, and high-beta currencies are in demand. This might be a sign that markets are seeing this moment as the peak in the Fed’s hawkish communication and are now eyeing opportunities to re-enter short-USD pro-cyclical positions at more attractive levels.   However, there is still some room for USD rates to absorb further hawkish repricing in rates expectations, and the rebound in risk currencies may be premature. Markets are pricing in a 5.13% Fed peak rate as of this morning, so still not fully factoring in another hike beyond March. Around 50bp of easing in the second half of the year remains in the price, which reflects both disinflation and recession risks in the US. Probably, the aim of hawkish Fed speakers at this stage is to convince markets that a) rates can go at least to 5.25%; b) that rate cut speculation is misplaced. It is fair to expect that more evidence from data will be required to convince markets of another 25bp after March. Jobless claims are the highlight of the day in the US today, and tomorrow’s University of Michigan sentiment index is the last piece of data in the US for the week. We think that a more patient trading environment could return after this morning’s risk-on mood and last until Tuesday’s pivotal US inflation report. In FX, it appears too early for the dollar to re-enter a sustained downtrend: local stories may instead take centre stage.   Francesco Pesole EUR: German inflation tests ECB hawkish comments German inflation numbers released this morning surprised on the downside. Headline CPI grew 8.7% year-on-year, lower than the forecasted 8.9%. The EU-harmonised print showed a deceleration from 9.6% to 9.2%, while consensus expectations were for a return to double-digit inflation. This will probably test the ability of the European Central Bank to continue pushing back against the bullish reaction in the rates market after last week’s ECB meeting. We’ll hear from Governing Council members Francois Villeroy, Joachim Nagel, Pablo Hernández De Cos and Luis de Guindos today. EUR/USD may struggle to climb back to the 1.0800 handle just yet. Elsewhere in Europe, keep an eye on Bank of England Governor Andrew Bailey as he testifies before parliament. Like in the eurozone, we have seen a good deal of hawkish commentary in the UK following last week’s BoE rate decision, and markets likely expect any policy comments today to fall on the hawkish side of the spectrum too. Weakness in the euro is endorsing the recent drop in EUR/GBP, and 0.8800 might be tested in the near term. Still, we don’t see the pair’s depreciation as sustainable given the grim economic outlook for the UK and no clear policy divergence.   Francesco Pesole SEK: A big day for the Riksbank The Riksbank and its new Governor Erik Thedeen are facing a historic challenge. The Swedish economic outlook looks very bleak, with both GDP and high-frequency data pointing down and the housing market having already corrected 15%. On top of that, inflation remains above 10% and the krona is close to all-time lows against both the euro and in trade-weighted terms. Today’s rate announcement and monetary policy report is of huge importance for the krona. We expect, in line with consensus, a 50bp rate hike today (here is our full preview). This outcome is fully priced in, but more uncertainty lies around the forward-looking tone and rate projections. We think the Riksbank has all the interest in sounding hawkish at this stage, despite acknowledging the risks related to the housing slump and high inflation. Rate projections from November see a peak below 3%: we think today’s revision will take it to at least the 3.25-3.50% region. With wage negotiations in Sweden about to end and a tendency for Swedish data (especially CPI) to be rather volatile, patience should be the name of the game for the Riksbank now. Even in the face of a clearly worsening economic outlook, the Bank should focus on a) halting the slump in the krona; b) keeping inflation expectations in check. To us, this appears a necessary step to restore confidence in Swedish markets. Then, data will undoubtedly need to come to the rescue, but with no policy meetings until the end of April, there is definitely some time for the economic and inflation picture to improve. We think a hawkish 50bp hike by the Riksbank can prevent another leg higher in EUR/SEK: a primary goal is to create a cushion for the pair to the all-time March-2009 11.68 highs. With markets currently attaching around 2.5-3% of risk premium to EUR/SEK due to concerns about the Swedish economy, SEK is not lacking room for recovery (our base case is still for a drop below 11.00 in EUR/SEK by the summer). We doubt this will happen in the near term though, and despite a convincing hawkish message by the Riksbank today, restoring confidence in the krona will require help from data. EUR/SEK may trade around 11.20-11.40 in the coming weeks, and that should already be a welcome development for the Riksbank. Francesco Pesole CEE: NBR's turn to confirm end of hiking cycle After the National Bank of Poland (NBP), today it is the turn of the National Bank of Romania (NBR) to confirm what we believe is the end of the hiking cycle. We don’t expect any change in the key rate level, but a mildly cautious tone could be employed to balance the obvious easing of monetary conditions since the last meeting. On FX side, the record demand for ROMGBs is having a positive impact on the Romanian leu, which has been below the NBR's intervention level most of the time since the beginning of the year. Massive inflows into bonds have helped the RON to test levels below 4.90 EUR/RON several times. Plus, global conditions, led by falling gas prices and a higher EUR/USD, are positive for FX. On the local side, the FX implied yield remains attractive as well, fluctuating steadily in the 6.60-7.00% range for the 3M tenor, comparable to the Czech koruna and Polish zloty. However, given the NBR's solid track record of managing the RON, potential FX depreciation losses look limited, which gives a distinct advantage, especially against the Hungarian forint and Polish zloty. Thus, we continue to expect the RON to hold below the 4.90 EUR/RON level depending on further inflows into ROMGBs. As expected, the NBP left rates unchanged yesterday and the statement did not bring much new information. So the main focus will be on Governor Adam Glapinski's press conference today at 3pm local time. The main questions will be on what inflation numbers the NBP expect for January and February, when inflation is expected to peak, and whether the governor still believes in the possible year-end rate cut he mentioned last time. The Polish zloty stabilised yesterday, but market rates have been volatile in Poland this week, probably also due to the NBP meeting, and the zloty remains fragile. The governor's words are thus likely to determine the zloty's direction. On the one hand, we see market expectations still significantly more dovish than our forecast, on the other, the whole IRS curve is higher by about 20-30bp over the last month. Thus, we expect the zloty to maintain the current 4.73-4.75 EUR/PLN range. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Long-Term Yields Soar Amidst Hawkish Fed: Will They Reach 5%?

Weak Data From The German Economy Will Make It Difficult For The ECB To Make Excessive Interest Rate Hikes

Kenny Fisher Kenny Fisher 09.02.2023 13:11
The euro has posted strong gains on Thursday. EUR/USD is trading at 1.0749, up 0.57%. German CPI ticks higher German inflation came in at 8.7% y/y in January, up from 8.6% in December. On a monthly basis, CPI rose 1.0%, following a -0.8% reading in December. The report shows that German inflation remains high and it’s still too early to talk of a peak. The good news is that nasty double-digit inflation seems behind us, thanks in large part to lower energy prices due to a warm winter in Europe. The ECB raised rates by 50 basis points last week, bringing the cash rate to 3.0%. The cash rate remains well below that of all other major central banks – the Fed’s rate, for example, is at 4.75%. ECB policy makers have noted that core inflation, which is a more reliable gauge than headline inflation, remains stickier than expected. The central bank meets next on Mar. 16 and the markets have priced in a 50-bp hike. What happens after March is uncertain. The ECB could take a pause in order to assess the impact of its tightening cycle or it could continue hiking, perhaps in modest increments of 25 bp, until there is a clear indication that core inflation is coming down. ECB rate policy is primarily focused on taming inflation, but it must also keep an eye on the strength of the German economy, the largest in the eurozone. Recent data has been weak, which will make it harder for the ECB to deliver oversize rate hikes. German Industrial Production came in at -3.2% in December, GDP in Q4 contracted by 0.2%, retail sales for December slumped by 5.3% and Manufacturing PMI remains mired in contraction territory. The Fed paraded four policy makers on Wednesday, each of whom drummed the message that the fall in inflation was welcome but the fight was not yet over. Fed member Williams said that a restrictive policy stance could last for a few years until inflation dropped to the target of 2%. The markets may be listening more closely to the Fed since the blowout employment report on Friday, but continue to underestimate the Fed’s end game. The markets have priced in a terminal rate of 4.6%, while the Fed has projected a terminal rate of 5.1%. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM EUR/USD Technical EUR/USD is testing resistance at 1.0758. Above, there is resistance at 1.0873 1.0714 and 1.0633 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
InstaForex's Ralph Shedler talks Euro against Japanese yen

USD/JPY Is Below 131.00 Again, The Aussie Is Close To 0.70$

Kamila Szypuła Kamila Szypuła 09.02.2023 13:55
The US dollar hovered near the middle of recent ranges compared to majors on Thursday as investors scrutinized comments from many Federal Reserve officials. Overnight, four Fed speakers continue to send their hawkish message to the market. The consistent message is that further interest rate hikes are announced and that the interest rate will have to stay high for a long time. The employment data initially raised expectations that the Fed might return to aggressive monetary policy, but Powell did not lean in that direction in his speech. Investors will be keeping a close eye on the consumer price inflation data that comes out on Tuesday for additional guidance on the policy outlook. USD/JPY During the morning trading hours, USD/JPY held above 131.40 but failed to sustain momentum. USD/JPY has returned to levels below 131.00. EUR/USD EUR/USD maintained its upward momentum and extended its daily gain towards 1.0800 on Thursday. Earlier in the day, data from Germany revealed that the Harmonized Index of Consumer Prices (HICP) fell to 9.2% on an annualized basis in January from 9.6% in December. This reading was much lower than market expectations of 10%, but the negative impact of these data on the euro remained short-lived. With the major European stock indices opening much higher on Thursday, the EUR/USD rate began to rise. At the time of publication, the German DAX 30 and Euro Stoxx 50 indices were up over 1% during the day. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM GBP/USD The Bank of England is concerned that UK inflation will remain stubbornly high. This suggests that the BoE has growing uncertainty about whether further policy tightening is warranted and that the current cycle of rate hikes may be coming to an end. The BoE has hiked interest rates 10 times since December 2021, the last being a week ago, as it battles to bring down sky-high inflation without causing a deep recession. Bank of England Governor Andrew Bailey is joined today by MPC members Huw Pill, Professor Silvana Tenreyro and Professor Jonathan Haskel in the Treasury Committee (TSC). So far, they have been asked whether the central bank is lagging behind in the fight against inflation. So far, the statements of BoE representatives suggest that the MPC is still worried about persistently high inflation and that the British economy may face a prolonged period of weakness. GBP/USD continued to move higher and hit a new six-day high above 1.2150 on Thursday. Cautious comments from BOE policymakers on the outlook for inflation and a risk-prone market environment help the pair keep their balance. On Friday, the UK's Office for National Statistics will publish estimate GDP figures for December 2022. AUD/USD The risk-sensitive Australian dollar gained against gains from US equity futures and the more hawkish Reserve Bank. AUD/USD rebounded strongly from 0.6920 in the Asian session. The New Zealand dollar also appreciated. Australians were rather dissatisfied after the last RBA meeting, which may point to further rate hikes in the future due to inflationary pressure. A slightly weaker dollar this morning is supporting the Australian bulls, including the rise of some key Australian commodities. The Australian pair is currently trading close to the $0.7000 level. Source: finance.yahoo.com, investing.com
FX Daily: Euro’s attractiveness on the rise

The Euro Can Consolidate Under The Specified Target Range

InstaForex Analysis InstaForex Analysis 10.02.2023 08:03
Yesterday, the euro tried to rally but failed, even though the turning point of the rally was above the shadows of the last two days. This time the rally stopped when the price would cross the 1.0787 level (more precisely, the upper limit of the target range at 1.0758/87) and the MACD indicator line on the daily chart. The Marlin oscillator is moving sideways. In general, the euro can consolidate under the specified target range. According to the main scenario, I expect EUR to fall to 1.0595. Staying below the level opens the next target at 1.0470. On the four-hour chart, the consolidation from the last three days looks like a correction from the decline since February 2. Read next: USD/JPY Is Below 131.00 Again, The Aussie Is Close To 0.70$| FXMAG.COM Yesterday the price approached the balance indicator line and turned around, which might signal the end of the correction. The price has settled under 1.0758. The Marlin oscillator is on the limit of the downtrend area, waiting for another signal to move into the lower area. In all likelihood, such a signal will come after the price overcomes yesterday's low of 1.0710.     Relevance up to 03:00 2023-02-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334718
Rates Spark: Nothing new on the dovish front

The Outlook Of The EUR/USD Pair Movement

Torben Melsted Torben Melsted 10.02.2023 08:16
EUR/USD tried to break above minor resistance at 1.0767 but failed. It means a final dip towards the ideal corrective target at 1.0650 to complete wave C of 4 and set the stage for wave 5 higher to 1.1391. In the short term, only a direct break above yesterday's high at 1.0791 will confirm that wave C of 4 already has been completed and wave 5 is in motion. Read next: USD/JPY Is Below 131.00 Again, The Aussie Is Close To 0.70$| FXMAG.COM Relevance up to 06:00 2023-02-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/312175
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

Analysis Of The EUR/USD Pair In Long And Short Positions

Jakub Novak Jakub Novak 10.02.2023 08:24
Analysis of transactions and tips for trading EUR/USD The first test of 1.0759 occurred when the MACD line was already far from zero, so the upside potential was limited. But sometime later, there was another test, where the MACD line was in the overbought area and was gradually descending from there. This was a good entry point to sell, but it did not result in a large downward move. A third test in the afternoon showed that buying at 1.0759 only leads to losses as it was wrong to count on the fall of euro in the current conditions. No other signals appeared for the rest of the day. Euro rose on Thursday due to the statements of ECB board member Joachim Nagel and a surprising jump in inflation in Germany. However, today there is nothing that could repeat or continue the momentum as Italy's industrial production report is of little interest to the market. There might be some reaction to the European Commission's economic outlook, but it is unlikely. In the afternoon, the US will release its data on consumer sentiment and inflation expectations, in which a rise in the figures will lead to the further strengthening of dollar. The speech of FOMC member Christopher Waller will also be in favor of the currency. For long positions: Buy euro when the quote reaches 1.0747 (green line on the chart) and take profit at the price of 1.0784. Growth could occur, but it is unlikely that the pair will go beyond the weekly high. Nevertheless, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0717, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0747 and 1.0784. Read next: USD/JPY Is Below 131.00 Again, The Aussie Is Close To 0.70$| FXMAG.COM For short positions: Sell euro when the quote reaches 1.0717 (red line on the chart) and take profit at the price of 1.0685. Pressure may return if statistics from the Euro area come out worse than forecasts. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0747, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0717 and 1.0685. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2023-02-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334736
Gold Trading Analysis: Technical Signals and Price Movements

FX Daily: The waiting game is on

ING Economics ING Economics 10.02.2023 10:26
Now that markets have absorbed hawkish reactions by central bankers after the latest rate announcement and data releases, the focus will shift back to data. We think the dollar may lack clear direction until next week’s inflation data. Canadian jobs numbers have the potential of driving large CAD swings today USD: Lack of direction The dollar is struggling to find clear direction in the current market environment. Federal Reserve officials continued to push their hawkish rhetoric this week but had to implicitly and explicitly acknowledge more evidence from data must be gathered before debating the size of further tightening. This is essentially leaving the market with one conviction - a 25bp hike in March - and one outstanding doubt about whether that will mark the peak. Fed funds futures are mirroring this uncertainty by pricing in a 5.14% peak rate. We suspect key dollar crosses will stay rangebound until the next key data releases. While today’s University of Michigan survey could have some market impact, next week’s CPI is the real risk event. And if the general risk environment proves resilient for another session today, the dollar should still find a floor on the back of some defensive positioning ahead of next week’s inflation data, as happened in the run-up to the Fed meeting. Fed communication remains important, but secondary to data. After all, markets have already had the chance to assess the reaction function of the Fed to strong economic data after the latest jobs report and another round of Fedspeak. Additional policy remarks from the Fed’s Christopher Waller and Patrick Harker today are not likely to be a game changer for the dollar. DXY may keep hovering around the 103 handle into next week’s CPI report. The latest jobs figures in the US likely raised the bar for a positive surprise in Canada today, even though the consensus is centred on a rather small increase in the headline hiring figure (+15k). Unlike the Fed, the Bank of Canada has signalled its tightening cycle is probably over, even though it left the door open for more hikes should data argue against the disinflationary narrative. Markets are pricing little to no chance of further rate hikes, but equally seem reluctant to factor in any rate cuts by year-end. This leaves some room on both ends for a pronounced CAD impact from a data surprise today. A weak number could fuel easing bets (risk of cuts is higher than expected anyway, in our view), while a strong number – paired with the recent revision higher in Fed rate expectations – could encourage markets to contemplate one last hike by the BoC. We still expect USD/CAD to test 1.3000 in the coming months, but the key driver may be USD weakness rather than loonie outperformance.  Francesco Pesole EUR: Rangebound for now A brief rally failed to propel EUR/USD back above 1.0800 yesterday, and the pair may mostly trade in the 1.07-1.08 range until next week’s data offers clearer direction to the dollar. Despite an improved risk environment helping the pro-cyclical euro, below-consensus inflation in Germany yesterday may have made investors more cautious about another EUR rally. In this sense, the ability of European Central Bank speakers to lift the euro appears diminished. One of the most prominent hawkish voices in the ECB, Isabel Schnabel, will participate in a live Q&A today, although her message on the need for more tightening has already been passed through to asset prices. Pablo Hernandez de Cos is also scheduled to speak today. Elsewhere in Europe, Norwegian CPI saw a significant upside surprise. We expect a final 25bp hike at the March meeting, though the surprise surge in underlying inflation suggests the committee could add another 25bp move in June. However this is only one input into Norges Bank's thinking, and the fall in oil prices since the middle of last year, and the fact the Fed is reaching the peak, suggest Norway is unlikely to move as aggressively as some of its European peers over coming months. Francesco Pesole GBP: First-quarter contraction looks more likely The UK published GDP numbers this morning and it's a very tough read. Most, if not all, of that 0.5% contraction can be blamed on either strikes (transport & health were both heavy drags) or a lack of Premier League football games in December due to the World Cup. However, the fact that the weakness in the fourth quarter was concentrated in December means the starting point for the first quarter is lower, and almost certainly means we'll get a contraction even if activity through the quarter effectively stagnates. Our own view is we'll get a 0.3-0.4% fall in GDP in the first quarter, and probably a slight fall in the second. Recession still looks narrowly the base case. However, next week’s wage figures are what the Bank of England policymakers will watch much more closely as they assess signs of “inflation persistence”. As discussed by our economics team here, wages and developments in the service sector can make or break a March rate hike. For now, our house call is one last 25bp increase in March. EUR/GBP seems to have lost some of its bearish momentum. As discussed recently, we do not see clear drivers of GBP outperformance and a return to levels above 0.8900 in the pair is our base case. Francesco Pesole Read next: Twitter Co-Founder Jack Dorsey Comments New Twitter's Owner| FXMAG.COM CEE: Inflation reminder Today, we have the first January inflation figures in the calendar. In Hungary, inflation rose from 24.5% to 25.7% year-on-year, beating all estimates, which means an upside surprise by 0.5pp. Later, we will see inflation in the Czech Republic, also expected to rise from 15.8% to 17.6% YoY, above market expectations. As always in recent months, the main issue is energy prices, which we believe saw a massive repricing in January. Also today, the Czech National Bank will publish the minutes of its last meeting as well as the complete new forecast including the alternative scenario preferred by the Board at the moment. This assumes a longer period of stable rates and a first cut only at the end of the year. In the FX market in the region, global factors were again in charge in recent days and apart from the Polish zloty, the CEE region returned to gains. The turnaround in EUR/USD together with gas prices testing new lows and further improvement in sentiment in Europe drove the Czech koruna and Hungarian forint to new lows against the euro. Moreover, higher inflation today should support domestic rates in our view and support both currencies. However, in both cases we see heavy long positioning already, which will make the path to further gains more complicated. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Rates Spark: Crunch time

EUR/USD Pair Is Belowe $1.07, USD/JPY Pair Is Back To 131 And GBP/USD Pair Is Slightly Above $1.21

Kamila Szypuła Kamila Szypuła 10.02.2023 12:44
During the American session, the University of Michigan will publish a preliminary consumer sentiment survey for February. The main consumer confidence index is expected to rise to 65 from 64.9 in January. Market participants will keep a close eye on the component of the survey on inflation expectations for the next year, which fell to 4% in January from 4.4% in December. An unexpected increase in this reading could strengthen the US dollar. USD/JPY The yen strengthened on Friday before recovering slightly after Kazuo Ueda, who was reportedly tapped as the next governor of the Bank of Japan (BOJ), said the central bank's monetary policy was the right one. The government is also nominating Ryozo Himino, the former head of Japan's banking regulator, and BOJ director Shinichi Uchida as deputy governors, the Nikkei said. BOJ deputy governor Masayoshi Amamiya was the frontrunner for the role of governor, but the Nikkei reported that he turned down the job. The government is expected to present candidates to parliament on February 14. The BOJ shocked markets in December when it raised the 10-year yield cap to 0.5% from 0.25%, doubling the allowable range above or below zero. USD/JPY managed to rebound towards 131.00 after falling below 130.00 earlier in the day. EUR/USD EUR/USD picked up momentum and climbed to around 1.0800 at the end of Thursday, but lost much of its daily gains and closed below 1.0750. EUR/USD came under slight downward pressure and fell towards 1.0700 during Friday's European session. The US dollar gained strength thanks to rising US Treasury yields. The euro hit a 10-month high against the dollar earlier this month. The prospect of a milder recession thanks to falling energy prices and plentiful natural gas supplies, coupled with China's exit from three years of severe COVID-related restrictions, has generally ignited investors' appetite for European assets. However, this enthusiasm has made the euro look vulnerable, at least in the short term. The Euro is set for a second consecutive week of declines and at the time of writing EUR/USD is trading below 1.07 at 1.6998. Read next: Tesla Will Increase Output For 2023, Deliveroo Are Planning To Cut Jobs| FXMAG.COM GBP/USD The pound weakened on Friday after data showed the UK economy stalled in the final three months of 2022, avoiding a technical recession but recording zero growth. The UK Office for National Statistics said on Friday that the UK economy contracted by 0.5% on a monthly basis in December and came to a standstill in the fourth quarter. On the positive side, industrial production rose 0.3% in December, beating market expectations for a 0.2% decline. The Bank of England forecast last week that the UK would enter a shallow but lengthy recession starting in the first quarter of this year and lasting five quarters. Moreover, Money Markets shows that investors believe that UK interest rates will peak below 4.40% by late summer, from the current 4%. UK consumer inflation data will be released next week and may have a bigger impact on these expectations. The GBP/USD pair previously surged to levels above 1.2130 but lost momentum and is now trading just above 1.2100 and below 1.2110. AUD/USD The Australian dollar held below $0.695, pressured by hawkish signals from Federal Reserve officials who reiterated their commitment to bring down inflation with more rate increases. The Australian Dollar remains supported by expectations that the Reserve Bank of Australia will tighten policy further. The RBA’s latest monetary policy statement showed that the central bank revised its inflation forecasts higher for this year, saying price pressures were spreading into services and wages. AUD/USD is headed towards 0.6900 amid disappointing Chinese CPI and PPI data. The Australian pair is not benefiting from the RBA's hawkish monetary policy statement, currently the Aussie pair holds above 0.6920. Source: finance.yahoo.com, investing.com
Small factors combine to pressure credit

The EUR/USD Price Shows Signs Of Consolidation

InstaForex Analysis InstaForex Analysis 13.02.2023 08:09
The euro fell by 62 points on Friday. The price is very close to 1.0660, the upper limit of the consolidation range of December 16-26. Overcoming the support can push the price to 1.0595, it can fall further to the target level of 1.0470, the lows of June 22 and April 28, 2022. Also, this level is close to the 38% retracement of the entire growth since September 28. The price has overcome the support of the balance and MACD indicator lines, the Marlin oscillator is declining in the red zone - a blatant downtrend. On the four-hour chart, the price shows signs of consolidation before reaching the support of 1.0660, the Marlin has settled in the area of the downtrend. We can also see the price in preparation as it falls further. Read next: UK Economy Suggest That Inflation Will Drop| FXMAG.COM Relevance up to 03:00 2023-02-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334853    
ECB cheat sheet: Difficult to pull away from the Fed

Analysis Of The EUR/USD Pair Price Situation

Torben Melsted Torben Melsted 13.02.2023 08:12
There should be one more spike lower to test the 1.0650 target. This final spike lower should complete wave C and 4 and set the stage for the next impulsive rally above the former peak at 1.1033. In the short term, a break above minor resistance at 1.0710 will confirm that wave 4 has been completed and wave 5 is in motion. The ideal target for wave 5 is seen near 1.1391. Relevance up to 06:00 2023-02-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/312337
Decarbonizing Steel: Contrasting Coal-based and Hydrogen-based Production Methods

FX Daily: Preparing for deflation reality checks

ING Economics ING Economics 13.02.2023 09:18
Asset markets have now fully absorbed the re-tuning of communication by central banks over the last two weeks. Now, it’s time for data to offer some direction, especially in the US. CPI data tomorrow may help build expectations around a May hike, and the dollar could find a bit more support. On Thursday we will see the ECJ's decision on Polish FX mortgages USD: Data in the driver's seat A key takeaway from the recent fluctuations in major G10 pairs is that, at this stage, data matters much more than central bank communication. The mass of hawkish comments - ranging from modest to aggressive - seems rather predictable in light of the markets’ early-February dovish run and strong jobs data in the US. However, more than providing direction to the market in terms of the next central bank moves, recent communication merely offered some tools to assess central bankers’ reaction function to data, and reinforced the notion that data-dependency is still the name of the game. Arguably, February’s price action so far has been mostly a reaction to strong nonfarm payrolls data in the US rather than to Federal Reserve and European Central Bank meetings: as long as central banks remain data-dependent in the short term, it's really up to the data to drive trends in FX. At this stage, this should be especially true for the Fed and the dollar.  This week sees the release of US inflation, retail sales and industrial production figures. A note of warning: US data in January should be strong throughout, largely thanks to greatly improved weather conditions compared to December. The big jump in hiring seen in the latest jobs report also suggests increased demand. Indeed, the most important piece of data will be inflation (tomorrow). Our in-house projections are in line with the market consensus for a month-on-month rise of 0.5% and 0.4% for headline and core rates, respectively. Auto sales and shelter should contribute to put a floor under core inflation for now, but we think these two components will start declining more sharply from mid-second quarter, which should fuel a more sustained downward trend in inflation. In other words, we don’t expect this setback in the deflationary path to suggest the trend is inverting. Still, this - with the aid of strong retail sales and industrial production figures - will likely be enough to allow markets and FOMC hawks to fully expect a 25bp rate hike in May after the one in March. Any upside surprise may push the peak rate pricing towards the 5.50% mark. From an FX perspective, the dollar appears in a position to at least hang on to recent gains this week. We could see a return to 105.00 in DXY soon. Today’s price action may follow a wait-and-see approach given there are no data releases, but we have observed a tendency of markets to move closer to defensive long-dollar positions into key risk events. The balance of risks appears skewed to the upside for the dollar today. Francesco Pesole EUR: Lacking the domestic push In the midst of the dollar's upward correction, the euro has also lost its idiosyncratic bullish momentum. Hawkish comments by ECB members seem to have only offset the communication hiccups on the day of the ECB meeting but have failed to lift the euro as rate differentials swung back in favour of the dollar. The EUR-USD 2-year swap rate spread is back to 145-150bp in favour of USD, around the lowest this year after having shrunk to the 110bp area in the aftermath of the Fed meeting. Our medium-term view is still one of EUR/USD appreciation over the course of 2023, but we don’t see clear drivers for a EUR/USD rebound this week, especially from the eurozone side. It would probably require a rather low US CPI figure to send the pair sustainably back above 1.0800-1.0850. We see a greater chance of the pair coming under some additional pressure, and a strong US CPI read could mean the 1.0500 support (1.0490 is the 2023 low) is tested. This week does not include key data releases in the eurozone, but just a few more ECB speakers. President Christine Lagarde will speak on Wednesday: expect another attempt to build market expectations around more tightening, although other ECB members have already gone a long way communication-wise and we don’t see her speech as a big risk event for the euro. Francesco Pesole Read next: UK Economy Suggest That Inflation Will Drop| FXMAG.COM GBP: Some key data for the BoE this week The UK dodged a technical recession according to last week’s fourth quarter figures, but that was hardly the key data point the Bank of England was focused on. This week sees the release of jobs, wages, CPI and retail sales. Among those, tomorrow’s wages should be the most important release for the BoE's next policy moves. Our UK economist discusses the relevance of this week’s data releases in this article. We think markets will be given reasons to consolidate their view around a 25bp hike in March, but expectations of further tightening may ultimately prove unfunded. The EUR/GBP drop could extend to 0.8800 but we think markets are running out of reasons to stay bearish on the pair for longer. We continue to see euro outperformance from the second quarter and 0.9000 is our target level in EUR/GBP in the second half of 2023. Francesco Pesole CEE: Zloty is waiting for the ECJ decision This week, we start with the current account December figures from Poland and the Czech Republic. On Tuesday, we will get the GDP numbers for the fourth quarter. For Poland, we expect 2.3% year-on-year in line with expectations, for Hungary 0.4% YoY, below market expectations, and for Romania 5.1% YoY, above market expectations. Also, on Tuesday we will see January inflation in Romania and we expect a slowdown from 16.4% to 15.4% YoY, implying Romania is the only country in CEE where inflation fell in YoY terms in January. January inflation in Poland will be released on Wednesday. We expect inflation to have jumped from 16.6% to 18.1% YoY, above market expectations. And Poland will also be in focus on Thursday when we should see the European Court of Justice's (ECJ) decision on the FX mortgage case, which will impact the local banking sector and Polish assets. In the FX market, it will be challenging for the market to balance between the local and global calendar this week. A higher US dollar should be rather negative for the region. On the other hand, the heavy economic calendar in the region should push the focus onto local drivers. The Polish zloty will be the main focus this week. A jump in inflation should support market rates and interest rate differentials. On the other hand, Thursday's ECJ decision brings a lot of uncertainty and is probably one of the main reasons why the zloty has underperformed within the region this year. However, the outcome may not bring much clarity to the situation. Therefore, the zloty is likely to be very volatile this week, but we remain rather bearish. On the other hand, the Czech koruna and Hungarian forint should stabilise at current levels. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
FX Daily: Time for the dollar to pause?

Forex Weekly Summary: EUR/USD Closed Below 1.07, GBP/USD started the week at 1.2050 and ended that way too

Kamila Szypuła Kamila Szypuła 11.02.2023 14:36
The dollar gained on Friday as investors grew concerned about a U.S. inflation report next week that could show a number that is higher than markets forecast amid data showing expectations for a continued rise in prices over the next year. As the data continued to show positive U.S. momentum, the dollar was on pace for its second weekly rise against a basket of six currencies, a run it has not seen since October. Federal Reserve Chair Jerome Powell has cited the Michigan survey's inflation outlook as one of the indicators the U.S. central bank tracks. USD/JPY The USD/JPY pair started the week trading at 132.12 and, despite the correction, was moving towards 132.50. Above this level on the first day of trading (Monday) it reached a weekly high of 132.88. In the following days, the USD/JPY pair fell below 132.00 until reaching the level of 130.50. The pair then traded in a range of 130.00-131.50 until USD/JPY dropped to 129.9550, which is the pair's weekly low. The pair closed between the highest and lowest levels, i.e. above 131.00, 131.38 to be exact. The yen rose on Friday across the board with Kazuo Ueda reportedly set to become the next Bank of Japan (BOJ) governor but pared gains after he said the central bank's monetary policy was appropriate. The Japanese unit was on track for its first weekly gain versus the dollar after posting losses for three straight weeks. Japanese Prime Minister Fumio Kishida said the government is planning to present the BOJ governor nominee to parliament on Tuesday, but did not answer a question on whether Ueda would be put forward. Read next: Tesla Will Increase Output For 2023, Deliveroo Are Planning To Cut Jobs| FXMAG.COM EUR/USD The EUR/USD pair started the week trading close to $1.08 at 1.0792. In the following hours, the EUR/USD pair reached a weekly high of 1.0804 and then began to fall towards 1.07. On Tuesday, EUR/USD fell below 1.07, then rose again on Wednesday, breaking above 1.0750 on Thursday. The pair failed to maintain this momentum and on the final day of trading fell to a weekly low of 1.0670. After that, EUR/USD rose slightly and closed the week just above the low of 1.0681. GBP/USD The Cable pair started trading at 1.2050. And for the next two days she lingered in this area. On Wednesday, GBP/USD started an upward move towards 1.21. On Thursday, GBP/USD traded close to 1.22 at 1.2191 which is the weekly high of GBP/USD, but fell back on Friday to close the week at 1.2058. The week's low was at 1.1963 for the GBP/USD pair. AUD/USD The Aussie Pair started trading at 0.6910 and fell on Monday to a weekly low of 0.6859. In the following days, the pair stayed above 0.69. On Thursday, AUD/USD broke above 0.70 and hit a weekly high of 0.7011, similarly to EUR and GBP, the Australian pair failed to maintain momentum and dropped Friday to end the week at 0.6921. The Australian and New Zealand dollars found support on Friday as markets continued to ramp up expectations for how high local interest rates might rise, sending bond yields to one-month peaks. Having hiked rates by a quarter point to a decade-high of 3.35% on Tuesday, the Reserve Bank of Australia (RBA) said domestic price pressures were building and spreading into services and wages, so it was unclear how high rates might have to go. Source: finance.yahoo.com, investing.com
Rates Spark: Crunch time

The EUR/USD Pair Is Still In Bearish Trend

Paolo Greco Paolo Greco 13.02.2023 10:36
M5 chart of EUR/USD On Friday, EUR/USD continued to fall and by the end of the day it was near its local lows. It failed to start a bullish correction and there's a high probability that the euro will continue to fall in the medium term. The pair remains too overbought, and the growth it's shown in recent months seemed unreasonable. Traders have already worked off all the bullish factors on the euro, and a correction has been brewing for more than a month. I believe that all factors are now in favor of the continuation of the quotes' decline. No fundamental and macroeconomic background on Friday. The only thing that stood out was the Consumer Sentiment Index from the University of Michigan, which was slightly above forecasts, but it did not have a strong impact on the pair's movement. The movements were purely technical. And not the best ones at that. At the European trading session, the pair showed several sharp reversals, and also crossed the critical line several times. Thus, false signals began to form immediately. Several of them were formed near the Kijun-Sen line. First of all, there were two buy signals, and they both failed to reach the nearest target level of 1.0762. Then there was a sell signal, which made it possible for traders to earn good profit, because by the end of the day, the pair was near the target level of 1.0669, if not for the two false buy signals before it. So, some traders could open a short position, but it was against the rules of the trading system. In general, the day didn't turn out quite great. COT report The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since early September. The euro started to rise around the same time. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. In the reporting week, non-commercial traders opened 9,500 long positions and 2,000 short ones. The net non-commercial position grew by 7,500. The number of long positions exceeds that of short ones by 134,000. There were no new COT reports in the last two weeks, and it's difficult to explain the cause exactly. So now we have to work with the data we have at our disposal. The correction was formed for a long time anyway, so it's clear even without the reports that the pair should continue falling. Read next: Amazon Is Slowly Dismantling Tony Hsieh’s Version Of Zappos, Louisa Vuitton Doubled Sales| FXMAG.COM H1 chart of EUR/USD On the one-hour chart, EUR/USD is still bearish. The quotes are currently located below the critical line, so the pair will likely fall. In order to fall further, the pair should overcome the 1.0658-1.0669 area. Fundamental and macroeconomic backgrounds are not the priority for now, since the price went up for a long time, often ignoring them. Now it is time for it to fall. On Monday, important levels are seen at: 1.0485, 1.0581, 1.0658-1.0669, 1.0762, 1.0806, 1.0868, 1.0938, as well as the Senkou Span B (1.0850) and Kijun Sen (1.0723) lines. Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events in the EU and the US on February 13. So traders will have nothing to react to. The movements may not be attractive or volatile. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 08:00 2023-02-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/334891
Crude Prices Are Rallying After A Mixed Jobs Report Sent The Dollar Lower

Russia Has Announced To Cut Its Production By 500 000 Barrels Per Day, Equities Are Under Selling Presure

Swissquote Bank Swissquote Bank 13.02.2023 10:45
US equities recorded their worst week since the year started. Hawkish comments from many Federal Reserve (Fed) members hammers sentiment, as stress mounts before the much-important US CPI data due Tuesday. US CPI If US inflation hasn’t eased, or eased enough, or God forbid, ticked unexpectedly higher on yearly basis, we could rapidly see the post-NFP optimism, and the pricing on the goldilocks scenario to leave its place to fear and chaos. Fed At the start of the week, the activity on Fed fund futures hints at around 91% chance for a 25bp in the next FOMC meeting, and around 9% chance for a 50bp hike. Forex In the FX, the US dollar index finally cleared the 50-DMA offers on Friday - which I think could be premature if tomorrow’s US inflation number is sufficiently soft. A a wave of fresh buying in the Japanese yen also marked the latest mood in the currency markets, but didn’t last long. The EURUSD, on the other hand, slipped below its own 50-DMA. What’s next depends on the US dollar, as the US dollar is what leads the dance right now. Read next: Amazon Is Slowly Dismantling Tony Hsieh’s Version Of Zappos, Louisa Vuitton Doubled Sales| FXMAG.COM Energy market In energy, US crude oil jumped past the $80pb on Friday, as Russia announced to cut its production by 500’000 barrels per day, which is roughly 5% of its daily production. But gains remain limited by an overall bearish mood and recession fears, and offers remain strong into the 100-DMA, which currently stands near $81pb level. Watch the full episode to find out more! 0:00 Intro 0:27 Investors are tense before US inflation data due Tue 3:30 S&P500, Nasdaq: key technical levels to watch this week 5:27 FX update: USD up, euro, yen down 7:47 UK avoids recession, FTSE at record, BP tops £100bn valuation 9:09 Crude jumps on Russia, but 100-DMA still intact Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #inflation #data #Fed #expectations #EUR #JPY #GBP #FTSE #BP #crude #oil #Russia #output #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The Pound Is Now Openly Enjoying A Favorable Moment

GBP/USD Started The New Week In A Calm Way, EUR/USD Is Waiting For US CPI Report

Kamila Szypuła Kamila Szypuła 13.02.2023 13:11
The dollar approached a five-week high against its major peers on Monday, and investors increased their bets on the Federal Reserve staying on tight monetary policy longer. The most important event this week will be US consumer prices data released on Tuesday, which will strengthen expectations regarding Fed policy. Strong CPI data in the US would increase expectations for monetary policy tightening by the Federal Reserve, which would probably push the dollar up. USD/JPY USD/JPY started the new week at the level of 131.3470, and in the following hours it rose and broke through the level of 132.00. At the time of writing, USD/JPY is trading above 132.50. The asset is expected to refresh a four-day high above 132.00 as investors are extremely risk-averse ahead of the United States inflation report. In January, Japanese investors became net buyers of foreign bonds for the first time in five months as US bond yields fell in a sign that slowing inflation would prompt major central banks to slow down the pace of interest rate hikes. Japanese investors bought foreign bonds net worth 1.56 trillion yen ($11.79 billion) in January, according to data from Japan's Ministry of Finance, marking their biggest buying frenzy since September 2021. Read next: Poland’s President Andrzej Duda Said The Decision To Send Fighter Jets To Ukraine Was “Not Easy To Take”| FXMAG.COM EUR/USD On Friday, a preliminary consumer sentiment survey by the University of Michigan in February showed that annual expected inflation rose to 4.2% from 3.9% in February. The reading helped the US dollar stay strong against its rivals ahead of the weekend and forced EUR/USD to end the week in the red. Early Monday, the US Dollar Index holds strong and limits EUR/USD's gains. The EUR/USD pair started trading at 1.0684 this week. In the following hours, EUR/USD fell towards 1.0660 but rebounded above 1.0680. At the time of writing, the EUR/USD pair is trading at 1.0675. The European Commission raised the EU growth forecast for 2023. The European Commission noted that the EU economy entered 2023 in a better position than predicted in the autumn and raised its growth forecasts for this year to 0.9% in the euro area. The Eurozone looks set to avoid a technical recession, thanks in large part to falling gas prices and a solid labor market. The Commission has also lowered its inflation expectations, with headline inflation now expected to fall to 5.6% in 2023. GBP/USD The GBP/USD pair started the week at 1.2050. Similar to the Euro pair, the GBP/USD pair fell towards 1.2035 during the morning trading hours before rising above 1.2060 again. Currently, GBP/USD is trading at 1.2056. The market awaits this week's data, which could show that unemployment in the UK remained flat in December and weekly earnings rose less than in November. The British economy, similarly to the US, will publish inflation reports this week. UK is expecting inflation to fall. UK retail sales figures for January are expected to show that while consumers continue to spend less, the pace of decline in sales may have slowed in the new year. AUD/USD Markets expects RBA Chairman Philip Lowe to reinforce the bank's hawkish stance at parliamentary hearings this week. Reserve Bank of Australia (RBA) Governor Philip Lowe will testify before the Senate this week. Lowe will appear before the Senate Appraisals Committee on Wednesday, and then on Friday will give his semi-annual testimony to the House Economics Committee. In between these public appearances will be squeezed in employment data on Thursday. The central bank surprised markets last week by signaling at least two more rate hikes after raising the cash rate to a decade high of 3.35%. This stifled any talk of a break and led the markets to price in a final rate of 4.2% The AUD/USD Pair started the week close to 0.6900, where it fell below this level in the following hours. The Australian pair managed to break above 0.6915 and is currently trading above 0.6930. Source: investing.com, finance.yahoo.com
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The Euro (EUR) Continued To Move Sideways

InstaForex Analysis InstaForex Analysis 14.02.2023 08:05
The market was calm on Monday, without any upbeat news, the euro could not overcome the technical support at 1.0660, yesterday's growth was 45 pips. The euro continued to move sideways in the 1.0660-1.0758 range. The best thing that the euro can do for the bearish scenario is to pierce the upper limit of the 1.0758/87 range. If the euro settles above the MACD line (above 1.0820), the alternative option is for the price to rise to 1.0990. I expect the price to cross 1.0660 and fall further to 1.0595. On the four-hour chart, the signal line of the Marlin oscillator is in the green zone. This will help the price and if it doesn't overcome the nearest resistance, then it will linger in the sideways movement. At the moment, time is not on the euro's side, since the MACD line is getting closer to the price with each candle, and it increases the pressure.   Relevance up to 03:00 2023-02-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/334987
Forex: Euro against US dollar - forecast on April 24th, 2023

The EUR/USD Pair Has Potential For Further Downside Movement

Oscar Ton Oscar Ton 14.02.2023 08:12
Technical outlook: EURUSD might be pulling back towards the 1.0800-50 area before turning lower again. The single currency pair is seen to be trading close to 1.0735 at this point in writing as the bulls prepare to push further. Prices have carved an Engulfing Bullish candlestick pattern on the daily chart indicating a potential short-term counter-trend rally in the near term. EURUSD is facing intraday resistance at 1.0800 and up to 1.0880 as the bears remain inclined to come back in control. The downside potential is seen through 1.0500 and 1.0100 as marked on the daily chat here (Red). Also, note that the Fibonacci 0.618 retracement of the entire rally between 0.9535 and 1.1025 is passing through 1.0100, hence a high probability remains for a bullish reversal. EURUSD faces resistance at 1.1025; while support comes in around 1.0481 as seen on the chart here. A break below 1.0481 will confirm further downside potential and open the door towards 1.0100. A continued break below 0.9860 will confirm that the larger-degree trend has turned lower and prices could drop below 0.9535. Trading idea: Potential bearish move against 1.1025 Good luck!   Relevance up to 05:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/312542
The EUR/USD Pair Consolidated In The Downward Trend Area

The European Currency (EUR) Should Continue To Depreciate

Paolo Greco Paolo Greco 14.02.2023 08:18
On Monday, the EUR/USD currency pair adjusted once again to the moving average line, but it has yet to overcome it. The pair did not remain still, yet their movement was neither resonant nor trend-forming. Simply a regular local upward trend with no specific justification. We think it makes sense at this point to try to see the big picture while removing yourself from specific macroeconomic reports. From our perspective, the European currency should continue to depreciate because it has grown excessively and for an extended period. It might emerge from the overbought state after falling 200–300 points, at which point it will be possible to discuss its growth prospects. However, it is still too high right now. It is important to comprehend the following point. There is a trend (such as the downward one over the past two years), and as a result, the pair moves in a certain direction for very particular reasons. Due to traders closing deals in line with the trend, the trend ends and the correction starts. In other words, the pair is moving in opposition to one another, but it appears to be doing so randomly. Therefore, just 50% of the recent increase in the value of the euro was warranted. Therefore, it is important to consider the essential background in general. Additionally, it demonstrates how well-positioned the US economy is given the current situation. The labor market is strong, the recession has not yet begun, and unemployment is at its lowest level in 50 years. Undoubtedly, certain individual signs could use improvement. Everything in the European Union is not entirely awful either. Although neither the economy nor unemployment has entered a recession, it is important to keep in mind that the key rate in Europe is considerably lower than in America. Even with low oil and petrol prices that made it possible to escape an energy crisis, there will be an economic slowdown if the ECB rate rises further (which is not inevitable). Waiting for an inflation-related resonance value is no longer worthwhile. Reports on inflation are still crucial for the market, but they are starting to mean different things now. It is a truth that inflation cannot go down each month. Since the Fed substantially tightened monetary policy last year, the rate of inflation has fallen six times in a row, each time rather sharply and quickly. But this situation cannot continue forever. Oil and petrol prices won't stay low indefinitely because the Fed is no longer raising the rate by 0.75%. Therefore, at best, we can expect an inflation decrease of 0.2-0.3% per month. There may be months when the consumer price index doesn't indicate any slowdown at all. The point is that while inflation is getting closer to the desired level, it can still be another year before it is achieved. And it's all right. A slight decrease in inflation cannot be viewed as an insufficient outcome of the Fed's efforts. Additionally, minor changes in inflation won't cause a significant market response. Simply said, it makes little sense for the Fed to raise the rate much higher than the current levels. Now, the regulator will move cautiously. Another rate increase will be feasible, for instance, if inflation does not slow down or does so only slightly for a period of two to three months. However, none of these adjustments will significantly alter either inflation or monetary policy. We believe that the pair of the euro and the dollar is entering a lengthy phase of consolidation. In other words, a 24-hour TF is capable of a flat or "swing." An assertive stance by the ECB is required to maintain the expansion of the euro. However, the ECB has already slowed down the pace of tightening itself and can do so again in a single meeting, demonstrating its opposition to such a strategy. Therefore, we think that the euro has almost certainly reached the end of its growth potential. In any case, it is pointless to discuss purchases at this time because the pair is trading below the moving average. As of February 14, the euro/dollar currency pair's average volatility over the previous five trading days was 74 points, which is considered to be "normal." So, on Tuesday, we anticipate the pair to move between 1.0659 and 1.0807. The Heiken Ashi indicator's downward turn will signal the start of a new downward movement. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trading Advice: The EUR/USD pair is still moving south. When the Heiken Ashi signal turns down, we can now consider opening new short positions with targets of 1.0659 and 1.0620. After the price is stabilized back above the moving average line, long positions can be initiated with targets of 1.0807 and 1.0864. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 04:00 2023-02-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/334991
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

The Outlook Of Price Of The EUR/USD Pair

Torben Melsted Torben Melsted 14.02.2023 08:20
EUR/USD moved lower as expected and printed a low at 1.0655 just above our ideal target of 1.0650. The following break above minor resistance at 1.0707 confirms that wave 4 has been completed and wave 5 higher towards 1.1391 now is in progress. As we expect, wave 5 to be in motion also means that the 1.0655 low must not be broken again or we will have to review our preferred count. Now, a break above resistance at 1.0791 will add confidence in our count of wave 5 being in motion and the expected move higher towards 1.1391.   Relevance up to 07:00 2023-02-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/312554
Rates Spark: Crunch time

The Euro (EUR) Still Has No Reason To Rise

Paolo Greco Paolo Greco 14.02.2023 09:33
5M chart of EUR/USD On Monday, EUR/USD rose by several dozens of points, and by the end of the day it was near the critical line, and even managed to overcome it. But overall, the upward movement did not exceed 70-80 pips, so it can hardly be argued that the downtrend was broken. Neither the EU nor the US issued any important reports, and there were no important events. So this movement was definitely not connected with any event and we just witnessed a normal growth. This week there will be many days when the macroeconomic background will be strong, so things can change very quickly. I expect the euro to fall because I don't believe that the bearish correction has completely ended. Several trading signals were formed on the 5-minute chart. The pair rebounded from the 1.0658-1.0669 area twice during the European session, which were two buy signals. In the first case, the price went up about 10 pips, so traders had to stay in the long position during the second signal. Then the pair started to sharply rise and managed to reach the Kijun-Sen line, where the upward movement ended on Monday. Traders should have locked in profits on the longs, it was not less than 40 pips. With the total volatility of the day about 70 pips, it's not a bad result. Read next: Poland’s President Andrzej Duda Said The Decision To Send Fighter Jets To Ukraine Was “Not Easy To Take”| FXMAG.COM COT report The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since early September. The euro started to rise around the same time. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. In the reporting week, non-commercial traders opened 9,500 long positions and 2,000 short ones. The net non-commercial position grew by 7,500. The number of long positions exceeds that of short ones by 134,000. There were no new COT reports in the last two weeks, and it's difficult to explain the cause exactly. So now we have to work with the data we have at our disposal. The correction was formed for a long time anyway, so it's clear even without the reports that the pair should continue falling. H1 chart of EUR/USD On the one-hour chart, EUR/USD remains bearish despite overcoming the critical line. The Senkou Span B line is stronger, so the bulls won't find it easy to overcome it. The euro still has no reason to rise, so I think the euro will eventually fall this week. The US inflation report, which will be released today, might provoke the strengthening of the dollar, if it turns out to be weak. On Tuesday, important levels are seen at: 1.0485, 1.0581, 1.0658-1.0669, 1.0762, 1.0806, 1.0868, 1.0938, as well as the Senkou Span B (1.0850) and Kijun Sen (1.0722). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On February 14, there will also be interesting events in the EU, there's the GDP report for the fourth quarter. It will be the second estimate, so I don't expect a strong reaction. Nonetheless, the report itself signals the state of the economy so its worth looking into. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group Relevance up to 08:00 2023-02-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335019
Central Bank Policies: Hawkish Fed vs. Dovish Others"

All Eyes Are On The US CPI Today, Kazuo Ueda Has Been Nominated As The Next Bank Of Japan Governor

Swissquote Bank Swissquote Bank 14.02.2023 09:41
Market bulls have endless optimism this year, it is amazing. Whether it is funded or not, is yet to be seen. US CPI Inflation could help answer that question today. A few indicators point at a certain uptick in inflation in January figures, and the expectation is that the US headline CPI may have slowed to 6.2% in January, from 6.5% printed a month earlier, on a yearly basis. A sufficiently soft, or ideally a softer-than-expected CPI read today should give an additional boost to the equity bulls while a stronger inflation read could easily bring the Fed hawks back to the marketplace and send equities tumbling. Forex In the FX, the US dollar has seen a crowd of sellers above the 50-DMA. A strong inflation data could finally send the dollar index sustainably above its 50-DMA, while a soft reading will be a good reason to sell the rebound. The EURUSD continues its own struggle around the 50-DMA. In Japan, Kazuo Ueda has been nominated as the next Bank of Japan (BoJ) governor. There are rumours that the new BoJ leader could scrap the YCC policy. The yen was better bid in Tokyo, but the US CPI data is probably what will determine the short-term direction both in EURUSD and the USDJPY. CPI What everyone wants to see is a soft US CPI figure, a softer US dollar, strong equities, improved bonds, and stronger other currencies. What everyone fears however is a figure that’s not convincingly softer. The only sure thing is, the CPI days are known for their high intraday volatility. Watch the full episode to find out more! 0:00 Intro 0:24 Mixed feelings about the market 3:51 All eyes are on the US CPI today! 7:13 FX update 8:39 Balloon update Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #inflation #data #Fed #expectations #EUR #JPY #XAU #US #China #spy #balloon #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      
FX Daily: Asymmetrical upside risks for the dollar today

FX Daily: Asymmetrical upside risks for the dollar today

ING Economics ING Economics 14.02.2023 10:25
Today's US CPI report looks like a rather binary event for markets. With the deflationary story having come under increased scrutiny, we suspect that a consensus 0.4% MoM read in core inflation may be enough to weigh on risk assets and support the dollar. We still see room for USD outperformance in the near term. In the UK, wage data endorsed a BoE march hike US consumer spending slowed sharply in the fourth quarter of 2022 USD: A consensus reading may be enough to support the dollar We are a bit surprised to see markets have started the week with some (cautious) optimism despite the big risk event represented by today’s US inflation report. A rise in global equities meant the dollar is trading weaker across the board with the exception of the yen, which continues to see elevated volatility as markets struggle to assess the implications of the Bank of Japan appointing – now officially – Kazuo Ueda as next governor. We expect JPY volatility to stay high as Ueda may refrain from offering clear direction on any policy shift before taking the role in April. For now, there are no indications he will favour an abrupt end to the BoJ’s ultra-dovish policy stance. Back to the US, January’s inflation report will be an important litmus test for the disinflation story that has driven the slowdown in Federal Reserve tightening. The market's reaction will likely be driven once again by the month-on-month figure, which our economist expects to match consensus expectations at 0.5% for the headline rate and 0.4% for core inflation. This should translate into year-on-year reads of around 6.2% and 5.5%, respectively. Such a consensus read may be enough to weigh on risk assets and support the dollar, as it should allow markets to fully price in 50bp of additional tightening by the Fed and offer the chance to scale back rate cut expectations (around 50bp priced in for 2H23). Given that core inflation in December came in at 0.3%, a 0.2% print (or below) today should be enough to trigger a dollar correction, and a 0.5% (or above) could trigger a dollar rally. We’ll be paying close attention to the details of today’s releases. Auto sales and shelter are two components that may contribute to a higher reading. The former may boost the CPI number on the back of a reported jump in auto auction prices by 2.5%: this may translate into 0.15pp added to MoM core CPI, given the high weighting of this component on the reference basket. Shelter accounts for approximately a third of the inflation basket and may prove sticky given the lagged effect on data of contracting house prices and new rental agreements. We still think these two components will drive a big chunk of the deflationary effect from the second quarter, but for now may work against any dovish narrative. We see the balance of risks as tilted to the upside for the dollar and to the downside for pro-cyclical currencies. A return to the 2023 highs in DXY (at 105.00) is still a tangible possibility in the near term, even though we continue to favour USD underperformance in the remainder of this year. Francesco Pesole EUR: No other drivers than US CPI EUR/USD should be moved almost solely by the US inflation report today, as the preliminary (i.e. second) release of eurozone growth numbers looks unlikely to impact markets and there is only one scheduled European Central Bank speaker (Gabriel Makhlouf). As discussed in recent notes, we expect to see a rather contained impact from additional ECB commentaries (even from those by Christine Lagarde tomorrow) from now on, as markets have probably absorbed in full the pushback against the dovish reaction to the February ECB press conference and are now switching their focus to key data releases. In line with our dollar view ahead of today’s US CPI, EUR/USD may slip back to 1.0650/1.0700 should core inflation come in at 0.4% or 0.5% MoM. Anything above that would likely trigger a larger contraction and 1.0600 should be tested. We continue to see downside risks for EUR/USD in the very near term as US data may endorse further Fed hikes and the euro lacks any solid domestic support. Francesco Pesole GBP: Sticky wages cement BoE March hike expectations Wage data released this morning in the UK came in higher than expected, lifting the pound. The Bank of England’s preferred measure of wage growth, the 3-month/3-month annualised change has now been consistently above 7% for a few months, and there is very little evidence of that wage slowdown suggested by some surveys. Tomorrow’s CPI release will be another key event for the pound, but we think that given the increased focus of the Bank of England on wage dynamics, today’s data strongly endorses a March 25bp rate hike (which is our base case). EUR/GBP may well break below 0.8800 this week, while GBP/USD could fall back below 1.2100 after the US CPI print. Francesco Pesole CEE: Break-up within the region Before we see any key releases on a global level, the CEE region also has something to say today. We will see GDP numbers across the region for the fourth quarter and an inflation number for January in Romania. The main focus will of course be on the confirmation of the technical recession in Hungary but also on the consumer side of GDP across the region given that January inflation has already surprised to the upside in Hungary and the Czech Republic. In the FX market, the Polish zloty and Hungarian forint secured the main attention at the start of the week. The zloty reached its weakest levels since mid-October last year weighed down by negative EU money prospects and Thursday's looming European Court of Justice (ECJ) ruling in the FX mortgage case. For now, we have not heard from officials how long it will take for the Constitutional Court to review the legislation after President Duda said he would not sign the bill and sent it instead to the court for review. However, the likelihood is growing that Poland will not get EU money before the October general elections. Moreover, there is a risk that Thursday's ECJ ruling will impose additional costs on the banking sector. Overall, it will thus be difficult for the Polish zloty to resist further losses in the days ahead. For now, we expect the zloty to test 4.80 EUR/PLN. On the other hand, the Hungarian forint has reached its strongest levels since last May. Drivers are the same as in recent weeks in our view - falling gas prices and by far the highest carry in the region. In particular, after Friday's upside inflation surprise, the short end of the IRS curve is up roughly 50-60bps, which has brought the interest rate differential back to levels seen at the start of the year and erased bets on an early central bank rate cut. Although in our view, heavy long positioning on HUF is still the main risk and profit-taking cannot be ruled out, we remain bullish on the forint. We expect further gains to be slower, however, the mentioned conditions should persist at least until the March National Bank of Hungary meeting. Thus, we see a good chance for the forint to beat our forecast of 385 EUR/HUF at the end of the quarter. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The GBP/USD Pair Is Expected The Consolidation To Continue

GBP/USD Pair Rose Sharply Above $1.22, EUR/USD Pair Also Rose

Kamila Szypuła Kamila Szypuła 14.02.2023 12:49
The dollar fell on Tuesday in anticipation of the eagerly awaited inflation report. Markets are looking at US consumer inflation data for further clues to the Federal Reserve's policy outlook. Investors expect the headline annual CPI to fall to 6.2% from 6.5% in December and the core CPI, which excludes volatile food and energy prices, to fall to 5.5% from 5.7%. USD/JPY The Yen pair initially cheered the pullback in the Treasury bond yields before the Japanese government’s announcements of Bank of Japan (BoJ) officials triggered hawkish concerns and weighed on the prices. Also favoring the USD/JPY bears is the broad US Dollar pullback as traders brace for a positive surprise from the US Consumer Price Index (CPI) for January. Japan’s preliminary readings of the fourth quarter (Q4) Gross Domestic Product (GDP) data printed mixed readings. Following that, the official nomination of Kazuo Ueda as the BoJ leader weighed on the USD/JPY prices. Fresh fears of the US-China tension over the balloon shooting also challenge the sentiment and put a floor under the USD/JPY price. The USD/JPY pair started trading above 132.30 today, but then fell towards 131.90. The yen pair managed to bounce back and traded close to 132.30 again. USD/JPY is currently trading above 132.20. EUR/USD The European Commission's winter economic forecast published yesterday says that the EU economy is geared to avoid recession. The EUR/USD pair held a narrow range of 1.0730-1.0745 in morning trading, but surged up in the European session. The euro maintained its earlier gains against the slightly weaker US dollar, with EUR/USD changing hands around 1.0760. The latest US inflation report due to be released will be another driver of action. Read next: Brazil’s Bank Allows To Pay Taxes Using Cryopto, Ford Will Cut Jobs In Europe| FXMAG.COM GBP/USD The UK unemployment rate remained unchanged for the 3 months to December 2022, as expected. The number of people out of work for up to 6 months has increased, mainly among people aged 16 to 24. The number of people working in the UK increased by 74,000. in the three months to December, well above market forecasts for an increase of 40,000. and after an increase of 27,000 in last month. Meanwhile, from November 2022 to January 2023, the number of vacancies fell by 76,000. up to 1,134,000 UK wages rose 5.9% in December 2022 compared to the same month last year, beating estimates and down 6.4% from the previous print. What will be of concern, however, is the increase in average earnings without bonuses, which rose to 6.7%, beating the 6.5% forecast. The data compares with market forecasts of growth of 6.2% and 6.5%, respectively. In real terms, adjusted for inflation, the increase in total and regular wages fell by 3.1% in the year from October to December 2022 for total wages and by 2.5% for regular salaries. GBP/USD has gathered bullish momentum and climbed toward 1.2200 in the European trading hours. AUD/USD The Australian and New Zealand dollars tried to hold their gains on Tuesday after a rebound on Wall Street boosted global risk sentiment and Australian data underlined the case for further domestic interest rate hikes. Currently, the price of the Australian pair is around 0.6970. Source: investing.com, finance.yahoo.com
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The EUR/USD Price Made A False Breakout Above The MACD Line

InstaForex Analysis InstaForex Analysis 15.02.2023 08:07
The major currencies traded with increased volatility due to yesterday's US inflation report, but the overall trends, nevertheless, did not change. The upper shadow of the EUR/USD pair, as we estimated in yesterday's review, pierced the upper limit of the target range at 1.0758/87, touched the MACD indicator line and returned below this range. The signal line of the Marlin oscillator grows sluggishly, the bulls' potential after yesterday's unsuccessful surge may be exhausted. On the four-hour chart, the price made a false breakout above the MACD line yesterday, returned under it and settled under this line. The Marlin oscillator, as well as the price, is under pressure. Now the signal for continuing the decline is when the price overcomes yesterday's low at 1.0707. The nearest target is 1.0660, then 1.0595.   Relevance up to 03:00 2023-02-16 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335127
EUR/USD Pair Has A Potential For Short-Term Rally

The EUR/USD Pair Is Looking For A Successful Break Above Resistance Level

Torben Melsted Torben Melsted 15.02.2023 08:12
EUR/USD rallied nicely and tested strong resistance at 1.0791 but wasn't able to break clearly above on the first try. After a temporary correction towards 1.0684, we should see a new and this time likely successful break above resistance at 1.0790 for a continuation higher towards 1.1109 in wave 5. So, look for a little more downside closer to 1.0684 to complete the minor correction from 1.0804 for a new impulsive rally towards 1.0933 and 1.1109 as the next upside targets.     Relevance up to 06:00 2023-02-16 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/312762
Rates Spark: Nothing new on the dovish front

Reports On The European Economy Are Unlikely To Help Euro Much

Jakub Novak Jakub Novak 15.02.2023 08:17
Analysis of transactions and tips for trading EUR/USD The test of 1.0755 occurred when the MACD line was already far from zero, so the upside potential was limited. Sometime later, there was another test, but this time it was at 1.0789 and the market signal was to sell. It resulted in a price decrease of over 50 pips. Eurozone's growth rate in Q4 remained unchanged, partly helping euro yesterday morning. However, CPI data in the US turned out to be higher than expected, so dollar strengthened during the US session. A number of reports on the European economy are scheduled for today, which are unlikely to help euro much. But more interesting is the speech of ECB chief President Christine Lagarde as she will relay her views on the future of the monetary policy. In the afternoon, a rather serious volatility burst is likely to happen due to the US retail sales data for January. A higher-than-forecasted figure is likely to prompt a further rise in dollar and a drop in euro. Reports on the Empire Manufacturing index and the change in industrial production will be of little interest. For long positions: Buy euro when the quote reaches 1.0745 (green line on the chart) and take profit at the price of 1.0789. Growth will occur if there is a sharp decline in the US retail sales this January. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0711, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0745 and 1.0789. For short positions: Sell euro when the quote reaches 1.0711 (red line on the chart) and take profit at the price of 1.0667. Pressure will return if data on the Euro area disappoints and if Lagarde's statement is dovish. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0745, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0711 and 1.0667. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 06:00 2023-02-16 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335141
FX Daily: Hawkish Riksbank can lift the krona today

FX Daily: Data can still lift the dollar

ING Economics ING Economics 15.02.2023 10:08
US CPI numbers were in line with consensus yesterday and offered more room for markets to raise Fed rate expectations. This hasn’t translated into a dollar rally, but we could still see at least some support coming the greenback’s way as US data for January should prove strong. Polish inflation should confirm a different inflation story in the CEE region USD: Still eyes on data There were no fireworks in the FX market yesterday as January’s CPI figures matched expectations. Evidence of a slowdown in the disinflation process is giving an opportunity to the Federal Reserve and markets to feel more comfortable about more tightening beyond March. Fed Funds futures are now pricing in 68bp of extra hikes, having added around 7bp in price after the inflation release. This has, however, failed to translate into a materially stronger dollar for now, which is largely a consequence of some resilience in global risk sentiment despite the reinforcing of hawkish Fed bets. We think data will remain the key driver for the dollar and the global risk environment, as the depth of the US economic slowdown is still a key driver of rate expectations, especially when it comes to the timing, size and pace of Fed easing in the medium term. We think that January’s US data may come in rather strong throughout on the back of weather-related factors and this may keep short-term US rates and the dollar supported in the near term. Today, we’ll keep a close eye on retail sales data, industrial production and empire manufacturing, which should all improve.  Francesco Pesole EUR: Lagarde's speech may be a non-event EUR/USD remains primarily a dollar story, and despite having survived the US CPI risk event, we continue to see some downside risks in the near term on the back of raising bets on Fed tightening and a lack of drivers from the euro side. In this sense, we don’t think that today’s speech by European Central Bank President Christine Lagarde will drive major market moves. After her attempts and those (more successful) of her governing council colleagues to keep rate expectations high in the eurozone, we don’t see how there is much she could add to the central bank’s rhetoric at this stage. The release of eurozone-aggregate industrial production data for December should not have any material market impact.  We see room for EUR/USD to slip back to 1.0650/1.0700 by the end of this week on the back of a strengthening dollar.  Francesco Pesole GBP: Bearish story is running out of steam This morning's UK inflation data missed estimates (5.8% vs est. 6.2% year-on-year). Looking at the details, this is also true of 'core services', the index we know the Bank of England is paying closest attention to because it includes the slowest-moving/most persistent components of the inflation basket. It seems like hospitality is doing some of the work here. A word of caution - by definition, the BoE's insistence on looking at 'inflation persistence' means it's not looking at single-month changes in inflation. But this nevertheless goes firmly in the opposite direction of what the central bank has forecast. We would still expect a 25bp hike in March, but if this trend continues then it would heavily lean towards a pause in May. The EUR/GBP fall could extend and force a break below 0.8800, but we think the bearish story may soon run out of steam and we favour a rebound to 0.9000 over the course of 2023. Francesco Pesole PLN: Poland joining the inflation club As usual this week, Poland will be in the spotlight today again. We expect January inflation to jump from 16.6% to 18.1% year-on-year, above market expectations. Last Friday, we saw numbers from Hungary and the Czech Republic surprise to the upside by 50bp and 40bp, respectively, and we should see a similar picture today in Poland. The market has already partially corrected expectations for the first rate cut by the National Bank of Poland in recent days, but we believe there is still room for market rates to go up at the short end of the curve. And today's inflation should provide that impetus. Thus, a further improvement in the rate differential could at least stop the Polish zloty from weakening for a while. However, the Polish story does not end today. On Thursday, we will see the European Court of Justice's decision on the FX mortgage case and on Friday, S&P's rating review will be published. The ECJ decision is probably the main reason why the zloty has been underperforming the region recently. While we do not expect the sovereign rating to be downgraded, after the Hungarian experience, the market may wonder whether the delay in accessing EU money will be a problem for rating agencies in the case of Poland as well. Thus, today the zloty could look towards 4.74 EUR/PLN. However, for the rest of the week we remain bearish and rather expect weaker values near 4.80 EUR/PLN. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Deciphering the Economic Puzzle: Unraveling Britain's Mixed Signals

UK Inflation Must Please Bank Of England, Crude Oil Down

Swissquote Bank Swissquote Bank 15.02.2023 10:29
Looking at the market pricing, you could’ve hardly guessed, but yesterday’s US inflation report was not brilliant. US stocks But US stocks gave a mixed reaction. Why?! Why did people buy equities on strong inflation data yesterday, is the main topic of today’s Market Talk.Still, treasury markets seemed more down to earth, as the US 2-year yield ticked to the highest levels since last November, activity on Fed funds futures gave a little more than 12% probability for a 50bp hike at the next FOMC meeting, versus around 9% at the start of the week. USD index But the dollar index remained stuck below its 50-DMA. Gold Gold extended losses to $1843 on the back of stronger yields and firmer US dollar. EUR/USD The EURUSD found support above the 50-DMA, which stands around the 1.0715 mark. USD/JPY The dollar-yen cleared resistance near its own 50-DMA level, but the risks are still tilted to the downside in USDJPY. Read next: Airbnb Posted A Profit Of $1.9. Billion, Air India And Largest Commercial Aircraft Deal In Aviation History| FXMAG.COM UK CPI and Crude Oil In the UK, inflation in January still eased more than expected to 10.1%. Crude oil remains offered into the 100-DMA, on a massive 10 mio barrel build in US oil inventories last week, while Biden Administration announced there would be further releases from the strategic petroleum reserves of 26 million barrels earlier this week.  Warren Buffett In individual stocks, Warren Buffett sold 86% stake in TSM. Shares plunged more than 4% in Taipei. Watch the full episode to find out more! 0:00 Intro 0:28 US inflation eased less than expected in January 2:55 But who cares? 5:35 FX & yields update 7:05 UK inflation must please BoE, but not sterling 7:36 Crude oil down on massive US inventory build 8:27 Buffett sells TSM. Ouch. Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #GBP #inflation #data #Fed #BoE #BoJ #expectations #EUR #JPY #XAU #US #crude #oil #F13 #TSM #Ford #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

USD/JPY Is Above 133.30, GBP/USD Droped Form $1.21 to $1.20, The Aussie Pair Is Trading Below $0.69

Kamila Szypuła Kamila Szypuła 15.02.2023 12:21
The dollar rose on Wednesday amid stubbornly high US inflation data and sharp interest rate talks from Federal Reserve officials. Year on year prices increased (CPI) by 6.4%. This is down from 6.5% in December, but above economists' expectations of 6.2%. The Core CPI, which excludes volatile food and energy prices, rose 0.4% as expected. More importantly, the underlying details of the report revealed that the core services' inflation, which the Fed pays close attention to, stood at 7.2% on a yearly basis. These figures showed markets that the disinflation has not picked up any steam in January and reminded that the Federal Reserve is unlikely to entertain the idea of a policy pivot. USD/JPY Kazuo Ueda, the Japanese government's nominee to be the next governor of the Bank of Japan (BoJ), will inherit a difficult set of problems when he takes over from incumbent Haruhiko Kuroda on April 8. Japanese inflation y/y reached 4% in December, the highest level since January 1991. The new central banker will have to decide when and by how much the BoJ needs to start reducing its very loose monetary policy in order to keep inflation in check while allowing enough monetary slack to allow for economic growth. As other countries have recently learned, once inflation takes root, it becomes increasingly difficult to bring it down. The yen pair after yesterday closed trading near 133.00 today in the first hours of trading USD/JPY started a decline towards 132.55. The drop in the first hours of trading was not sustained and the pair rose above 133.00. At the time of writing, the yen pair is trading at 133.31. EUR/USD The EUR/USD pair started the day trading above 1.0740 but fell towards 1.0710 in the following hours. EUR/USD gained momentum in the European session and traded near 1.0730 but lost momentum and is now trading around 1.0715. According to ING, remarks by European Central Bank President Christine Lagarde later probably won't move the euro materially. EUR/USD pair should remain driven by dollar moves and faces near-term "downside risks" as the market raised its U.S. interest rate expectations following Tuesday's higher-than-expected inflation data. Read next: In The United States The Demand For Warehouse Space Is Still Growing| FXMAG.COM GBP/USD The British pound fell this morning after the UK CPI. The report showed weaker than expected inflation data, both y/y and m/m, concerning headline and core inflation, respectively. The UK's Office for National Statistics reported on Wednesday that the Consumer Price Index declined 0.6% on a monthly basis in January, causing the annual rate to retreat to 10.1% from 10.5%. The Core CPI also edged lower to 5.8% from 6.3% on a yearly basis, coming in lower than the market expectation of 6.2%. Although it's too early to say how these figures could influence the Bank of England's (BoE) policy outlook, the reaction suggests that markets have scaled back hawkish BoE bets. The Cable pair started trading at a high of 1.2175 on Wednesday, but in the following hours it started to fall initially to 1.2150 and then to 1.2100. Currently, GBP/USD is below 1.2100, at 1.2076. AUD/USD The Aussie pair is just below 0.6900. The AUD/USD pair is under strong selling pressure on Wednesday and is pulling further back from its over-week high. The RBA's latest monetary policy statement showed the central bank revised its inflation forecast for this year higher, saying price pressures were spreading to services and wages. The communiqué suggests two more interest rate hikes in the coming months and possibly a third if inflation remains high. Source: investing.com, finance.yahoo.com
Hawkish comments and a decline in continuing unemployment claims below 1.8 mln boosted chances of a June rate hike rose rose to 37%

The Fed Chairman's Salary Is Closer To That Of Third-Year Analysts

Jakub Novak Jakub Novak 15.02.2023 13:29
A fairly intriguing report was released yesterday that included details about the earnings of Jerome Powell, the chairman of the Federal Reserve System, as speculators tried to predict the Fed's upcoming moves. Additionally, although he can "move the markets," his earnings on Wall Street are not as high as those of other members of the "party." More recently, in a conversation with the co-founder of Carlyle Group Inc., David Rubenstein, Powell disclosed specifics of his annual compensation. This sparked a flurry of questions on social media platforms about why the head of the US central bank gets paid so little. Despite this, Powell claimed that he thought his annual remuneration of roughly $190,000 was appropriate. However, many people disagreed, claiming that his pay did not adequately represent his position as head of the central bank. Powell's income Everyone is listening intently to what Jerome Powell has to say. Even though what he says has the power to swing the markets in any direction, he makes about as much money as a rookie analyst who has just graduated from college. Powell's income falls within the usual basic salary range of investment bank personnel, who get between $150,000 and $200,000. This is according to Wall Street Oasis, a website that records financial payouts. Also take note that bonuses are not included in the source of income for Wall Street employees' wages. Employees' pocket incentives typically equal roughly 50% of their yearly salaries. This varies considerably by year and by organization, though, as certain bonus payments can equal 100% of wages. Congress does, however, have financial restrictions on the Fed chairman. Salary According to the article, the Fed chairman's salary is closer to that of third-year analysts, who earn around $194,000 on average. Although Powell's decisions are mirrored in global markets, as I mentioned above, Congress determines his pay. Appointees to the federal government are categorized based on the levels that influence their salary. The Fed Chairman and the Finance Minister, two senior political figures with the highest salaries, were limited to earning no more than $226,300 in 2017. Powell's pay has been frozen since 2014, like that of other senior officials. For instance, specialists in this field claim that Powell earns substantially less than government employees. For instance, President Joe Biden is paid a salary of $400,000. EUR/USD Regarding the technical picture for the EUR/USD, pressure on the pair increased again following the US inflation report. Staying over 1.0710 will cause the trading instrument to surge to the 1.0760 level and stop the bear market. Above this point, you can easily reach 1.0800 and update to 1.0840 in the near future. Only the collapse of support at 1.0710 will put more pressure on the pair and drive EUR/USD to 1.0670, with the possibility of dropping to a minimum of 1.0640 if the trading instrument declines. GBP/USD Regarding the technical analysis of the GBP/USD, the bulls have not been able to regain the advantage. They still have to surpass 1.2180. Only if this resistance fails will there be a greater chance of a rebound to the area of 1.2260, following which we will be able to discuss a more abrupt movement of the pound up to the area of 1.2320. After the bears take control of 1.2115, from which point the bulls will likely also act more aggressively, it is possible to discuss the return of pressure on the trading instrument. As a result, it is difficult to pass this level. When 1.2115 is broken, the bulls' positions are hit, and GBP/USD is likely to fall back to 1.2070 with a possible increase to 1.2030.   Relevance up to 10:00 2023-02-16 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335183
The EUR/USD Pair Consolidated In The Downward Trend Area

The EUR/USD Pair Consolidated In The Downward Trend Area

InstaForex Analysis InstaForex Analysis 16.02.2023 08:01
Euro has once again broke the support level of 1.0660 after coming from a weekly consolidation. This indicates the determination of the market; thus, it is likely that there will be another breakdown of the support level today. The price could also decline to the target level of 1.0595. A consolidation under it will open the way to 1.0470. The signal line of the Marlin oscillator is completing. There is a consolidation in the negative area (grey rectangle on the chart), and after it there will be a breakdown of the signal line. On the four-hour (H4) timeframe, price has consolidated under the balance line, while the Marlin oscillator consolidated in the downward trend area. The situation on both timeframes is bearish, so there is a high chance that they will approach the target levels.   Relevance up to 03:00 2023-02-17 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335253
FX Daily: Euro’s attractiveness on the rise

Analysis Of The EUR/USD Pair; Key Support At 1.0655 Is Safe And The Next Part For The Impulsive Rally

Torben Melsted Torben Melsted 16.02.2023 08:04
The correction from 1.0804 pushed lower than expected but stayed nicely above the key support at 1.0655 to confirm the new impulsive rally we have been looking for. Short-term we would like to see a break above minor resistance at 1.0745 to confirm that key support at 1.0655 is safe and the next part for the impulsive rally in wave 5 towards the target area between 1.1108 and 1.1188 is developing. We could see EUR/USD moving above the 1.1108 - 1.1188 target area, but as always let's take the expected rally higher in baby steps. This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/312949
USDX Will Try To Test And Break Below The 103.50 Level

FX Daily: Short end continues to drive the dollar

ING Economics ING Economics 16.02.2023 08:53
The dollar is holding onto recent gains. The continuation of better US activity data this quarter provides leeway for the Fed to remain hawkish and is keeping short-dated US yields firm. It is hard to see this changing in the short term. The data calendar is quiet today, but we have several Fed and ECB speakers. Look out for more on Polish FX mortgage news today USD: A delicate balance Another day and another piece of positive US activity data. Yesterday saw a strong January retail sales release. Though boosted by warmer weather, the data still positively contributes to the first quarter activity story where the Atlanta Fed's GDPNow measure for the first quarter has been revised up to 2.4% from 2.2%. 'Wot recession?' some might ask. The data provides ammunition for the Fed to remain in hawkish mode and for the market to continue to price two to three more 25bp Fed rate hikes by the summer. February's hawkish re-assessment of Fed policy has lifted short-dated US yields by 50bp over the last two weeks and reinserted a little volatility back into the interest rate and FX space. The 2-10 year US Treasury curve remains as inverted as at any point in this cycle - providing the dollar with support. Arguably the dollar could/should have traded even stronger given the backup in US rates. The reason it has not traded stronger is probably down to the risk environment. Equity markets are holding onto early-year gains and recent buy-side investor surveys show that cash levels - though dipping - are still far from levels to suggest the buy-side is fully invested in this equity rally. Indeed, surveys still point to underweight positioning in equity markets.   We suspect this delicate balance between a hawkish Fed and a buy-side still looking to add to risk assets will leave the dollar range-bound for the rest of this quarter. 1.05-1.10 could be the broad range in EUR/USD and something like 128-136 for USD/JPY - the latter also having to deal with a new Bank of Japan governor. For today, the US focus will be on the January PPI numbers (core expected to decelerate to 4.0 from 4.6% year-on-year), initial claims and the Philly Fed business outlook. We will also hear from the Fed hawks Loretta Mester (1445 CET) and James Bullard (1830). DXY should trade within a narrow 103.50-104.00 range. Chris Turner EUR: 1.08 remains our 1Q forecast It looks like EUR/USD is settling into a broad 1.05-1.10 trading range this quarter - leaving us comfortable with the EUR/USD profile we outlined in our latest FX talking publication: 'Soft landing, hard landing, no landing?'. That profile saw EUR/USD ending the first quarter near 1.08 before pushing decisively above 1.10 in the second as the US disinflation story accelerated at a time when China was reopening. The European Central Bank hiking a further 75bp - taking the deposit rate to 3.25% in May - certainly helps too, although the recent repricing in the Federal Reserve cycle is somewhat muting this story. There is not much in the way of eurozone data today and perhaps the most interesting ECB speaker will be Chief Economist, Philip Lane. A 1600CET he delivers the Dow Lecture at the NIESR in London - the lecture entitled: 'The Euro Area Hiking Cycle: An Interim Assessment'. Presumably, he will not want to push back too much against the 115bp of tightening priced by the markets this summer - even though we think it will be closer to 75bp.  EUR/USD is bouncing off the recent 1.0650/0660 lows helped by a slightly positive risk environment coming out of Asia. We would expect it to continue trading well within the confines of a 1.0650-1.0750 range today. Chris Turner GBP: Gains proving hard work Sterling continues to show high sensitivity to monetary policy. This week's slightly softer-than-expected wage and core CPI data have seen sterling hand back a budding rally. We suspect this will be the story for most of this year, where we see EUR/GBP trading in the 0.89/90 area. GBP/USD may, however, get a lift in the second quarter if we are right with our dollar call. The UK data calendar is quieter today ahead of tomorrow's release of January retail sales. Bank of England Chief Economist, Huw Pill, speaks at 1800CET, where he delivers a fireside chat on monetary policy. He's been seen as a little more hawkish recently and may choose to maintain that position until the BoE has finished its tightening cycle. We look for one last 25bp hike at the 23 March meeting - taking Bank Rate to 4.25% - where it will be left until summer 2024.   For today, cable should continue to find support in the 1.1950/2000 area. Chris Turner PLN: FX mortgage saga strikes back Today is a big moment for the Polish banking sector. This morning we should hear the decision of the European Court of Justice (ECJ) in the FX mortgage case. As we mentioned earlier, this dispute is probably one of the main reasons why the zloty has significantly underperformed the CEE region this year. Thus, today's result should show whether the market's fears were real. And what is actually on the table? The ECJ was asked by a local court whether or not banks should receive interest on mortgage capital even when the loan contract had been invalidated by the court due to abusive clauses. Domestic courts are still struggling to judge how mutual obligations should be resolved if the loan is ruled to be invalid. In the event of a negative ruling for the banking sector, this would mean additional losses for the banks, which would of course have negative implications for Polish assets. It is hard to say what to expect today and how clear the decision will be. Another uncertainty is how much this risk is priced in. However, in any case it is an important tail risk for the zloty and Polish government bonds. Our Warsaw team covered all the details of the FX mortgage case in a recent article. It will be tough for the zloty to navigate through this news flow but as we mentioned earlier, we retain a bearish bias and expect the zloty to test 4.80 EUR/PLN. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Rates Spark: Crunch time

Confirmation Of The ECB's Hawkish Stance May Help The Euro Increase

Jakub Novak Jakub Novak 16.02.2023 09:00
Analysis of transactions and tips for trading EUR/USD The test of 1.0711 occurred when the MACD line was already far from zero, so the downside potential was limited. Sometime later, there was another test, but this time MACD was already recovering from the oversold area, which was a pretty good signal to buy. It resulted in a price increase of about 20 pips. The test of 1.0667 in the afternoon allowed traders to buy and led to another 20-pip rise. Changes in industrial production and the eurozone's trade balance had no impact on EUR/USD's direction, nor did a speech from ECB President Christine Lagarde. However, strong US retail sales data for January prompted dollar demand to surge, causing the pair to fall in the afternoon. A trade balance report from Italy and an ECB economic update are scheduled for today, followed by speeches from ECB Board members Fabio Panetta and Joachim Nagel. The latter may help euro rise, but only if they confirm the bank's hawkish stance on rates. In the afternoon, the US will release data on building permits and new foundations, which are part of the most important sectors of the economy. Meanwhile, the weekly jobless claims, producer price index and the Philadelphia Fed manufacturing index are unlikely to affect the market; however, in case the data turns out to be better than expected, another strengthening in dollar and fall in euro will be seen. For long positions: Buy euro when the quote reaches 1.0716 (green line on the chart) and take profit at the price of 1.0763. Growth will occur if there are hawkish comments from ECB representatives. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0686, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0716 and 1.0763. Read next: USD/JPY Is Above 133.30, GBP/USD Droped Form $1.21 to $1.20, The Aussie Pair Is Trading Below $0.69| FXMAG.COM For short positions: Sell euro when the quote reaches 1.0686 (red line on the chart) and take profit at the price of 1.0630. Pressure will return if data on the Euro area disappoints and if the Fed's statements remain hawkish. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0716, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0686 and 1.0630. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trade   Relevance up to 08:00 2023-02-17 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335283
InstaForex's Ralph Shedler talks Euro against Japanese yen

USD/JPY Is Trading Close To 134.00, EUR/USD Is Remaining Above $1.07

Kamila Szypuła Kamila Szypuła 16.02.2023 12:26
The dollar stalled on Thursday as investors scooped up higher-risk currencies after a string of strong US economic data bolstered confidence in the global growth outlook, even as the Federal Reserve appears poised to raise interest rates further. However, the question for market watchers is how well the economy can hold up, especially as interest rates are much higher than many initially thought. The US Bureau of Labor Statistics will publish data on the producer price index (PPI) for January. It is forecast that in annual terms the PPI will fall to 5.4% from 6.2% in December and the core PPI will fall to 4.9% from 5.5%. USD/JPY The yen pair started the day trading above 134.00, but the upward momentum was not maintained and USD/JPY fell below that level to 133.70. In the following hours, USD/JPY tried to make up for losses. At the time of writing, the yen pair is close to 134.00 and trading at 133.9520. The appointment of former BJ board member Kazuo Ueda as governor of the central bank cooled speculations about an early normalization of interest rates. In the past, Ueda has warned of the danger of premature interest rate hikes, putting an end to any fears of higher interest rates in the foreseeable future. The perception that Ueda could improve YCC, given accelerating inflation, could at least limit USD/JPY's rise. EUR/USD EUR/USD regained traction after Wednesday's declines and moved into positive territory just above 1.0700 early in the day on Thursday. The EUR/USD pair is trading slightly above 1.07. European Central Bank President Christine Lagarde told the European Parliament on Wednesday that she intended to raise key interest rates by 50 basis points (bps) in March. Lagarde reiterated that core inflation in the euro area is still high and price pressures remain strong. Later in the day, ECB Chief Economist Phillip Lane and ECB Executive Board Member Fabio Panetta will deliver speeches. If ECB officials leave the door open to additional rate hikes after March, euro losses are likely to remain contained in the short term. Read next: Tesla Will Make Supercharger Network, Visa Will Allow The Use Of Cryptocurrencies To Settle Transactions| FXMAG.COM GBP/USD The Bank of England has already signaled it may stop raising interest rates in March, and Wednesday's inflation figures reinforced that view. Softer-than-expected January UK inflation data weighed heavily on sterling during European trading hours on Wednesday. GBP/USD is trading positive around 1.2050 on Wednesday. Positive turnaround in risk sentiment helps pair maintain gains as investors await US macro data releases. The UK inflation data released yesterday surprised negatively, which resulted in lower expectations for rate hikes. This also followed positive employment data, with market participants now pricing in a peak rate below 4.5%. This week's positive data could be the stimulus the Bank of England (BoE) needed to signal an early pause in rate hikes that could see GBP face further selling pressure. AUD/USD The recent decline of the Australian dollar against the US dollar reflects the disparity in the growth prospects of the two economies. This morning's decline from the dismal Australian jobs was no exception - employment fell for the second month in a row in January, while the unemployment rate rose to its highest level since May. The pair has maintained its intraday gains for the first half of the European session and is currently trading near the 0.6920 region. Source: investing.com, finance.yahoo.com
Forex: Euro against US dollar - forecast on April 24th, 2023

The EUR/USD Pair Is Struggling At The Support Level

InstaForex Analysis InstaForex Analysis 17.02.2023 08:03
Although euro is declining lesser than other currencies, its trend is still bearish. It was able to hold onto the support level of 1.0660 yesterday, but this morning it opened with a breakdown of this level. It seems that the signal line of the Marlin oscillator is trying to break out of its own consolidation downwards. If that happens, the level of 1.0595 could be hit, and this will open the way to 1.0470, which is also the low of April 28, 2022. On the four-hour (H4) timeframe, the pair is struggling at the support level of 1.0660. The Marlin Oscillator is already deep into the downtrend, so it is likely that the quote will hit the first target level of 1.0595 (top on December 5, 2022) soon   Relevance up to 03:00 2023-02-18 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335390
Small factors combine to pressure credit

Analysis Of EUR/USD Pair: Support At 1.0655 Will Now Act As Resistance

Torben Melsted Torben Melsted 17.02.2023 08:07
EUR/USD failed first to break clearly above resistance at 1.0791 and then broke below the short-term key support at 1.0655 which has forced us to review our count for wave 4. With the break below 1.0655, we should expect wave 4 to move closer to support at 1.0498 before setting the stage for the next impulsive rally in wave 5 towards 1.1196 or higher. The former support at 1.0655 will now act as resistance, but only a direct break above resistance at 1.0723 will again shift the focus towards the upside.   This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313138
EUR/USD Pair Has A Potential For Short-Term Rally

Germany's PPI And France's CPI Could Lead To An Upward Spike In The Euro

Jakub Novak Jakub Novak 17.02.2023 08:21
Analysis of transactions and tips for trading EUR/USD The test of 1.0716 occurred when the MACD line was already far from zero, so the upside potential was limited. Sometime later, there was another test, but this time it was at 1.0686 and the market signal was to sell. But since the MACD was also far from zero, the price decrease was not very strong. Italy's trade balance report and the ECB's economic bulletin failed to help euro recover on Thursday, as did the statements of ECB Board member Fabio Panetta. However, Germany's PPI and France's CPI, which are due out today, could lead to an upward spike in the currency if the figures turn out to be better than expected. The ECB's current account balance will not affect the market's direction. In the afternoon, besides the speeches of FOMC members Michelle Bowman and Thomas Barkin, there is nothing to help dollar, so a slight uptrend in EU/USD can be expected. The import price index and leading indicators are of no interest. For long positions: Buy euro when the quote reaches 1.0656 (green line on the chart) and take profit at the price of 1.0694. Growth will occur if the inflation data for the eurozone exceeds expectations. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0630, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0656 and 1.0694. For short positions: Sell euro when the quote reaches 1.0630 (red line on the chart) and take profit at the price of 1.0596. Pressure may return at any moment, especially considering the current trend. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0656, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0630 and 1.0596. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader   Relevance up to 07:00 2023-02-18 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335412
Rates Spark: Balancing data and risk factors

According To The ECB Chief The Central Bank Must Keep Taking Aggressive Action

Paolo Greco Paolo Greco 17.02.2023 09:21
On Thursday, the EUR/USD currency pair attempted to resume its downward trend, although the volatility was quite low. Many reports were released in the US throughout the day, but as we had previously warned traders, all of them turned out to be secondary. Perhaps there was a 20–30 point response to a single report, but should we have anticipated such a response? So, we won't even concentrate on macroeconomic data from other countries. The technological picture has significantly improved in terms of interest. If a long-term downward trend has developed on the 4-hour TF and is not reversed, then the pullback we are currently seeing on the 24-hour TF is not particularly convincing. Although the Kijun-sen line has officially been passed, the pair is still extremely close to it, so anything can happen at any time. The major events of this week are all over, so we can't anticipate a lot of volatility or a significant trend change in the coming days. The daily TF, however, clearly demonstrates how weak the current downward correction is in comparison to the prior upward movement, therefore we are still waiting for a further collapse from the pair. We think that the dollar has fallen so much in recent months unfairly and that the euro currency is still significantly overbought. The rhetoric used by ECB and Fed officials is still described as "hawkish," and both sides have made pronouncements and dropped signals about a potential tightening of monetary policy that might be more pronounced than anticipated. As a result, the rates between the euro and the dollar are currently roughly identical. Read next: USD/JPY Is Trading Close To 134.00, EUR/USD Is Remaining Above $1.07| FXMAG.COM Another speech by Christine Lagarde was made this week. The ECB chief has been speaking quite a bit lately, but what new information does she have to share with the market given that everyone is already aware of the regulator's plans? The market anticipated two successive rises of 0.5% and a further 0.25% even before the rate hike in February. As a result, the market was unaffected by Ms. Lagarde's comments regarding an almost certain tightening of monetary policy by half a percent in March. As we just mentioned, since these solutions have been there for a while and are well known, the market has been working on them. The central bank must keep taking aggressive action because inflation is still high, according to Ms. Lagarde. There's nothing new here. At the same time, Gabriel Makhlouf, the president of the Central Bank of Ireland, predicted that the deposit rate would rise over 3.5% and stay there for a considerable amount of time. The key rate is currently 2.5 percent, and the deposit rate is considerably lower. Even a 3.25% rate, in our opinion, won't be sufficient to bring inflation back to 2% in the near future. We, therefore, believe that the ECB rate will increase for more than two meetings. The European Central Bank (ECB) has a considerably greater capacity for tightening than the Federal Reserve, although much will depend on the condition of the European economy, which is on the verge of entering a recession. As a result, the European currency may resume its movement toward the north during 2023. Although we are not opposed to this scenario, we must remind you that trends cannot exist without corrections. As a result, at this point, we anticipate that the pair will keep declining. The road map for future rises is unlikely to clear up by March when there will be a new ECB meeting, but after that, new clues from regulator officials will start to flow in. As a result, the pair can continue to adjust until mid-March. All indications point to a downward trend: the lower linear regression channel is pointing downward, the moving channel is likewise pointing downward, and the price updated its local minimum yesterday. We do not have any leading purchase indications because the CCI indicator did not move into the oversold area. The pair may continue to advance toward Senkou Span B on a 24-hour TF. As of February 17, the euro/dollar currency pair's average volatility over the previous five trading days was 82 points, which is considered "normal." As a result, we anticipate that the pair will move on Friday between 1.0603 and 1.0767. A new round of corrections will be signaled by the Heiken Ashi indicator's upward movement. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trade Suggestions: The EUR/USD pair maintains a downward trend. Before the Heiken Ashi indication comes up, we can now consider opening new short positions with targets of 1.0603 and 1.0620. If the price is established above the moving average line with a target of 1.0864, long positions can be opened. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 01:00 2023-02-18 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335378
Gold Trading Analysis: Technical Signals and Price Movements

FX Daily: Hawks in the ascendancy

ING Economics ING Economics 17.02.2023 09:43
It is a familiar story in FX, but the strong run of US price and activity data has provided a tailwind to Fed hawks. Yesterday it was the turn of Fed's Mester and Bullard to put the idea of more aggressive 50bp rate hikes back on the table. We have another couple of Fed hawks speaking today, Barkin and Bowman, suggesting the dollar can hold gains The Fed's James Bullard said he would not rule out supporting a half-percentage-point hike at the March meeting USD: First quarter of 2023 is proving to be the push-back quarter The dollar continues to quietly reclaim some of the heavy losses seen since last October. DXY has now reclaimed about a quarter of that sell-off. The move has clearly been driven by the re-assessment of the Fed cycle, where the 'higher for longer' camp is in the ascendancy. Yesterday, it was the turn of Loretta Mester and James Bullard to outline how they had favoured a 50bp hike earlier this month instead of the 25bp which was delivered. Equally, they both implied they could support a 50bp hike at the 22 March meeting.  Their comments coincided with an above-consensus US January PPI release and pushed 10-year US Treasury yields a further 6-7bp higher. At 3.89%, the US 10-year yield is now the highest since November. The higher rates for longer thesis has also seen some substantial re-pricing of the Fed curve this month where market pricing for the December 2023 Fed Funds rate has risen to 5.10% from 4.35%. Financial markets are making these substantial adjustments to the Fed cycle – i.e. markets are listening to the Fed hawks – because US activity and price data are coming in stronger than expected. We think the better activity data is partly weather-related and had always thought that the next leg of the US disinflation story would be in the second rather than the first quarter. In short, we think the current dollar rally is probably a correction to an underlying bear trend in 2023. This 1Q23 dollar correction may have a little further to run, however. Today we will also hear from Fed hawks Thomas Barkin and Elizabeth Bowman, plus receive an update on January import prices. We see a scenario where DXY continues to edge up to 105.00, with outside risk this quarter to strong resistance at 106.50 (about 1.8% above current levels), which may then prove the best dollar levels of the year. The next big input to the story will be the FOMC minutes released next Wednesday. Chris Turner EUR: Temporary downside to EUR/USD The hawkish re-pricing of the Fed curve dominates markets and even though eurozone money market rates have risen too, the two-year EUR/USD swap differential has widened back out to levels last seen in mid-December. This now stands at -150bp having narrowed to -110bp at the start of this month. Arguably this spread should not narrow in too much more (unless the market thinks that Fed Funds will end the year near 5.50%), meaning that EUR/USD may not have to fall too much more. We would, however, say the direction of travel is to the 1.0450/1.0500 area, which may be the strongest dollar level of the year for eurozone corporates. There is not too much on the eurozone calendar today apart from the December current account figure and the market seems to be ignoring yesterday's comments from ECB dove, Fabio Panetta, favouring the ECB to move in 25bp rather than 50bp increments. Today we hear from ECB's Francois Villeroy (1230CET), seen more as a centrist these days. Chris Turner GBP: BoE slowdown softens the pound In contrast to the hawkish Fed rhetoric yesterday, comments from Bank of England chief economist Huw Pill pointed towards the BoE shifting towards a slower pace of tightening. As mentioned yesterday, we look for one final 25bp BoE hike to 4.25% next month. The comments have seen sterling very marginally underperform – consistent with our preferred view of EUR/GBP drifting into a 0.89/90 range this year. Away from central banking, the UK press is focusing on a surprise trip by Prime Minister Rishi Sunak to Northern Ireland today. The presumption is that he is trying to win over the DUP nationalist party in support of changes to the Northern Ireland protocol, which could see improved trading relations with the EU. We suspect sterling does not get much of a bounce were a new EU deal announced, with investors quite fatigued on this subject. Chris Turner  PLN: The FX mortgage saga remains on the table Yesterday, the European Court of Justice (ECJ) gave its opinion on the FX mortgage issue in Poland. According to the statement, European Union law does not prevent local law from allowing consumers to claim compensation over and above the compensation already common today. On the other hand, banks cannot charge capital costs if the contract with the client is terminated. However, it seems that a clear interpretation of the ECJ's opinion is yet to be found before assessing whether yesterday's statement is negative or not. From the market reaction, it seems that the first direction was negative, however, during the day the Polish market was rather hit by the global story, and in fact, banking stocks in Poland reversed their direction and erased their initial losses. Of course, this story did not end yesterday, and we will probably see more headlines from local banks and the government in the coming days as to what the expected impact on the banking sector is. As for the market, we are unlikely to see a clear sell-off and a jump-up in the Polish zloty, but the issue remains on the table, and we are more likely to see constant pressure on the zloty to continue to underperform the CEE region. For now, we expect EUR/PLN to stabilise around 4.77. Also today after the end of trading we will see a rating review of Poland by S&P. We expect the rating to remain unchanged and yesterday's decision should not affect the review. However, the August review assumed a smooth drawdown of EU money, which has emerged as a problem for the Polish government in recent weeks. Moreover, the macro picture is also mixed and after the experience with the recent downgrade in the case of Hungary, the market cannot ignore this review. Frantisek Taborsky Read this article on THINK TagsFX Federal Reserve Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more    
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

Kenny Fisher Kenny Fisher 17.02.2023 10:29
The euro is down for a third straight day and fell earlier to 1.0629, its lowest level since Jan. 23. In the European session, EUR/USD is trading at 1.0639, down 0.30%. US dollar flexing muscles The US dollar is showing some strength this week against the majors, as US data continues to shine. Retail sales impressed with a 3% gain earlier this week, and PPI and unemployment claims were both better than expected. Is the disinflation process stalled? The markets didn’t expect such good numbers, but the economy has proved to be surprisingly resilient to rising interest rates. The Fed has been preaching ‘higher for longer’ for some time, but the markets stuck to their dovish stance, expecting that the Fed would have to pivot and even cut rates later in the year. The host of strong US numbers has forced investors to recalibrate, and the markets have revised upwards their peak rate forecast to above 5%. The US dollar has been the big winner of the shift in market thinking, and US Treasury yields are at their highest level this year. Fed member Mester said she saw a strong case for raising rates by 50 basis points at the last Fed meeting, a sign that the Fed could move away from the moderate 25-bp hikes if inflation isn’t falling quickly enough. Mester said that she didn’t see inflation falling to 2% until 2025, which points to a long disinflation process. The ECB raised rates by 50 basis points in February and has signalled that it will do the same at the Mar. 16 meeting. The main financing rate is currently at 3%, well below the Fed (4.5%) and other major central banks. It’s not clear what the Bank has planned after the first quarter, but with inflation running at 8.5%, the risk for further rate hikes is skewed to the upside. The ECB has made it clear that rates will remain high until there is evidence that inflation is falling toward the target, which means that the current rate-tightening cycle isn’t anywhere near its end. Read next: USD/JPY Is Trading Close To 134.00, EUR/USD Is Remaining Above $1.07| FXMAG.COM EUR/USD Technical EUR/USD is testing support at 1.0629. Below, there is support at 1.0581 1.0762 and 1.0847 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Impact of Declining Confidence: Italian Business Sentiment in August

EUR/USD And AUD/USD Are In Downward Trend, USD/JPY Hit 135.00, GBP/USD Is Below $1.20

Kamila Szypuła Kamila Szypuła 17.02.2023 13:12
The dollar rose to a six-week high on Friday as strong US economic data and comments from Federal Reserve officials prompted investors to bet on another rate hike. The Fed's target range is currently between 4.5% and 4.75%. Economists at Goldman Sachs on Thursday raised their expectations for Fed rate hikes this year. After previously expecting two more hikes, they said they now expect three more hikes of 25 bp in March, May and June. That would push interest rates to 5.25% to 5.5%. The US Economic Report will not include any macroeconomic data releases that could significantly affect the behavior of the US dollar. As such, market participants will pay close attention to risk perception. USD/JPY The yen pair hit its highest level in almost two months. USD/JPY has been trending up since the start of the day. USD/JPY started the day trading just above 134.07 and has now crossed the 135.00 mark. EUR/USD EUR/USD extended its decline during the Asian trading hours and hit its lowest level since early January below 1.0650. The technical outlook for the short-term pair shows that the bearish bias remains intact. Meanwhile, comments from Federal Reserve (Fed) and European Central Bank (ECB) officials add to the burden on the EUR/USD pair. The euro could weaken further as the market's interest-rate rise expectations for the European Central Bank may be overdone given comments from ECB members about the risks of excessive policy tightening. ECB board member Fabio Panetta said on Thursday that the ECB should consider the risk of unduly tightening policy and argued that the bank should not commit unconditionally in advance to future policy moves. From a more neutral point of view, the ECB's chief economist Philip Lane said he was open-minded about the exact amount of monetary tightening that would be needed to meet the inflation target. On the other hand, Cleveland Fed President Loretta Mester reiterated that the interest rate will have to rise above 5% and stay there for some time for the Fed to control inflation. Read next: Wyoming Prohibits Forced Disclosure Of Private Cryptographic Keys By US State Courts, JP Morgan Projections Of FX Market| FXMAG.COM GBP/USD GBP/USD extends losses towards 1.1900 in the early European morning. The strength of the US dollar (USD) had a big impact on the GBP/USD exchange rate in the second half of the week. Hawkish comments from Fed policymakers and the latest released macroeconomic data have revived expectations that the Fed may decide to make additional interest rate hikes even after May. Data from the UK showed that retail sales rose by 0.5% in January, as compared to market expectations for a fall of 0.3%. While this reading was better than the market's 0.3% decline, December's -1% reading was revised lower to -1.2%, preventing Sterling from taking advantage of the data. AUD/USD Reserve Bank of Australia (RBA) Chairman Lowe's comments did not stop the AUDUSD rate from falling. Governor Lowe warned that the RBA was keeping an open mind and their view was that further rate hikes were needed. Lowe also stated that interest rates are not on a predetermined path as it takes 18-24 months for rate hikes to make an impact in the economy. The pair of the Australian is in a downtrend on Friday. AUD/USD has fallen well below 0.69 and is trading below the 0.6820 level. Source: finance.yahoo.com, investing.com
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

Forex Weekly Summary: USD/JPY Closed Below 135.00, GBP/USD Ended The Week Above 1.20, EUR/USD Ended At 1.0697 And The Aussie Pair Closed Below 0.69

Kamila Szypuła Kamila Szypuła 18.02.2023 13:33
For the forex market, the most important event was the publication of the US CPI and speeches by representatives of the Fed and the ECB. The Dollar Index (DXY) has seen gains recently thanks to Fed officials, which is somewhat surprising as the markets seemed steady after the Non-Farm Payroll (NFP), CPI and Retail Sales figures. In addition, the Fed's guidance has been largely rejected recently, but as the pressure to maintain tight monetary policy in the US increases, so does its impact on market participants. The Fed's Mester mentioned that "January's CPI figures showed there is still a long way to go in cooling down inflation," again adding to the messages sent by yesterday's speakers giving further support to the dollar. USD/JPY The yen pair started the week trading at a weekly low of 131.5020. Throughout the week, USD/JPY was in an uptrend. The weekly high of USD/JPY was above 135.00 at 135.0840. After that it dropped below 135.00 to 134.1140 where it closed the week. As Federal Reserve officials continued to reiterate their commitment to containing price pressures through tight monetary policy, compelling arguments for another 50 basis-point rate hike at the March FOMC meeting supported the strengthening of the dollar versus the yen. Although Tuesday's appointment of Kazuo Ueda as a possible successor to incumbent BoJ (Bank of Japan) governor Haruhiko Kuroda gave the Japanese yen a slight respite, losses were limited. EUR/USD The euro/dollar pair started trading at 1.0681, and rose for a day and a half to reach a weekly high at 1.0789 on Tuesday. And from this level, the EUR/USD pair was in a downtrend where the pair was heading towards 1.0620. On Friday, in the European session, it approached this level and thus recorded the lowest trading level of the week, and then bounced back and closed the week at a level close to 1.07, 1.0697. ECB Executive Board member Fabio Panetta said on Thursday that the ECB should consider the risks of over-tightening the policy and argued that the bank should not unconditionally pre-commit to future policy moves. Despite the rather dovish comments, money markets priced in a terminal ECB rate of 3.75% for the first time - implying that the ECB still has another 125 bps worth of hikes to come. GBP/USD The Cable pair started the week at 1.2053. And similarly to the EUR/USD pair, the GBP/USD pair remained in a bullish trend until Tuesday's US session. GBP/USD, like EUR/USD, had a weekly high on Tuesday above 1.22 (1.2241), then the pair began its decline. The decline in the pair continued until Friday until GBP/USD reached its lowest trading level (1.1916), after which the cable pair rebounded and ended the week above 1.20 at 1.2044. The UK's Office for National Statistics reported on Friday that Retail Sales increased by 0.5% on a monthly basis in January AUD/USD The AUD/USD trade start was at 0.6916. The movement of the Australian pair was linked to its European counterparts (GBP, EUR). On Tuesday, AUD/USD reached its highest level of the week - 0.7016. In the following days, the pair was falling towards 0.6825, where on Friday below this level, at 0.6814, it reached its lowest level. Towards the end of the trade, AUD/USD rebounded and closed the week at 0.6880. Source: investung.com, finance.yahoo.com
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

It Seems That Euro Is Preparing To Overcome The Support Level

InstaForex Analysis InstaForex Analysis 20.02.2023 08:03
The 60-pip decline of EUR/USD last Friday could not be extended. This is because the pair closed with a small white candle, and this morning went back to the range it was trading at last February 16. Although indicator readings have not changed over the past two days, it seems that euro is preparing to overcome the support level of 1.0660. If that happens, the way towards the target level of 1.0470 will be easier. Market players should look out for the exit of the signal line of the Marlin oscillator, which is marked on the daily (D1) chart with a gray rectangle. On the four-hour (H4) chart, Friday's growth was stopped by the resistance of the balance and MACD lines. The signal line of the oscillator is also turning down, and although there was a similar pattern of simultaneous reversal of the price and the oscillator from last Thursday, the signal this time may turn out to be more significant.   Relevance up to 03:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335509
ECB cheat sheet: Difficult to pull away from the Fed

The EUR/USD Prices Might Continue Dragging Lower

Oscar Ton Oscar Ton 20.02.2023 08:07
Technical outlook: EURUSD dropped close to 1.0600 on Friday before bouncing back sharply. The single currency pair is seen to be trading near 1.0690 at this point in writing and is looking poised to break above the 1.0720 initial resistance in the near term. The pullback has the potential to rally up to 1.0800 and 1.0900 levels in the next few trading sessions. EURUSD is working on a corrective drop towards 1.0500 and potentially 1.0100 after having carved a meaningful top at 1.1025 earlier. Within the correction, it looks like the first wave might have been complete at the 1.0600 lows last week. If the above-proposed structure is correct, the euro could rally towards 1.0850-900 levels before reversing lower. On the flip side, prices might continue dragging lower from here and target below 1.0500 to take out initial support. We can expect a pullback rally thereafter as the second wave unfolds towards 1.0800. The bears will be inclined to drag lower towards 1.0100 as the final leg begins to unfold. Also, note that 1.0100 is the Fibonacci 0.618 retracement of the entire rally between 0.9535 and 1.1025 respectively. Trading idea: Potential bearish continuation against 1.1025 Good luck!   Relevance up to 06:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313267
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

The Preferred Scenario Of The EUR/USD Pair Movement

Torben Melsted Torben Melsted 20.02.2023 08:12
We continue to look for a deeper correction in wave 4 after the break below support at 1.0655. Ideally, we will see wave C of 4 continue lower to the 1.0498 target to complete wave 4 and set the stage for wave 5 moving towards new highs for the entire rally from 0.9536. In the short term, only a break above minor resistance at 1.0723 will question our preferred scenario and call for more upside towards 1.0834.   Relevance up to 07:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313283
EUR/USD Pair Has A Potential For Short-Term Rally

Today, Bundesbank Report And The Eurozone Consumer Confidence Indicator May Have A Impact On The EUR/USD Pair

Jakub Novak Jakub Novak 20.02.2023 09:03
Analysis of transactions and tips for trading EUR/USD The test of 1.0656 occurred when the MACD line was already far from zero, so the upside potential was limited. Sometime later, there was another test, but this time it was at 1.0630 and the market signal was to sell. But since the MACD was also far from zero, the price decrease was not very strong. Although euro fell on Friday after Germany reported a decline in its producer price index, buyers were able to offset the fall due to the closing of many positions at the end of the week. Speeches of FOMC members Michelle Bowman and Thomas Barkin also did nothing to help dollar in the afternoon. Today, apart from the Bundesbank report and the eurozone consumer confidence indicator, there is nothing that will have a significant impact on the market. Thus, it is likely that EUR/USD will rise. In the afternoon, there are no statistics at all, so expect a decrease in volatility and trading volume, which will lock the pair in a horizontal channel. For long positions: Buy euro when the quote reaches 1.0703 (green line on the chart) and take profit at the price of 1.0729. Growth will occur if economic data for the eurozone exceeds expectations. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0679, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0703 and 1.0729. For short positions: Sell euro when the quote reaches 1.0679 (red line on the chart) and take profit at the price of 1.0640. Pressure may return at any moment, especially considering the current trend. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0703, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0679 and 1.0640. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335535
USDX Will Try To Test And Break Below The 103.50 Level

FX Daily: Is the dollar rally getting tired?

ING Economics ING Economics 20.02.2023 10:57
FX markets start the week on a quiet footing, with US markets closed for Presidents Day. The US highlights this week will be the FOMC minutes (Wednesday) and January's core PCE deflator (Friday) - both providing input into the Fed's 'higher for longer' policy narrative. We will also get PMI business confidence updates and hearings for the new BoJ governor USD: Price action suggests rally could be running out of steam Dominating global FX and rate markets last week continued to be the Federal Reserve narrative of rates staying 'higher for longer'. Some slightly higher-than-expected inflation prints and hawkish commentary - putting 50bp hikes back on the table - helped drive US yields and the dollar higher. Friday's price action, however, suggested that February's hawkish re-pricing of the Fed story might have come far enough for the time being. US yields reversed from highs seen in early Europe on Friday and DXY dropped quickly from a high of 104.60. On Friday, we had said that this DXY rally could extend to 105.00 or, with outside risk, to 106.50. Yet Friday's price action suggests those levels could be out of reach. Determining whether this month's dollar bounce has any further to go will be two key inputs. The first is Wednesday's release of the FOMC minutes of the February meeting where the Fed hiked 25bp. As ING's US economist, James Knightley, discusses in the week ahead, the focus will be on how close the Fed was to hiking 50bp at that meeting. Watching Fed Chair Jerome Powell's press conference at that meeting, he came across as pretty relaxed and announced that the disinflation process had started. However, the market could be sensitive to suggestions that a 50bp hike had been a close call. On the same subject, Friday's release of the January core PCE deflator - expected at 0.4% month-on-month - will also shed light on the disinflation story. Overall our base case is that February's dollar rally is a correction - but this week will determine whether it runs out of steam or has a little further to go. In addition, this week will see much focus on the anniversary of Russia's invasion of Ukraine and a potential speech from Russian President Putin. In addition, the dollar story could on Friday be driven by USD/JPY. Here, nomination hearings take place for new Bank of Japan Governor, Kazuo Ueda. He is seen as more of a pragmatic academic than the ultra-dove of his predecessor, Haruhiko Kuroda. Any hints of a change to the BoJ's ultra-dovish monetary policy could see USD/JPY sell off again - dragging the broader dollar with it. Expect narrow-range trading in DXY today. Chris Turner EUR: PMIs in focus this week EUR/USD bounced off a low at 1.0613 on Friday - largely as US rates softened through the day. Interestingly, EUR/USD did not seem to take too much notice of comments by the European Central Bank's Isabel Schnabel that the disinflation process had not even started in the euro area. Two-year EUR swap rates jumped 8bp on the remarks, but had completely reversed by the end of the day suggesting market participants feel the hawkish story might have come far enough for the time being. This week, the eurozone focus will be on business confidence in the form of PMIs and the German Ifo. The PMI readings are seen hovering around the 50 area and the market may take more notice of the Chinese February PMI readings which come out later next week. As above, the dollar rally might have come far enough for the time being and EUR/USD found good demand ahead of 1.06. It will probably require quite a hawkish set of FOMC minutes on Wednesday for EUR/USD to break towards 1.05 - where we expect to see good demand ahead of a EUR/USD rally in the second quarter. Elsewhere, the focus will be on Sweden today and the release of the minutes of the central bank's February policy meeting. That meeting delivered a hawkish 50bp rate hike. Let's see whether the minutes shed any further light on how concerned the Riksbank has been with recent weakness in the krona.  Chris Turner Read next: Twitter And Elon Musk Faced A Growing List Of Claims| FXMAG.COM GBP: Sunak struggles to make progress Sterling enjoyed a modest recovery on Friday as the dollar softened through the day. We doubt sterling strength owes much to PM Rishi Sunak trying to make progress on revisions to the Northern Ireland protocol. Here, eurosceptics in the Conservative party, including former PM Boris Johnson, will try to thwart any progress. And Sunak will be reluctant to have to rely on opposition Labour votes to win progress in parliament. Instead, it will probably continue to be monetary policy that drives FX trends. There is little UK data this week, but we will hear from a few more Bank of England speakers. We think BoE rates will peak at 4.25% in March - not that far from market pricing of a peak at 4.35%. Expect EUR/GBP to stay range-bound and GBP/USD to be bounced around by the dollar trend. Chris Turner CEE: Back to gains As we head into the second half of the month, the calendar in the region is lighter this week, but even so, Poland remains in the spotlight. Last Friday, S&P kept its rating unchanged with a stable outlook. Today, we'll see industrial and labour market data for January. We expect industrial production to increase by 4.4% year-on-year, slightly below market expectations. Also tomorrow, Poland will release retail sales for January. Here, we expect a slightly higher number compared to surveys. On Thursday, we continue with unemployment numbers in Poland before moving to the Czech Republic on Friday, where consumer confidence for February will be released. In the FX market, we saw a wave of selling in the CEE region last week but also a boost in interest rate differentials limiting a more pronounced sell-off in our view. The global story should play out this week and with the US dollar running out of steam, the CEE region should return to gains. The main focus will be on the Hungarian forint and Polish zloty. We believe the forint should outperform and benefit from the massive rise in market rates last week. Moreover, the depreciation has eased the pair in a crowded long trade. Thus, we expect a return to 380 EUR/HUF. The zloty should still find its way out of last week's European Court of Justice ruling. We expect stabilisation around the current 4.76 EUR/PLN. However, we are likely to see more headlines following the ECJ ruling which could point to a new direction. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

Fed Hawkishness Is Spreading Toward Europe, Rising Geopolitical Tensions

Swissquote Bank Swissquote Bank 20.02.2023 11:09
The planet is boiling. US Dollar Escalating geopolitical tensions combined with the hawkish Federal Reserve (Fed) bets boost demand in the US dollar, while gold sees demand below the $1840 mark. US stock market But the US yields are trending higher on an increasingly hawkish Fed talk, and that could well send the precious metal into the bearish consolidation zone, sooner rather than later. Fed and ECB And the Fed hawkishness is spreading toward Europe. The European Central Bank’s (ECB) Isabel Schnabel warned last week that investors may be underestimating the persistence of inflation, and more importantly the response needed to tame it. Read next: Twitter And Elon Musk Faced A Growing List Of Claims| FXMAG.COM EUR/USD The EURUSD rebounded from the 1.0612 dip on Friday. European stock markets The European stock markets, on the other, continue performing well despite the hawkish ECB expectations. Why? Watch the full episode to find out more! 0:00 Intro 0:27 Rising geopolitical tensions… 2:21 … and Fed hawks support USD bulls 3:10 US stock rally in jeopardy? 4:41 What to watch this week? 5:50 ECB hawks become louder… 6:46 But European stocks push higher! 8:09 Energy under pressure 9:24 Is dovish Chinese monetary policy enough to boost appetite? Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #China #Russia #North #Korea #Iran #geopolitical #tensions #economic #inflation #data #Fed #ECB #China #rate #expectations #Alibaba #Baidu #earnings #USD #EUR #XAU #Crude #Oil #DAX #CAC #EuroStoxx #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

USD/JPY Pair Is Above 134.00, EUR/USD Pair Holds Below 1.07, GBP/USD Pair Managed To Rebound

Kamila Szypuła Kamila Szypuła 20.02.2023 13:22
The dollar fell on Monday but stayed close to Friday's six-week high as a recent wave of positive economic data boosted market expectations for a tightening of the Federal Reserve's monetary policy. USD/JPY The USD/JPY pair started trading at 134.32 and then rose rapidly towards 134.50. The momentum was not extended and the yen fell to 134.00. At the time of writing, USD/JPY is trading slightly above 134.00 at 134.0290. The geopolitical risk intensified over the weekend when North Korea fired ballistic missiles into eastern waters overnight after an intercontinental ballistic missile was launched on Saturday. Saturday's launch landed off Japan's west coast and prompted joint exercises between the US and South Korea as well as the US and Japan. The sister of North Korean leader Kim Jong Un said the use of the Pacific as a "training ground" would depend on the behavior of US forces and warned of the growing presence of US military assets in the region. This comes as rumors swirl of a new Russian offensive in Ukraine and ongoing US-China spy balloon issues. Markets are still awaiting guidance from the new leadership of the Bank of Japan (BoJ), but hopes for a move away from ultra-easy monetary policy may be overly optimistic. EUR/USD European Central Bank (ECB) policymaker Francois Villeroy de Galhau reiterated that inflation in the eurozone is "too fast and probably persistent", while arguing that the ECB needs to be more predictable in its communications and provide a short-term policy outlook. Later in the day the European Commission will release flash consumer confidence index for February, which is expected to slightly improve to -19.0 from -20.9 in January. Poor trading conditions, however, will likely see the pair's shares confined to a narrow channel. The EUR/USD pair started the week at 1.0686 but was falling. After the fall, the EUR/USD pair rose towards 1.07, but failed to maintain momentum and the pair is again around 1.0680. Read next: EY Will Review Darktrace Key Financial And Control Processes| FXMAG.COM GBP/USD After last week's hesitant action, GBP/USD managed to rebound around the mid-1.2000 area early Monday. The cable pair has been falling from above 1.2050 and is currently trading at 1.2025. Sterling could fall if the Bank of England raises interest rates by 25 basis points in March, but signals that this will be the last hike. Some worrisome economic data from the UK dampened additional rate hikes after March, and money markets now appear to favor a break from the May meeting. The widening of the US-UK rate differential has recently weakened sterling, which could get even worse if the BOE formally deems a potential March interest rate hike to be its last, and given the US data still favors a tightening of the rate path interest rates for the Federal Reserve. AUD/USD The AUD/USD pair is based on Friday's good rebound from around 0.6800, the lowest level since January 6, and gaining strong traction on the first day of the new week. The Australian pair was growing towards 0.69. AUD/USD managed to drink through 0.69 and trade above that level. This momentum was interrupted and the pair dropped to 0.6901. Source: investing.com, finance.yahoo.com
Expect the ECB to keep increasing rates at the short-term, at least until the summer

The Disinflation Process Has Not Started In The Eurozone

Kenny Fisher Kenny Fisher 20.02.2023 14:19
The euro showed some volatility at the start of last week but since then it has been in calm waters and has stayed close to the 1.0.7 line.We’ll get a look at eurozone and German PMIs on Tuesday. ECB signals another 50 bp hike The ECB has been criticized for sending mixed messages to the markets, but Christine Lagarde was crystal clear last week when she told EU lawmakers that “in view of the underlying inflation pressures we intend to raise interest rates by another 50 basis points at our next meeting in March”. Lagarde said the ECB would then evaluate future moves, but with inflation still high, the risks for further rate hikes are skewed to the upside. The ECB’s primary focus is to tame inflation. Headline inflation fell to 8.5% in January, down from 9.2% in December, but is still unacceptably high. Core CPI has been stickier than expected and wage increases are stemming the drop in inflation. ECB member Isabel Shnabel said last that investors risk underestimating inflation, a warning that the Fed has also made to the markets that have consistently been more dovish about rate policy than the Fed. Schnabel noted that the disinflation process has not started in the eurozone, another signal that the central bank will remain in a hawkish mode for the near future. Fed members continue to pound out the message that inflation remains too high and more rate hikes are needed. Investors are clearly concerned that the Fed will make good on these statements, which has sent risk sentiment lower and the US dollar higher. The markets had high hopes that the March rate increase would be a ‘one and done’, but it looks like the Fed will continue raising rates into the second quarter. According to CME’s FedWatch, the markets have priced in an 83% of a 25-bp hike and a 17% of a 50-bp increase. Read next: USD/JPY Pair Is Above 134.00, EUR/USD Pair Holds Below 1.07, GBP/USD Pair Managed To Rebound| FXMAG.COM EUR/USD Technical EUR/USD is testing resistance at 1.0704. Above, there is resistance at 1.0795 1.0604 and 1.0513 are the next support lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
FX Daily: Euro’s attractiveness on the rise

The EUR/USD Pair Is Still Under Pressure

InstaForex Analysis InstaForex Analysis 21.02.2023 08:05
EUR/USD failed to break out of the support of the important technical level of 1.0660, continuing to consolidate under the indicator lines. The signal line of the Marlin oscillator is also sideways, but it is in a negative area, which keeps the downside potential. Overcoming the level of 1.0660 will open the way towards the nearest target level of 1.0595. The success of that development will make the hike to 1.0470 possible. On the four-hour (H4) chart, the pair is above the MACD line because its movement has only been sideways. The Marlin oscillator also continued its lateral movement along the zero line. For the MACD line to help the pair, it needs to rise high enough (1.0710), preferably to consolidate above the balance line (red indicator). However, it is still under pressure, so market players should wait for the price to hit 1.0595   Relevance up to 03:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335623
Forex: Euro against US dollar - technical analysis - May 18th

The European Currency Will Continue To Decline For At Least Another Two To Three Weeks

Paolo Greco Paolo Greco 21.02.2023 08:10
On Monday, there was almost no movement in the EUR/USD currency pair. Volatility was low, which can be partially attributed to the absence of significant macroeconomic and fundamental events. Moreover, Mondays frequently feature weak movements. After the weekend, the market needs to "swing," which takes some time. However, the pair continued to trade below the moving average line, indicating that there is currently no flat. An attempt to break over the moving average line was made last week, but it was unsuccessful due to the news on US inflation. The US dollar should have increased in price as January witnessed a very minor slowdown in inflation. As the market recognized its mistake, it stopped selling it and started buying it again. We witnessed a false overcoming of the moving at this point, which was shortly leveled. According to the Heiken Ashi indicator's current downward trend, the pair may fall to the levels of 1.0590 and 1.0620 today. We anticipate that the European currency will continue to decline for at least another two to three weeks. The pair can successfully shift downwards during this period. If the market is set for an upward trend in 2023, it will be sufficient to begin developing one later. As we've already mentioned, the market has already figured out one of the main things that have been helping the euro currency in recent months. The market was able to anticipate a 1.25% rate increase because the ECB had previously disclosed its expectations for the upcoming several months. As inflation is still extremely high, the European Central Bank will probably not stop at this level of tightening, but the market is still in the dark regarding the regulator's next moves. In any case, the euro currency cannot continue to appreciate even if the "hawkish" sentiment holds strong through May and June. In any case, corrections are necessary. Olli Rehn: Interest rates will continue to rise until the summer. The statement by Olli Rehn, a member of the ECB monetary committee, may have been the sole event on Monday. He delivered the speech that was, in theory, required of him. He specifically stated that the rate hike should continue since core inflation is still too high and has not slowed down. The rate should increase by 0.5% again in March. It is advised to keep growing the pace until the summer when it should reach its maximum level. So, for a very long period, the rates will need to be kept high enough for inflation to recover to 2%. In general, all of these theses have been known to the market for a long time, except for the statements regarding the potential continuation of tightening into the summer. As we previously stated, the ECB is expected to maintain its "hawkish" stance, which may support the euro in the medium term. But, it is important to keep in mind that the Fed may also continue to raise interest rates until the summer. And in this instance, the Fed rate will almost certainly be higher by that time than the ECB rate. As a result, in our opinion, the euro will no longer enjoy widespread support. Therefore, it should no longer be justified in a sharp decline in the price parity area. We see the level of 1.0600 as the lowest target for the present downward movement because there is around where the Senkou Span B line intersects the 24-hour TF. The critical line was crossed on the same TF. The pair has been slowly declining to this point, and this week's macroeconomic and fundamental conditions are not expected to stop it. Hence, nothing has altered in our prognosis as of yet. While volatility has recently dropped to a relatively low level of 74 points per day, we continue to anticipate a fall in the pair, albeit a slow one. Market participants appear to indicate that there aren't many reasons to engage in aggressive trading right now. As a result, you must choose between waiting for new, significant publications and events or relying on weak movements right away. As of February 21, the euro/dollar currency pair's average volatility over the previous five trading days was 74 points, which is considered to be "normal." Thus, on Tuesday, we anticipate the pair to move between 1.0590 and 1.0738 levels. A new round of correction will be signaled by the Heiken Ashi indicator's upward movement. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trade Advice: The EUR/USD pair is still moving south. Before the Heiken Ashi indication comes up, we can now consider opening new short positions with targets of 1.0590 and 1.0620. After the price is fixed above the moving average line, long positions can be initiated with targets of 1.0742 and 1.0864. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 05:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335625
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

The EUR/USD Pair Has A Potential For Bearish Movement

Oscar Ton Oscar Ton 21.02.2023 08:16
Technical outlook: EURUSD rallied through the 1.0704 high intraday on Monday before pulling back. The single currency is seen to be trading around 1.0665 at this point in writing as the bears continue retracing lower. Intraday support is seen through the 1.0650-60 zone, and we can expect the bulls to be back in control. Prices could push higher through 1.0750 and up to 1.0850 in the near term. EURUSD is broadly unfolding a larger-degree corrective drop towards 1.0500 and down to 1.0100 as projected on the daily chart. Within the larger-degree drop, prices are setting up for a counter-trend rally towards 1.0750 at least. The bears are expected to be back in control thereafter and drag lower towards 1.0500 and 1.0100 respectively. EURUSD is facing strong resistance at the 1.1025 high while interim support is seen around 1.0600, followed by 1.0481 levels respectively. Ideally, the price should stay below 1.1025 and continue lower towards 1.0500 in the near term. Watch out for a short-term rally towards 1.0750 and possibly up to 1.0850 before the bears are back. Trading idea: Potential bearish move towards 1.0500 and down to 1.0100 Good luck!   Relevance up to 06:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313423
Rates Spark: Nothing new on the dovish front

The EUR/USD Pair Is Moving Down In A Sluggish Manner

Paolo Greco Paolo Greco 21.02.2023 08:19
Analysis of Monday's trades: 30M chart of EUR/USD On Monday, EUR/USD traded horizontally due to an empty macroeconomic calendar in the US and the eurozone as well as a lack of any fundamental factors able to somehow affect the market. Any price movements and volatility are usually untypical for Mondays. In general, the pair is still in a downtrend that is no longer as strong as it used to be. Traders are now more cautious when selling. Anyway, a bearish continuation is likely. The last two weeks of February are going to be rather uneventful. The world central banks will announce new rate decisions in March, and future trends of major currency pairs will depend on that. There is currently neither a trend line nor a channel. The pair is moving down in a sluggish manner. 5M chart of GBP/USD No trading signals were generated on Monday. The pair traded horizontally in the 1.0669-1.0697 range, i.e. a 30-pips sideways channel. Therefore, there was no point in trading for beginners. Rather, they should wait until the price leaves the channel. In fact, that could happen even without any fundamentals and macro data coming. Volatility will increase once Monday is over anyway. On Tuesday, a few interesting reports are set to be released, which could have a strong influence on the pair. Trading plan for Tuesday: In the M30 time frame, there is a bearish continuation. This is also a weak movement with frequent corrections, and therefore it is hard to price. Volatility is low. The macroeconomic calendar for the coming weeks will contain only reports of secondary importance. So, this is going to be an uneventful and quite boring couple of weeks. In the M5 time frame, levels 1.0535, 1.0587-1.0607, 1.0669, 1.0697, 1.0792, and 1.0857-1.0867 stand as targets. A Stop Loss should be set at the breakeven point as soon as the price passes 15 pips in the right direction. On Tuesday, the eurozone and the US will see the release of their manufacturing and services business activity data. The reaction of the market to these reports will depend on how actual results will differ from forecasts. If they come in line, no reaction will follow at all. Basic principles of the trading system: 1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a breakout). The shorter this period, the stronger the signal. 2) If two or more trades are opened at some level following false signals, i.e. those signals that do not drive the price to a Take Profit level or the nearest target, any consequent signals near this point should be ignored. 3) During a sideways trend, any currency pair may form a lot of false signals or produce no signals at all. In any case, a sideways trend is never the best condition for trading. 4) Trades are opened in the time period between the opening of the European session and the middle of the North American one when all trades should be closed manually. 5) We can pay attention to signals coming from the MACD in the 30M time frame only if there is volatility and a definite trend confirmed by a trend line or a trend channel. 6) If two key levels are too close to each other (about 5-15 pips), that is an area of support or resistance. Indicators on charts: Support and resistance levels can serve as targets when buying or selling. You can place a Take Profit near them. Red lines are channels or trend lines that display the current trend and show which direction is better to trade. MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines. Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, it is important to trade as carefully as possible or exit the market in order to avoid a sharp price reversal. Beginner traders should remember that not all trades will be profitable. The development of a reliable strategy and money management is the key to success in long-term trading.     search   g_translate       Relevance up to 20:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335615
ECB cheat sheet: Difficult to pull away from the Fed

In The Nearest Time The EUR/USD Pair Will Depreciate Up To The Level 1.0482

InstaForex Analysis InstaForex Analysis 21.02.2023 08:24
With the appearance of deviation between price movement with CCI indicator. The Histogram gave the signal if in the nearest time will depreciate up to the level 1.0482 where this confirmed by Zero Line in red which mean both Bearish condition and Chop Zone indicator is in red means that the bias from Fiber is Bearish. But with the condition that the two Sidewinder indicators are colored red which indicates that the EUR/USD condition is in a non-trending / non-volatile condition, therefore please also pay attention if there is a upward correction not exceeding the 1.0804 level because if this level is successfully penetrated, there is a high probability that the downward scenario described earlier will become invalid and automatically cancel itself. (Disclaimer)   Relevance up to 06:00 2023-02-26 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/119885
FX Daily: Time for the dollar to pause?

The EUR/USD Pair Is Waiting For PMI Reports From Eurozone And US

Jakub Novak Jakub Novak 21.02.2023 08:38
Analysis of transactions and tips for trading EUR/USD The test of 1.0679 occurred when the MACD line was already far from zero, so the downside potential was limited. Given the low trading volume due to the weekend in the US, no other signals appeared for the rest of the day. The Bundesbank report and the eurozone consumer confidence indicator surprisingly had no impact on euro yesterday. Today promises to be more interesting as ahead are PMI reports for the eurozone. Figures above 50 points will prompt a rise in euro, which will extend if ZEW data on business sentiment and current conditions also show good numbers. In the afternoon, a similar PMI report is expected for the US, but the data are unlikely to be as strong as in the eurozone. Signals of weakening activity will certainly hurt dollar, which will allow euro to continue its rally. Meanwhile, a strong reading will lead to a sharp decline in EUR/USD during the US session. For long positions: Buy euro when the quote reaches 1.0696 (green line on the chart) and take profit at the price of 1.0729. Growth will occur if economic data for the eurozone exceeds expectations. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0665, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0696 and 1.0729. For short positions: Sell euro when the quote reaches 1.0665 (red line on the chart) and take profit at the price of 1.0624. Pressure may return at any moment. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0696, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0665 and 1.0624. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335649
Gold Trading Analysis: Technical Signals and Price Movements

FX Daily: Growth stories back in focus

ING Economics ING Economics 21.02.2023 08:58
It’s PMI day, and we think the euro could benefit from the reinforcement of its growth story after a period of few domestic drivers. With the Fed's hawkish rate repricing having gone a long way, we suspect the USD rally may soon run out of steam, even though risk-off may delay a downtrend. Elsewhere, we expect a hawkish 50bp RBNZ hike, but dovish risks have risen Yesterday's visit by President Joe Biden to Kyiv reiterate the now well-established notion that this will be a long war USD: Supported by risk-off mood, but rally looks tired After a very quiet start to the week in FX due to a US holiday, we should start to see some action today. Yesterday’s visit by President Joe Biden to Kyiv and the pledge for more support to Ukraine don’t have clear implications for markets in the near term, but probably reiterate the now well-established notion that this will be a long conflict. The ramifications for the global economy can still be quite deep, especially in neighbouring Europe, but energy prices have been the main transmission channel from the war to the market, and TTF trading around 50 EUR/KWh is allowing markets to turn a blind eye to longer-term risks. We argued in yesterday’s FX Daily how this could be the week where the dollar rally starts losing some steam. The main reason for this is that the recent hawkish rhetoric and strong data have likely been absorbed by now and a further hawkish repricing in Fed rate expectations (currently embedding a 5.40/45% peak rate) is looking increasingly harder. We think that at this stage, it may be mostly down to external factors – like news from Ukraine/China or a general deterioration in risk sentiment – to push the dollar even higher. The key event on the Fed front this week, the FOMC minutes, may not match the hawkish tone we heard after the strong jobs and inflation data released after the meeting. PMIs will be watched in the US like in the eurozone, but the rebound in other surveys already favoured a positive re-rating in US growth expectations and may have set the bar quite high for a major positive surprise to lift the dollar. Still, signs of deterioration in the global risk sentiment this morning suggest today might not be the day for the start of a dollar downtrend, but – equally – we struggle to see DXY extend the recent rally to 105.00 and we could instead witness the start of a decline again towards 102.50-103.00 in the coming days. Francesco Pesole EUR: A reminder of the improved growth outlook The euro has been left without strong domestic drivers on the data front over the past week, so today’s PMIs will be watched quite closely. Consensus is leaning in favour of some modest improvement in both manufacturing and service gauges, and investors might see this as an opportunity to re-enter strategic medium-term long-EUR positions now that the dollar correction seems to be losing momentum. Instability in global risk appetite today may delay the beneficial effects on EUR/USD today, but we still see the balance of risks tilted to the upside for EUR/USD in the coming days, and a return to the 1.0750-1.0800 range seems possible. Elsewhere, it is a very busy week in Sweden. Despite some easing in inflation expectations in the Prospera survey released this morning, yesterday’s core CPIF inflation print came in hotter than expected at 8.7% (rising from 8.4%), and EUR/SEK dropped on expectations of more Riksbank tightening. While this fits our view for a recovery in the krona over the course of the year, we warn against celebrating too early. Remember that the slump in SEK was originally triggered by concerns about the Swedish economic and housing situation, and while more Riksbank tightening helps SEK in the near term, it raises the risks of a black-swan scenario materialising down the road. We think activity data and the outcome of wage negotiations can still generate significant volatility in the krona, and a sustainable move below 11.00 in EUR/SEK still looks premature.   What the Riksbank surely wants is a stronger SEK, and we have now gotten used to hearing references to the currency from many speakers. The minutes from the latest meeting, released yesterday, did all but confirm that there is a strong hawkish direction at the Riksbank. We have long argued how maintaining such rhetoric is likely the best way to navigate the current policy challenges in Sweden. We’d be surprised to hear any dovish hint from the two speakers today (Floden and Ohlsson) or by Governor Erik Thedeen tomorrow.   Francesco Pesole GBP: Looking unlikely to sustainably outperform EUR The PMIs will also be released in the UK this morning, and the consensus seems to be looking at an improving outlook here as well. Still, UK PMIs should continue to fall below the eurozone ones and therefore continue to point to the UK’s relative economic underperformance. Ultimately, we struggle to see the pound consistently strengthening against the euro, especially as we expect the Bank of England to deliver only one last 25bp hike in March, while markets are partly pricing in further tightening after that. EUR/GBP may stay range-bound or climb gradually at this stage. Francesco Pesole NZD: We expect 50bp by RBNZ, but watch the cyclone risk The Royal Bank of New Zealand (RBNZ) announces monetary policy at 0100 GMT tomorrow and we are aligned with the consensus call for a 50bp rate hike – as discussed in our meeting preview. This is its first monetary policy meeting since November, and policymakers will need to take note of the deterioration in activity indicators, inflation having undershot the Bank’s projections, and a housing market that has remained under pressure. All those factors are enough, in our view, to convince the RBNZ to slow the pace of tightening from 75bp to 50bp, but there is probably little advantage in offering dovish signals to the market. Such signals would not just come with a smaller – 25bp hike – but also by revising the peak rate projections lower, which are currently at 5.50% in mid-2023. We have increasing doubts that the 5.50% level will be reached at all (rates are at 4.25% now). Despite the house price correction having largely been in line with RBNZ projections, lower-than-expected inflation would encourage stopping hikes – and hopefully the housing slump – earlier. It is, however, too premature to review those rate projections lower, in our view, at least until there is more conclusive evidence that the disinflation process has started. There is one key risk to our call though: the impact of the cyclone in New Zealand. This has triggered growing speculation that the RBNZ will only hike by 25bp or even pause, and is probably behind the drop in NZD/USD to 0.6200 this morning.  Admittedly, this downside risk has become more material now, but we stick to our call for a hawkish 50bp hike by the RBNZ, and we think this will lift the New Zealand dollar tomorrow. However, we think this may be one of the last times the RBNZ has a direct positive impact on NZD as many factors suggest a dovish pivot will come soon. Francesco Pesole Read this article on THINK TagsNew Zealand dollar FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Unraveling UK Inflation: The Bank of England's Next Move

The Pound Gained After The Publication Of PMI Reports, Euro Is Below 1.07, USD/JPY Pair Is Above 134.50

Kamila Szypuła Kamila Szypuła 21.02.2023 12:54
The dollar was parked below recent peaks on Tuesday, as a three-week rally faded and traders waited on economic data to figure out whether it's warranted to push the dollar up any further. Strong U.S. labour data and sticky inflation have raised U.S. rate expectations and supported the dollar's rally this month - Tuesday's European and U.S. manufacturing data and Friday's core PCE price index will guide the next steps. After an unannounced visit to Kiev, US President Joe Biden will visit Poland on Tuesday. Biden will reportedly talk about strengthening Poland's security by increasing NATO's presence in the country. USD/JPY USD/JPY regains positive traction on Tuesday and maintains its bidding tone throughout the first half of the European session. The pair is gradually approaching the level of 135.00. The yen pair at the time of writing is close to 134.70. The services PMI in Japan turned out to be much better than expected and from the previous reading. The manufacturing PMI was well below expectations, falling month-on-month. On the policy front, the European Central Bank has continued to aggressively tighten policy, despite signs that inflationary pressures may have peaked. The European Central Bank raised interest rates by 50 basis points at its February meeting to the highest level since late 2008, marking another hike of the same magnitude next month and reaffirming its commitment to fighting inflation. Source: investing.com EUR/USD The euro stayed below USD 1.07, oscillating around the weakest level since January 6. In the eurozone and Germany, the manufacturing PMIs turned out to be weak, below expected levels. Services PMI rose. And also ZEW economic sentiment showed an improvement in sentiment. Source: investing.com Read next: Baltic Pipe Is Alternative Energy Source For Poland| FXMAG.COM GBP/USD The data on public finances in the UK released this morning exceeded estimates. The pound strengthened on Tuesday after data showed an unexpected rebound in UK business activity, suggesting the economy could avoid a deep recession. The pound managed to break through 1.2100 and is currently trading just above. UK data showed private sector business activity surged in early February with the Composite PMI rising to 53 from 48.5, providing a boost to sterling. As the UK private sector is resilient to strong inflation, the Bank of England is likely to continue to raise its key rate without worrying about a deep recession. British Foreign Secretary James Cleverly said late Monday evening that they would hold further talks with the EU over the Northern Ireland Protocol in the coming days. Cleverly is also reportedly planning to address Tory MPs on Wednesday to give an update on the negotiations. Source: investing.com AUD/USD The minutes of the RBA meeting revealed most of what was already known to the market. The outlook for the Australian economy has many positive aspects, but a potential concern is that the CPI outperforms both PPI and wage inflation. The year-on-year CPI by the end of 2023 was 7.8%, and the PPI in the same period was 5.8%. Tomorrow the Australian Bureau of Statistics (ABS) will release the Wage Price Index. The AUD/USD pair came under renewed selling pressure on Tuesday and reversed much of the positive move from the previous day. The pair remains below the 0.6900 level for the first half of the European session. The Aussie pair is above 0.6880. Source: investing.com, finance.yahoo.com
The EUR/USD Pair Chance For The Further Downside Movement

The EUR/USD pair is showing signs of strength

InstaForex Analysis InstaForex Analysis 22.02.2023 08:00
Overview : The EUR/USD pair continues to move downwards from the level of 1.0733. Yesterday, the pair dropped from the level of 1.0733 (this level of 1.0733 coincides with the double top - 38.2% of Fibonacci retracement levels) to the bottom around 1.0649. Today, the first resistance level is seen at 1.0712 followed by 1.0733 (the daily pivot point), while daily support 1 is found at 1.0613. Also, the level of 1.0733 represents a weekly pivot point for that it is acting as major resistance/support this week. Amid the previous events, the pair is still in a downtrend, because the EUR/USD pair is trading in a bearish trend from the new resistance line of 1.0785 towards the first support level at 1.0670 in order to test it. If the pair succeeds to pass through the level of 1.0670, the market will indicate a bearish opportunity below the level of 1.0670. So, we expect the price to set below the strong (first) support at the level of 1.0670; because the price is in a bearish channel now. The RSI starts signaling a downward trend. Consequently, the market is likely to show signs of a bearish trend. If the trend breaks the major support at 1.0670, the pair will move downwards continuing the bearish trend development to the level 1.0623 in order to test the daily support 2. The EUR/USD pair is showing signs of strength following a breakout of the lowest level of 1.0550. The market is indicating a bearish opportunity above the above-mentioned support levels, for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. However, if a breakout happens at the resistance level of 1.0733, then this scenario may be invalidated.   Relevance up to 00:00 2023-02-23 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313559
Forex: Euro against US dollar - forecast on April 24th, 2023

The EUR/USD Pair May Now Make An Attempt To Rise To The Target Range

InstaForex Analysis InstaForex Analysis 22.02.2023 08:12
EUR/USD fell by 35 pips on Tuesday, breaking through the support level of 1.0660. However, the decline is short-lived as the pair is already trying to get back above 1.0660 during today's Asian session. This is already the second unsuccessful attempt to go under the support level. The first one was on February 17. Under the new circumstances, the pair may now make an attempt to rise to the target range of 1.0758/87. If the Marlin oscillator continues to move sideways or go down, the pair will not be able to climb up. After all, a consolidation has been going on since February 6, and a breakout is most likely to occur downward. If that happens, the pair will decline below 1.0595 and go further towards 1.0470. On the four-hour (H4) timeframe, the pair is under the indicator lines and the Marlin oscillator is moving sideways. Wait for a consolidation above or below 1.0660 and watch for further developments. Relevance up to 03:00 2023-02-23 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335744
Small factors combine to pressure credit

Good Germany's Data On Inflation Will Allow Euro To Rise

Jakub Novak Jakub Novak 22.02.2023 08:34
Analysis of transactions and tips for trading EUR/USD The test of 1.0665 occurred when the MACD line was just starting to move downwards, which was a good signal to sell. There was no strong price decrease during the first test, but on the second the pair managed to fall down by 20 pips. No other entry points were achieved for the rest of the day. PMI data for the eurozone was ignored by markets even though the figures were better than expected. They only reacted with similar reports from the US, prompting a rise in USD. Key reports for today are Germany's data on inflation, as well as reports on business conditions, present situation and economic expectations from the IFO. Good numbers will allow EUR to rise and get out of the pressure from sellers. In the afternoon, there is only the Fed's minutes, which is unlikely to have a strong impact on markets as much has already changed since the meeting. For long positions: Buy euro when the quote reaches 1.0681 (green line on the chart) and take profit at the price of 1.0722. Growth will occur if economic data from Germany exceeds expectations. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0650, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0681 and 1.0722. For short positions: Sell euro when the quote reaches 1.0650 (red line on the chart) and take profit at the price of 1.0616. Pressure may return if there is no reaction to IFO data. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0681, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0650 and 1.0616. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader Relevance up to 07:00 2023-02-23 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335762
Impact of Declining Confidence: Italian Business Sentiment in August

FX Daily: Geopolitical risk strikes back

ING Economics ING Economics 22.02.2023 09:06
We remain doubtful that the dollar has further to run on the Fed story, and today’s FOMC minutes may struggle to match the recent hawkish Fedspeak. However, a resurgence in geopolitical risk means that defensive USD positions may linger. Elsewhere, the RBNZ 50bp hike was paired with a hawkish tone, but the risk of undershooting rate projections is high In a speech on Tuesday, Putin said Russia would pull out of its last remaining nuclear treaty with the US USD: Helped by geopolitical uncertainty We recently argued that the dollar rally would run out of steam, as the hawkish repricing of Federal Reserve rate hikes has likely peaked, and that external factors would be a more likely cause of further USD appreciation. This has indeed been the case since market action resumed after Monday’s US holiday, as a return of geopolitical risk weighed on global risk assets and buoyed the safe-haven dollar. The focus is now on Russia’s next moves on the Ukraine front ahead of a potentially turbulent anniversary of the invasion, at a time when China – a key ally for Russia – has seen a rapid deterioration in its relationship with the US. An important point is that geopolitical themes had a clear channel with assets through energy prices, and the drop in gas prices observed over the winter has broken that link. This means both that there is room for more geopolitical risk to be priced in, but also that impact should not be as direct and forceful as last year unless energy prices materially bounce back. On other fronts, markets will watch with great interest the content of the FOMC minutes today. We must remember that the 1 February meeting was held before the strong jobs and inflation figures, and crucially before the hawkish repricing in Fed expectations. With markets pricing in close to a 5.50% peak rate, we would essentially need to see evidence that multiple members voiced the desire to hike by 50bp at the start of February. That would back the cause for a 50bp move in March, and likely lift the dollar. However, the bar is set quite high after the recent hawkish comments, and we don’t see a very high chance of a hawkish surprise today. The current instability in the geopolitical picture warrants caution and a bit more support to the dollar may be on the cards, even though we see a good chance that the USD upside correction has peaked. Francesco Pesole EUR: Rebound delayed? Yesterday’s PMIs clearly pointed to an improving picture in the eurozone, and we had previously signalled how the data could have encouraged some to re-enter strategic medium-term euro longs. However, the resurgence of geopolitical risk in Russia/Ukraine is inevitably curbing appetite in the common currency: markets may need to get some reassurance on that before jumping back into EUR/USD longs. We think that, at this stage, support around 1.0640-1.0660 is enough of an encouraging sign for EUR/USD given the strength of the dollar against other pro-cyclical currencies. A hawkish surprise in the FOMC minutes and/or more geopolitical risk being priced in would likely put the 1.0600 support at risk. But unless those two risks materialise, a good Ifo reading in Germany today and stabilisation in sentiment may actually start to favour a move back to 1.0700-1.0750 before the weekend. Francesco Pesole GBP: Enjoying good momentum The pound has continued to display very good resilience despite a re-strengthening in the dollar, this time thanks to very strong PMI readings yesterday. A big (and unexpected) jump from 48.5 into expansionary territory (53.0) in the composite gauge is favouring a re-rating of growth expectations in the UK, which is ultimately translating into rising bets on Bank of England tightening – the biggest driver of GBP performance of late. The OIS pricing for the BoE peak rate has jumped by around 15bp since Monday, and now falls around the 4.55% area - i.e. fully factoring in at least two more hikes. There’s another factor that may play a role here: government borrowing figures for January surprisingly came in £22bn short of the Office for Budget Responsibility’s forecasts. This essentially gives Chancellor Jeremy Hunt plenty more ammunition to deploy fiscal support. The initial impact on the pound from those figures was not positive, but there are reasons to believe this could prove beneficial for GBP further down the road. We are not convinced the BoE will ultimately deliver more than one hike, and given the pound’s high sensitivity to the BoE story, we are struggling to see a sustainable outperformance of sterling against the euro in the coming months. But we have to admit that a break below 0.8800 in EUR/GBP is a tangible possibility in the very near term, and a recovery from those levels (which is our base case) may only be gradual. Francesco Pesole NZD: RBNZ stays hawkish The Reserve Bank of New Zealand's decision overnight was fully in line with our expectations: a 50bp rate hike to 4.75%, a hawkish tone, and unchanged rate projections. The New Zealand dollar is trading stronger after the announcement and press conference by Governor Adrien Orr, but it still seems like the instability in global risk sentiment is putting a cap on NZD/USD gains at the moment. The acknowledgement of slower inflation and a subdued economic outlook were included in the statement, as well as an analysis of the potential impact on growth (negative) and inflation (positive) of cyclone Gabrielle. Ultimately, the reiteration that the monetary policy strategy has a medium-term horizon was clearly aimed at detaching market rate expectations from such short-term events. Interestingly, the new RBNZ projections included an even larger (and longer-lasting) slump in the housing market. This seems to us another attempt to sound hawkish and to re-link the market pricing with the 5.50% projected peak rate, as the housing correction appeared to many – including us – as the main reason to stop hiking earlier. We still think there is a high risk that the 5.50% peak rate will not be reached unless the impact of the cyclone effectively stops the deflationary process. Markets are pricing in 35bp for the 5 April meeting: it’s important to note that there are no key data releases except 4Q GDP before that date. A 25bp increase looks more likely, but we wouldn’t exclude one last 50bp move before data deteriorate in the second quarter. This means that the RBNZ could offer support to NZD into the start of 2Q, but we then think that a worsening in data and slower inflation should leave further NZD/USD upside heavily dependent on a favourable external environment. We still target 0.67 by the third quarter. Francesco Pesole Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Worst behind us for UK retail despite fall in sales

The Likelihood Of An Economic Recession In The UK Has Greatly Lessened

Jakub Novak Jakub Novak 22.02.2023 10:33
Yesterday, the British pound gained significantly against the US dollar, although the UK economy is undergoing the most severe cost-of-living crisis in several generations. Yet, as it turned out, it is handling things better than economists and the Bank of England's policy had anticipated, which improves the likelihood that the nation will escape entering a recession. PMI index  According to PMI index figures released yesterday, private sector output increased for the first time in seven months, accompanied by significant increases in tax collections and higher-than-expected retail sales. All of this suggests that the economy remains stable, defying official and expert predictions. Difficult task Prime Minister Rishi Sunak and his Conservative Party, who have a difficult task ahead of them to win the general election, might take solace in this kind of news. The resulting number, however, might force the Bank of England to keep up the sharpest rate increase in the last three decades to bring inflation back to the target level of roughly 2.0%. Recession The facts to date only show that the likelihood of an economic recession has greatly lessened when compared to before, but the heightened inflationary pressure has not subsided and unquestionably continues to be the regulator's top concern. Bank of England As mentioned above, yesterday's statistics showed a substantial rise in activity in the service sector, which caused the pound to rise and the weekly maximum to be updated. The Bank of England had previously revised and improved its prediction earlier this month, anticipating a contraction of less than 1% over the following five quarters. In actuality, this is a protracted period of stagnation rather than a full-blown recession. Energy demand The Treasury's demand for cash has decreased as a result of lower-than-anticipated interest payments on debt and the highest-ever income tax receipts. A warmer winter lowers energy demand, enabling government subsidies for citizens to pay their electricity and natural gas bills to be reduced. Remember, though, that the British Finance Minister rejected calls for a significant tax cut and declined to grant the unions' requests for salary rises, both of which, in theory, would have reduced inflationary pressure and limited future inflationary pressure. Hunt's statement "Given that debt is at its highest level since the 1960s, we must stick to our plan to reduce it in the medium term. Debt reduction will require some difficult decisions, but it is extremely important to reduce the amount that will be spent on debt interest so that we can protect our public services," Hunt said in a statement. Inflation Inflation is not declining as quickly as anticipated, even if some indicators show a significant improvement. The most recent value of 10.1% is far from the Bank of England's targets, although being one percentage point lower than the peak in October. GBP/USD Regarding the GBP/USD's technical picture, the bulls were able to halt the bear market. The bulls must ascend above 1.2140 to stabilize the situation. The only way to increase the likelihood of a subsequent recovery to the area of 1.2215, after which it will be feasible to discuss a more abrupt movement of the pound up to the area of 1.2265, is if this resistance fails to hold. After the bears seize control of 1.2065, it is feasible to discuss the return of pressure on the trading instrument. The bulls' positions will be hit if this range is broken, which could push the GBP/USD back to 1.1980 with a potential return of 1.1920. EUR/USD  Regarding the EUR/USD technical picture, the pair's pressure was maintained. Breaking above 1.0660 will cause the trading instrument to snap to the 1.0720 level and halt the bear market. Above this point, you can easily reach 1.0760 and update 1.0800 in the near future. I anticipate some activity from significant purchasers if the trading instrument only declines in the vicinity of 1.0615. It would be preferable to wait until the 1.0565 low has been updated if no one is there before initiating long positions   Relevance up to 08:00 2023-02-23 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335768
Australian dollar against US dollar: USD may rise on the back of the Republicans and Democrats negotiations

The AUD/USD Pair Remains Under Selling Pressure, The GBP/USD Pair Is Below 1.21 Again

Kamila Szypuła Kamila Szypuła 22.02.2023 13:38
The dollar rose slightly on Wednesday, continuing to trade near six-week highs on the back of strong economic data. Survey data released on Tuesday showed U.S. business activity unexpectedly rebounded in February to reach its highest in eight months. In the euro zone, a survey-based gauge of activity also surged, hitting a nine-month high. Investors' focus now turns to the release of the minutes from the Fed's latest meeting later on Wednesday, which could offer more insight into policymakers' plans. USD/JPY One pair is moving in a sine wave pattern today. In the first hours of trading, USD/JPY dropped to around 134.60 and then rose to around 1134.95. This move has been repeated once again, and USD/JPY is now heading down towards 134.65. Bond purchases and BOJ loans dominate the headlines in Japan. The Japanese yen found some support against the US dollar on Wednesday morning, while the Bank of Japan (BOJ) had to buy 10-year government bonds due to the yield breaking the upper limit set by the BoJ (0.5%) of their policy range. It was the second consecutive trading session during which this took place. BOJ's Tamura gave mixed messages, stating that loose monetary policy is now required, but future policy changes will be crucial at some point in the future. EUR/USD The movement of the EUR/USD pair in Asian Russia and at the beginning of the European traded in the range of 1.6550-1.6650. In the European session, the pair fell and is currently trading around 1.6300. Yesterday's data from the euro zone showed further improvement, with flash PMI beating estimates in the services sector, while production fell slightly. The Zew Sentiment Survey reflected an improvement in sentiment and optimism, with expectations and current conditions outperforming estimates in both the Eurozone and Germany. This morning brought German inflation data for January up from December, confirming comments from ECB President Christine Lagarde about a 50 basis point hike at the upcoming meeting Read next: Sweden And Finland Are Getting Closer To Becoming NATO Members| FXMAG.COM GBP/USD The cable pair in the Asian session kept its momentum above 1.21. The European session is not favorable for the gunt pair and the pair is below 1.21. At the time of writing, GBP/USD was trading at 1.2090. Sterling pulled back on Wednesday after rising sharply on stronger-than-expected British business activity as traders awaited consumer confidence data and focused on Britain's political headaches. The latest UK PMIs beat forecasts and showed business activity in the UK, especially in the services sector, picking up sharply in February. The latest data suggest that the UK economy may be improving, giving the Bank of England more wiggle room to increase interest rates. UK inflation is on the way down, but at a current level of 10.1% is sharply higher than the Bank of England’s (BoE) mandate of around 2%. Inflation is expected to fall quickly over the coming months, according to the BoE, as energy prices and the cost of imported goods fall. AUD/USD The AUD/USD pair adds to the significant losses from the previous day and remains under selling pressure for the second day in a row on Wednesday. The Aussie Pair is holding below 0.69. At the beginning of the day, AUD/USD started to fall to the level of 0.6830 and in the Asian session kept trading in the range of 0.6830-0.6840. In the first hours of trading in the European session, the Australian pair fell below 0.6820, but managed to rebound and at the time of writing was just above 0.6830. Source: finance.yahoo.com, investing.com
Rates Spark: Crunch time

The EUR/USD Price Settled In The Consolidation Range

InstaForex Analysis InstaForex Analysis 23.02.2023 08:04
On Wednesday, the euro did not provide any surprises and went 43 pips down to the target level of 1.0595, missing it by only 4 pips. The price settled in the consolidation range of December 16-29, which, following the main scenario, will move down quite quickly, since the signal line of the Marlin oscillator has already moved down from its consolidation. Now we are waiting for the price to settle under 1.0595 and reach the target range of 1.0443/70 (the low of April 2022 - low of December 17). The four-hour chart has all the prerequisites for quickly moving away from the achieved range to the downside. This is the current price development under both indicator lines, decline in the signal line of the Marlin oscillator, as well as in its own descending channel. I expect the price to settle under 1.0595.     Relevance up to 04:00 2023-02-24 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335872
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The EUR/USD Bears Are Looking Inclined To Drag The Price Lower

Oscar Ton Oscar Ton 23.02.2023 08:11
  Technical outlook: EURUSD dropped to the 1.0599 low during the late New York session on Wednesday before pulling back. The single currency is seen to be trading close to 1.0620 at this point in writing as the bulls prepare to unfold a counter-trend rally soon. The near-term resistance is seen around 1.0700 and a push higher will confirm a bottom in place at 1.0599. EURUSD bears are looking inclined to drag the price lower toward 1.0500 from the current levels. A consistent break below 1.0600 will open the door to a drop further toward the 1.0480-1.0500 support as marked on the daily chart here. If the above scenario unfolds, the proposed counter-trend rally will be further delayed. Either way, the larger-degree wave structure is indicating that EURUSD is heading lower towards 1.0100 in the next several trading weeks. Also, note that 1.0100 is the Fibonacci 0.618 retracement of the earlier rally between 0.9535 and 1.1025 respectively. If the drop unfolds as corrective, a high probability remains for a bullish reversal from 1.1025. Trading idea: A potential drop against 1.1025. Good luck!   Relevance up to 07:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313743
ECB cheat sheet: Difficult to pull away from the Fed

The EUR/USD Pair Is Seeing Resistance Near 1.0650 That Ideally Will Cap The Upside For The Expected Decline

Torben Melsted Torben Melsted 23.02.2023 08:15
EUR/USD continues to follow the expected path lower in wave C of 4. Ideally, we will see wave C continue lower to test the ideal target seen at 1.0498 before completing wave C and wave 4. This should be setting the stage for wave 5 to take over for the next impulsive rally to above the former top at 1.1033 and ideally, closer to the 1.1360 - 1.1390 target area. We see resistance near 1.0650 that ideally will cap the upside for the expected decline towards 1.0498, but only with a break above resistance at 1.0723, we will review our count.     Relevance up to 07:00 2023-02-24 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313747
FX Daily: Time for the dollar to pause?

The EUR/USD Movement Is Weak Since There's Almost No Important Market Events Right Now

Paolo Greco Paolo Greco 23.02.2023 09:19
M5 chart of EUR/USD EUR/USD continued to trade the same way it did a few days before. A rather weak downward movement, which is completely justified and expected. I have already mentioned that I expect the euro to continue to fall, because the factors that have been pushing the pair up for several months have been worked off by the traders more than once. Now it needs a technical bearish correction, which is hardly over. Besides, the European Central Bank is not in a hurry to toughen its hawkish rhetoric, while the Federal Reserve gladly does. The problem of inflation is more acute for the ECB, not the Fed. Generally, I think that the pair's systematic decline will continue for some time to come. There were only two signals yesterday, and there were no important events during the day, except the Fed minutes. Therefore, all the reversals during the day were not related to fundamental events. The first rebound from 1.0658 triggered the 20 pips decline, which was enough only for the Stop Loss to Breakeven. The pair returned to 1.0658 and rebounded from this level again, which created the second sell signal. This time the price went down about 50 pips, but traders had to close the position earlier, closer to the evening and manually. Therefore, the profit was probably about 20 points. COT report: Due to a technical glitch, fresh COT reports have not been released since January 24. Therefore, we can only analyze reports published before this date. The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since September. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. In the reporting week, non-commercial traders opened 9,500 long positions and 2,000 short ones. The net non-commercial position grew by 7,500. The number of long positions exceeds that of short ones by 134,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue. H1 chart of EUR/USD EUR/USD is still bearish and trades below the Ichimoku indicator lines. The downward movement is not strong, but at the same time it is stable. The movement is weak since there's almost no important market events right now, so the pair is moving according to our forecasts, but it's still too slow. But such movement is still better than a flat. On Thursday, important levels are seen at 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0762, and also Senkou Span B lines (1.0708) and Kijun Sen (1.0653). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On February 23, the EU will release its second estimate of inflation for January. It is unlikely to differ much from the first, so I don't expect the market to react to this report. In the U.S. the GDP report for the fourth quarter will be published in the second estimate, so I don't expect the market to react to this report either. All other events of the day will be even less important than those listed above. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders. Relevance up to 08:00 2023-02-24 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335890
US core inflation hits 5.5% and it's the second lowest reading since November 2021

FX Daily: Dollar bears will have to be patient

ING Economics ING Economics 23.02.2023 10:47
Last night's release of the February FOMC minutes provided little comfort to dollar bears who were looking for signs that the Fed was increasingly buying into the disinflation/slowdown narrative. Yet the subsequent rise in US yields and strengthening of the dollar has been quite muted. It's a quiet day for data in the G10 space, but EM FX is interesting USD: FOMC minutes can keep the dollar supported Despite Federal Reserve Chair Jerome Powell sounding quite relaxed at the 1 February press conference and declaring that the 'disinflation process has started', the minutes of that meeting were largely hawkish. The consensus agreed that further rate increases were needed and that inflation remained unacceptably high. There were no hints of a pause and very little to divert market pricing of three more 25bp hikes from the Fed over the March, May and June meetings. This backdrop can keep the dollar supported in the near term and potentially into the 22 March FOMC meeting, where the debate will focus on whether the Fed Dot Plots will retain a median view of a 100bp easing cycle in 2024. For dollar bears, both activity and price data will have to soften over the coming weeks to make an impact on an otherwise hawkish Fed. The next set of meaningful US data is tomorrow's core PCE data for January - but even that is likely to see the core month-on-month reading rising to 0.4% from 0.3%. And for today, the market should not take too much notice of revisions to the strong fourth quarter GDP data -  driven by an inventory build and weaker imports. Our first quarter game plan is that DXY does not hold onto these gains. But for the time being, it looks like DXY wants to probe higher to the 105.00 area with outside risks this quarter to the 106.00/106.50 area. Chris Turner EUR: PMIs drowned out by hawkish Fed The better run of European PMIs earlier this week has rather been drowned out by the hawkish Fed. And actually, the German Ifo proved something of a reality check, where the current assessment of business conditions continued to deteriorate. The good news for EUR/USD is that the re-pricing of the European Central Bank cycle has nearly matched that of the Fed - meaning that the two-year EUR:USD swap differential has not substantially widened in favour of the dollar. In fact, it was interesting to read in the FOMC minutes - under the market developments section - that the Fed felt it was interest rate differentials and the improved Rest of World growth prospects that had been weighing on the dollar into January. These are the factors we have been using in our scenario analyses.  For the short term, EUR/USD remains soggy and it is hard to rule out a break under 1.0600 towards the 1.05 area. Our game plan remains that 1.04/1.05 could now be some of the lowest EUR/USD levels of the year - but it feels like EUR/USD could trade on the offered side for a few weeks yet. Chris  Turner EUR/SEK has seemed to find support at the key 11.00 level for two consecutive sessions after rising bets on Riksbank tightening had put pressure on the pair. We could see a temporary break below 11.00, but our view is that a sustained SEK rally is premature. Our short-term fair value model shows how there is no risk premium left on EUR/SEK: in other words, markets have priced out the risk of a collapse in the housing market in Sweden and a consequent slump of the whole economy. While hawkish Riksbank rhetoric is helping the krona, markets may have moved too quickly on the optimistic side. Upcoming data may underpin the rising risks to the Swedish economy, and could trigger a rebound in EUR/SEK before a sustainable move below 11.00 can materialise - we think from the end of the second quarter onwards. Francesco Pesole GBP: BoE's Mann speaks today Sterling is just about holding onto Tuesday's gains when strong PMI data triggered a sharp re-pricing of the Bank of England curve. Markets now price a further 50bp of BoE hikes by June - taking the Bank Rate to 4.50% - and the policy rate being kept there until early 2024. For today, the focus will be on a speech at 1030CET by the BoE's Catherine Mann. She speaks at the Resolution  Foundation on 'The results of rising rates: Expectations, lags and the transmission of monetary policy'. This sounds like it could be a dovish speech - i.e. let's pause and see what prior tightening has done. However, she is a hawk and with no clear signs of an easing in tight labour market conditions we doubt she will want to knock the current market pricing of the BoE cycle. We think EUR/GBP probably traces out a 0.8750-0.9000 range for the first half of the year, while cable should find support under 1.20. Also - whisper it. Sterling offers quite attractive risk-adjusted yields in the G10 space. Chris Turner ZAR: Seeking alpha There is much talk of 'stock-picking' or 'seeking alpha' this year as financial markets may no longer be purely risk on/risk off. In other words, local stories are having a greater bearing and that is certainly true in the EM FX space. We are no longer looking at the kind of homogeneous returns driven purely by the Fed/China story.  Here we will quickly look at two topics. The first is that some emerging currencies are lagging as politicians start to resist high interest rates and question central bank independence. This has been a loose fear in Brazil with the new Lula administration questioning whether the central bank needs to lift its inflation target. The Brazilian real has lagged gains in EM FX this year and we expect it to continue underperforming. More surprising have been events in Israel, where the Foreign Minister heavily criticised the central bank for hiking rates 50bp on Monday. Normally an outperformer, the Israel shekel was hit hard on the news and the Israeli government has spent the rest of the week trying to re-affirm the independence of the central bank. We like the shekel and see USD/ILS trading back to 3.30/3,40 later this year. But we will now have to watch political developments closely. Meanwhile, the South African government yesterday announced a major financial support plan for state utility, Eskom. The plan has been greeted well by Eskom bondholders, though the support means South Africa's sovereign debt to GDP profile deteriorates. The South African rand has been an underperformer this year and near 8% implied yields through the three-month forwards and the China recovery story have not been enough to provide support. We think investors will continue to pause for thought before chasing yields in the rand. For those investors wanting to take exposure in EM FX, we continue to think the Mexican peso remains attractive. It has one of the highest risk-adjusted yields in the EM FX space (implied yields corrected by implied volatility from the FX options market) and the Mexican sovereign trades on a narrower CDS than most after Mexico refused to add on debt during the pandemic. USD/MXN looks biased to the 18.00 area. Chris Turner Read this article on THINK
Rates Spark: Crunch time

The Euro Fell Below 1.06, The USD/JPY Pair Is Close To 135.00

Kamila Szypuła Kamila Szypuła 23.02.2023 13:00
The dollar held shy of multi-week peaks against other major currencies on Thursday, a day after minutes from the Federal Reserve's last policy meeting supported, but did not add to markets' view the central bank will raise rates further. Minutes from the Federal Reserve meeting released last night confirmed the hawkish rhetoric of Fed officials over the past two weeks. The key takeaway, of course, is that the Fed is committed to keeping interest rates higher for longer to bring inflation down to the 2% target. The impact of the protocol was somewhat dampened as the meeting was preceded by a series of metrics released in February, most notably employment figures, which showed the US economy was doing well, leaving more room for the Fed to raise interest rates to bring down inflation. Markets will be focused on US GDP as well as the accompanying labor market data in the form of jobless claims. US GDP is expected to come in marginally weaker than the previous. USD/JPY USD/JPY struggles to gain any significant traction on Thursday and trades in a tight band just below the psychological 135.00 mark for the first half of the European session. The yen pair started the day above 134.90, in the Asian session USD/JPY fell towards 134.70. In the European session, USD/JPY increased and is now just below 135.00. In addition, the USD/JPY pair is also weighed down by hawkish concerns around the Bank of Japan (BoJ), due to the imminent end of the term of governor Haruhiko Kuroda. Alternatively, Fed policymakers are poised for further interest rate hikes, according to the latest Federal Open Market Committee (FOMC) meeting minutes, which in turn is fueling demand for the US dollar. EUR/USD EUR/USD in the Asian session was above 1.06, and the pair traded close to the 1.0630 level. In the Asian session, EUR/USD fell below 1.06. This morning brought data on inflation in the euro zone for January, in which annual inflation fell to 8.6% in the euro zone and to 10.0% in the EU. In January, food, alcohol and tobacco accounted for the largest contributors to the euro area's annual inflation rate, followed by energy, services and non-energy industrial goods, according to data released by Eurostat. In addition, EU members will hold further talks on a new package of sanctions against Russia after failing to reach an agreement on Wednesday. According to Reuters, the proposed package includes trade restrictions worth more than €10 billion. Russia is reportedly planning to cut oil production in response to Western sanctions. The heightened risk of rising energy prices, which will contribute to stronger inflation in the eurozone, could help the euro hold its position in the short term, as such a situation would force the European Central Bank (ECB) to raise interest rates further after March. Read next: Tesla Opens Its Global Engineering Headquarters In Palo Alto, California| FXMAG.COM GBP/USD The cable pair in the Asian session was rising towards 1.2070, but in the European session it lost momentum and fell to the level of 1.2020. Currently, GBP/USD is at 1.2022. GBP/USD extended its decline towards 1.2000 early Thursday after reversing much of the PMI-driven gains on Wednesday. Markets will be keeping a close eye on US stocks and Brexit developments for the remainder of the day. AUD/USD The AUD/USD pair was rising towards 0.6840 in the first hours of trading. Then the pair of the Australian fell and rebounded again. In the European session the Aussie Pair traded below 0.6820, currently the AUD/USD pair is trading above 0.6820. Australian capital expenditure data beat estimates across the board (reaching its highest level since Q4 2021) showing optimism in these sectors. Source: investing.com, finance.yahoo.com
US GDP Ahead, Energy Prices Push Lower, EUR/USD Pair Struggles

US GDP Ahead, Energy Prices Push Lower, EUR/USD Pair Struggles

Swissquote Bank Swissquote Bank 23.02.2023 13:09
Hawkish were the minutes from the latest FOMC meeting. They confirmed that the Federal Reserve (Fed) officials are indeed not lying when they say that they will continue hiking the interest rates to tame inflation toward the 2% mark. US and China Both the US 2 and 10-year yields bounced lower from early-week highs. A part of it was perhaps explained by the rising tensions between the US and China after China said that their relationship with Russia is ‘rock solid’. Stock market The S&P500 eased another 0.16%, Nasdaq tipped a toe into the bearish consolidation zone, but US equity futures are in the positive this morning, as the tech-heavy index is boosted by an almost 9% jump in Nvidia shares in the afterhours trading, after the company announced soft, but better than expected results. US GDP Due today, the US GDP is expected to have expanded 2.9% in the Q4, which is a fairly strong number. A read above expectations will certainly boost the Fed hawks on the idea that the US economy is resilient enough to withstand more hikes, while a number below expectations could ease the hawkish Fed tensions. But the days when bad news was good news are gone. At this point, we can’t really bet that a soft growth would soften the Fed’s hand. Only soft inflation could do that. Watch the full episode to find out more! 0:00 Intro 0:25 FOMC minutes confirmed hawkish stance 2:50 Nvidia results help Nasdaq shake off post-minutes moodiness 4:12 But could the US stock rally extend?! 6:30 Watch US GDP update today 7:30 USD consolidates gains, EURUSD struggles 8:27 Energy prices push lower Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #FOMC #minutes #Nvidia #earnings #EUR #inflation #natural #gas #crude #oil #EIA #US #GDP #data #USD #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

The EUR/USD Pair Waiting For The Development Of Events With The Formation Of Confirming Signs

InstaForex Analysis InstaForex Analysis 24.02.2023 08:02
On Thursday, the euro showed some volatility, not being able to break away from the target level of 1.0595. This morning, the quote is also fluctuating near that level, but the Marlin oscillator started reversing upward, so it might correct to the resistance at 1.0660. If the price finds the strength to settle under 1.0595, then next week we can expect a hike to the target level of 1.0443/70. On the four-hour chart, the nearest resistance to the corrective growth is the MACD indicator line (1.0622). Once it overcomes this line, we can expect further price growth. The Marlin oscillator, which has come out of its own descending channel upwards, counts on the bulls' potential success. There is a traditional nuance - a false exit of the examined line beyond the boundary of the geometrical construction, so we're waiting for the development of events with the formation of confirming signs, both for bulls and bears. Relevance up to 04:00 2023-02-25 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335994
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The EUR/USD Pair Recovered 50% Of Its Losses From The Downward Trend

Paolo Greco Paolo Greco 24.02.2023 08:07
On Thursday, the EUR/USD currency pair maintained its rather weak downward trend. Although corrections continue to occur frequently, the pair is not losing much daily. On the other hand, it happens virtually daily and steadily. Recall that following a several-month increase of about 1,500 points, we have frequently warned that the European currency is severely overbought. Sincerely, there weren't any fundamental causes for this increase. There was another trend, a downward one that lasted two years, right before this one. Understandably, a correction of at least 400 points was required following such a significant and protracted downward trend. So we succeeded. The pair recovered 50% of its losses from the downward trend, raising the question: why should the euro continue to rise? While the ECB and Fed both raise rates at the same time, the Fed does it more quickly and forcefully. In other words, the dollar side is where this advantage lies. 90% of the time, the US economy won't experience a recession, but the EU economy could still get caught in a "trap." The US is experiencing a harsher, faster, and longer decline in inflation than the EU. The Fed's continued use of tough and aggressive rhetoric benefits the US currency as well. As a result, practically all factors continue to be in favor of the US dollar, which has declined significantly over the past six months. And now it has a legitimate reason to recoup its losses. Nevertheless, on the 24-hour TF, the pair figured out the Senkou Span B line, which we've discussed numerous times. The 38.2% Fibonacci level is 1.0609 as well. The fall might continue since there hasn't been a rebound from these supports yet. And if it persists, the pair runs the risk of dropping to prices of $1.03 and $1.02. This means that the euro may be priced similarly to the dollar within the next month. Except for the senior linear regression channel, all indicators on the 4-hour chart point downward. As a result, the downward trend continues and is not cause for concern. Even the CCI indicator cannot enter the oversold area and create a warning signal regarding an upward reversal since the downward movement is too weak. The "moderately hawkish" Fed policy. As we've already stated, in general, we don't think the Fed minutes are a big deal. Rarely do they contain crucial information, but they occasionally do. That was not the case on Wednesday night. The only thing worth mentioning is the regulator's monetary committee's continued "hawkish" stance, which still aims to raise the rate without pausing. However, as it turned out, several committee members decided to endorse a 0.5% rise all at once at the previous meeting. They certainly remained the minority, though. We feel that this fact should not mislead traders, because, for example, in the last three meetings of the Bank of England, two out of nine committee members voted against tightening. Even still, the rate continues to rise by 0.5% as 7 additional members support them. As a result, unless there is "more than half" of them, "a few officials voting for 0.5%" in the United States do not matter. Also, the likelihood of this decreases with each meeting. Even so, the rate is still increasing by 0.25%. Yet, it is already 4.75%. Even if inflation slows down, it will eventually stop growing. We, therefore, think that it will grow by a quarter point for however long it takes, rather than a predetermined number of times as many experts prefer to forecast. We think the Fed will respond to each inflation report and take appropriate action. For instance, we can already predict that the rate will rise by 0.25% in March with a 100% likelihood. Only a 0.1% yearly decline in inflation in January was unsatisfactory to the regulator. As a result, additional tightening is necessary. The public debt and its ceiling were also discussed in the protocol, which may soon cause the financial system to run into them once more. It is noteworthy that at least twice a year, a new season of the series "raising the debt ceiling in the United States" is released. And each time, the corresponding conclusion is reached following a protracted debate in Congress and the Senate. As a result, we think that this is rarely a problem and not even worth paying attention to. The key rate is expected to rise consistently throughout the first half of 2023, thus the dollar is still growing steadily. We think that the euro/dollar pair can decline for a few days in relative calm. As of February 24, the euro/dollar currency pair's average volatility over the previous five trading days was 60 points, which is considered to be "normal." Thus, on Friday, we anticipate the pair to move between 1.0525 and 1.0645 levels. A new round of correction will be signaled by the Heiken Ashi indicator's upward movement. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trade Advice: The EUR/USD pair is still moving downward. Unless the Heiken Ashi indication turns up, you can continue to hold short positions with targets of 1.0525 and 1.0498. If the price is fixed above the moving average line with a target of 1.0742, long positions can be opened. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. The short-term trend and the direction in which to trade right now are determined by the moving average line (settings 20.0, smoothed). Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones. Relevance up to 01:00 2023-02-25 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335986
Small factors combine to pressure credit

The EUR/USD Pair Might Still Have Room To Drop Towards 1.0480

Oscar Ton Oscar Ton 24.02.2023 08:13
Technical outlook: EURUSD slipped through the 1.0575 low on Thursday before finding bids coming. The single currency pair is seen to be trading close to 1.0600 at this point in writing as the bulls prepare to come back in control. A pullback could happen from here or from 1.0500 in the near term towards 1.0800 and up to 1.0900 levels. The bears will enter the market thereafter. EURUSD might still have room to drop towards 1.0480 to take out initial support and then produce the much-awaited pullback rally. On the other hand, if prices manage to break above 1.0700 which is short-term resistance, it would confirm that a meaningful bottom is in place at 1.0575. The bulls will be inclined to push the price higher through 1.0800. EURUSD is unfolding a larger-degree corrective drop towards 1.0500 and 1.0100 in the medium term. Also, note that 1.0100 is close to the Fibonacci 0.618 retracement of the earlier rally between 0.9535 and 1.1025 respectively. A high probability remains for the larger-degree trend to resume higher towards 1.1025 and further from 1.0100 strong support. Trading idea: The potential drop against 1.1025 in the medium term Good luck!   Relevance up to 07:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313917
Rates Spark: Nothing new on the dovish front

The Euro (EUR) Is Moving Slowly To The Downside

Paolo Greco Paolo Greco 24.02.2023 08:20
5M chart of EUR/USD EUR/USD was trading flat for most of the day, although we saw a bit of a downward bias. Thus, in general, everything goes according to plan. The euro is moving slowly to the downside, which we've been waiting for quite a long time. The macroeconomic and fundamental background is nearly absent, so it is very difficult to expect a strong movement now. Yesterday, the EU published its second estimate inflation report, which did not have any particular meaning or impact on market sentiment. It was the second estimate of the indicator for January. The same goes for GDP in the US, also the second estimate. With the overall volatility of the pair around 50 pips, it is hardly necessary to talk about any reaction of traders to these reports. Technically there is always a reaction, but who cares about 20 pips movement? Speaking of trading signals, everything is still disappointing. The first trading signal was formed closer to the evening, when the price reached 1.0581. Naturally, there was no sense to work it out at night. Therefore, traders should not open positions on Thursday, if they are guided by our signals and tips. Such weak movements can persist for another week or two. COT report: Due to a technical glitch, fresh COT reports have not been released since January 24. Therefore, we can only analyze reports published before this date. The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since September. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. In the reporting week, non-commercial traders opened 9,500 long positions and 2,000 short ones. The net non-commercial position grew by 7,500. The number of long positions exceeds that of short ones by 134,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue. 1H chart of EUR/USD On the one-hour chart, the pair maintains the bearish mood and trades below the Ichimoku indicator lines. The downward movement is not strong, but at the same time it is stable. The movement is weak since there's almost no important events on the market now, so the pair is moving according to our forecasts, but it's still doing it too slowly. Formally, we have a trend, but it looks like a flat most of the time. On Friday, important levels are seen at 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0762, and also Senkou Span B lines (1.0708) and Kijun Sen (1.0641). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On February 24, there are no important events planned in the European Union. In the US, we only have the Personal Income and Spending data and the University of Michigan Consumer Sentiment Index. Completely secondary reports that are unlikely to provoke any reaction. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.   Relevance up to 01:00 2023-02-25 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335982
Gold Trading Analysis: Technical Signals and Price Movements

FX Daily: Geopolitics sees pro-risk trades unwind

ING Economics ING Economics 24.02.2023 09:07
US data and Fed commentary is keeping the dollar bid. At the same time, geopolitics and reports that China is preparing to increase its support for Russia are also seeing an unwind of 2023 global recovery trades. February and March are seasonally strong months for the dollar and 4.50% overnight deposit rates can keep the dollar supported a little longer  Incoming Bank of Japan Governor Kazuo Ueda USD: Dollar strength is not just a Fed story It has been quite surprising to see USD/CNH move back above the 6.90 area and also see USD/KRW stay bid above 1300. The 2023 narrative was meant to be about US disinflation, China re-opening and $/Asia playing a major part in the broad dollar decline. That has not been the case. Away from the US disinflation/Fed story, the rally in USD/Asia and USD/CNH may also be down to a re-appraisal that: a) Asian trade surpluses may be harder to come by given the slowdown in Europe and the US, plus b) geopolitics creeping into investment decisions. For example, reports overnight suggest that China may be preparing to up its support for Russia consistent with recent briefings out of Washington. The fear of an escalation in US sanctions may be prompting investors to re-appraise some of their investment holdings along geo-political lines.  This comes at a time of the year when the dollar is seasonally strong (February and March) and the bar to put money to work outside of 4.50% yielding overnight dollar deposits is not particularly low. Away from geopolitics, yesterday's US fourth quarter GDP revision saw the core deflator revised up to 4.3% annualised, from the 3.9% originally reported, and today should see the January core PCE deflator at a sticky 0.4% month-on-month. In other words, the US disinflation/bearish dollar narrative will find little from today's data. DXY looks like it can continue to press 105.00 and should USD/CNH trade back up to 7.00 on geopolitics, we could be looking at 105.60/106.00 on DXY.  Chris Turner EUR: Eurozone core inflation strikes new high Yesterday's revisions to eurozone January inflation saw core inflation revised to a new cycle high of 5.3% year-on-year. No wonder ECB officials such as Isabel Schnabel are keen to dispel any ideas that the disinflation process has started. And a core view slowly permeating through the market is that the ECB has perhaps another 100bp+ of tightening to do, but crucially will be leaving rates at those high levels throughout a large chunk of 2024. This should be a key factor in keeping EUR/USD supported on a multi-quarter view.  The eurozone calendar is light today, but given the dollar bid on the back of US data/geopolitics, the EUR/USD bias looks to a press of 1.0575 support and a potential move to 1.0500. Chris Turner GBP: A good week for UK data Following on from Tuesday's strong PMI release, the UK outlook has received another boost today in the form of a big jump in GFK consumer confidence. This has now returned to levels not seen since last April. At the margin, this will make the Bank of England's life harder as it seeks to cool aggregate demand to soften inflation. Markets are now quite comfortable in pricing the BoE's Bank Rate at 4.50% at the end of this year – pricing 25bp hikes in March and May. Slightly better growth prospects, sticky inflation and some further monetary tightening are the story across the US, the eurozone and the UK at the moment – suggesting bilateral FX rates do not need to move too much. This has seen three-month GBP/USD implied volatility drift under 10% and would tend to favour more modest moves in the spot. We think support levels at 1.1850/1950 may hold over the next couple of weeks. BoE dove Silvana Tenreyro speaks at 1730CET today. Chris Turner JPY: Few bombshells from BoJ Governor nominee The Japanese yen event risk has been overcome today in the form of testimony from the nominee Bank of Japan (BoJ) Governor Kazuo Ueda. The yen and Japanese government bond (JGB) yields moved little on his remarks that a dovish policy setting was still appropriate, but that normalisation would be needed were the BoJ to conclude that inflation had achieved 2% on a stable basis. The forward market for 10-year JGB yields does, however, price a further widening of the 10-year JGB band (+/- 50bp around zero) within the next three months. And the FX options market prices volatility around the key BoJ monetary policy dates of 10 March and 28 April. Our view is that this corrective dollar bounce could carry USD/JPY up to the 136/137 area over the next couple of weeks. But assuming that we are correct with the US disinflation story dominating again in the second quarter, USD/JPY should be back towards 125/126 into the summer. Chris Turner Read this article on THINK TagsYen FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Forex: Euro against US dollar - technical analysis - May 18th

Analysis Of Movement Of The EUR/USD Pair In Short Term

Torben Melsted Torben Melsted 24.02.2023 09:54
EUR/USD continues to follow the expected path lower towards the ideal corrective target seen at 1.0498 to complete wave 4 and set the stage for a new impulsive rally in wave 5 towards 1.1360 - 1.1390. Short-term we see minor resistance near 1.0626 that ideally will cap the upside for more downside pressure towards the 1.0498 target. Relevance up to 09:00 2023-02-27 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313937
Turkey cuts rate despite inflation threat, Japanese inflation hits 41-year high

Turkey cuts rate despite inflation threat, Japanese inflation hits 41-year high

Swissquote Bank Swissquote Bank 24.02.2023 10:58
US stocks had a wobbling trading session yesterday. US equities gained, then lost, then rebounded to close the session in the green. Nvidia The 14% jump in Nvidia certainly helped improve the overall market mood, whereas the US economic data was mixed and was not supposed to pour water on the equity bears or improve sentiment regarding the Federal Reserve (Fed) hawks.  US economy The latest GDP update from the US revealed that the US economy expanded slower than expected, while prices rose faster-than-expected. We have one more important data point to watch before the week ends… and that’s the US PCE index, the Fed’s favourite gauge of inflation. Given the previous inflation data, we know that inflation has certainly eased, but not as much as expected. Eurozone Across the Atlantic Ocean, the European stocks gained and the euro fell on Thursday, even though the latest inflation data from the eurozone revealed that the core inflation advanced to a record high. Japan While the data released this morning showed that inflation in Japan rose to 4.3%, a 41-year high, and gave a rapid boost to the yen, sending the USDJPY down to the 134 mark. Watch the full episode to find out more! 0:00 Intro 0:35 Mixed reaction to mixed data 3:55 Watch US PCE index today! 5:40 European stocks up, euro down after record core CPI. Why?! 7:38 Japanese inflation hits 41-year high 8:25 Turkey cuts rate despite inflation threat Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #EUR #JPY #GDP #inflation #data #Turkey #rate #decision #TRY #EuroStoxx #DAX #BIST #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The German economy underperformed in the Q4 of 2022, GDP declined

The German economy underperformed in the Q4 of 2022, GDP declined

Kenny Fisher Kenny Fisher 24.02.2023 14:28
The euro is down slightly on Friday. EUR/USD has been slowly moving lower and is down 1.1% this week. German GDP misses estimate The German economy, the biggest in the eurozone, underperformed in the fourth quarter of 2022. GDP declined by 0.4% in Q4 2022 q/q, below the 0.5% gain in Q3 and shy of the forecast of -0.2%. On an annualized basis, GDP slowed to 0.9%, down from 1.4% in Q3 and below the forecast of 1.1%. It was a rough end to 2022 for the German economy – the energy crisis, high inflation and the end of fuel subsidies all contributed to negative growth in the fourth quarter. The German consumer spent less in Q4 compared to Q3, but the silver lining is that consumer confidence continues to rise. GfK Consumer Climate is estimated to have improved to -30.5 in March, up from -33.8 in February. Consumer confidence is still deep in negative territory but has now accelerated over five consecutive months. The Federal Reserve remains in hawkish mode, as members continue to remind the markets that inflation is too high and more rate hikes are coming. The recent employment and retail sales reports helped convince the markets that the Fed means business, and investors are no longer talking about a ‘one and done’ rate hike in March with rate cuts before the end of the year. The markets appear to have bought into the ‘higher and longer’ stance that the Fed has been pushing, and expectations of a 0.50% hike in March have risen. According to CME’s FedWatch, the markets have currently priced the odds of a 25-basis point hike at 76% and a 50-bp increase at 24%. Earlier this week, the split was 83% for a 25-bp hike and 17% for a 50-bp rise.   EUR/USD Technical 1.0604 is a weak resistance line. Above, there is resistance at 1.0704 There is support at 1.0513 and 1.0413 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

EUR/USD, GBP/USD And AUD/USD Drop, USD/JPY Rose Above 135.00

Kamila Szypuła Kamila Szypuła 24.02.2023 13:25
The dollar index rose to seven-week highs on Friday as investors braced for an extended hold on higher US interest rates after a series of strong economic data in the US. Investors await data on the US Personal Consumer Expenditure (PCE) Price Index. The annual core PCE price index, the Fed's preferred measure of inflation, is projected to fall to 4.3% in January from 4.4% in December. The core consumer price index (CPI) fell to 5.6% y/y in January from 5.7% in December. A modest fall in core PCE inflation should not come as a big surprise at this point. The PCE Core Price Index is expected to increase by 0.4% m/m. In the event that the monthly value exceeds the market consensus, the US dollar may gain strength. It is worth noting, however, that markets are already fully pricing in two more Fed rate hikes of 25 basis points in March and May. USD/JPY USD/JPY started the day with a decline towards 134.20. Then the yen pair moved upwards. USD/JPY hit 135.00 and is now trading at 135.3850 The Japanese yen may fall further after the new governor of the Bank of Japan, Kazuo Ueda, signaled that very loose monetary policy should be maintained. Ueda's comments after his approval in the lower house of Japan's parliament did not produce any clear hawkish signal that could fuel a resurgence of speculative demand for the yen in the near term. EUR/USD EUR/USD traded above 1.06 in the Asian session, mostly in the 1.0605-1.0610 range. In the European session, the EUR/USD pair lost momentum and returned to levels below 1.06. Currently, the pair is trading just below 1.06 at 1.0580. The euro started the European session weaker after worse than expected data on German GDP. GDP data showed that the German economy contracted (-0.4%) in the fourth quarter of 2022 and brought recession talk back. Moreover, a weaker-than-expected rise in monthly core PCE inflation could trigger a USD correction and help the EUR/USD rebound ahead of the weekend. Read next: Visa Success At The Expense Of Small Businesses| FXMAG.COM GBP/USD The cable pair in the Asian session and in the beginning of the European session traded around 1.2020. The GBP/USD pair lost momentum and fell below 1.20, at 1.1987. British consumers have become more optimistic about their personal finances and economic outlook, but their sentiment is much lower than it was before the COVID-19 pandemic, research firm GfK said on Friday. Improved consumer sentiment does not always translate to improved spending, as evidenced by the flat retail sales reading for February from the Confederation of British Industry on Thursday. However, energy prices are finally backing down from last year's highs and the UK economy is not looking as bad as expected just a few weeks ago, according to this week's Purchasing Management Index (PMI) business activity survey that showed an unexpected rebound in early February. AUD/USD The pair of the Australian in the Asian session stayed above 0.6819, but with the start of the European session it began to fall below 0.68. Currently the Aussie Pair is trading below 0.6870 The Australian yen gained in value after the alleged head of Japan's central bank maintained the status quo on monetary policy and was apparently in no rush to end its massive stimulus programme.. Source: investing.com, finance.yahoo.com
Impact of Declining Confidence: Italian Business Sentiment in August

Forex Weekly Summary: EUR/USD Ended The Week Below 1.06 And GBP/USD Below 1.20, USD/JPY Ended The Week Higher Above 136.00

Kamila Szypuła Kamila Szypuła 25.02.2023 20:01
The dollar climbed to seven-week peaks on Friday, after data showed U.S. inflation accelerated while consumer spending rebounded last month, reinforcing expectations that the Federal Reserve may need to hike interest rates a few more times this year to curb the surge in prices. On Friday, the core PCE index in the US amounted to 4.7% y/y at the end of January against expected 4.3% and 4.6% earlier. USD/JPY USD/JPY started the week at 134.1140. The weekly trend of the yen pair was up as the dollar was supported by strong data from the US economy and no support came from Japan. By Wednesday, USD/JPY was trading around 134.75. The first break above 135.00 was on Thursday but the momentum did not hold, USD/JPY rose again on Friday and passed 136.00 and recorded the highest trading level of the week at 136.4960. USD/JPY closed the week at 136.4060 The Japanese yen weakened past 135 per USD, dropping to its lowest level in over two months after incoming BoJ Governor Ueda stated the central bank must maintain its ultra-low policy stance for the time being. The official also discarded immediate changes to the bank’s yield curve control, supporting bond prices worldwide. The dovish policy is set to stay despite the steady increase in Japanese consumer prices. Headline inflation jumped to 4.3 percent in February EUR/USD It was a difficult week for the EUR/USD pair. The euro pair managed to fall below 1.05 this week. The euro pair started the week at 1.0683 and then fell. Weekly high above 1.07 (1.0705). The trend was down and the lowest level was reached by the EUR/USD pair at 1.0540. The week will close at 1.0547. S&P Global's Composite Purchasing Managers Index for the currency bloc hit a seven-month high of 50.3 in January. That was above both December's 49.3 and the flash reading of 50.2. For the first time in seven months, the number was above the key figure of 50 that separates expansion from recession. The data came after better official Eurostat data from the beginning of the week. They showed that the eurozone economy grew by 0.1% in the last quarter of 2022, beating expectations for a decline of 0.1%. GBP/USD For the cable pair, the week was mixed. GBP/USD started trading for the week at 1.2043, closing the week was much lower at 1.1942. The best day for the cable pair was Tuesday as the pair received support from the UK economy (positive PMI readings) and GBP/USD traded above 1.21, which was the week's high (1.2141). Trading lows occurred at the end of the week, with the all-time low at 1.1935. The British pound fell below $1.20, hovering around its lowest level since January 5, as data pointing to a still-tight US labor market and sticky US inflation fueled expectations that the Federal Reserve would keep interest rates higher for longer. At the same time, the Bank of England will raise the interest rate by another 25 basis points to 4.25% next month to combat double-digit inflation before the end of the current tightening cycle. AUD/USD The Aussie pair started trading at the 0.6869 level and on the first day rose above the 0.69 level. Above 0.69, the AUD/USD pair reached a weekly high of 0.6922. The Australian couple did not enjoy an increase for long and in the following days it decreased. Similar to European counterparts, AUD/USD reached its lowest level on Friday. The weekly low was at 0.6721. The Aussie Pair ended the week trading at 0.6727. Source: finance.yahoo.com
ECB cheat sheet: Difficult to pull away from the Fed

EUR/USD Pair Has Maintained A Moderate Downward Trend

Paolo Greco Paolo Greco 26.02.2023 12:29
Long-term outlook. Throughout the current week, the EUR/USD currency pair has maintained a moderate downward trend. As we have repeatedly stated in recent weeks, we anticipate the European currency to decline because it has increased excessively over the last six months, as is seen in the above illustration. Everything is normal from the perspective of a correction against the downward trend, given that the trend itself lasted two years and that a correction must be made against it. It is time and an honor to know, but the growth of the euro was not driven by fundamental or macroeconomic issues, thus the correction is a correction. This week, the macroeconomic and fundamental backdrops were mostly absent. You may remember several speeches by Fed officials, a report on the US economy, or a report on inflation in the European Union, but we have mentioned before that the significance of these publications lies solely in their signboard. The second estimate included GDP and inflation. Unsurprisingly, the market did not respond particularly well to this data. Also, it did not adhere to the so-called "moderately hawkish" Fed policy. We think that the market is now dominated by technical factors. Because the pair successfully passed the Kijun-sen line on the 24-hour TF and now has a strong probability of consolidating itself below the Ichimoku cloud, we think the fall may continue up to the levels of 1.0312 or 1.0200. In reality, the euro can achieve price parity and distance itself from its multi-year lows by doing just that. The betting component is still, in our opinion, crucial. The Fed is not going to ease down and occasionally gives hints of a more significant rate hike than anticipated. The euro is overbought at this time. The hikes that were previously known have been determined by the market, and the ECB has not yet indicated that it will tighten monetary policy further. It appears that the euro is falling and has a very good chance of continuing to move south. COT Technical difficulties prevented the delivery of COT reports for over a month, but on Friday, one of the delayed reports for January 31 was made available. Since a month has gone by since then and we still don't have access to the data from the subsequent reports, which are more or less relevant, this report is not meaningful. As a result, we keep looking at the available data. The illustration accurately reflected market conditions for the euro currency during the past few months. The aforementioned illustration makes it very evident that, from the start of September, the net position of significant players (the second indicator) has been improving. At about the same time, the value of the euro started to increase. Although the net position of non-commercial traders is currently "bullish" and growing virtually weekly, it is the relatively high value of the "net position" that now permits the upward trend's impending end. The first indicator, which frequently occurs before the trend's end and shows that the red and green lines are very far apart from one another, signals this. Although the euro has already begun to decline, it is still unclear if this is just a brief pullback or the start of a new downward trend. The number of buy-contracts from the non-commercial group increased by 9.0 thousand during the most recent reporting week, while the number of short positions declined by 7.1 thousand. The net position thus increased by 16.1 thousand contracts. Currently, there are 148 thousand more buy contracts than sell contracts for non-commercial traders. Nonetheless, the correction has been developing for a while, so it is obvious even without news that the pair should keep falling. Analysis of fundamental events In addition to the aforementioned activities, business activity indices in various industries were released in the United States and the European Union, while in Germany, an inflation report revealed an acceleration in consumer price growth. Again, there was essentially no response to these figures; nevertheless, it should be emphasized that business activity in the service sectors improved while output declined. Regarding the German inflation news, Jerome Powell and a few other central bankers specifically discussed it. After this process was finished, the price of oil and gas, which has been declining for the previous six months, either started to rise or stopped falling. Consequently, it is safe to divide into two all pessimistic predictions for the return of inflation to 2% during the next year or two. To combat excessive rates of price growth, central banks will have to continue their efforts rather than simply lowering the rate and waiting. As a result, we anticipate seeing plenty of financial surprises this year that will have an impact on how the pair moves. Trading strategy for the week of February 27 to March 3: 1) The pair started moving lower on the 24-hour period, surpassing the Kijun-sen line and the 38.2% Fibonacci level, or 1.0609. As a result, targets in the range of 1.0200-1.0300 can still be reached if the Senkou Span B line does not halt the descent. Sales, in our opinion, are currently appropriate. 2) The purchases of the euro/dollar pair are no longer significant. You should now wait for the price to return above the critical Ichimoku indicator lines before you start to think about long positions. There are currently no circumstances in which the euro currency can start moving higher again. But, in the present world, anything can happen at any time. Explanations for the illustrations Fibonacci levels, which serve as targets for the beginning of purchases or sales, and price levels of support and resistance (resistance/support). Take Profit levels may be positioned close by. Bollinger Bands, MACD, and Ichimoku indicators (standard settings) The net position size of each trading category is represented by indicator 1 on the COT charts. The net position size for the "Non-commercial" category is shown by indicator 2 on the COT charts.   Relevance up to 09:00 2023-02-27 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336091
EUR/USD Pair Has A Potential For Short-Term Rally

The EUR/USD Price May Fall In The Specified Target Range

InstaForex Analysis InstaForex Analysis 27.02.2023 08:04
Last Friday, the euro made a big deal. It settled under the support of 1.0595. The signal line of the Marlin oscillator is declining, the next thing to do is to reach the target range of 1.0443/70. Consolidating under the range can push the price to fall to 1.0290, the low of November 30, 2022. On the four-hour chart, the price decreases under the indicator lines, the Marlin oscillator is on the downside, and though it turned to the upside, it has no divergence forms, or triangular or other geometric patterns. As a consequence, we don't expect the corrective growth to be deep, at the end of which I expect the price to fall in the specified target range.   Relevance up to 03:00 2023-02-28 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336123
Rates Spark: Nothing new on the dovish front

The EUR/USD Pair Continues To Trend Downward

Paolo Greco Paolo Greco 27.02.2023 08:07
On Friday, the EUR/USD currency pair maintained its consistent downward trend. Without any correction or rollback, inertia has probably already taken place. This is the exact scenario we anticipated from the pair. The only issue is that the performance started a little later than we anticipated. The unjustified growth of the euro currency could not, however, continue indefinitely; sooner or later, a significant downward correction had to start. It is easier to detect the upward movement on the 24-hour TF, which must be adjusted downward to anticipate any new trend. According to our assessment, the pair has the requisite ability to achieve price parity within the next one to two months. Although the price is unlikely to fall to exact parity, it may still do so and reach $1.02. This is confirmed by the fact that the most recent macroeconomic statistics from overseas were very strong, particularly when the most important labor market and unemployment reports are considered. Despite a slower rate of reduction in January, inflation did not especially disappoint either. Even more significant is the Fed's willingness to tighten its "hawkish" stance on monetary policy to stop the high inflation period from lasting for several years. James Bullard, for instance, stated last week that the rate should be raised further to prevent a repeat of the situation from the 1970s when high inflation accompanied the economy for more than ten years. As a result, the rate might finally become significantly higher in 2023; we'll talk about this later. On the 24-hour TF, it is also very obvious that the pair may soon break through the Ichimoku cloud, which would be a strong sell signal. Since we do not now see any factors that could push the euro below 0.9500, we are not currently evaluating the possibility of restarting a long-term downward trend. However, in the foreign currency market, no option can be completely ruled out. The euro currency may fall precipitously if the ECB begins to lose support on the subject of raising the key rate. Also not mentioned is the ongoing geopolitical situation in Ukraine. The most popular plan for 2023 is to increase the Fed rate to 5–6% and then keep it there for at least a year. Back in January, the market predicted that 1-2 rate rises would be expected, followed by a pause. Real inflation statistics, however, demonstrate that, in reality, anything is possible. The majority of experts and analysts base their predictions of the rate merely on the simple fact that inflation has decreased over the past seven months. This is a slightly incorrect strategy, in our opinion, because the US inflation rate declined due to both the worldwide decrease in energy costs and the Fed's tightening of monetary policy. Prices have steadied over the past month, and inflation in the US has already begun to slow down. It should be kept in mind that there is a delay between the rate rise and the way the economy responds to it. If it has been several months, then inflation has not yet shown its final decline. Nevertheless, who can definitively state at what point the rate should be increased to bring inflation back to 2% within a year? After all, the Fed is deciding on the rate based solely on the most recent figures on consumer prices. This makes it appear as though it is operating almost blindly. The needed rate level is determined by the "Taylor rule," which takes GDP and the desired inflation rate into account. The Fed and other central banks allegedly pay attention to this rule. It predicts that in 2023, the rate will increase to 8–9%. Of course, it is nearly impossible to believe this now, but it is important to keep in mind that Fed officials, particularly James Bullard, the Fed's most aggressive "hawk," spoke of a high rate of 3.5% at the beginning of 2022. The rate has since increased to roughly 5%, and the regulator is considering many additional rises. As a result, we first think that inflation may slow down in its decline to the point where its pace becomes nominal. Inflation in Germany started to increase in January. Second, if inflation data is unsatisfactory, the Fed may increase the rate to 6–7%. Yet a very important question is how much the ECB can raise the rate. The euro currency may eventually fall below price parity if the European regulator backs down. As of February 27, the euro/dollar currency pair's average volatility over the previous five trading days was 58 points, which is considered "normal." Hence, on Monday, we anticipate the pair to move between 1.0488 and 1.0604. A new round of correction will be signaled by the Heiken Ashi indicator's upward movement. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trade Suggestions: The EUR/USD pair continues to trend downward. Unless the Heiken Ashi indication turns up, you can continue to hold short positions with targets of 1.0498 and 1.0488. If the price is fixed above the moving average line with a target of 1.0742, long positions can be opened. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 01:00 2023-02-28 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336115
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

The EUR/USD Pair Trades Below The Ichimoku Indicator Lines

Paolo Greco Paolo Greco 27.02.2023 08:09
5M chart of EUR/USD EUR/USD fell on Friday. It retained the bearish trend and was partly supported by the macroeconomic background in the second half of the day. At the same time, the Personal Income and Consumer Spending data was released in America, as well as the University of Michigan Consumer Sentiment Index. All three reports turned out to be better than expected, but the US dollar had started rising much earlier. So I think that the pair would have continued to fall anyway. As I have mentioned many times before, a decline is the most logical outcome right now, because the euro has been rising for a long time without any definite reason to do so. Now it's time for a correction, which the pair has been showing for several weeks. The farther into the forest, the more reasons to expect a deeper decline from the euro. There were only two trading signals on Friday. First, the pair rebounded from 1.0581, but it failed to move up 15 pips, which would be enough to place the Stop Loss at Breakeven. Therefore, the long position closed with a loss of about 17 pips, when the pair settled below 1.0581. This sell signal could have been priced too, and this time the price passed in the right direction at least 20-30 pips, which traders could have gotten by closing the deal manually closer to the evening (there was no other option). COT report: Due to a technical glitch, new COT reports have not been released for almost a month, but on Friday, one of the reports for January 31 was released. This report does not make much sense, because since then, a month has passed, and the data from the next reports (which are more or less up-to-date) are still not available. Therefore, we will analyze the data that are available. The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since September. Around the same time, the euro started to rise. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. The euro has already started to fall, but it is not clear yet, is it a pullback or a new downtrend? In the reporting week, non-commercial traders opened 9,000 long positions while the number of shorts decreased by 7,100. Correspondingly, the net position increased by 16,100. The number of long positions exceeds that of short ones by 148,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue. 1H chart of EUR/USD On the one-hour chart, the pair maintains the bearish mood and trades below the Ichimoku indicator lines. We also formed a descending trend line, consolidating above which will determine the end of the downtrend. However, for the time being, the pair might continue a slight but steady decline. On Monday, important levels are seen at 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0762, as well as Senkou Span B (1.0708) and Kijun Sen (1.0641). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On February 27, no important reports or events are scheduled in the European Union. In the US, we will just receive a report on Durable Goods Orders which is unlikely to cause a strong reaction in the market. Monday is likely to be as dull as usual, but the pair may continue to move down due to the momentum. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders     Relevance up to 01:00 2023-02-28 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336111
FX Markets React to Rising US Rates: Implications and Outlook

In Europe Core Inflation Continuing To Edge To Record Highs, The DAX Posting Its Biggest Weekly Fall

Michael Hewson Michael Hewson 27.02.2023 08:53
When we started 2023 most of the narrative had been centred around when we would see start to see a Fed pivot and the timing of the first rate cut. Once it became apparent that this was somewhat wishful thinking, this narrative started to shift towards a Fed pause, even in the face of mounting evidence of a remarkably resilient US economy.     Even when the Fed downshifted the pace of its current rate hiking cycle to 25bps at the start of February, there was some disquiet that they might be sending the wrong signal to the market, about their determination to crack down on inflation.   The resilience of the January payrolls report which came in ahead of expectations at the beginning of this month started to sow the first seeds of doubt into the pause narrative, and while bond markets started to react to these shifting sands, the equity markets still held out the hope that a Fed pause was only a few weeks away. On Friday all notion of a possible pause appears to have gone the way of the dodo, in the face of a series of better-than-expected economic data releases, with markets now pricing in another three 25bps rate increases at the March, May, and June Fed meetings.   There had already been signs that the January core PCE numbers might have been susceptible to an upside surprise after retail sales in January surged by 3%, however, Friday's sharp jump in the Federal Reserve's preferred inflation measure to 4.7%, was as unwelcome as was the upward revision to December's number from 4.4% to 4.6%. Throw in the biggest upswing in personal spending in 12 months, by 1.8%, and you have all the ingredients of a US economy that shows few signs that higher prices are weighing on demand.   US 2-year yields reacted accordingly, jumping by 11bps, above their previous peaks in November last year, to close at their highest level since 2007, at 4.813%. It wasn't just yields in the US that moved sharply higher, with German 2-year yields rising to their highest levels since October 2008, closing above 3% Equity markets reacted as you would expect, falling back sharply, with the DAX posting its biggest weekly fall since mid-December. The FTSE100 also rolled over quite sharply wiping out the previous week's gains in the process, although both indexes remain in their uptrends from their October lows.     The S&P500 fell sharply but managed to hold above and rebound off its 200-day SMA, even as it fell to a one-month low, with the Nasdaq 100 also rebounding off its 200-day SMA as well.   This recovery off key technical supports should offer European markets a modest rebound when they open later this morning, after last week's sharp falls. As we look towards a new week, and the end of the month tomorrow, last week's falls have called into question whether markets in Europe can hold onto their February gains, while US markets have already slipped into negative territory for the month, after last week's sharp falls.   The US dollar appears to have accelerated its upward momentum, rising for the fourth week in a row, and is in sight of its highest levels this year, and on course to post its first positive month since September last year.   On the data front the main focus this week, in the absence of the February jobs report which has been pushed out to the 10th of March, is the latest ISM services report which is due at the end of this week and could be instrumental in reinforcing the hawkish narrative that has started to take hold in the last few weeks. A similarly strong report following on from the January report will further reinforce the case for 3 more 25bps rate hikes at the next few meetings.   In Europe, the narrative around sticky inflation appears to be evolving along similar lines, with rapid declines in headline inflation but core inflation continuing to edge to record highs.   This week we'll get to see the latest flash numbers for February, from Germany, whose economy could already be in recession, France as well as the EU, where core prices hit a record high of 5.3% in January and could well stay there in numbers due to be released towards the end of the week.     EUR/USD – the next support lies at the January lows at 1.0480/85, a break of which opens up the prospect of a test of the 200-day SMA at 1.0320. Currently have resistance at the 1.0620/30 area, and behind that at the 50-day SMA. GBP/USD – currently sitting on support at the 200-day SMA at 1.1930, a break of which retargets the 1.1830 area. Resistance currently at the 50-day SMA at 1.2150. EUR/GBP – continues to edge higher with the next resistance currently 0.8870. Support comes in at the 0.8780 area. USD/JPY – closing in on the 200-day SMA and Kumo cloud resistance area at 136.90/00. Interim support at 133.60, and below that at 132.60, and 50-day SMA.   FTSE100 is expected to open 32 points higher at 7,910. DAX is expected to open 48 points higher at 15,457 CAC40 is expected to open at 35 points higher 7,222   Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Ipek Ozkardeskaya Ipek Ozkardeskaya 27.02.2023 08:56
The week starts on a cautious note, as the Federal Reserve (Fed) rate hike expectations intensify the selloff in global stocks and bonds, while pushing the US dollar higher against most majors.   Friday's US PCE data was bad. We knew, from the earlier releases that US inflation wouldn't slow as much as expected, but Friday's PCE data showed that not only inflation didn't slow in January, but headline figure ticked higher to 5.4% from 5.3% printed a month earlier, and core inflation ticked higher to 4.7% from 4.6% printed a month earlier. The latter fueled the Fed hike expectations, because a slower-than-expected easing in inflation is one thing, but rebound in inflation is another thing. And the latter is much less cool for the Fed, and the Fed expectations. A rebound in inflation is the worst nightmare for the Fed.   And if the PCE drama was not enough, personal spending surged 1.8% in January, the strongest burst since March 2021, and the University of Michigan's consumer sentiment index hit a 13-month high this month. It's still much lower than the pre-pandemic levels, yes, but it also means that it has ways to recover.   In summary, the tight US jobs data, strong spending and improved sentiment may sound nice to you, but it sounds horrendous to the Fed.  A new study that was presented at a conference in New York on Friday now suggests that the Fed should maybe hike rates all the way up to 6.5% to win its battle against inflation in the US.  As a result, the US 2-year yield is pushing above the 4.80% mark, the 10-year yield is flirting with the 4% mark. Activity on Fed funds futures now assesses just slightly less than 30% probability for a 50bp hike at the FOMC's March meeting. This probability is up from below 10% at the start of this month.   The S&P500 slipped below the 50-DMA (3980) and tested the 200-DMA (3940) to the downside, and closed what was the worst trading week since the start of the year 2.7% down, and below the 4000 psychological mark. Nasdaq, on the other hand, pulled out the major 38.2% Fibonacci support on the latest rally, tested its own 200-DMA to the downside, and closed the week in the bearish consolidation zone and below the 12'000 psychological mark.   And all indicators point at a deeper selloff as long as the higher Fed discussions remain heated.  Read next: The Effect Of Shifting The Aggregate Demand Curve - Demand Shocks| FXMAG.COM FX and commo  It becomes increasingly  clear that we will see a pause in the USD downside correction. The US dollar index is now clearly headed higher.   In EURUSD, a further fall to and below 1.05 is just a matter of time, and the last support to the September to February rally stands near 1.0470, if cleared will send the pair into the medium term bearish consolidation zone, with prospect of further fall to 1.02-1.03 range.  And a softer euro will then make the energy imports more expensive for the Europeans yet again, and spur the European Central Bank (ECB) rate hike expectations.   Hawkish ECB bets will certainly not do much to tame the strong-USD-led inflation, but a more aggressive policy rate response from the ECB would be bad for European businesses, and weigh on European stocks.   Rising US yields and the stronger US dollar hint at further decline in gold prices, as well. Gold cleared a key Fibonacci support, the 38.2% retracement on the November to February rally, and starts this week in the bearish consolidation zone, with the next natural target for the bears standing at $1775, the 200-DMA.  Crude oil continues struggling. Oil bulls never really bought the Chinese reopening story, nor the sharp decline in Russian output. But they might well play the rising recession odds that come along with the tighter central bank policies around the world. As such, sellers are certainly waiting to sell US crude into the 50-DMA, a touch below the $78 per barrel.   Copper futures, on the other hand, sank below their 50-DMA for the first time since November in COMEX, as the higher rate prospects weigh on copper appetite, which is a good gauge of global growth.  Finally?!  In Europe, Britain's Rishi Sunak and EU's Ursula von der Leyen will meet today to finalize the Northern Ireland drama, which could soften barriers in a country that is willing to remain half seated in Europe and half seated in the United Kingdom, while the UK and Europe part ways.  There is however little chance today's annoucement, if any, solves the problem entirely. DUP is expected to oppose.  Mr. Sunak was expected to make an announcement last week. He didn't. And even if it did, I am not sure it would change the course of sterling. The pound is now below 1.20 against the US dollar as a result of a broadly stronger greenback, and is about to slip below the 200-DMA. Further retreat to 1.1650/1.17 band is on the cards.  
Central Bank Policies: Hawkish Fed vs. Dovish Others"

FX Daily: Sticky inflation keeps dollar higher for longer

ING Economics ING Economics 27.02.2023 09:00
The dollar remains broadly bid after Friday's release of US PCE inflation data argued that the Fed needed to push rates higher and for longer. 25bp Fed hikes are now priced for March, May and June. Expect the dollar to hold gains this week, although China's February PMIs (Wednesday) and the US ISM Services (Friday) may prove a challenge USD: Hard to argue with dollar strength near term Friday's release of US core PCE inflation data for January completed what has been a very bond bearish/dollar bullish set of US data this month. We have learned that US inflation is proving much stickier and US activity firmer than we were led to believe in December and January. Understandably, investors are now taking the Federal Reserve hawks more seriously and have priced three more 25bp rate hikes from the Fed in March, May, and June. This hawkish run of data also questions what the new set of Fed Dot Plots will look like when they are released on 22 March. The Fed's current median expectation sees Fed Funds at 5.00-5.25% by the end of 2023 and 4.00-4.25% by end-24. Both of these projections could be revised higher. This prospect could well dissuade investors from re-entering dollar short positions over the next few weeks. At the same time, the US 2-10 year yield curve is now inverted the most since the Paul Volcker tightening of the mid-1980s - creating a headwind to risk assets. It is hard to see global equity markets pushing much further ahead until there are clearer signs that the Fed - and other central banks - can relent in their tightening cycles. For this week, we think the macro highlights will be the ISM business confidence data in the US. The manufacturing component (released Wednesday) is expected to remain soft at 48. More interesting will be Friday's release of ISM services. Was the bounceback in the January services release merely weather-related or did it reflect much better optimism? This could help set the trend in US data through March. Investors will also be looking at the Chinese February PMIs released on Wednesday. A strong showing here could provide some support to the renminbi and to activity currencies in general - although as we discussed on Friday, geopolitics does seem to be weighing on the renminbi too. What does this all mean for the dollar? DXY broke above 105.00 on Friday and the multi-week bias looks towards resistance at the 106.20/106.50 area - some 1.00/1.20% above current levels. Through March we will better assess whether these prove the best dollar levels of the year. Chris Turner EUR: Dollar strength to keep EUR/USD heavy Like the Fed, the European Central Bank remains very much in hawkish mode. Investors fully subscribe to the ECB's message of a 50bp hike on 16 March and then price a further 80bp of tightening into year-end. This should be the key difference between the Fed and the ECB cycles. We think the Fed could be in a position to cut by year-end, while the ECB looks likely to keep rates at their peak throughout the majority of 2024. There is not too much eurozone data this week but today sees eurozone business and consumer confidence for February - all expected to improve modestly. For EUR/USD, we think the strong dollar view will dominate. Expect 1.0500 to be tested, with a chance that it briefly trades down to the 1.0460 area.  Chris Turner Read next: The Effect Of Shifting The Aggregate Demand Curve - Demand Shocks| FXMAG.COM GBP: Northern Ireland trade deal yet to provide a sterling boost So far, sterling seems to be taking little notice of potentially improved trading and political relations between the UK and the EU. Later today, expectations are building that a deal will get announced between the two to soften the trade barriers on the Irish sea. It will be interesting to see whether this will be sufficient to get the DUP back into government in Northern Ireland.  An improvement in UK-EU relations probably does little for sterling in that it will not improve the broader trading environment between the UK and the EU. Instead, the macro-monetary settings of the two will continue to dominate. The ECB looks like it has much further to hike than the Bank of England and suggests that EUR/GBP continues to find support under 0.88. GBP/USD will be vulnerable to continued dollar strength and risks a move to 1.1850 this week. Chris Turner CEE: NBH to assure market that it is too early for change More action returns to the region this week. We start on Tuesday with the National Bank of Hungary meeting. In line with the market, we expect rates to remain unchanged. There is no discussion on the macro side. Central bankers are waiting for a tangible and sustained improvement in domestic and external risks and it is clear that the developments so far are positive but still insufficient for the NBH to reverse course. From a market perspective, however, the main question is whether the central bank can maintain the hawkish tone it set in January. PMI indicators for February across the region will be released on Wednesday. We expect a slight improvement in sentiment in Poland and the Czech Republic and a deterioration in Hungary. We will also see the final GDP numbers for the fourth quarter of last year across the region during this week. On the ratings side, we have two interesting reviews in the CEE region this week - Moody’s in Hungary and Fitch in the Czech Republic. More interestingly, Hungary received a negative outlook and rating downgrade recently from Fitch and S&P and we expect a negative outlook from Moody’s as well. In the Czech Republic, Fitch downgraded the outlook already last year to negative. In our view, the risk of a rating downgrade has diminished since the last review in October but is still significant. In the FX market, this week the main focus will be on the Hungarian forint to see if it can extend its rally. The main driver will be NBH and its efforts to maintain a hawkish tone. Given market expectations, the central bank may only deliver a small push to the forint, but it's still worth being bullish and testing new levels below 380 EUR/HUF, in our view. However, at the end of the week, Moody’s will remind us that there are still a number of issues on the table in Hungary led by EU money access, which should bring the forint back to or above 380 EUR/HUF. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Gold Trading Analysis: Technical Signals and Price Movements

EUR/USD Pair Is Trading Around 1.0560, USD/JPY Is Above 136.20, GBP/USD Gained

Kamila Szypuła Kamila Szypuła 27.02.2023 14:03
The dollar fell from a seven-week high on Monday as investors took stock of last week's strong US economic data and outlook for global interest rates. Friday's data showed that US consumer spending rose sharply in January, while inflation accelerated. Traders now expect the Fed to raise interest rates to around 5.4% by the summer. USD/JPY The first day of the new week for the USD/JPY pair was mixed in both the Asian and European sessions. The pair started the week at 136.4430, but fell to 136.00 during the day. At the time of writing, the yen was trading at 136.2970. In late February, the Japanese yen weakened above 136 to the dollar, hitting its lowest level in more than two months as Ueda, nominated governor of the Bank of Japan, doubled down on the bank's very restrictive monetary policy. The new governor of the Bank of Japan, Kazuo Ueda, said on Monday that the benefits of the bank's current monetary policy outweigh the costs, stressing the need to maintain support for the Japanese economy with very low interest rates. The comments reinforced signals that the bank will not turn away from its dovish attitude anytime soon. Previously, Ueda had opposed monetary tightening in response to cost-driven inflation and rejected immediate changes to the bank's yield curve control, warning that such measures would deeply hurt growth. EUR/USD EUR/USD started the week at 1.0556. In the Asian session, it mostly traded near 1.0550 and even 1.0560, then fell below 1.0540. In the European session, the euro was rising towards 1.0570. Currently, the EUR/USD pair is trading around 1.0560. The US currency has benefited widely from the view that its central bank has more power and leeway to counter inflation. Meanwhile, the Eurozone has to meet the varying needs of its twenty national economies, some of which will struggle to cope with even minor further interest rate increases. Interest rate differentials are likely to dominate euro fundamentals this week, although some key domestic data is emerging, most notably official eurozone inflation data. Due for release on Thursday and the annual base rate is expected to remain unchanged at 5.3% Read next: BNP Paribas Sued For Providing Financial Services To Companies That Allegedly Contribute To Deforestation Of The Amazon Rainforest| FXMAG.COM GBP/USD The movement of the cable pair resembles the movement of EUR/USD. GBP/USD started the week at 1.1950, but during the day GBP/USD fell towards 1.1930. In the European session, it gained an upward momentum and exceeded the level of 1.1980. Politically, European Commission President Ursula von der Leyen is due to travel to the UK today to meet Prime Minister Rishi Sunak on a new Brexit deal. This could see a resumption of trade between Northern Ireland and the UK, but it has not really translated into the GBP yet. AUD/USD The AUD/USD pair is the worst performer among the major currency pairs. The Aussie Pair started the day above 0.6730 but fell towards 0.6700 in the next session. In the European session, AUD/USD has slightly increased and at the time of writing it is just above 0.6710. The Australian dollar weakened to around $0.67, trading at its lowest level in nearly 2 months as better-than-expected US economic data boosted expectations that the Federal Reserve would need to raise interest rates further to stem rising inflation. Weak domestic employment data also affected the currency with Australia's unemployment rate unexpectedly rising to 3.7% in Q4 despite expectations to hold steady at 3.5%. Meanwhile, the Reserve Bank of Australia's latest monetary policy statement showed it had revised its inflation forecast for this year higher, saying price pressures were spreading to services and wages. Source: investing.com, finance.yahoo.com
Rates Spark: Nothing new on the dovish front

The EUR/USD Pair Is In The Bearish Momentum

InstaForex Analysis InstaForex Analysis 28.02.2023 08:05
On Monday, the market showed a renewed interest in risk: S&P 500 +0.31%, Euro Stoxx 50 +1.66%. But the main reason why the euro grew was increasing market expectations on the European Central Bank's rates, which sharply rose up to 3.9% by the beginning of 2024. As a result, the price overcame the resistance of 1.0595 and it is already aiming for 1.0660, deepening the correction, which we estimated was not deep. On the daily chart, the signal line of the Marlin oscillator turned up, helping the price reach the upper limit of the 1.0595-1.0660 range. On the four-hour chart, the price tentatively consolidated above the balance and MACD indicator lines, the Marlin oscillator rooted in the growth area. The price could reach the 1.0660 target resistance. The general trend is a downward one, there are no reversal conditions, as before. Consolidating below 1.0585, i.e. under the MACD line, will bring back the bearish momentum with the intention to reach the target range of 1.0443/70   Relevance up to 03:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336245
Technical Outlook Of The Main EUR/USD Currency Pair

The EUR/USD Pair Is Seen To Be Trading Just Below The 1.0590 Mark

Oscar Ton Oscar Ton 28.02.2023 08:07
Technical outlook: EUR/USD rallied through the 1.0620 high intraday on Monday before pulling back. The pair is seen to be trading just below the 1.0590 mark at this point in writing as bulls remain poised to push further toward the 1.0640-50 zone. Intraday support is seen around the 1.0570-75 range, and bulls are expected to come back strong if prices drop from here. EUR/USD is unfolding a larger degree corrective wave after prices pushed through 1.1025 swing highs on February 02, 2023. It is quite possible that the first wave is complete between 1.1025 and 1.0535 levels. If the above structure holds well, the quote could stage a rally toward 1.0700 and up to the 1.0800-1.0850 range. Prices should stay above 1.0535 for the above structure to remain intact. EUR/USD is facing immediate resistance around 1.0700-20; while support is seen at 1.0480 levels. The expected pullback should materialize from current levels or after breaking below 1.0481. Please note that bears are targeting 1.0100 levels before the corrective wave terminates. A high probability remains for a bullish bounce from 1.0100 since it is the Fibonacci 0.618 retracement of the earlier upswing. Trading plan: Potential short-term rally to 1.0700-800 zone before turning lower. Good luck!   Relevance up to 06:00 UTC+2 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314232
Small factors combine to pressure credit

The EUR/USD Pair Maintains The Bearish Mood

Paolo Greco Paolo Greco 28.02.2023 08:15
5M chart of EUR/USD EUR/USD traded higher on Monday. It was unexpected for many people, but in general, we just witnessed a standard growth, and as a result, the pair was near the critical line. The only report that traders could pay attention to was the Durable Goods Orders. European Central Bank President Christine Lagarde had an interview, but she did not mention anything that was particularly new, just reassured that the rate will continue to grow as part of the fight against high inflation. And the Durable Goods Orders report was weak enough for the dollar to hold its current positions. It did not. As a result, the pair rose about 70-80 pips. There were few trading signals on Monday. The first one was formed in the US session, when the pair broke through 1.0581. The Kijun-Sen line was very near, so the price was close to it almost immediately. However, it was possible to earn about 15 pips on a long position. The same profit was possible on a short position upon a rebound from the critical line. And the last buy signal could have been ignored, as it was formed too late. But 30 points of profit is not a bad result either. COT report: Due to a technical glitch, new COT reports have not been released for almost a month, but on Friday, one of the reports for January 31 was released. This report does not make much sense, because since then, a month has passed, and the data from the next reports (which are more or less up-to-date) are still not available. Therefore, we will analyze the data that are available. The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since September. Around the same time, the euro started to rise. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. The euro has already started to fall, but it is not clear yet, is it a pullback or a new downtrend? In the reporting week, non-commercial traders opened 9,000 long positions while the number of shorts decreased by 7,100. Correspondingly, the net position increased by 16,100. The number of long positions exceeds that of short ones by 148,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue. 1H chart of EUR/USD On the one-hour chart, the pair maintains the bearish mood and trades below the Ichimoku indicator lines. We also formed a descending trend line, consolidating above which will determine the end of the downtrend. Despite the correction on Monday, the downtrend could easily resume with a bounce from the Kijun-Sen and the trend line. On Tuesday, important levels are seen at 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0762, as well as the Senkou Span B (1.0708) and Kijun-sen (1.0615). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On February 28, there are no important events planned in the European Union and the United States. In theory, with an empty fundamental background, the bulls will not have enough strength to overcome the critical line and the trend line. Therefore, I expect the euro to fall today. Otherwise, we'll have an uptrend. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders   Relevance up to 01:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336237
What are the possible scenarios for EUR/USD? Euro against US dollar - inidicator analysis

The Euro (EUR) Currency Is Still Highly Overbought

Paolo Greco Paolo Greco 28.02.2023 08:20
The EUR/USD currency pair traded unusually on Monday. In reality, the pair frequently corrects on Friday following a long fall. This is because some traders set profit targets for positions before the weekend. At the same time, the downward trend continued on Friday, and the pair adjusted to the moving average on Monday. This pair's movement was somewhat supported by macroeconomic data. Yesterday, the United States released one more or less significant report on long-term goods orders. Although we have previously stated that we do not anticipate a significant response to this report, the dollar declined by around 60 points as a result of its release. We believe it is more likely a coincidence. The report itself revealed a considerably more significant decline in order volumes than was anticipated, disappointing buyers of dollars. As a result, the pair is currently trading close to the moving average line but has not yet surpassed it. We still don't know why the European currency can demonstrate observable growth, but if there is a consolidation above the moving average, then the bulls can take the lead for a while. The fundamental (global) background has not changed at all recently, and the euro currency is still highly overbought. On the 24-hour TF, the situation gets a little complicated on Monday. Meanwhile, the price is below the crucial level of 1.0609 (38.2% Fibonacci), but it has not yet been able to penetrate below the Senkou Span B. If not, the pair may quickly return its steps to the critical level, which is now located close to the level of 1.0780. Therefore, the pair must at least overcome the moving average on the 4-hour TF to anticipate growth. The rhetoric remains unchanged under Christine Lagarde. Christine Lagarde's speech, meanwhile, was already delivered this week. More specifically, it was a meeting with the Financial Times. Lagarde asserts that the ECB may require a further tightening of monetary policy and that the question of the level of the rate hike in March has nearly been completely addressed. As the rate hasn't been a secret for very long, traders now anticipate another 0.5% increase. Remember that the ECB effectively declared a 1.25% rate increase at the next three meetings a few months ago, and so far it has followed through on that plan. Consequently, Lagarde's remarks on Monday may have potentially supported the euro, but what would have caused the market to respond if there had been no new information? Ms. Lagarde added that the regulator is ready to increase the key rate once more if required to maintain 2% inflation. And this will certainly be necessary. A report for February will be released this week, and it predicts that the consumer price index may slow to 8.2%. We wouldn't jump to conclusions, however, given that Germany's inflation has already shown signs of growth. Ms. Lagarde may not want to shock the markets with strong pronouncements just yet because doing so will not be beneficial. What will the ECB do if inflation begins to rise again? There are already rumors that rates below 6% may not be sufficient to guarantee price stability by 2%, especially in the United States, where inflation has been declining for 7 consecutive months. It is far from certain that the ECB will be able to tighten monetary policy as sharply and enthusiastically as the Fed, given how much more complicated things are in Europe as a result of a rate hike. In general, as previously stated, 2023 may bring surprises, and all current inflation or rate projections are subject to another 1,000 changes. Remember how many experts forecast an impending recession in the US and the EU last fall and summer? And the Fed rate was at its highest point at 3.5% at the beginning of last year. As a result, this year's predictions will probably need to be updated more than once. As of February 28, the euro/dollar currency pair's average volatility over the previous five trading days was 69 points, which is considered "normal." Thus, on Tuesday, we anticipate the pair to move between the 1.0538 and 1.0676 levels. The downward turn of the Heiken Ashi indicator will signal the beginning of a new downward movement. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trade Advice: The EUR/USD pair is still moving downward. At this point, we can take into account new short positions with targets of 1.0498 and 1.0488 if the Heiken Ashi indicator reverses its upward trend. After the price is fixed above the moving average line, long positions can be initiated with targets of 1.0676 and 1.0742. Explanations for the illustrations: Channels for linear regression - allow us to identify the present trend. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 01:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336235
Impact of Declining Confidence: Italian Business Sentiment in August

FX Daily: Risk sentiment too fragile for a big dollar correction

ING Economics ING Economics 28.02.2023 09:16
The dollar is restrengthening this morning after a soft start to the week. Still, the data flow is not endorsing any unwinding of Fed hawkish bets and further improvements in risk sentiment may become harder to sustain. Today, keep an eye on French and Spanish inflation, and on the Norges Bank FX purchases announcement UK PM Rishi Sunak and EC President Ursula von der Leyen at a press conference on a new post-Brexit trade arrangement for Northern Ireland USD: Not trusting a big rebound in risk sentiment The dollar is trading stronger across the board this morning after suffering a correction yesterday that was due to a rebound in global equities and probably some month-end flows. We have recently highlighted how the narrative for the greenback has turned more structurally supportive, meaning that a return to a USD downtrend will take time and may only be very gradual. That is unless incoming data start painting a different picture for the US economic and inflation outlook, which would force some unwinding of recent hawkish bets on the Fed. This week’s key data releases will be the ISM surveys, and in particular Friday’s ISM services index, which served as a benchmark for the rapid swings in US growth sentiment over the past two prints. Still, we have some interesting data points to monitor today. The Conference Board consumer confidence indicator is expected to rise after a small contraction in January, the Richmond Fed Manufacturing Index is also expected to improve, while wholesale inventories may hold at 0.1% month-on-month in the January read. US data may not move the market dramatically today, so the dollar may be primarily driven by global risk sentiment. We struggle to see a material and sustained recovery in global equities in such a worsening valuation environment, and with data still supporting the Fed’s hawks for now, the dollar’s short-term bias still appears neutral/modestly bullish. A return above 105.00 in DXY seems possible in the ISM services release on Friday. Francesco Pesole EUR: Regional CPI figures in focus Inflation figures for January are the main highlight of the week in the eurozone, and today’s numbers out of France and Spain may already start moving the market. Remember that inflation rebounded in both of those countries in January, which underpinned the recent ECB hawkish narrative. Today, consensus sees a stabilisation in the EU-harmonised French inflation at 7.0% and a slowdown from 5.9% to 5.7% in Spain. Unless we see a material surprise on the downside – that would suggest a more widespread easing in price pressures across the eurozone – today’s regional CPI figures may fail to dent hawkish expectations for ECB tightening. Markets are currently pricing in around 130-140bp of tightening before reaching the peak. This could offer some floor to the euro, and we expect any re-strengthening of the dollar to see high-beta commodity currencies more at risk than the euro for the time being. Still, the risks of 1.0500 being tested in the near term remain elevated. Francesco Pesole GBP: Impact of new Northern Ireland deal may be only short-lived The pound is one of the best-performing currencies since the start of the week after the confirmation of a new UK-EU deal on Northern Ireland. The “Windsor Framework” reviews some sticky points of the existing NI protocol, essentially reducing the number of checks on trade between Northern Ireland and the rest of the UK. The direct impact on the UK economy should not be significant, but markets are probably welcoming the conciliatory steps in UK-EU trade relationships. It seems hard, however, that the pound will find sustained support simply based on the new NI deal. The central bank story should instead remain the most central driver of GBP, and given the lack of data today, markets will watch three Bank of England speakers today: Jon Cunliffe, Huw Pill and Catherine Mann. A 25bp move in March is fully in the price, and the debate appears to be much more centred on whether the Bank will need to keep tightening beyond March: markets are definitely swinging on the hawkish side, expecting a total of 80bp of tightening before reaching a peak. For now, the global central bank narrative and improving UK data are not giving many reasons to unwind such hawkish expectations, and the pound may continue to prove more resilient than other pro-cyclical currencies. Francesco Pesole Scandinavia: Grim data in Sweden and Norges Bank FX sales in focus Swedish growth data came on the soft side this morning. The second print of fourth-quarter data showed a larger contraction (0.9%) than previously estimated (0.6%). Although this is clearly backward-looking data, the ongoing tightening by the Riksbank, a very fragile housing market and high inflation continue to point to a rather grim economic outlook in Sweden. Remember that we are approaching the end of wage negotiations in Sweden, which may suggest even more monetary tightening will be required. We see the recent good performance of SEK as unsustainable unless data start pointing at an improvement in the growth outlook. A return to 11.10+ in EUR/SEK (paired with elevated volatility) is a tangible possibility in the coming weeks. In Norway, we’ll keep a close eye on Norges Bank’s announcement of daily FX purchases for the month of March this morning. Net purchases were increased to 1.9bn NOK for February after three months of reductions from the 4.3bn peak in October 2022. With NOK being the worst-performing currency in G10 this year and risk sentiment instability continuing to pose downside threats (remember the krone is the least liquid currency in G10), some support in the shape of lower FX purchases may come from Norges Bank today. This may avert – or at least delay – another decisive break above 11.00 in EUR/NOK. Francesco Pesole Read this article on THINK TagsFX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ECB cheat sheet: Difficult to pull away from the Fed

FX: EUR/USD Is Above 1.06 Again, GBP/USD Also Gained

Kamila Szypuła Kamila Szypuła 28.02.2023 12:44
The U.S. dollar resumed its rally on Tuesday after dipping against sterling and the euro a day earlier, putting it back on track for its first monthly gain since September. The greenback's rally gathered momentum in recent weeks as upbeat economic data led to mounting expectations that the U.S. Federal Reserve will have to raise interest rates more than initially expected. The US economic report will include the Conference Board's Consumer Confidence Survey for February. In January, the annual expected consumer inflation component of this survey rose to 6.8% from 6.6% in December. The latest inflation data for January showed that price pressure remained higher than expected. If consumers' inflation expectations continue to rise, the US dollar could gain strength in the second half of the day. USD/JPY In the Asian session, the yen traded in the range of 136.20-136.30, but in the Asian session there was a sharp increase and at the time of writing USD/JPY is trading at 136.6930. Recent comments from new BOJ vice-president Shinichi Uchida and current BOJ governor candidate Kazuo Ueda had a dovish tone during testimony before the upper house of the Japanese parliament. Ueda confirmed his intention to stick to "abenomics" and defend the central bank's monetary policy stance. Japanese data released overnight were mixed as industrial production was weaker than expected and retail sales rose. Industrial production recorded the first decline in 3 months, when production fell in January by 4.9%MoM. Retail sales rose by a solid 1.9% m/m, with clothing and motor vehicles having the largest share. Manufacturing in Japan remains an area of ​​concern; however, consumption looks good and is indeed on track to recover. EUR/USD The euro pair fell in the morning session from levels above 1.06 to levels around 1.0585. In the European session, the EUR/USD pair rose significantly above 1.0620. At the time of writing, the EUR/USD pair is trading around 1.0615. However, deteriorating market sentiment seems to be limiting the pair's gains for now as the focus shifts to the Conference Board's US consumer confidence survey. The consumer price index (CPI) in France rose to 7.2% y/y in flash estimates in February from 7% in January. Similarly, the annual CPI in Spain rose to 6.1% from 5.9% in the same period. After stronger-than-expected inflation figures from major eurozone economies, markets are almost fully pricing in the European Central Bank's (ECB) final interest rate at 4%, down from 3.75% last week, with hawkish ECB betting helping the euro hold its ground. GBP/USD The cable pair in the Asian session maintained a downward trend and in its decline headed to the level of 1.2028. The European session provided a positive impulse for GBP/USD and the pair rose above 1.2090. The pound pair managed to break above the 1.21 level but failed to hold and is currently trading below that level at 1.2098. Meanwhile, British Prime Minister Rishi Sunak announced late Monday that he had reached an agreement with the European Union to replace the Northern Ireland Protocol with the Windsor Framework. While it's too early to tell whether these developments could have a lasting impact on sterling's valuation and the Bank of England's (BOE) policy outlook, the initial market reaction helped the pair to gain momentum. UK Prime Minister Sunak also noted that MPs would vote on the new deal and that they would respect the results of the vote. Later in the session, several BOE decision makers will give speeches. AUD/USD In the Asian session, the Australian pair recorded a significant drop from the 0.6750 levels to the 0.6710 levels. In the European session, the AUD/USD pair is rising again and trading around 0.6730. Source: investing.com, finance.yahoo.com, dailyfx.com
Forex: Euro against US dollar - forecast on April 24th, 2023

The EUR/USD Pair May Fall To The Specified Target

InstaForex Analysis InstaForex Analysis 01.03.2023 08:03
The bullish momentum the euro showed on Monday was not enough, yesterday, it did not even reach the target level of 1.0660, and it went back under 1.0595. Obviously, it can now take the target range of 1.0443/70 without too much movement. French and Spanish CPI indicators showed growth again, but investors' worries were not so much about the European Central Bank's monetary policy as about inflation as a sign of recession - Swiss and Canadian GDP for Q4 showed zero growth, while Canadian GDP for December was already down 0.1%. On the four-hour chart, the price has settled under the MACD indicator line, the Marlin oscillator is moving into the downtrend area. The situation is completely downward on both charts. I expect the pair to fall to the specified target   Relevance up to 03:00 2023-03-02 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336363
Rates Spark: Crunch time

Analysis Of Price Movement Of The EUR/USD Pair

Torben Melsted Torben Melsted 01.03.2023 08:09
EUR/USD tried to break above resistance at 1.0628 but failed, indicating a final spike lower to test the ideal corrective target at 1.0498 to complete wave 4 and set the stage for the next impulsive rally higher towards 1.1197 and likely closer to 1.1350. That said, we are clear in the final stages of the corrective decline in wave 4 and we should expect wave 4 to bottom on this next decline toward 1.0498.   Relevance up to 06:00 2023-03-02 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314418
FX Daily: Upbeat China PMIs lift the mood

FX Daily: Upbeat China PMIs lift the mood

ING Economics ING Economics 01.03.2023 09:50
Financial markets are caught between the two narratives of a softer landing (helped by China's reopening) and sticky inflation keeping policy rates higher for longer. That will probably keep bond markets on the back foot and FX markets volatile in ranges. Today's highlights will be PMI releases around the world and presumably high German inflation USD: Foreign Direct Investment trends of interest The dollar has softened marginally in Europe and emerging market currencies are generally bid after China released an encouraging set of February PMIs. There were strong rebounds for both the manufacturing and service sectors which are feeding the narrative that a 2023 China recovery is the real deal. The PMIs come ahead of this weekend's 'Two Sessions' political gathering where we expect a growth target of 5.5-6.0% to be outlined. So far, so good and the China PMI data trumped some local news where AUD/USD has ended up higher on the session despite some softer-than-expected GDP and CPI data. Catching our eye this morning has been a survey by the US Chamber of Commerce (AmCham) that only 45% of American companies see China as their top three investment destination, compared to 60% a year ago. Clearly, geopolitics is driving this. Of the 24% of companies which said they might relocate out of China, one-third said they would relocate to the US. This topic of re-shoring/friendshoring will be an important multi-year factor driving Foreign Direct Investment (FDI) trends and could provide some resistance to those looking for the secular decline of the dollar. On that subject, we also note that Tesla will be building its next plant in Mexico. That only adds to the attraction of the Mexican peso, which remains our high yield/EM currency of choice. Back to today. The US releases ISM manufacturing data which should remain soft at 48. More interest will be had in Friday's services ISM. We suspect the China PMI story might dominate FX trading today and maintain a slightly offered tone for the dollar. Yet DXY will probably trade well within Monday's range of 104.55-105.35. Chris Turner EUR: Inflation, inflation, inflation EUR/USD got a lift yesterday from data showing Spanish February core inflation pushing to a new cycle high. The fact that Spanish core inflation includes food may not mean such a large read-through to tomorrow's eurozone core CPI data which is expected at 5.3% year-on-year. Yet our team thinks that this figure could now push up to a new cycle high of 5.4/5.5%. The worrying trend in prices continues to feed into European Central Bank expectations where the market looks to be pricing an extended tightening cycle into 2024, with the deposit rate (now 2.50%) possibly being raised as high as 4.00%. Feeding into that story today will be German CPI, which is released around 14CET. The continued re-pricing of the ECB curve is providing EUR/USD with some support against higher US rates and suggesting 1.05 will be the bottom of the EUR/USD's first quarter range after all. Certainly, the disinflation story is taking a back seat this month.  Today, we have a few ECB speakers and we should expect a relatively quiet 1.0565-1.0645 range for EUR/USD. The more aggressive ECB pricing is also providing some support to EUR/CHF, which looks like it might end March near our 1.00 target. Chris Turner GBP: More focus on the Northern Ireland deal Yesterday, we wrote a piece on what the new Northern Ireland deal - or 'Windsor Framework' - meant for sterling. While welcome news, we doubted that it would prove a game changer for sterling. Some other FX strategists felt that the news could be a lot more positive for sterling - even triggering a 2/3% rally in the pound were the DUP to come on board, support the deal and return to government in Northern Ireland.  We think the small rally in the pound that was seen (and has since partially reversed) is probably sufficient in that it reflects a warmer political relationship between the UK and the EU. We doubt any approval by the DUP makes much difference to the pound. As we discussed in the article, weak UK growth and an increasingly hawkish ECB will probably keep EUR/GBP supported for most of the year.  We do note, however, that some of last year's policy uncertainty is still being taken out of sterling via the FX options market. For example, the one-year EUR/GBP risk reversal - the price for a EUR call option over an equivalent EUR put option - has fallen to 0.95% from 2.5% last September. And one-year EUR/GBP traded volatility has fallen to 7% from 11%. But those moves may well have come far enough for the time being. Our baseline sees EUR/GBP staying supported under 0.88. Look out for a speech by Bank of England Governor Andrew Bailey at 11CET today. Money markets price the Bank Rate at 4.75% into September. Our team thinks that BoE rates will not need to be hiked that far, yet with inflation staying high for the time being, Governor Bailey may find it too early to disabuse the markets of that pricing. GBP/USD could drift back to 1.2100 on the slightly softer dollar today. Chris Turner CEE: Gas prices support the region again The National Bank of Hungary (NBH) left rates unchanged yesterday. Even though at face value it looks like nothing has changed, our impression is that the central bank still means business when it comes to fighting inflation and was able to sound a bit more hawkish. The central bank will not be distracted by promises and outliers. The NBH wants to see a permanent improvement in every aspect and will not rush policy easing. However, looking at the market reaction, it is clear that the market already understood the NBH's message in January and the February meeting did not bring much fresh news. As we mentioned in our NBH preview, we expect the forint to take a break in March and the central bank meeting is the last chance for gains below 380 EUR/HUF for now. We remain positive on the forint, but the current drivers have run out of steam. Plus we could see some negative news in the EU story in the coming days and a downgrade in the outlook from Moody's this Friday.  Today, we will see the PMIs across the region for February. We expect a slight improvement in sentiment in Poland and the Czech Republic and a deterioration in Hungary. In Hungary, the PPI for January will be published. The Czech Republic's state budget numbers for February will also be revealed, which could shed more light on the financing and issuance of CZGBs.  In the FX market, we have seen new gains for CEE again in recent days. The Czech koruna, in particular, has attracted attention, breaking below 23.50 EUR/CZK for the first time since 2008. The main reason, in our view, is the renewed decline in gas prices and the testing of new lows. However, the rest of the market does not indicate favourable conditions for the koruna and the region. With core rates rising further, interest rate differentials have compressed across the board and the US dollar is once again on the stronger side. Thus, we are hard-pressed to find reasons to see the current gains as sustainable.  Frantisek Taborsky  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Expect the ECB to keep increasing rates at the short-term, at least until the summer

CPI Report Cranked Up The Hawkish ECB Rate Expectations

Swissquote Bank Swissquote Bank 01.03.2023 11:02
Inflation in Europe took the wrong direction in February. The data released yesterday printed a record inflation of 7.2% in France and ticked higher to 6.1% in Spain. Both were higher than expected, of course, and cranked up the hawkish European Central Bank (ECB) rate expectations. US market In the US, cooling US house prices for a seventh straight month, and ugly Richmond manufacturing index cooled the hawkish Federal Reserve (Fed pressures yesterday, but the S&P500 couldn’t hold on to its gains above the 50-DMA, and closed yesterday’s session below this level. As a result, the month of February ended with a 2.7% loss for the S&P500, and with mounting pressure from the bears. Crude Oil Elsewhere, crude oil jumped yesterday, although the latest API data showed another 6.2 million barrel build last week in the US crude inventories. The strong PMI data from China certainly helped keeping the oil bulls alert. It also helped Aussie rebound following soft CPI data. Read next: Elon Musk Is Richest Man Again, The State Bank Of India Had Raised $1 Billion From Global Banks| FXMAG.COM Stocks In individual stocks, Target and Zoom gained after results, while Rivian lost 10% in after hours trading on mixed results and soft outlook. Watch the full episode to find out more! 0:00 Intro 0:36 Hot European inflation boosts ECB hawks 5:24 Strong China PMI counter soft AUD inflation, but... 6:30 S&P500 closes the month 2.7% down 7:59 Crude oil gains but solid inventory data could limit rally 8:44 Target, Zoom gain, Rivian tanks post earnings Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Eurozone #inflation #ECB #rate #hike #EUR #USD #AUD #Crude #Oil #Target #Zoom #Rivian #earnings #Stoxx #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The USD/JPY Price Reversed From The Lower Limit

Euro Is Rising, USD/JPY Falls Below 136.00, The Aussie Pair Also Gains

Kamila Szypuła Kamila Szypuła 01.03.2023 13:32
The dollar weakened and the Chinese yuan gained on Wednesday after Chinese manufacturing activity rose at the fastest pace since April 2012, while the euro gained after regional price data in Germany boosted inflation concerns. The Australian and New Zealand dollars also benefited from strong Chinese economic data that beat expectations, with the official Industrial Purchasing Managers' Index (PMI) rising to 52.6 last month from 50.1 in January. Upbeat China PMI data showed that Chinese economic activity continued to gain momentum following the decision to reopen the economy in December. The situation sparked a rally in major Asian stock indices, with the Euro Stoxx 50 index opening in the red. USD/JPY The yen traded above 136.25 in the Asian session, but fell sharply below 136.00 in the European session. The USD/JPY pair has dropped significantly to 135.30 in the last hours. USD/JPY at the time of writing is just above 135.30 (135.3040). The Japanese yen (JPY) strengthened slightly after data released today showed the Manufacturing PMI (Feb) was better than expected. EUR/USD On Wednesday, the trade of the euro pair is significantly positive, the EUR/USD pair has been rising since the beginning of the day. At the time of writing, the EUR/USD pair is trading around 1.0670. Data released on Tuesday showed accelerating inflation in France and Spain, the eurozone's two largest economies, raising the European Central Bank's (ECB) expectations for interest rate hikes. The pair is taking advantage of the ECB's hawkish expectations and the significant weakness of the US dollar. All eyes are on German inflation and US ISM PMI data. Markets expect the Harmonized Index of Consumer Prices (HICP), the European Central Bank's preferred measure of inflation, in Germany to fall to 9% yoy in February from 9.2% in January. If the annual HICP unexpectedly approaches or even exceeds January's value, the euro's initial reaction is likely to outpace its rivals. Markets are almost fully pricing in the ECB's final interest rate at 4% in 2023, and a strong inflation print from Germany should allow the ECB's hawkish bets to dominate the euro's valuation. Read next: Developer Vanke Is Selling 300 Million Shares To Allocate For The Proceeds To Debt Repayment| FXMAG.COM GBP/USD The GBP/USD pair is not doing as well as EUR/USD, despite rising to levels above 1.2080 in the Asian session. In the European session, the cable pair fell towards 1.2020, but rebounded and rose above 1.2050. Sterling rose marginally against a weaker dollar on Wednesday, trimming gains made earlier in the session after Bank of England Governor Andrew Bailey said nothing had been decided in terms of whether interest rates would need to rise again. Meanwhile, British Prime Minister Rishi Sunak reportedly told his MPs to give the Democratic Unionist Party (DUP) time and space to study the details of the new deal. The recent UK-EU deal or "Windsor Framework" has given the pound some momentum but it has struggled to maintain said gains. The reasons for this may be partly because the economic impact of the deal is unlikely to be significant for the UK economy as it does not improve trading conditions between the rest of the UK and the EU. A recent poll by the Bank of England found Brexit no longer a key uncertainty for UK businesses. AUD/USD AUD/USD gains on Wednesday. The Aussie Pair fell significantly at the beginning of the day, but then rebounded and maintained its upward trend. The Australian pair is trading above 0.6775 at the time of writing. The Australian dollar fell below 67 cents after Q4 quarter-on-quarter GDP was 0.5% instead of the 0.8% forecast and compared to the previous 0.7%, which was revised up from 0.6%. The currency trimmed losses later in the day thanks to solid data from China. Annual GDP by the end of December was 2.7%, in line with expectations. Today's GDP figures come ahead of the Reserve Bank of Australia's monetary policy meeting next Tuesday. They are expected to raise their target cash rate by 25 basis points (bps) to 3.60%. If it does, it will be the tenth increase since it started in May last year. The latest inflation reading is well above the RBA target range of 2-3% at 7.8% year-on-year. Source: finance.yahoo.com, investing.com
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

EUR/USD Pair Is Still Trying To Overcome The Support

InstaForex Analysis InstaForex Analysis 02.03.2023 08:10
Yesterday, the euro rallied 90 pips without any fundamental or technical reasons, breaking through two target resistances, 1.0595 and 1.0660. The trading volume was the highest since the 16th of February, there was probably a hunt for the bears' Stop Losses, who were above 1.0650. If that's the case, then the euro's further growth looks really strange. With a great stretch it is possible to assume that market participants expect this a higher rate from the European Central Bank than the Federal Reserve, but, first of all, such a version hasn't drawn much attention in the western press yet, and secondly, the rate difference even in the long term will be in favor of the Fed and the dollar. What we hear more is the version that risk appetite increased due to upbeat Chinese PMI for February. The manufacturing PMI increased from 50.1 to 52.6 points. But the stock market did not benefit from this as the main indices closed in the red zone. Today, the European CPI for February is expected to decline from 8.6% y/y to 8.2% y/y and the number of initial jobless claims in the US might stay at a relatively low level for the last 6 weeks - the forecast is 195,000. The signal line of the Marlin oscillator of the daily chart is in the negative area and shows the first sign of a downward reversal. If the price closes today below 1.0660, then further fall to 1.0595 will resume and, what we expect according to the main scenario, further advance to the target range of 1.0443/70. An alternative scenario, the probability of which, however, has increased, suggests that the price settles above 1.0660 (i.e. closing the day with a white candlestick), Marlin's transition into the positive zone and further growth to the target range of 1.0758/87. On the four-hour chart, the price has consolidated above the balance and MACD indicator lines, it is still trying to overcome the support at 1.0660, the Marlin oscillator turns down sharply, which is an early sign of price reversal   Relevance up to 03:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336499
Small factors combine to pressure credit

The Trend Change Of The EUR/USD Pair Are Now Required

Paolo Greco Paolo Greco 02.03.2023 08:13
On Wednesday, the EUR/USD currency pair was trading higher, and, for the first time in a while, it broke through the moving average line. As a result, the trend is now formally upward. "Formally" – as overcoming the moving is not a significant signal by itself. This is merely a cautionary note that the trend might change. Signals confirming the trend change are now required. Furthermore, such signals might not exist. The pair may close tomorrow below the moving average due to strong statistics from the USA or weak figures from the European Union. Here, it's important to pay close attention to both the signs on the 24-hour TF and the fundamental background. Additionally, I'd like to point out that we continue to anticipate a decline in the value of the euro. To be honest, it should be said that it is becoming increasingly difficult to think that the value of the euro would decline every day. We shall discuss the ECB's problems in more detail below, but for now, let's focus on the basic issue: no one knows how much a given central bank should raise interest rates to get inflation back to 2%. Most likely, there is no response to this query because the economy has a complicated structure that makes it difficult to foretell such occurrences. All central banks, therefore, attempt to operate "in the course of the play." And given this, it is quite challenging to predict which way the pair will move over the next two to three months. Tomorrow, Christine Lagarde will announce that the ECB will increase interest rates three more times by 0.5%. Of course, the euro will instantly experience strong growth. Jerome Powell will announce the Fed will speed up the tightening of monetary policy the day after tomorrow, and the dollar will already be more expensive. As a result, traders must now take action and be ready for any changes in the course of events. The pair's failure to overcome the Senkou Span B line on the 24-hour TF (so far) raises serious red flags regarding the potential end of a downward correction. On top, there is a Kijun-sen line that must be crossed for the upward trend to resume. As of now, a decline in prices is still something we may anticipate, but now strong factors are required for the devaluation of the euro. One noteworthy incident from yesterday will be remembered. In a speech, Joachim Nagel, the head of the German central bank, warned that many more additional tightenings in monetary policy may be necessary following the ECB's 0.5% rate hike in March. Also, he pointed out that in Germany, inflation won't drop below 2% in 2023, 2024, or 2025. It's still unclear what Nagel meant. The reality that inflation will remain over target for a long time because the ECB is just not prepared to tighten monetary policy for an extended period? Or the fact that inflation will continue to be high regardless of how much the rate is raised? We think that Nagel's statements currently only reflect his perspective. Since the ECB is the central bank of a group of nations, the monetary committee of the ECB is not just present, and its other members may have different opinions. Also, it is necessary to consider each party's interests. In our opinion, the European regulator won't be prepared to increase the rate to 5 or 6%. In other words, it might take a while for the consumer price index to recover to the desired level, at least in the coming years. By the way, Germany's inflation has already begun to increase once again. Not just in Germany, either. Today, a European inflation indicator will be issued, which may disappoint markets. But how will it disappoint them? In light of Nagel's statement, the euro appreciated significantly as the likelihood of a prolonged rate hike increased multiple times. The euro may continue to rise if inflation today shows only a slight slowdown or no decline at all since the probability will only increase. High inflation is therefore more beneficial than detrimental for the euro currency. The euro may well continue to be supported by this factor for a few more days, after which the Fed and US inflation will control everything. The Federal Reserve, a more active central bank, might also tighten its rhetoric if the consumer price index starts to increase in the US. Also, traders respond to speeches by Fed members far more enthusiastically than they do to similar statements by ECB members. As a result, such "swings" may very well be present on the market soon. But for the time being, we continue to think that the value of the euro will decline. As of March 2, the euro/dollar currency pair has experienced 83 points of "average" volatility over the previous five trading days. Thus, on Thursday, we anticipate the pair to move between the 1.0566 and 1.0732 levels. The Heiken Ashi indicator's downward turn will signal a potential continuation of the downward movement. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 100986 Trade Suggestions: The attempt to begin an upward trend by the EUR/USD pair can only be a technical corrective. Until the Heiken Ashi indicator turns down, you can continue holding long positions with targets of 1.0732 and 1.0742. After the price is fixed back below the moving average line, short positions can be initiated with targets of 1.0566 and 1.0498. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 01:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336489
EUR/USD Pair Has A Potential For Short-Term Rally

Analysis Of EUR/USD Pair: It Is A Bullish Factor For The Euro

Paolo Greco Paolo Greco 02.03.2023 08:26
5M chart of EUR/USD EUR/USD continued to rise on Wednesday. Yesterday, there were quite specific reasons for such a movement, although they can be questioned. For instance, yesterday, Germany published its inflation report, which showed that there was no slowdown. And last month, it was rising almost to its peak. Thus, prices are not slowing down in the EU's largest economy and traders can expect a slowdown in the rate of decline of pan-European inflation. This will only mean that the European Central Bank needs to keep up its momentum and keep raising the rate as fast as it can. Naturally, it is a bullish factor for the euro. Joachim Nagel also gave a speech stating that the monetary tightening cycle may last much longer than it is expected now. This is also a bullish factor for the euro. The only problem is that the euro rose on Wednesday first, and then there was a speech and the release of the report... Technical signals can be divided into the European and the US sessions. At the European session, there was a buy signal near the critical line, afterwards the pair rose to 1.0658. The price rebounded from the level, so the long position should have been closed at that moment. Profit at 35 pips. The sell signal at 1.0658 also should have been executed, but it turned out to be false and brought in a loss of 25 pips. The price started to move from side to side, the signals were formed often and were mostly false. The levels 1.0658, 1.0669 and 1.0690 were very close to each other, so we shouldn't open any positions between them. When the sell signal formed when the pair settled below 1.0658, the ISM report was released in the US, so we should have ignored that one too. Moreover, the initial reaction to it was illogical. COT report: Due to a technical glitch, new COT reports have not been released for almost a month, but on Friday, one of the reports for January 31 was released. This report does not make much sense, because since then, a month has passed, and the data from the next reports (which are more or less up-to-date) are still not available. Therefore, we will analyze the data that are available. The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since September. Around the same time, the euro started to rise. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. The euro has already started to fall, but it is not clear yet, is it a pullback or a new downtrend? In the reporting week, non-commercial traders opened 9,000 long positions while the number of shorts decreased by 7,100. Correspondingly, the net position increased by 16,100. The number of long positions exceeds that of short ones by 148,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue. 1H chart of EUR/USD On the one-hour chart, the trend is shifting upward. The trend below the Senkou Span B line isn't completely canceled, but the fact that the pair settles above the critical line and the trend line already says a lot. Therefore, until it overcomes the Senkou Span B line, the pair can still restore the downtrend. On Thursday, important levels are seen at 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0762, 1.0806, and also Senkou Span B (1.0690) and Kijun Sen (1.0613). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On March 2, the ECB will publish the most important inflation report for February. The ECB and the Fed will also deliver some speeches. The day promises to be very interesting. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.   Relevance up to 01:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336484
ECB enters final stage of tightening cycle

The Former Resistance Of EUR/USD Pair At 1.0628 Is Expected

Torben Melsted Torben Melsted 02.03.2023 08:24
There was no time for EUR/USD to spike lower to the ideal target at 1.0498 as we saw a small dip to 1.0565 followed by a clear break above resistance at 1.0628 confirming that EUR/USD has completed its corrective decline in wave 4 and a new impulsive rally now is unfolding towards 1.1102 and ideally closer to 1.1400. Short-term the former resistance at 1.0628 is expected to act as a floor for the next rally higher, but only an unexpected break below support at 1.0565 will revive the corrective decline in wave 4 and the 1.0498 target before completing wave 4 and setting the stage for a new impulsive rally higher in wave 5.   Relevance up to 06:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314611
FX Daily: Time for the dollar to pause?

EUR/USD Pair Is Projected To Trade Lower

Oscar Ton Oscar Ton 02.03.2023 08:33
Technical outlook: EURUSD rallied through the 1.0691 intraday highs during the early New York session on Wednesday. Prices remained shy of a few pips from the 1.0700 resistance and pulled back. The single currency pair is seen to be trading close to 1.0635 at this point in writing and could slip further towards 1.0820 before finding support again. The instrument is looking higher thereafter. EURUSD is carving a larger-degree corrective decline which began from the 1.1025 highs in February. The pair has managed to carve the first wave of the corrective drop towards 1.0531 recently. The price could be progressing towards 1.0720 and up to 1.0850 as the second wave unfolds. We can expect prices to resume lower to 1.0100 later. EURUSD is projected to trade lower in the medium term and drag towards 1.0100 before resuming its rally. Also, note that the Fibonacci 0.618 retracement of the previous rally between 0.9535 and 1.1025 is seen passing through the 1.0100-10 zone. A high probability remains for a bullish bounce if prices manage to reach there. Trading plan: Potential rally to 1.0720 and 1.0850 in the near term, then lower again Good luck!   Relevance up to 08:00 2023-03-30 UTC+2 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314619
Pound Sterling: Short-Term Repricing Complete, But Further Uncertainty Looms

Hotter-Than-Expected EU Inflation Data, Euro Is Recovering

Swissquote Bank Swissquote Bank 02.03.2023 10:40
Hotter-than-expected inflation data pushes the European yields higher. The higher yields support recovery in the euro, but not the European stock valuations. A slowing economic growth Across the Atlantic Ocean, the news is not great, either. The ISM manufacturing index revealed a slower contraction in February, but the improvement compared to the last month was less than expected.A slowing economic growth is not bad news for the Federal Reserve (Fed), but the mounting price pressure is. This is what the ISM report revealed yesterday, and further fueled Fed hawks. Fed Activity on Fed funds futures now gives more than 30% chance for a 50bp hike at the next meeting, and Fed swaps price in a peak Fed rate of around 5.5%. This number was around 4.9% at the start of the year. Yields Consequently, the US 2-year yield continues its steady climb toward to 5% mark, and the 10-year spiked above the 4% psychological level yesterday.The S&P500 tested the critical 200-DMA to the downside. There is major speculation about an aggressive selloff below this 200-DMA level. And given the persistent positive pressure on the yields, clearing the 200-DMA support is not a matter of if, but a matter of when. Read next: Twitter Employees Are Overburdened As Elon Musk Tries To Run Twitter With Fewer Staff| FXMAG.COM Watch the full episode to find out more! 0:00 Intro 0:37 European inflation pressures yields and euro higher, equities lower 4:03 Just a matter of time before S&P500 slips below 200-DMA 8:41 Crude oil gains, but China-led rally may never materialize 10:02 Why Elon Musk’s Master Plan III was a flop? Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Eurozone #inflation #ECB #rate #hike #EUR #USD #Crude #Oil #Tesla #Master #Plan #EV #Stoxx #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
What are the possible scenarios for EUR/USD? Euro against US dollar - inidicator analysis

Despite The Decline Euro Remains Above 1.06, GBP/USD Is Trading Below 1.20

Kamila Szypuła Kamila Szypuła 02.03.2023 12:52
An improvement in risk sentiment after the publication of upbeat macroeconomic data from China made it difficult for the US dollar to find demand on Wednesday. USD/JPY The USD/JPY pair in the Asian session recouped losses and rose towards 136.80. At the beginning of the European session, the yen dropped significantly to 136.2540, but quickly began to recover. At the time of writing, USD/JPY is trading at 136.7450 So far, the Japanese yen has been stable this week in a period where the US dollar has weakened significantly against most of its G-10 peers. The yen's lack of strength may reflect the belief that the new Governor of the Bank of Japan (BoJ) Kazuo Ueda will maintain the very loose monetary policy of his predecessor. EUR/USD The euro pair is in a downtrend. It started the day high above 1.0670 but dropped to trade around 1.0620. The euro fell against the dollar on Thursday after data showed inflation in the euro zone was not as high as investors had feared based on national readings in recent days. Eurozone inflation eased to 8.5% in February from 8.6% a month earlier on lower energy prices. The core inflation rate in the Euro Area rose for a third successive month hitting a fresh record high of 5.6% in February. The core CPI which excludes prices of energy, food, alcohol and tobacco went up 0.8%. The core number reinforces the idea that without decreases in energy prices inflation remains sticky and adding credence to the recent hawkish rhetoric from ECB policymakers. Investors now see the ECB's 2.5% deposit rate rising by a combined 100 basis points in March and May, then to around 4.1% at the turn of the year. Read next: Tesla Intends To Cut Assembly Costs, The White House Released The National Cyber Strategy | FXMAG.COM GBP/USD The pound pair against the euro is down today. GBP/USD traded below 1.20 again. GBP/USD extended its decline and dropped below 1.2000 on Thursday after failing to capitalize on Wednesday's US dollar (USD) weakness. The couple looks delicate. The British pound loses against the US dollar this Thursday as the dollar finds some support. Last night, Fed officials (Kashkari and Bostic) maintained their hawkish stance. From the UK's perspective, the Brexit deal between the Prime Minister and the EU. Trade disputes with Northern Ireland have now been resolved, but the most surprising aspect of the deal was the favorable reception from some senior Brexiteers who praised the new concessions. While this is positive for the overall UK economy, the currency remains driven by central bank policy. The Brexit deal could bring short-term relief to the pound against the USD. AUD/USD The Australian movement is similar to its European counterparts. The AUD/USD pair remains above 0.67 despite a significant drop from 0.6767 to 0.6730. Source: finance.yahoo.com, investing.com
Forex: Euro against US dollar - technical analysis - May 18th

The EUR/USD Price Is Moving Away From Yesterday's Low

InstaForex Analysis InstaForex Analysis 03.03.2023 08:07
Yesterday, the euro returned to the support level at 1.0595. The lower shadow reached Tuesday's closing level and Wednesday's opening level - at that time the level was stable. The signal for further downward movement, to the target range of 1.0443/70, will be when the price surpasses yesterday's low (1.0577). The Marlin oscillator in the area of the downtrend, the downward movement is developing again. On the four-hour chart, the MACD indicator line held back the price from falling even deeper. Also, the price could not overcome the support of the balance indicator line. The price moving away from yesterday's low means that the price has also overcome these indicator lines. The Marlin oscillator struggles with the resistance of its own zero line. We are waiting for the price to fall according to the main scenario. The alternative scenario will come into effect once the price climbs above 1.0660 and settles there Relevance up to 03:00 2023-03-04 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336630
Rates Spark: Crunch time

The Minor Correction Of The EUR/USD Pair Became Slightly Deeper

Torben Melsted Torben Melsted 03.03.2023 08:18
The minor correction, we were looking for from 1.0691, became slightly deeper than we expected, but short-term important support at 1.0565 has held firm and should continue to do so as EUR/USD moves higher through minor resistance at 1.0616 and more importantly through resistance at 1.0677 that calls for a continuation higher towards 1.1108 and likely closer to 1.1400. Only an unexpected break below the short-term key support at 1.0565 will confirm that the corrective decline from 1.1033 still is in motion for a final dip closer to 1.0490 to complete wave 4, before moving higher in wave 5.     Relevance up to 06:00 2023-03-06 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314772
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

FX Daily: The ISM litmus test

ING Economics ING Economics 03.03.2023 09:08
After grim December numbers and encouraging January ones, today’s ISM services index will tell us which of the last two reads was the aberration in the series. All seems to point to December being a one-off drop, and levels above 54 will be enough to endorse the Fed’s hawkish tone and support USD. At the ECB, a 4.0% peak rate is now seemingly on the table   Join our economists and strategists for a live discussion on the upcoming US Federal Reserve, European Central Bank and Bank of England meetings. We’ll run through our expectations and what the meetings could mean for financial markets. 9 March 2023, 15:00-15:40 CET, via Microsoft Teams. REGISTER HERE USD: Consensus expects a stabilisation in ISM services Volatility, rather than trend, has been the name of the game in G10 FX this week. The dollar continues to draw benefits from the hawkish Fed narrative and good US data, but strong Chinese PMIs on Wednesday worked as a reminder that China can do the heavy lifting to restore global risk appetite. Today, all eyes will be on the US ISM service index for the month of February. Remember that a surprise drop to 49.2 (i.e. recessionary territory) in the December read was the trigger for a dovish repricing in Fed rate expectations and a weakening in the dollar. The sharp rebound to 55.2 in the January read (pretty much the same level as November) posed a serious counterargument to recession speculation and paired with strong jobs data to send expected Fed rates and the dollar higher. So, the February figures released today will essentially tell us whether the aberration in the ISM Service series was in December or January. Given the very strong correlation between levels below 50 in the index and a US recession, the impact on markets can be sizeable. Consensus is centred around a marginal decrease from 55.2 to 54.5, which would confirm speculation on recession is too premature and would continue to endorse the Fed’s hawkish rhetoric. We think this should allow further stabilisation of the dollar around current levels. A return to sub-50 levels is seen as rather unlikely and would cause a significant unwinding of hawkish Fed bets and probably the start of a new dollar downtrend. A read in the 50-53 area would probably be enough to generate some dovish repricing and should weigh on the dollar. However, as long as jobs data remain strong (payrolls are released next week), we shouldn’t see a dollar downtrend fully materialise. We’ll hear from some Fed speakers today (Lorie Logan and Michelle Bowman) after the ISM release, in the build-up to next week’s Senate and House parliamentary hearings by Fed Chair Jay Powell. Barring huge surprises on today’s ISM figures, we should continue to hear a hawkish data-dependent narrative, which should keep capping high-beta FX and supporting DXY above 104.00. Francesco Pesole EUR: 4% narrative shielding against USD strength The good news for the euro in this environment of consolidating dollar outperformance is that the hawkish repricing in the eurozone is also breaking new highs. After some reasonably hawkish ECB minutes, the ECB’s Pierre Wunsch explicitly put the 4.0% peak rate idea on the table – something markets had been flirting with for a few days. The OIS curve now fully prices in a 4.0% depo rate by October, and no rate cuts until well into 2024. This is 50bp above our economics team rate expectations, and probably looks too premature to even discuss such a large commitment now, but the interest in sounding as hawkish as reasonably possible at this stage is very clear: the latest inflation data pointed at building core price pressures and the ECB desperately needs to keep eurozone rates well supported. The fact that this is also preventing another large decline in the euro is also a welcome effect for the ECB: the two-year EUR-USD swap rate differential has started to narrow again, currently at -133bp after touching -150bp last week. Let’s see whether this 4.0% narrative gains more momentum among other ECB speakers today. Wunsch will speak again, along with Robert Holtzmann, Luis de Guindos, Bostjan Vasle and Madis Muller. The eurozone calendar includes final PMI reads for February and PPI numbers for January, but the US ISM services numbers are likely to be the only true data release to watch for EUR/USD today. Rangebound volatility in the 1.0550-1.0650 area may be the norm into next week. Francesco Pesole GBP: BoE cannot match ECB hawks EUR/GBP has stabilised after Wednesday’s big rally. The ECB’s narrative has fallen more convincingly on the hawkish side compared to the BoE’s, and yesterday’s Decision Makers Panel survey signalled that firms now expect to raise prices and wages at a slower pace, which favours a more cautious monetary policy approach. We still think the BoE will hike by 25bp on 23 March, but the market’s pricing for an additional 50bp of tightening after that seems too aggressive. Today, we’ll hear from BoE official Andrew Houser, while the UK calendar only includes the final PMI read. EUR/GBP may continue to find support beyond the 0.8900 level for now as the euro may gain more momentum in the crosses and unstable risk sentiment should hit GBP harder. Francesco Pesole CEE: Rating reviews in Hungary and the Czech Republic Today's calendar offers less interesting data such as the trade balance in Hungary and the final GDP numbers from the Czech Republic. The Czech GDP report will likely confirm the previously published flash estimate that the economy declined in the fourth quarter of last year, making it two consecutive quarters of decline, pushing the Czech economy into a mild recession. The recession has mainly been driven by a continuous strong decline in consumer spending as households are facing the burden of high energy prices on their purchasing power.  However, the main topic will come after the end of trading. We have two interesting rating reviews in the CEE region today – Moody’s in Hungary and Fitch in the Czech Republic. More interestingly, Hungary received a negative outlook and rating downgrade recently from Fitch and S&P and we expect a negative outlook from Moody’s as well today. In the Czech Republic, Fitch already downgraded the outlook last year to negative. In our view, the risk of a rating downgrade has diminished since the last review in October but is still significant.  The situation in the FX market in the CEE region remains complicated. On the one hand, the return of US dollar strength has led to a retracement of previous gains in the region, but at the same time we have seen another rise in market rates that could help FX in CEE to gain again. Of interest in this context will be the Czech koruna, whose market interest rate has jumped by 20bp at the short end of the curve versus euro rates. If the US dollar allows, we should see the koruna retest new gains today on the way to 23.30 EUR/CZK. The Hungarian forint could move back below 375 EUR/HUF, however Moody's rating review should bring the topic of EU money and the delay in accessing it back on the table which should bring the forint back to 380 EUR/HUF.  Frantisek Taborsky  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The EUR/USD pair lasted less than a day above the moving average line

Paolo Greco Paolo Greco 03.03.2023 09:39
On Thursday, the EUR/USD currency pair decreased. If you recall, we stated in the article from yesterday that simply fixing above the moving average is not a strong signal to reverse the trend. This is merely a caution that the trend might change and that traders might gradually start to think about making reverse trades. Well, it happened this time. The euro/dollar pair lasted less than a day above the moving average line before rapidly falling below it. But it should be observed right away that yesterday's macroeconomic and fundamental backgrounds did not lend themselves particularly well to the decline of the euro. For instance, the February inflation report revealed a further reduction in the rate of price growth. Indeed, it was minimal, which is depressing in and of itself. Yet, this aspect was intended to help the euro because there is now a greater likelihood that the ECB will tighten monetary policy for a longer period. We've already mentioned that compared to the Fed, not everything is as apparent when it comes to the ECB or the Bank of England. The economy, labor market, and unemployment rates are all favorable for the Fed. The unemployment rate in the European Union, which is nearly twice as high as that in the US, stayed at 6.7% in January. The economy has already reached zero growth rates, at a pace of only 3%. The European economy will undoubtedly enter a recession, making it vulnerable to further tightening of monetary policy if we assume that the rate needs to be hiked to at least 5%, if not more. Also, it should be kept in mind that the European Union is a commonwealth of almost thirty nations; therefore, the regulator cannot carelessly raise the rate while concentrating solely on Germany or France. The situation is significantly worse in the UK because there has been no decrease in inflation there and the rate has already increased to 4%. There is no doubt that a recession will occur; the only question is when it will begin. As a result, unlike the Fed, the Bank of England cannot continuously raise the rate at any level of inflation. It turns out that the time has arrived when the European Union or Britain should no longer maintain a combative "hawkish" attitude due to excessive inflation. The ECB or the BA will most definitely not continue tightening monetary policy, prolong the cycle of rate hikes, or quicken the pace of tightening if inflation starts to grow tomorrow. As a result, the euro and the pound are losing one of their main sources of support and could continue to decline. Christine Lagarde on EU inflation. Every speech by Christine Lagarde is interesting. She claimed yesterday that there has been no consistent drop in European Union inflation, which is still at a high level. She added that she is certain that the consumer price index will fall further and that the rate will rise by another 50 points in March. A longer cycle of rate increases may be necessary, Ms. Lagarde added. Although there are numerous ways to read her statements, market participants undoubtedly anticipated hawkish rhetoric in response to the February inflation report. In our opinion, the euro currency was quite able to show growth yesterday, but this didn't happen, and in our opinion, this is a very important development. If the market stops buying when there are valid reasons to do so, this could indicate that the sentiment has shifted to one of bearishness. As a result, we continue to support the decline of the European currency. The pair is still inside the Ichimoku cloud on the 24-hour TF, but this won't last forever. The price is already getting close to the Senkou Span B line. As a result, one way or another, the pair will leave in the near future. The downward mood is still below the critical level. The pair's decline to the level of $1.02 is now completely supported by the technical picture as well. In theory, it will be extremely difficult for the European currency to count on observable growth if nothing changes in the foreseeable future. And not much can change now. The Fed will continue to increase interest rates "until the bitter end," and the ECB will respond to the situation while keeping an eye on the economy. The euro currency can quickly regain price parity if the market is fully aware of this fact. Then, new fundamental factors will determine every aspect of life. We do not anticipate a continuation of the upward trend that has been developing over the last five to six months. It is unlikely that anything will change at the Fed and ECB meetings in March. As of March 3, the euro/dollar currency pair has experienced 92 points of "average" volatility over the previous five trading days. Thus, on Friday, we anticipate the pair to move between 1.0496 and 1.0680. A new round of upward movement will be signaled by the Heiken Ashi indicator turning back to the top. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trade Suggestions: The EUR/USD pair has reconsolidated below the moving average line. Unless the Heiken Ashi indication turns up, you can maintain short positions with a target price of 1.0498. If the price is stabilized back above the moving average line, long positions can be initiated with targets of 1.0680 and 1.0742. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. The short-term trend and the current trading direction are determined by the moving average line (settings 20.0, smoothed). Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 01:00 2023-03-04 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336622
Assessing 'Significant Upside Risks to Inflation': Insights from FOMC Minutes

According To Schiff's Opinion Customers Must Cut Back On Their Spending

Jakub Novak Jakub Novak 03.03.2023 11:24
By the end of the week, the euro and the pound had deteriorated sharply when compared to the US dollar, but today could be different, especially in light of statistics showing a sharp increase in activity in the services sectors of the eurozone and the UK. This will likely lead to new discussions about the impending spring inflationary pressures that these nations will face. Now, though, I want to briefly discuss something else. There is constant discussion in the US about whether the Federal Reserve is acting morally by putting the economy at risk and sacrificing the labor and housing markets to get inflation back to its pre-crisis level. Comments by economist Peter Schiff  Recent comments by economist Peter Schiff on this topic revealed some of his preconceptions, according to which the US economy may suffer greatly from the Federal Reserve's battle against inflation. Schiff stated: "We had experienced months of lowering inflation very recently, but suddenly everything has shifted." Schiff was referring to recent economic statistics, notably the personal consumption price index, which increased by 0.6% in January. The economist argued that the Fed's campaign against inflation is entirely ineffectual, noting: "If the Fed is serious about battling inflation, which I doubt, it would have to fight much harder than it is right now. The rates should increase significantly more than the levels anticipated." Nevertheless, in Schiff's opinion, simply raising interest rates won't be sufficient. "Moreover, consumer lending should significantly decline. Loan rates must rise to a point where consumers will exercise financial restraint," he said. "People are making purchases. Their credit card debt increases. Inflation rises as a result of this. Customers must cut back on their spending." The economist emphasized that instead of spending, people should work, produce, and save. Also, according to Schiff, the federal government must take charge of the expenditure issue: "Government spending needs to be significantly reduced. Because it drives up costs, the government cannot just hand out cash to the populace." Jerome Powell  Since Fed Chairman Jerome Powell has recently repeatedly mentioned the imbalance between supply and demand, it is clear that Schiff is on the right track. If we can somehow influence this demand—which can be done by reducing consumer lending—then it will return to normal inflation levels a little more quickly. Another factor is that this will slow down GDP growth, but the Biden administration will still criticize the Fed in this case, especially in the years leading up to the elections. After the conversation, Schiff warned that if nothing is done, the Fed's activities will trigger a financial crisis or, even worse, an economic catastrophe. Additionally, he issued a warning that the Fed might even force the US government to take legal action against Social Security and Medicare cuts. In light of this, it is not surprising that there is sensitivity to and demand for the US dollar as a safe-haven asset. EUR/USD  Regarding the EUR/USD's technical picture, the pair is still under pressure, although today there is a potential for an upward correction. To restart the bull market, 1.0600 must be held and 1.0630 must be broken. You can easily advance from this level to 1.0660 and 1.0730 with the chance of doing so soon. If the trading instrument declines, I only anticipate activity from significant buyers around 1.0600. If no one is present, it would be preferable to hold off on initiating long positions until the 1.0565 low has been updated. GBP/USD Regarding the technical analysis of the GBP/USD, the bulls have even more difficulties. Buyers must rise above 1.2000 to regain control of the situation. The only way to increase the likelihood of a subsequent recovery in the area of 1.2030 and 1.2070, after which it will be able to discuss a more rapid movement of the pound up to the area of 1.2220, is if this resistance fails to hold. The breakdown of this range, which would occur if the bears took control of 1.1950, would strike the bulls' positions and drive the GBP/USD back to 1.1920 with potential growth to 1.1870.   Relevance up to 08:00 2023-03-04 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336654
Bank Of England Will Probably Be Unable To Avoid A Significant Easing Of Policy

Bank Of England Will Probably Be Unable To Avoid A Significant Easing Of Policy

Jakub Novak Jakub Novak 03.03.2023 11:30
The pound tested a key support level in the area of 1.1920 for the third time, a breach of which will result in the resumption of the bear market and another significant drop in the pair. But before we discuss the technical picture of the GBP/USD pair, I'd want to draw attention to some recent remarks made by Michael Saunders, a former Bank of England official who was known for being one of the most hawkish individuals in the institution. We are all aware that the Bank of England will probably be unable to avoid a significant easing of policy in the near future due to the inflation situation. In a recent interview, Saunders, a former committee member, shocked everyone by declaring that he would vote to slow the rate of an interest rate increase. Raising Rates? If he were still a member of the nine-member Monetary Policy Committee, the economist said he would favor raising the key rate by a quarter point to 4.25%. Saunders asserts that it would be incorrect at this time to raise rates by 0.5%, as was done at the last two sessions. Saunders According to Saunders, the economy is starting to suffer from the fastest cycle of monetary policy tightening in the past three decades, and there is not much more that can be done by policymakers to accomplish the desired effect of containing inflation. "Based on the evidence that we have at the moment, and with only a couple of weeks until the next MPC meeting, I would vote for a rise, but by 25 basis points rather than the 50 and 75 that we have seen in the last couple of quarters," Saunders said in an interview. "I don't believe we need to take any further action." Bank of England Recall that the Bank of England increased the base rate by 390 basis points to 4% at the end of 2021, the highest level since 2008. At the upcoming meeting on March 23, investors are very likely to predict an increase of another quarter point, with a top of 4.75% by the end of September. Although Bank of England Governor Andrew Bailey stated this week that the bank should terminate its strong monetary policy soon, it is clear that traders have lowered their expectations for further, more aggressive rate hikes. "We are seeing signals that interest rates are impacting many areas of the economy considerably harder than we expected - especially the housing market," said Saunders, who is currently a senior economic consultant at Oxford Economics. In light of this, the pound continues to decline since the Federal Reserve System's policy is anticipated to be more aggressive than previously thought in the near future. GBP/USD Regarding the technical analysis of the GBP/USD, the bulls have even more difficulties. Buyers must rise above 1.2000 to regain control of the situation. The only way to increase the likelihood of a subsequent recovery in the area of 1.2030 and 1.2070, after which it will be able to discuss a more abrupt movement of the pound up to the area of 1.2220, is if this resistance fails to hold. The breakdown of this range, which would occur if the bears took control of 1.1950, would strike the bulls' positions and drive the GBP/USD back to 1.1920 with potential growth to 1.1870. EUR/USD Regarding the EUR/USD's technical picture, the pair is still under pressure, although today there is a potential for an upward correction. To restart the bull market, 1.0600 must be held and 1.0630 must be broken. You can easily move from this level to 1.0660 and 1.0730, with the chance of doing so soon. If the trading instrument declines, I only anticipate activity from significant buyers around 1.0600. If no one is present, it would be preferable to hold off on initiating long positions until the 1.0565 low has been updated   Relevance up to 08:00 2023-03-04 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336656
The USD/JPY Price Seems To Be Optimistic

USD/JPY Pair Comes Under Some Selling Pressure, EUR/USD Holds Above 1.06 While GBP/USD Remains Below 1.20

Kamila Szypuła Kamila Szypuła 03.03.2023 14:31
The US dollar declined against its major trading partners early Friday ahead of the release of service sector data for February from S&P Global. The US economic docket will feature the ISM Services PMI report on Friday. Recession fears could return if the headline PMI comes in below and the US Dollar could come under pressure ahead of the weekend. The Fed appearance schedule is also full on Friday. Dallas Fed President Lorie Logan is scheduled to speak followed by Atlanta Fed President Raphael Bostic, Fed Governor Michelle Bowman and Richmond Fed President Tom Barkin. Logan and Bowman both vote on the Federal Open Market Committee in 2023. USD/JPY The yen pair traded in the range of 136.60-136.70 in the Asian session. In the European session there was a dip to close to 136.00, but USD/JPY rebounded and traded at 136.19 Following the previous day's sharp slide from a multi-week high, the US Dollar (USD) was back in demand amid a further rise in the US Treasury bond yields and turned out to be a key factor acting as a tailwind for the major. The Japanese Yen (JPY), on the other hand, is weighed down by expectations that the Bank of Japan (BoJ) will stick to its dovish stance for the foreseeable future. In fact, the incoming BoJ Governor Kazuo Ueda stressed the need to maintain the ultra-loose policy to support the fragile economy and said earlier this week that the central bank isn't seeking a quick move away from a decade of massive easing. The market focus now shifts to the upcoming BoJ monetary policy meeting, scheduled next week. In the meantime, the divergent Fed-BoJ outlook should continue to lend support to the USD/JPY pair. EUR/USD The last day of the trading week for the euro pair was up in the Asian session. Also in the European session, the EUR/USD pair was increasing with moments of decline. Currently, the pair is at the level of 1.0614 ECB Governing Council member Pierre Wunsch said early Friday that a terminal rate of 4% could not be excluded if core inflation in the eurozone remains persistently high. Meanwhile, Morgan Stanley said in its latest research note that they have updated the ECB terminal rate projection to 4% following "material revisions" to inflation forecasts. GBP/USD A pair of cable makes up for losses all Friday. GBP/USD started the day at around 1.1950 and is now trading above 1.1990 The pound rose on Friday, boosted by data that showed business activity rose at the fastest rate in eight months in February, bolstering investors' view that UK rates would continue to rise after March. The final version of the S&P Global/CIPS UK Services Purchasing Managers' Index (PMI) rose to 53.5 last month from 48.7 in January, the strongest rate of increase since June last year. Any reading above 50 means expansion. AUD/USD The Austalitic exchanged similarly to the pound today, but fell in the European session and is currently trading above 0.6750. Source: investing.com, finance.yahoo.com
Rates Spark: Crunch time

FX Weekly Summary: Euro Holds At 1.06, The Main Focus Of AUD Now Is On The RBA's Interest Rate Decision

Kamila Szypuła Kamila Szypuła 04.03.2023 18:57
The U.S. dollar slid from a 2-1/2-month high versus the Japanese yen on Friday, on track for its largest weekly loss since mid-January against a basket of six major currencies, as traders stepped back to gauge the path for Federal Reserve policy. At the beginning of the week, optimistic PMI data for manufacturing from China allowed risk flows to return to the markets and hindered the strengthening of the USD. USD/JPY The yen pair started trading at 136.3840 for the week. Throughout the week, USD/JPY held above 136.00 except on Wednesday, where it traded below that level, recording a weekly trading low of 135.27. The next day, the yen pair rose and registered its highest trading level of the week at 137.05. The pair failed to maintain momentum and fell below 136.00 on the last day of trading to end the week at 135.8310. The Japanese Yen is weighed down by expectations that the Bank of Japan (BoJ) will stick to its dovish stance for the foreseeable future. In fact, the incoming BoJ Governor Kazuo Ueda stressed the need to maintain the ultra-loose policy to support the fragile economy and said earlier this week that the central bank isn't seeking a quick move away from a decade of massive easing. EUR/USD The beginning of trading in the EUR/USD pair was at weekly lows. The euro pair started trading at 1.0550 and for the first two days of the week rose above 1.06. This increase did not last long and the EUR/USD pair fell below 1.06. The beginning of the new month was very favorable for the euro pair as it gained and reached the highest trading level of the week at 1.0689. The exemplary momentum did not last long and the pair found themselves under pressure to fall towards 1.0580 again. The pair last day rebounded and traded above 1.06 (1.0638). GBP/USD The beginning of the week and at the same time the end of the month was favorable for the pound and the GBP/USD pair gained and thus reached the highest trading level of the week (Tuesday) at 1.2140. The new month brought a downward move to the cable pair and the pair tested below 1.20 again. On the last day, GBP/USD made up for the previous day and managed to cross the 1.20 level and close the trade at 1.2045. The British pound found some support on Friday thanks to the UK Services PMI data, as well as renewed risk appetite after better-than-expected China PMI data. From the UK's perspective, the focus will be on British GDP, which is likely to fall below 0%, and if the actual figures are confirmed, fears of recession will return, possibly hampering GBP growth. AUD/USD For the Australian, trading in the week was mixed, with both highs and lows. For the first days of trading, the AUD/USD pair gained in the direction of 0.6760, then fell sharply to open the week's low at 0.6698. After falling, the Aussie Pair rose until it reached a weekly high at 0.6783 before falling back towards 0.6710. The last day of trading was up for the AUD/USD pair, the pair ended the week close to the week's high, at 0.6771. The decline in the Australian dollar stalled after surprisingly strong data on manufacturing and services in China. However, for the AUD/USD rebound to be sustainable, a reversal in Australia's monetary policy and growth divergence with US monetary policy may be necessary. The macro data from Australia since early March has been disappointing. The Australian economy expanded at its weakest pace since last quarter, while monthly consumer prices rose less than expected in January. Building permits have fallen the most in history, suggesting the housing market is in the throes of interest rate hikes by the Reserve Bank of Australia. The main focus now is on the RBA's interest rate decision scheduled for March 7 - the central bank is widely expected to raise the cash rate by 25 basis points. Source: finance.yahoo.com, investing.com
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

The EUR/USD Price Decided To Continue To Move Sideways

InstaForex Analysis InstaForex Analysis 06.03.2023 08:02
On Friday evening, investors tried to win back European Central Bank President Christine Lagarde's statements about the Bank's intention to raise the rate by 0.50%. Over the weekend, Mary Daly, head of the San Francisco Fed, countered Lagarde's statement by suggesting a higher finish to the rate hike cycle and a longer hold on that rate should stronger economic data come in. The focus has been on the labor market, so Friday's jobs data will be the main event of the week. But it is the anticipation of key data that adds to the uncertainty. On the daily chart, the signal line of the Marlin oscillator slowed growth, because it has the zero line resistance ahead - the boundary of the growth area. The resistance is 1.0660. The price decided to continue to move sideways in the 1.0595-1.0660 range. As it was earlier, on March 1, the false move above the upper limit of the range is quite possible. On the four-hour chart, the price bounced from the MACD line. Now the price seems to be stuck above both indicator lines. The Marlin oscillator is rising in the green zone. There is a high probability that the price will reach the target level of 1.0660, but I'm not sure that the optimism will extend to the price hitting the target range of 1.0758/87. Market participants are set for action on Friday.   Relevance up to 03:00 2023-03-07 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336763
Rates Spark: Crunch time

In The Medium Term, The Downtrend Of The EUR/USD Pair Is Likely To Resume

Paolo Greco Paolo Greco 06.03.2023 08:09
M5 chart of EUR/USD On Friday, EUR/USD was in a flat trend. In the 1-hour time frame, it showed a sluggish movement. In the 5-minute time frame, it was in a flat. The lines of the Ichimoku indicator have almost merged, indicating a flat trend. In terms of macro statistics, the reports that had come, including the ISM non-manufacturing PMI, had no effect on the price. All in all, we could see a minor bullish correction. In the medium term, the downtrend is likely to resume. Speaking of trading signals, the pair hovered near the psychological line during the day. So, it was almost impossible to yield some profit at least. Traders who had tried to price the first two signals near this line were bound to losses. There was no point in continuing trading afterward. COT report: Due to a technical glitch, the Commodity Futures Trading Commission will likely publish reports with a month delay. Clearly, analyzing such reports will be of no use. Anyway will continue doing so. The situation may change for the better in the future. So far, we can say that the coming reports have been in line with developments in the market in recent months. According to the COT report from February 7, the net non-commercial position of large traders (second indicator) has risen since September 2022. The net non-commercial position is bullish and continues to increase with each new week, allowing us to expect the uptrend to stop shortly. Such a signal comes from the first indicator, with the green line and the red line being far apart, which is usually a sign of the end of a trend. The euro has already begun its bear move against the greenback. So far, it remains unclear whether it is just a downward correction or a new bear trend. According to the latest report, non-commercial traders closed 8,400 long positions and 22,900 short ones. Consequently, the net position rose by 14,500. The number of long positions exceeds that of short ones by 165,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue. H1 chart of EUR/USD In the 1-hour time frame, we can see attempts to resume the uptrend. Consolidation above or below any of the Ichimoku lines does not matter. Despite the flat trend, corrections constantly occur. On Monday, trading levels are seen at 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0762, 1.0806, Senkou Span B (1.0618), and Kijun-sen (1.0626). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On March 6, eurozone retail sales will be the only interesting macro report. However, figures will trigger a reaction only if they seriously miss market expectations. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders   Relevance up to 01:00 2023-03-07 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336751
FX Daily: Euro’s attractiveness on the rise

The EUR/USD Pair Can't Exclude A Final Spike Lower To Test Support

Torben Melsted Torben Melsted 06.03.2023 08:11
EUR/USD still needs to break above minor resistance at 1.0694 to confirm the end of the wave 4 correction that has dominated the chart since the peak at 1.1033. A break above minor resistance at 1.0694 will confirm that wave 5 towards 1.1103 and likely closer to 1.1400 is unfolding. We have to keep in mind that as long as minor resistance at 1.0694 remains untouched, we can't exclude a final spike lower to test support at 1.0493. The odds for this outcome are small but nonetheless a possibility.   Relevance up to 07:00 2023-03-07 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314962
Metals Market Update: Decline in LME Copper On-Warrant Stocks, Zinc and Lead Surplus Continues, Nickel Market in Supply Surplus

FX Daily: Climbing the wall of worry

ING Economics ING Economics 06.03.2023 09:10
FX markets have opened the week on a steady footing, buoyed by a strong end to last week from equities and appearing to shake off a slightly lower-than-expected growth target from China. This week's focus will very much be on central bankers and activity data - the highlights being Fed Powell testimony (Tuesday and Wednesday) plus US jobs growth (Friday) USD: How strong is the US economy and what will the Fed do about it? After a few weeks where US price data has taken centre stage, this week will all be about activity data and Fed speak. On the activity side, Friday's release of February US jobs data should shed light on whether January's +517,000 surge was an aberration powered by seasonal adjustment factors or a genuinely strong number. Our US economist, James Knightley, tends to favour the former interpretation - although conviction levels are low. Running up to Friday's job data will be Wednesday's release of JOLTS and ADP data - again providing insights as to whether tight conditions in US labour markets are starting to ease. The other US highlight this week will be testimony to the Senate (Tuesday) and House (Wednesday) from Federal Reserve Chair Jerome Powell. He will be testifying on the Fed's semi-annual monetary policy report which was released on Friday. The market will be interested to hear what he thinks about re-accelerating the pace of hikes to 50bp from 25bp (+30bp is priced for the 22 March meeting) and any indication on what the terminal rate might be. Recently, we have been writing that an upward revision to the Dot Plots on 22 March will discourage investors from aggressively re-establishing dollar short positions. This week also sees central bank policy meetings in Japan, Australia, Canada, and Poland. Of these, the Reserve Bank of Australia (RBA) is the only one expected to hike rates (+25bp). However, Friday's Bank of Japan (BoJ) meeting will prove interesting as will tomorrow's release of Japanese wage data for January. Another widening of the BoJ's 10-year JGB target band on Friday would be a big surprise and drag USD/JPY lower. What does this all mean for the dollar? In today's session, the dollar has not found too much support from a slightly lower-than-expected Chinese growth target for 2023 at 5.0% (5.5-6.0% had been expected). Equally, equities continue to hold up quite well despite last week's big rise in bond yields and are providing a little support to pro-cyclical currencies. In all, we suspect it is another range-bound week for the dollar, where DXY continues to trade in a 104.00-105.50 range and local stories can win out.  Chris Turner EUR: ECB helps build the 1.05 EUR/USD floor European Central Bank speakers continue to point to a 50bp hike at the 16 March meeting as being a done deal. The market then prices a further 150bp of tightening by year-end - which looks a little aggressive. Still, the tough ECB talk has kept the EUR:USD interest rate differential supported at the short end of the market and firmed up the 1.05 support zone for EUR/USD this month. We think EUR/USD probably ends March in the 1.07/1.08 area. For today, the eurozone focus will be on January retail sales and the March Sentix Investor survey. Improvements are expected for both, although may not move markets. We also have ECB Chief Economist, Philip Lane, speaking in Dublin at 11 CET. He has recently shifted over to the hawkish side and it is probably too early for him to push back against the market's pricing of the ECB deposit rate at 4.00%. EUR/USD probably trades well inside a 1.0600-1.0700 range today. Elsewhere in Europe, Switzerland sees February CPI. The market expects some deceleration from January's firm readings. Any upside surprise could pressure EUR/CHF in its latest 0.9900-1.0000 range. Chris Turner GBP: Steady sterling this week This week it is hard to find a UK catalyst for sterling to break out of recent ranges. We doubt any further progress on the Windsor Framework deal is worth much more to sterling. And having heard from Bank of England big hitters (Andrew Bailey and Huw Pill) last week, we doubt that this week's BoE speakers make much of a dent in market pricing of the BoE cycle. Activity data for January looks like it could come in on the softish side, although the services sector will be in focus following the recent jump in the services PMI reading. In all, EUR/GBP should trade well within a 0.8800-0.8900 range, while GBP/USD will be bounced around on this week's big inputs from the US events calendar. Chris Turner CEE: Inflation numbers leave no room for rate cuts A busy calendar awaits us this week in the CEE region. Today, we start with labour market data in the Czech Republic, key for the Czech National Bank, and retail sales in Hungary. On Tuesday, industrial production for January will be released, which should confirm a weakening economy. On Wednesday, we will also see February inflation in Hungary, as the first number within the CEE region. We expect only a slight drop from 25.7% to 25.4% year-on-year, in line with market expectations, but also slightly higher core inflation. Later on, we will see the decision from the National Bank of Poland. In line with the market, we expect interest rates to remain unchanged. However, the main focus will be Governor Adam Glapinski's press conference a day later. The central bank will also publish a new forecast. While inflation was lower than expected in January, core inflation remains high. So the question will be how the governor's tone will change since the last forecast and whether he will officially announce the end of the hiking cycle or mention a possible rate cut later this year. We then move to the Czech Republic on Friday, where industrial production and inflation data will be published. CPI, in our view, fell slightly from 17.5% to 16.9% YoY, above the market and CNB forecasts.  In the sovereign rating space, Fitch maintained a negative outlook for the Czech Republic on Friday. In Hungary, Moody's again did not publish a rating review as it did in September, which means that the outlook and rating remain unchanged, and presumably, the agency is waiting further for developments in the negotiations between the Hungarian government and the European Commission regarding access to EU money.  On the FX side, global conditions for the CEE region remain mixed. The US dollar will hamper EM currencies, on the other hand, gas prices broke 45 EUR/MWh on Friday indicating a further rally in the Hungarian forint and Czech koruna. February inflation data should be a boost to both currencies, confirming the current hawkish market pricing, leaving no room for early rate cuts. On the other hand, a dovish NBP may bring pain to the Polish zloty. Thus, it will be key to watch for indications of a first rate cut during the governor's press conference on Thursday. The Czech koruna could retest levels below 23.40 EUR/CZK and the Hungarian forint below 375 EUR/HUF. However, the Polish zloty should test weaker levels above 4.740 EUR/PLN again.  Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The RBA Raised The Rates By 25bp As Expected

Important Week For The Australian Dollar And Japanese Yen, BoJ And RBA Monetary Policy Decision Ahead

Kamila Szypuła Kamila Szypuła 06.03.2023 13:45
The US dollar weakened on Monday as investors awaited testimony from Federal Reserve Chairman Jerome Powell ahead of February's employment report later in the week, which is likely to influence how much more the US central bank raises interest rates. After making massive hikes last year, the Fed raised rates by 25 basis points in its last two meetings, but a plethora of resilient economic data fueled market fears that the central bank might return to an aggressive path. USD/JPY The yen pair started the week at 136.0380 but failed to stay above 136.00 and fell to 135.3890. After this fall, the USD/JPY pair rebounded, but at the beginning of the European session it fell again. Also after the second drop, the pair rebounded and managed to break above 136.00, but failed to hold. USD/JPY is trading below 136.00 at 135.94. The Japanese yen strengthened above 136 to the dollar amid general dollar weakness as investors cautiously awaited Tuesday and Wednesday's congressional testimony from Federal Reserve Chairman Jerome Powell. Meanwhile, the yen remains more than 6% below its January highs as Ueda, nominated governor of the Bank of Japan, doubled down on the bank's ultra-easy monetary policy. During the second parliamentary hearing of the approval process, Ueda stated that the benefits of the BJ stimulus outweigh the negative effects for the current economic scenario, adding that a move to more restrictive policies would only be necessary if inflation increased significantly. Ahead this week, the Bank of Japan’s (BoJ) monetary policy decision will be made on Friday although the market is not expecting any changes there. EUR/USD The EUR/USD pair started trading at 1.0628 and initially traded in the range 1.0625-1.0630. The euro pair then rose to levels around 1.0650, then to above 1.0660. This increase in the European session did not last and the pair dropped to levels around 1.0625. The euro may end the month slightly higher against the dollar, supported by signals from the European Central Bank about further interest rate hikes. ECB officials continue to point to a 50bps rate hike at its March 16 meeting as a deal done, with the market pricing in another 150bps hike by year-end GBP/USD The cable pair started trading at 1.2032 and held in the range of 1.2025-1.2040 in the Asian session. In the European session, the GBP/USD pair, as well as the EUR/USD pair, fell below 1.20, but rebounded and at the time of writing is at 1.2008. Sterling trading could be stable this week as it's hard to find a catalyst to break the currency out of recent ranges. Any further progress on the UK-EU deal to review post-Brexit trade arrangements in Northern Ireland is unlikely to be worth much more than pound sterling. AUD/USD The Australian pair started the week with a dip to the 0.6757 level and then fell to the 0.6743 level. After this decline, the AUD/USD pair rose to 0.6770 but failed to maintain momentum. The last hours of the Asian session for the Australian were in the range of 0.6750-0.6760. With the start of the European session, the AUD/USD pair began a decline, and at the time of writing it reached the level of 0.6728. The Australian dollar lost some of its gains Monday morning after the Chinese National People's Congress (NPC) released more conservative 2023 GDP forecasts. The forecast is currently at 5%, as opposed to the expected range of 5.5-6%, which could be disappointing for commodity-exporting countries like Australia, but a lower base could allow for a better chance of an upside surprise. Looking ahead, the Reserve Bank of Australia (RBA) will be in the spotlight tomorrow morning with its interest rate decision. The consensus is in favor of another 25 bp rate hike, which will be the 10th rate hike in a row by the central bank. This could cause the Australian dollar to find some support against the US dollar Source: investing.com, finance.yahoo.com
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

There Are Conditions For The EUR/USD Price To Fall Below 1.0660

InstaForex Analysis InstaForex Analysis 07.03.2023 08:04
The euro rose 45 pips on Monday, breaking through the resistance level of 1.0660. The signal line of the Marlin oscillator tries to move into the area of the uptrend. Yesterday, I mentioned a possible false breakout above the target level, and right now there are conditions for the price to fall below 1.0660, first of all, it is a possible reversal of the Marlin from the zero line to the downside. If these don't stop the euro's correction, it could result in a target range of 1.0758/87. On the four-hour chart, the price forming a divergence with the oscillator also indicates the probable end of the correction. This will be confirmed once the price settles below 1.0660. We can only talk about bringing back the downward movement in the medium-term once the price breaks through the MACD line and the support level of 1.0595. However, the price is not in a hurry, because the US employment data will be released on Friday   Relevance up to 03:00 2023-03-08 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336883
Technical Outlook Of The Main EUR/USD Currency Pair

Technical Outlook Of The Main EUR/USD Currency Pair

InstaForex Analysis InstaForex Analysis 07.03.2023 08:07
Even though on the 4-hour chart the main EUR/USD currency pair shows a Bullish 123 pattern followed by Ross Hook (RH) but with the appearance of the Ascending Broadening Wedge pattern and the deviation between price movements and the Awesome Oscillator indicator it seems that in the near future Fiber will return to The initial bias is Bearish where if the correction to the upward rally does not break above the 1.0725 level then EUR/USD has the potential to depreciate to the 1.0566 level as the main target and the 1.0533 level will be the next target to go. (Disclaimer)   Relevance up to 04:00 2023-03-08 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120759
EUR/USD Pair Has A Potential For Short-Term Rally

EUR/USD Pair Has A Potential For Short-Term Rally

Oscar Ton Oscar Ton 07.03.2023 08:11
Technical outlook: EURUSD rallied through the 1.0696 high late during the New York session on Monday. The single currency pair is still seen to be trading just below 1.0690 at this point in writing as the bulls prepare to push through the 1.0720-40 zone. Immediate resistance is seen around 1.0720, which could put pressure and drag prices lower again. EURUSD is unfolding a corrective wave higher towards 1.0850 before the bears are back in control to drag prices below the 1.0500 interim support. The instrument is progressing within a larger-degree corrective wave towards 1.0100 in the next several weeks to come. Please note that the current rally from 1.0535 is just a retracement as the bears will be ready to come back from 1.0850. EURUSD faces resistance around 1.0720-40, followed by 1.0850; while interim support comes around the 1.0530 mark. Also, note that 1.0850 is the Fibonacci 0.618 retracement of the recent downswing between 1.1030 and 1.0530 levels respectively. Hence, the probability remains high for a bearish turn if prices manage to reach there. Trading idea: Potential short-term rally towards 1.0700-20 and 1.0850 then lower again Good luck!     Relevance up to 07:00 UTC+2 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315124
Small factors combine to pressure credit

Analysis Of EUR/USD Pair: Support Is Now Seen Near 1.0650

Torben Melsted Torben Melsted 07.03.2023 08:15
EUR/USD has rallied nicely and is currently challenging the neckline resistance of a S/H/S bottom. A break above the neckline at 1.0704 will call for a continuation towards 1.0790 as the next hurdle to overcome. This should only be a temporary obstacle. Once broken, the next target is seen at near 1.1103 and likely closer to 1.1400. Support is now seen near 1.0650 which ideally will act as a floor for the expected break above the neckline resistance at 1.0704.   Relevance up to 07:00 2023-03-08 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315130
Rates Spark: Crunch time

There Was No Justification For The Increase In The Euro

Paolo Greco Paolo Greco 07.03.2023 08:21
The new week began with growth for the EUR/USD currency pair. For the previous week, the price frequently reversed its direction of movement, nearly always surpassing the moving average. We cannot rule out the possibility that this week will see a similar event. There was no justification for the increase in the euro on Monday, at least. Let's discuss the underlying context in greater detail below. We currently have a mild upward trend from a technical perspective. We think the negative trend that started a few weeks ago is still in place because the pair is still trading below the crucial line and inside the Ichimoku cloud on the 24-hour TF. As was already mentioned, Monday essentially had no noteworthy news or events. The head economist of the ECB, Philip Lane, delivered a speech, and a report on retail sales in the European Union was also released. Philip Lane reiterated everything Christine Lagarde and her colleagues in the "transport shop" mentioned last week as retail sales declined significantly more than traders had anticipated. Hence, there was no justification for the current development of the euro. In addition, there wasn't anything for traders to react to during the day. As a result, we think that Monday's increase in the value of the euro was entirely technical. Following the pair's prolonged decline, an upward correction was necessary, which is what we are currently witnessing. The explanation of what is taking place is kept as basic as possible. This week is full of significant events, but none of them take place in the European Union. As there was nothing noteworthy to write about on Monday, we decided to produce a "Preview of the Week" article on Tuesday. It might as well have been released on Wednesday as traders will also have access to some crucial information on Tuesday. The fun will start on Wednesday. The third assessment of the European Union's GDP report for the fourth quarter will be released on this day. The final value is predicted to be between 0 and 1%, and it is doubtful that the third estimate will significantly change from the first or second. Unless this report surprises us in some way, we don't anticipate a response. Christine Lagarde, the head of the ECB, will deliver her subsequent speech on Wednesday as well. We don't expect anything noteworthy from them, though, because members of the monetary committee have already stated their position: the rate will rise by 0.5% in March, and the rate will continue to grow after that. There isn't much else to be said about this. The next event in the European Union this week will be another speech by Christine Lagarde, but this time on Friday evening. We can say the same thing about this event. As it turns out, there won't be any significant events taking place in the EU this week. Ms. Lagarde might be able to inform the market of something significant, but the likelihood of this happening is low. As a result, traders will be able to focus solely on American data and events. Nonetheless, there appear to be numerous significant events, but in reality, everything revolves around Friday Nonfarm and unemployment. But in the article on the pound/dollar, we'll discuss the American calendar. As a result, the situation is as follows: the pair must gently adjust upwards before they may begin falling again. In any case, we do not anticipate a significant increase in the pair's value because we think the downturn should last for several weeks or perhaps months in the future. As of March 7, the euro/dollar currency pair's average volatility over the previous five trading days was 84 points, which is considered "normal." Thus, on Tuesday, we anticipate the pair to move between 1.0599 and 1.0767 levels. A new round of downward movement will be signaled by the Heiken Ashi indicator turning back downward. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trade Suggestions: The EUR/USD pair has resumed consolidation above the moving average line. Until the Heiken Ashi indicator turns down, you can continue holding long positions with targets of 1.0742 and 1.0767. After the price is fixed below the moving average line, short positions can be opened with a target of 1.0498. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 01:00 2023-03-08 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336875
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Euro Pair Has Potential For The Further Downside Movement

Peter Jacimovic Peter Jacimovic 07.03.2023 09:28
Technical analysis: EUR/USD has been trading sideways at the resistance Fibonacci confluence zone 1.0690. Due to the strong resistance zone in the background and the downside cycle, I see potential for the further downside movement. Downside objectives are set at the price of 1.0580 and 1.0545 Stochastic and MACD oscillators are still showing upside reading but watch for potential bear cross to confirm further downside direction... Key resistance is set at the price of 1.0700-1.0730   Relevance up to 08:00 2023-03-08 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315164
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

EUR/USD, GBP/USD And AUD/USD Is Decreasing, USD/JPY Is Trading Close To 136.00

Kamila Szypuła Kamila Szypuła 07.03.2023 13:01
The U.S. dollar held steady on Tuesday ahead of testimony before Congress by Federal Reserve Chair Jerome Powell, while the Aussie slid after the Reserve Bank of Australia hinted it might nearly be done with monetary tightening. The RBA is no exception in warning of further tightening. Central bankers, including the US Fed and European Central Bank, said more work needed to be done to fight inflation. The prospects for further policy tightening by the Fed continue to act as a tailwind for the US Dollar (USD), the markets seem convinced that the US central bank will stick to its hawkish stance and keep rates higher for longer in the wake of stubbornly high inflation. The bets were lifted by the incoming US macro data. Investors will also face the release of the closely watched monthly US employment data, popularly known as the NFP, this week. USD/JPY The USD/JPY pair started trading above 136.00 on Tuesday and traded above 136.10 in the first hours. The yen pair failed to hold and fell below 136.00 and tested the level of 135.8440. In the European session there was an even greater drop to 135.60. Currently, the pair has managed to rebound and the hadel takes place close to 136.00. The decline, however, remains contained amid expectations that the Bank of Japan will maintain very loose policy to support a fragile domestic economy. In fact, the new BoJ governor, Kazuo Ueda, said last week that the central bank is not aiming for a quick turnaround from a decade of massive monetary easing. As such, the BoJ's monetary policy decision, scheduled to be announced on Friday, is unlikely to give the JPY any respite. EUR/USD The euro pair traded high above 1.0680 in the Asian session. In the European session, the EUR/USD pair fell below 1.0660. At the time of writing, the EUR/USD pair is just above 1.0660. Looking ahead, it seems that comments from central bank officials could be a driving force for the EUR/USD rate along with other FX markets and bond markets in general. The ECB is scheduled to meet on Thursday, March 16 ahead of the Fed, which begins its meeting next week on March 22. An additional risk of events may also be data on GDP in the whole euro, which will be released on Wednesday. GBP/USD The cable pair started trading above 1.2020 and traded around this area in the Asian session. GBP/USD managed to rise above 1.2060 but lost momentum and fell below 1.20. The pound pair is at the time of writing just below 1.20, at 1.1992. Although the US dollar came under renewed selling pressure on Monday, the GBP/USD pair struggled to gain traction. Furthermore, a sense of stability has returned to the UK property market after last year's turmoil, with a second consecutive month of gains after falling in December 2022. However, prices remain at 2.5% q/q, and underlying activity continues to indicate a downtrend. AUD/USD The pair of the Australian started trading above 0.67, but had already fallen to 0.66 earlier in the Asian session. The Aussie pair is currently trading below 0.6670. The Reserve Bank of Australia raised its benchmark interest rate by 25 basis points in an attempt to control inflation reaching its highest level in three decades. The Reserve Bank of Australia raised its cash rate by a quarter of a percentage point to 3.60% and said further monetary policy tightening would be needed. Source: finance.yahoo.com, investing.com
Is Gold Ready to Shine Again? US CPI and Fed Policy Insights

Gold Is Consolidating As Investors Await Any Signs Over How Much More Restrictive Fed Policy Will Become

Ed Moya Ed Moya 07.03.2023 14:20
US stocks are slightly higher ahead of Fed Chair Powell’s Congressional testimony.  Everyone is expecting Fed Chair Powell to deliver his best hits of ‘we have more work to do’ and ‘higher for longer’.  Powell might not commit how much higher rates will go, but he will keep the door open for the Fed’s dot plots to move higher.  Lawmakers will argue that we don’t need to see a recession to bring inflation back to target.  Powell will likely signal that Americans could see economic pain later this year. Powell will most likely stay hawkish given how high inflation remains and the strength of the labor market.    Biden This week, Wall Street is expecting to get President Biden’s budget proposal for fiscal 2024. This morning, President Biden’s op-ed in the NY Times gave a sample of what he will be proposing.  He noted that, “my budget proposes to increase the Medicare tax rate on earned and unearned income above $400,000 to 5% from 3.8%.” He is aiming to keep the Medicare trust fund solvent beyond 2050.  This is just the beginning of budget negotiations as House Republicans will not get on board with this first pitch.  RBA The RBA did not surprise after raising its cash rate target by 25bps to 3.60%.  The RBA is nearing the end of its tightening cycle as they removed the language about hikes in the coming months. Australia doesn’t have the same wage pressures that the US has and that is why they believe inflation has peaked and that further hikes will be data dependent.  The RBA’s dovish hike sent the Australian dollar lower by 0.9% against the US dollar.  EUR After a day to digest ECB’s Holzmann case for four half-point rises, ECB hike odds continue to rise. It looks like no one wants to listen to doves, especially considering we keep seeing core CPI make fresh record highs.  Holzmann argued for 50bps point rises in March, May, June and July, with restrictive policy starting at 4.00%.  Nomura bumped up their ECB forecast from 3.50% to 4.25%.  Earlier in the week, Morgan Stanley increased their ECB forecast to 4.00%.  Dovish ECB member Lane argued against having policy on ‘autopilot’, emphasizing that it should not be on autopilot, but stay data dependent.     The euro could see some support once we get beyond Fed Chair Powell’s testimony and Friday’s nonfarm payroll report.  Oil Crude prices are wavering ahead of Fed Chair Powell’s testimony to the US Senate. Oil has had a nice start to the month, but lingering demand concerns and further oil inventory increases should cap this rebound.  Oil looks like it might need to trade in a range a little longer until we have a clearer outlook for the US economy.  The debate over what type of recession will hit the US economy will not be answered in a couple of months time, so we might see conservative calls for demand to remain healthy over the short-term.  In the event, risk appetite runs wild following Fed Chair Powell’s Senate appearance, WTI crude should find major resistance at the $84.80 region.  Gold Ahead of Fed Chair Powell’s testimony to the Senate, gold is consolidating as investors await any signs over how much more restrictive Fed policy will become.  A strong bullish argument for holding bullion could be made as global central banks are growing confident peak tightening will soon be in place.  The RBA rate decision provided optimism that inflation may have peaked and that further tightening might not be needed if disinflation trends remain firmly in place.  Gold might benefit if the rest of the major central banks start delivering dovish hikes. Also providing a boost for gold is the steady demand it is seeing from China.  This current macro environment should lead to stronger central bank buying.  The focus for many is the steady buying by the PBOC and if the weaker dollar trade unfolds later this year, gold could shine.  Bitcoin Bitcoin remains anchored despite a potential weekly death cross pattern.  Bitcoin had a great start to the year, but since the middle of February prices have gradually softened.  Contagion risks from Silvergate Capital and hard landing fears are keeping cryptos heavy, but the key trading range of $21,000 to $25,500 continues to hold up.  Crypto traders are closely watching the bond market and if yields refuse to breakout higher, Bitcoin may remain in this trading range.    This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Rates Spark: Nothing new on the dovish front

The EUR/USD Price Overcame The Support Of 1.0595 With Stunning Success

InstaForex Analysis InstaForex Analysis 08.03.2023 08:05
The euro collapsed 130 pips yesterday. The beginning of the dollar's general onslaught and the markets' collapse was caused by the Australian dollar, which started falling after the Reserve Bank of Australia's decision to raise the rate by the expected slight 0.25% and the soft comments of the accompanying statement. At the same time, RBA Governor Philip Lowe expressed doubts about a soft landing of the economy. In the evening, Federal Reserve Chairman Jerome Powell appeared before the U.S. Senate Banking Committee and said he was ready to tighten policy (i.e., raise the rate by 0.50% at the next meeting) if the data came in well. Investors put the probability of such a scenario in federal funds futures at 54.3% from 31.4% the day before. The U.S. S&P 500 stock index was down 1.53%. On the daily chart, the reversal of the signal line of the Marlin oscillator from the zero line was confirmed. The price overcame the support of 1.0595 with stunning success, now the obvious target of 1.0443/70 is just ahead. The MACD indicator line turns down, this is a sign of the beginning of a medium- or long-term downtrend. On the four-hour chart, the price has settled below 1.0595 and both indicator lines. The Marlin oscillator has moved deeply into the negative territory, and with the price near the low of February 24 and 27, there might be a consolidation or even a slight correction today, in order to let the oscillator release the tension, and then, on Thursday and Friday, to continue the decline.   Relevance up to 04:00 2023-03-09 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337008
Technical look: Euro against US dollar - what can we expect from the pair?

The EUR/USD Pair Broke Below The Right Shoulder's Low

Torben Melsted Torben Melsted 08.03.2023 08:09
The S/H/S-bottom neckline is held firm. Instead, EUR/USD broke below the right shoulder's low, which is viewed as an S/H/S-failure. Instead of measuring the upside target, we can predict the downside target from the failure, which measures a target near 1.0407 from where the next impulsive rally should be expected. We now see resistance near 1.0650 that ideally will cap the upside for a move closer to the 1.0407 target to complete wave 4. Relevance up to 06:00 2023-03-09 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315279
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

The European Currency Experienced Significant Pressure

Paolo Greco Paolo Greco 08.03.2023 10:15
The EUR/USD currency pair traded on Tuesday as though it were paying attention to our recommendations and forecasts. In recent days, we have frequently discussed how the price frequently reverses its direction of movement and surpasses the moving average line. The upward movement appeared to have started on Monday and might have continued, but on Tuesday the pair simply collapsed downward. Also, this is exactly what we anticipated given that we have recently been discussing the overbought European currency, its unwarranted increase in the second half of the year 2022, as well as the lack of growth factors. Yet, we think that Jerome Powell's statement was simply a trigger for the current strengthening of the US dollar that eventually occurred. In any event, Powell's "hawkish" statement accidentally caused the US dollar's decline when it was scheduled to start growing again. In the next few sections, we shall discuss the Fed chairman's speech, but for now, allow us to state the following. In the medium term, a new wave of movement to the south may well begin with the current collapse of the European currency. The market has already demonstrated recently that it is not prepared to purchase the euro. The European currency experienced significant pressure even in those years when growth would have been reasonable or at least not at odds with the underlying conditions. Hence, a new fall was coming. Of course, the pair may simply follow the British pound's lead and remain flat, but given that it has already departed its side channel, it may instead continue to decline. So, both pairs, which frequently move in the same manner, have fantastic potential to advance in the direction that we recently anticipated. The two once more rested on the Senkou Span B line on the 24-hour TF. If it is overcome, there is a greater possibility that quotes may decline more. In this instance, it may go all the way to the level of 1.0200. We think that such a move would be entirely appropriate, even from a fundamental perspective. The US rate will remain higher than the rate in the European Union for a considerable amount of time since the Fed continues to maintain a more hawkish stance than the ECB. The Fed's chairman made a hint about a longer rate increase. What specifically did the Fed chairman say to Congress, then? If readers recall or familiarize themselves with our most recent publications, they will be able to verify what we have repeatedly stated: the US rate will need to be raised considerably more than 5.25%, as many are currently anticipating. The basic calculation indicates that it will only take 1-2 more rises to bring inflation back to 2%. Nevertheless, the Fed intends to return to price stability as soon as feasible and will not prolong the pleasure for a long time. Even so, in the European Union or the UK, this scenario would take far longer. The rate should therefore keep rising in any event. In addition, we noted that since energy prices have declined, which has an impact on the costs of practically all goods and services, inflation has slowed down over the past six months in many nations throughout the world. But, the decline in the price of oil and gas could not endure indefinitely, thus this positive inflationary factor eventually had to be leveled. And that's what occurred. The Fed also enjoys a strong economy, a low likelihood of a recession, a strong labor market, and record-low unemployment. As a result, the Central Bank not only has the capability but also the motivation to actively fight rising inflation. Jerome Powell essentially acknowledged that on Tuesday in front of Congress. He predicted that the struggle against inflation would be long and uneven, and that interest rates would have to be raised much more than previously anticipated. There was a chance that inflation would stall in February or March because it barely slowed down in January. The likelihood of a 0.5% rate hike in March has now increased to roughly 50%, although traders were not even seriously considering this possibility a week ago. According to Powell, the regulator is prepared to speed up the tightening of monetary policy once again if necessary. To be honest, we did not expect such a dramatic reaction to Powell's speech, but we must say that the Fed chairman was exceptionally open and truthful this time. His speech could not help but strengthen the dollar, though it could have been lower, as only such a situation could have been foreseen recently. And given the recent figures on the nonfarm sector and inflation, what else might we anticipate? As of March 8, the euro/dollar currency pair's average volatility over the previous five trading days was 95 points, which is considered "high." Therefore, we anticipate that the pair will move on Wednesday between the levels of 1.0470 and 1.0660. A new phase of upward movement will be signaled by the Heiken Ashi indicator turning back to the top. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0964 Trade Suggestions: The moving average line has been reclaimed below by the EUR/USD pair's consolidation. Unless the Heiken Ashi indication turns up, you can continue to hold short positions with targets of 1.0498 and 1.0470. If the price is fixed above the moving average line with a target of 1.0742, long positions can be opened. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. The short-term trend and the direction in which to trade right now are determined by the moving average line (settings 20.0, smoothed). Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 01:00 2023-03-09 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337000
Japanese yen increased by over 0.5% on Friday. Japanese monetary policy may change soon

USD/JPY Is Above 137.00, The Aussie Pair Is Trading Below 0.66, GBP/USD And EUR/USD Are Also Lower

Kamila Szypuła Kamila Szypuła 08.03.2023 12:55
The dollar hit multi-month highs against most other major currencies on Wednesday after Federal Reserve Chairman Jerome Powell warned that US interest rates may need to rise even faster and higher than expected to contain stubborn inflation. Powell told lawmakers on Capitol Hill on Tuesday that recent economic data from the United States was better than expected, so the pace and size of future hikes may also need to be stepped up, pushing expectations for short-term US interest rates higher. Higher interest rates are good for the dollar as they improve its yield and investors seek safety while global stock markets fall. The dollar also surpassed its 200-day moving average against the yen for the first time this year. The dovish slope from the RBA contrasted with the hawkish Jerome Powell. USD/JPY The yen pair started the day trading above 137.40 and rising towards 137.90. After this increase, the USD/JPY pair began to fall. At the time of writing, the USD/JPY pair was above 137.40, but has the potential to fall further towards 137.30. On the Japanese front, during the final political meeting with Governor Haruhiko Kuroda this week, the Japanese central bank will maintain a very loose monetary policy. Data on Tuesday showed Japan's real wages fell by the most in nine years in January, as four-decade high inflation erodes Japan's purchasing power. EUR/USD The EUR/USD pair started trading above 1.0545, but quickly started a decline towards 1.0530. After this decline, the EUR/USD pair started rising towards 1.0545 and kept trading in the 1.0540-1.545 range. At the time of writing, papra has dropped to 1.0540 and is now at 1.0537. German data released today showed that retail sales weakened more than expected, while industrial production rose sharply, easily beating forecasts. Moreover, the hawkish tone of Powell's comments also seems to have an impact on expectations of interest rate hikes by the European Central Bank (ECB). According to Reuters, markets see a 65% probability that the ECB's final interest rate will be 4.25% this year, compared to a 4.00% final interest rate last week alone. The ECB's hawkish bets could help the euro limit losses in the short term. GBP/USD The cable pair started trading above 1.1825 but similarly to the euro then fell. After falling to the level of 1.1810, the GBP/USD pair rebounded and rose towards 1.1840. After breaking above 1.1845, the pound pair fell back towards 1.1830. The pound reacted negatively to Fed Chairman Jerome Powell's more aggressive guidance during yesterday's appearance before the Senate Banking Committee. UK OIS markets are now fully pricing in a 25 basis point (BoE) rate hike for the first time since February 27. While BoE expectations are hawkish, the policy divergence is more pronounced than ever with CME Group's FedWatch tool pointing to a 75% probability of a 50 bp rate hike at the next Fed meeting. AUD/USD The movement of the Australian pair is similar to that of the pound-euro pair. After falling to the level of 0.6570, the AUD/USD pair broke again and broke above 0.66, but did not hold and fell to the level of 0.6698. The Australian dollar fell to a four-month low on Wednesday as diverging interest rate expectations between the US and Australia sent local yields to their biggest discount to government bonds in nearly four decades. Source: finance.yahoo.com, investing.com
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

The EUR/USD Price Is Still Pulling Towards The Target Range

InstaForex Analysis InstaForex Analysis 09.03.2023 08:04
Yesterday, the currency market took a bit of a breather after Tuesday's big drop. Today, the market is preparing for Friday's U.S. jobs report. Such preparation might be in the form of an ongoing sideways price movement, or with some loss of positions against the dollar, as the US stock market closed mixed yesterday and the yields on the government bonds are slightly rising in the Asian session. There are no changes on the daily chart, the price is still pulling towards the target range of 1.0443/70. The Marlin oscillator is directed upward, but now it looks like its natural correction before it falls further. The situation on the four-hour chart repeats the technical picture of the daily chart. The price develops under both indicator lines, the MACD line turns downward, the Marlin oscillator discharges before falling further.   Relevance up to 03:00 2023-03-10 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337092
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

AUD/USD Rose Above 0.66, USD/JPY Drop Below 137.00

Kamila Szypuła Kamila Szypuła 09.03.2023 11:40
The dollar held near a three-month high on Thursday, backed by a message from Federal Reserve Chairman Jerome Powell that interest rates will need to go higher and possibly faster. On the second day of his testimony before Congress on Wednesday, Powell confirmed his message, though he made a cautious point, saying that the debate over the scale and path of future interest rate hikes is still ongoing and will depend on the data. USD/JPY The yen pair has been in a downtrend since the beginning of the day. During the day, USD/JPY dropped from 137.2360 to 136.2230. Concerns about a deeper global economic downturn continue to weigh on investor sentiment, which in turn favors a safe haven for the Japanese yen (JPY) and puts some downward pressure on the major currency. Market concerns were further fueled by the latest Chinese inflation data, which showed that domestic demand remains weak and weakened hopes for a strong recovery in the world's second largest economy. However, any significant pullback in USD/JPY still seems elusive amid expectations that the Bank of Japan (BoJ) will remain dovish to support a fragile domestic economy. In fact, the new BoJ governor, Kazuo Ueda, recently stressed the need to maintain ultra-loose policy settings and said the central bank is not aiming for a quick turnaround from a decade of massive easing. Bets were further raised after the release of the final GDP print, which showed Japan's economy narrowly avoided a technical recession in the final months of 2022. EUR/USD The euro pair started the day with a drop from 1.0556 to 1.0542. After this decline, the EUR/USD pair started an upward move towards 1.0570. After this move, the EUR/USD pair fell to the level of 1.0562. EUR/USD remains close to monthly lows after the recovery faded near 1.0570 during the US session. The US dollar failed to pick up a new leg, but maintained its recent gains. The dollar looks solid as markets are priced at "higher for longer" US interest rates. Data released on Wednesday helped consolidate expectations. Market participants also see a more hawkish European Central Bank (ECB) as recent research points to a higher final rate. Thursday's economic report does not include first-tier reports for the eurozone and preliminary claims for US unemployment benefits. Markets will continue to weigh Powell's message as they prepare for non-farm payrolls. GBP/USD The beginning of trading in the GBP/USD pair started trading with the application to the euro. Then, still in the Asian session, it rose slightly. The cable pair recorded a significant increase at the beginning of the European session and exceeded 1.1880. Currently, the level of the GBP/USD pair is above 1.1870. A permanent rebound seems unlikely as buyers refrain from betting on sterling further strengthening due to policy divergence between the US Federal Reserve and the Bank of England, although BoE expectations are hawkish. AUD/USD The Australian pair traded in the 0.6580-0.6595 range at the beginning of the Asian session. Still in the Asian session there was a significant increase above 0.6610. After this surge, AUD/USD traded in the 0.6610-0.6615 range. At the time of writing, the Aussie pair is trading at 0.6612. The Australian dollar is trying to bounce back this Thursday after Tuesday's decline. The morning started with weak economic data from Australia in the form of building permits and private home permits for January. Both sets of data printed in line with estimates but reached levels last seen in January 2022. This deterioration in the housing and construction sectors is a reflection of the high interest rate environment created by the Reserve Bank of Australia (RBA). Source: investing.com, finance.yahoo.com
US core inflation hits 5.5% and it's the second lowest reading since November 2021

Nonfarm Data Can Strengthen The U.S. Currency, Provoking Another Dollar Rally

InstaForex Analysis InstaForex Analysis 09.03.2023 12:49
The EUR/USD pair consolidated within the fifth figure, thanks to Jerome Powell, who voiced hawkish rhetoric in the walls of the U.S. Congress. But despite the strengthening bearish moods in the pair, the sellers could not overcome the 1.0520 support level, corresponding to the lower line of the Bollinger Bands indicator on the D1 timeframe. It is an important price barrier, overcoming which will open the way to the area of the 4th figure. Obviously, traders need additional information impulse for the next downward spurt. The February Nonfarm Payrolls report, which will be released tomorrow, March 10, could be such momentum. Powell and Nonfarm The U.S. Nonfarm Payrolls is important in its own right, but in light of recent events, the significance of this release has increased in many ways. Speaking to Congress, Fed Chairman Powell said that the labor market is "extremely tight" and contributes to inflation. By and large, Fed officials have been saying the same thing for weeks, ever since the January Nonfarm Payrolls (which showed a half-million gain in employment) were released. The market, in particular, has started to talk about a possible "second order effect," whereby rising wages further unwinds inflation in a wage-price spiral. Responding to questions from congressmen, Powell suggested that some easing in the labor market is needed to bring inflation under control. He said this is necessary so that "inflation will come down in the broad service sector, a labor-intensive part of the economy where prices continue to rise." What the ADP report said Yesterday, the U.S. ADP employment report was released, which can be considered as a "preview" of Friday's nonfarm report. The ADP report came out in the "green zone," stating the creation of 242,000 jobs in the private sector. This result was somewhat surprising, since most experts predicted a more modest increase of 180,000. But the actual result exceeded the analysts' forecast. It is worth noting that recently the report has shown a fairly high correlation with the official release, so the good February figures from ADP suggest that the main components of the release tomorrow will please dollar bulls with a "green color." Preliminary forecasts for February Nonfarm Payrolls also suggest that the U.S. labor market will not disappoint, at the very least. Unites States unemployment should remain at January levels, i.e., at 3.4%. The nonfarm payrolls growth figure should show a more modest result than the previous month, but we should not forget that there was a half-million gain in January. February is expected to see an increase of 205,000. The private sector of the economy is projected to grow by 210,000. In light of Powell's recent statements, the wage component of the release is especially important. According to forecasts, the salary index should resume growth, rising to 4.7%, after the January decline to 4.4%. The trend itself will be important here, as with the major inflation indicators (CPI, core PCE index). Conclusions If nonfarm data comes out in the green zone on Friday, the dollar will again strengthen its position throughout the market. A strong report would suggest that the Fed will accelerate the pace of rate hikes at its March meeting and announce a hawkish stance on the prospects of monetary tightening. We are talking about an almost guaranteed 50-point interest rate hike in March. The regulator may also revise the level of the final rate—tentatively to 5.5% (possibly up to 5.75%). And while much will depend on the dynamics of the February and March inflation indicators, this scenario looks the most realistic. According to the CME FedWatch Tool, the likelihood of the 50-point scenario materializing in March is now nearly 75%. As to further prospects, the market is still fluctuating. As of today, the probability of a 25-point rate hike in May is 59%, while the 50-point increase is 25%. In anticipation of such a significant release, it is advisable for traders of the EUR/USD pair to maintain a wait-and-see attitude. Nonfarm data can strengthen the U.S. currency, provoking another dollar rally. But they can also put pressure on the greenback. From the technical point of view, the pair on the daily chart is between the middle and lower lines of the Bollinger Bands indicator, as well as below all the lines of the Ichimoku indicator. It is important for the EUR/USD bears to consolidate below the lower line of the Bollinger Bands (i.e., below 1.0520) – in this case, they will be able to test the area of the 4th figure, and in the future – the 1.0450 support level (Kijun-sen line on the same timeframe).   Relevance up to 11:00 2023-03-10 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337134
The EUR/USD Price May Fall Under 1.0660

There Is A High Probability That The EUR/USD Price Will Reverse To The Downside

InstaForex Analysis InstaForex Analysis 10.03.2023 08:03
Yesterday, the euro managed to develop a correction so that it can reach the target level of 1.0595 this morning. The price returned to the consolidation range of the second half of December 2022, and can stay there until the release of the US employment data. Also, the price may settle below 1.0595, as the trading volumes have noticeably decreased in recent days. We expect today's Nonfarm Payrolls to be good as weekly jobless claims are coming in at a consistently low 196,000 on average over the past month. A month earlier, the average was 189,000 and then, in January, Nonfarm Payrolls showed an increase of 517,000 new jobs. Forecast for February is 205,000, the data is likely to be better than forecast. I expect the euro to fall to the target range of 1.0443/70. On the four-hour chart, the price has stopped rising in the area where the MACD indicator line coincides with the target resistance of 1.0595. The signal line of the Marlin oscillator closely approached the zero neutral line.There is a high probability that the price will reverse to the downside. In the main bearish scenario, the price can also climb above the resistance, but this will be a false breakout.   Relevance up to 03:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337211
Technical look: Euro against US dollar - what can we expect from the pair?

The Euro's Technical Picture Looks More Like A Swing Than A Trend

Paolo Greco Paolo Greco 10.03.2023 08:13
5M chart of EUR/USD EUR/USD continued a very weak, upward, corrective movement on Thursday. Volatility was very low again, but there was a very concrete explanation in the form of a complete absence of fundamental and macroeconomic events. The pair could not crawl even to the nearest Ichimoku indicator line, although it has been correcting for two days. Therefore, there is no new conclusion regarding the pair's movement and outlook over the past two trading days. We have to wait for the reports, which may determine the dollar's future, until the next FOMC meeting, which will be held on March 21-22. I still expect the pair to fall, i.e. the rise of the USD. However, today it might take a different scenario, as there is no guarantee that the Nonfarm Payrolls report will be much higher than the forecasted value again. Speaking of trading signals, the situation wasn't good on Thursday, but why is it so surprising if the pair managed to go "even" 50 pips in a day? Of course, you should not expect that the pair would provide a lot of strong and profitable signals. At first the pair rebounded from 1.0581, and then was down 15 points, which at least let you place the Stop Loss to Breakeven. Further, the pair traded along 1.0581, but by that time it was clear that trading was not active on Thursday. Therefore, traders could quietly close the terminal and leave the market, waiting for a more interesting Friday. COT report: On Friday, traders had to learn once again the COT report from February 7. This report was published a month ago. It seems that the Commodity Futures Trading Commission will now publish reports with a month's delay instead of a three-day delay as it was before. In the event of this, the reports will hardly be of great importance. However, we will continue to analyze them. Maybe in the future, the situation will change for the better. So far, we can say that in the last few months, the overall picture has been corresponding to the market situation. On the chart above, we see that the net non-commercial position of large traders (second indicator) has risen since September 2022. The net non-commercial position is bullish and continues to increase with each new week, allowing us to expect the uptrend to stop shortly. Such a signal comes from the first indicator, with the green line and the red line being far apart, which is usually a sign of the end of a trend. The euro has already begun its bearish move against the greenback. So far, it remains unclear whether it is just a downward correction or a new downward trend. According to the latest report, non-commercial traders closed 8,400 long positions and 22,900 short ones. Consequently, the net position rose by 14,500. The number of long positions exceeds that of short ones by 165,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue. 1H chart of EUR/USD On the one-hour chart, the pair sharply fell, but after that ended it started a correction for two days. Unfortunately, the chart shows that the downtrend can't be considered as completely revived yet. Now the euro's technical picture looks more like a "swing" than a trend. If the data turns out to be disappointing today, the pair might go back to 1.0692, which will make us believe in the "swing". On Friday, important levels are seen at 1.0340-1.0366, 1.0485, 1.0537, 1.0581, 1.0658, 1.0692, 1.0762, 1.0806, 1.0868, and also Senkou Span B (1.0615) and Kijun Sen (1.0610). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On March 10, the market will pay attention to the U.S. NonFarm Payrolls and the Unemployment report. However, European Central Bank President Christine Lagarde is also going to give a speech in the EU. All in all, it will be a rather volatile and active day. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.   Relevance up to 01:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337199
Rates Spark: Nothing new on the dovish front

The EUR/USD Pair Has Formed A Consolidation Below The Moving Average Line

Paolo Greco Paolo Greco 10.03.2023 08:18
On Wednesday and Thursday, the EUR/USD currency pair was trading much more calmly. The initial impact of Powell's speech quickly subsided, and it is now uncertain what will happen next. On the one hand, the pair has formed a consolidation below the moving average line, which offers great prospects for further decline. Yet, the pair has only surpassed the moving average five times in the past week, so further consolidation below the moving average line is meaningless. Hence, all we can say at this point is that the market may go downward, but in reality, a lot depends on the American statistics that will be announced today. More on it is covered below. Powell's second address to the US Congress contained no new information, as was to be expected. We are taken aback by how the market reacted to the Fed chairman's statement on Tuesday because every argument made was foreseeable. We've stated time and time again that the Fed rate needs to be increased to at least 6% and that any discussion of "the regulator's reaction to reports" or anything similar is nothing more than "a good mine with a poor game." Hence, we were not surprised by Powell's statement regarding the need to speed up the pace of monetary policy tightening once more. The Fed made it clear from the start that it wanted to raise the rate to 2%. And not in the next 5–10 years, but as soon as possible. The topic would be very different if the American economy was on the verge of recession. Nevertheless, very reliable macroeconomic data are being released every month, giving the Federal Reserve every opportunity to tighten monetary policy as required. Following Powell's remarks, the dollar increased as expected, and we think that it will do so going forward. On the 24-hour TF, the pair continued to gain ground beneath both the Ichimoku cloud and the 38.2% Fibonacci line. As a result, the likelihood of a future decline in the quotes has grown, and we have another sell signal. If today's US reports are successful, the pair might decline another 100 points. Non-farm and unemployment in the US won't change market sentiment. We think the debate over raising the rate by 0.5% in March is nearly settled. Jerome Powell rarely makes unsupported claims or assertions that lack substance. If he indicated that there is a chance that the rate of growth will accelerate, the regulator would be preparing for this. Powell's attempt to "step back" in his address on Wednesday was futile, and nobody believed him. The likelihood of a 0.5% rate increase at this point is already more than 50%. Furthermore, this market belief won't be altered by today's reports (in our opinion). Let's analyze it. Will the Fed still go forward with its intentions to raise the rate by 0.5% even if today's non-farm data is weak and unemployment increases? No, we believe. Thus, it's important to consider the entire dynamics and trend rather than just one particular report. Nonfarms consistently perform at a high level. Unlike other experts, we have consistently asserted that adding 200–300 new jobs each month represents an excellent value. Hence, even if there are 150,000 non-farms today, for example, the overall situation will not change. It's the same with unemployment. It is already down 3.4% and is still going down. It is now even preferable for the Federal Reserve to somewhat cool the economy so that inflation does not re-accelerate. The question already exists: should rates be raised to slow the economy and boost unemployment rather than to cut inflation? When there is a labor shortage, salaries start to rise, which in turn causes inflation to accelerate. Meanwhile, the UK is reporting a similar issue. We, therefore, think that the rate will rise by 0.5% with any nonfarm and unemployment. This aspect can significantly assist the dollar over the coming few months in the conflict between the euro and the dollar. The ECB will likewise increase the rate, but it won't be until much later than the Fed rate, and it's unlikely that it will increase to 6% as it did in the US. As a result, the pair has adjusted by 50% from the previous decline, but it simply lacks new growth factors. As of March 10, the euro/dollar currency pair has experienced 75 points of "average" volatility over the previous five trading days. As a result, we anticipate that the pair will move on Friday between 1.0505 and 1.0655. The Heiken Ashi indicator's downward turn will signal a potential continuation of the downward movement. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0964 Trade Suggestions: The EUR/USD pair has consolidated below the moving average line once more. Currently, short positions with targets of 1.0505 and 1.0498 can be taken into account if the Heiken Ashi indicator reverses direction upward. After the price is established above the moving average line, long positions can be initiated with targets of 1.0655 and 1.0742. Explanations for the illustrations: Channels for linear regression - allow us to identify the present trend. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.     Relevance up to 01:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337203
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Outlook Of EUR/USD Pair In Short And Long Positions

Jakub Novak Jakub Novak 10.03.2023 09:20
Analysis of transactions and tips for trading EUR/USD The pair tested 1.0561 at a time when the MACD line was just starting to move above zero, which was a good reason to buy. It resulted in a price increase of about 20 pips. No other market signal appeared for the rest of the day. Contrary to expectations, the lack of statistics yesterday led to a further correction in EUR/USD. But today, there is a chance for growth as Germany's CPI data could prompt a rise in demand. The increase, however, will not be large because later in the day, ECB President Christine Lagarde and Board member Fabio Panetta will give a speech, which are unlikely to be good. Upcoming reports on the US labor market are also expected to strengthen dollar as a fall in unemployment rate, jump in non-farm payrolls and increase in average hourly earnings are reasons to buy the currency. Of course, if the data actually disappoints, euro will get a chance to see gains. For long positions: Buy euro when the quote reaches 1.0600 (green line on the chart) and take profit at the price of 1.0640. Growth is possible, but it will only be as an upward correction and nothing more. Nevertheless, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0574, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0600 and 1.0640. For short positions: Sell euro when the quote reaches 1.0574 (red line on the chart) and take profit at the price of 1.0538. Pressure will return if the US releases a strong labor market data. However, make sure that when selling, the MACD line is under zero or is starting to move down from it. Euro can also be sold at 1.0600, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0574 and 1.0538. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337241
The EUR/USD Pair Chance For The Further Downside Movement

The EUR/USD Pair Chance For The Further Downside Movement

Peter Jacimovic Peter Jacimovic 10.03.2023 09:24
Technical analysis: EUR/USD has been trading upside but I found that price has reached important intraday resistance Fibonacci at 1.0600 and there is chance for the further downside movement. Due to the longer-term downside trend and the rejection of the Fibonacci, I see potential for the further downside movement. Downside objectives are set at 1.0530 and 1.0400 DPO oscillator is showing extreme bull reading and potential for the downside rotation.... Key resistance is set at the price of 1.0600     Relevance up to 08:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315638
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

USD/JPY Is Close To 137.00, EUR/USD Is Below 1.06, GBP/USD Is Trading Below 1.20

Kamila Szypuła Kamila Szypuła 10.03.2023 12:18
The dollar index was steady on Friday, a rare spot of calm in volatile global markets ahead of key U.S. payrolls data later in the day, while the yen weakened after the Bank of Japan kept stimulus settings steady. The focus for today is the publication of the non-farm payroll (NFP) in the US with forecasts of 205,000. USD/JPY With the beginning of the trade, USD/JPY traded later at 136.00, but quickly bounced back to 136.75. In the following hours of the Asian session, the prices of the yen pair were above 136.50. At the beginning of the European session, the pair's exchange rate fell to the level of 136.25, but this time it managed to recover. At the time of writing, USD/JPY is trading above 136.95 but still below 137.00. In his last meeting as the BOJ Governor Haruhiko Kuroda left policy settings steady, in line with expectations, given the Japanese central bank adjusted the yield band as recently as December. Incoming BOJ Governor Kazuo Ueda has said the central bank must maintain its current ultra-easy policy for now until there are signs that inflation has sustained above BOJ’s 2% target EUR/USD The euro pair trading on Friday is quite mixed. In the Asian session, the EUR/USD pair was held just after 1.06 and above 1.0585. In the European session, the euro was both above 1.0605 and below 1.0580. At the time of writing, the EUR/USD pair is below 1.0590. The euro rises against the dollar after heavy losses at tech-focused U.S. lender SVB Financial and could extend its gains on potentially softer U.S. jobs data later. The euro gained some support this Friday morning thanks to slightly weaker dollar and better than expected German CPI data. Although the actual numbers were printed as forecast, the figure of 8.7% underscores heightened and persistent inflationary pressures in Germany. As Germany is the largest economy in the Eurozone, the inflation release acts as a proxy for the wider region, reinforcing hawkish sentiment on the part of the European Central Bank (ECB). To close the trading session from a EURUSD perspective, ECB's Christine Lagarde is due to speak and may reiterate the need to suppress inflation after today's German data. GBP/USD The pair of the pound, contrary to the euro, trades calmly. In the zajastj session, the cable pair held around 1.1930, but was mostly below this level. With the European session, the GBP/USD pair began to grow. The GBP/USD pair managed to get close to the 1.20 level, but did not maintain momentum and at the moment of writing the text is trading after 1.1977. Sterling rose on Friday after Britain's economy was shown to have grown by more than expected in January, further allaying fears of a recession. The Office for National Statistics (ONS) said Britain's economy expanded 0.3% month-on-month, after a drop of 0.5% in December. AUD/USD The movement of the pair Aussie equals and z is mixed. At the beginning of the Asian session, the AUD/USD pair fell towards 0.6570 and then increased towards 0.66. In the following hours, the Australian pair remained in the range of 0.6585-0.6595. After a surge, AUD/USD has fallen again and is now trading below 0.6590 Source: investing.com, finance.yahoo.com
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

FX Weekly Summary: USD/JPY Ended Above 135.00, GBP/USD Was At 1.2032, EUR/USD Ended At 1.0643, AUD/USD Was Below 0.66

Kamila Szypuła Kamila Szypuła 11.03.2023 09:31
The dollar weakened on Friday after U.S. labor data for February showed slower wage growth, suggesting an easing of inflation pressures may keep the Federal Reserve's pace of interest rate hikes modest and thereby reduce the greenback's appeal. USD/JPY The yen pair started trading this week at 135.9770. For the first two days, USD/JPY traded mostly below 136.00. After that, the yen pair rose and reached a trading high of 137.8850. After reaching the top, the pair turned down and the pair fell towards 136.00. The lowest trading level was recorded on the last day of trading at 134.1710. The USD/JPY pair traded at 135.0480 . In his last meeting as the BOJ Governor Haruhiko Kuroda left policy settings steady, in line with expectations, given the Japanese central bank adjusted the yield band as recently as December. Incoming BOJ Governor Kazuo Ueda has said the central bank must maintain its current ultra-easy policy for now until there are signs that inflation has sustained above BOJ’s 2% target. EUR/USD The euro pair started trading at 1.0632. For the first two days of trading, the EUR/USD pair rose towards 1.0695, but failed to maintain momentum and plummeted below 1.06. After this drop, the euro remained below 1.06 for the next trading days, reaching its lowest level at 1.0529 on Wednesday. Despite the low level below 1.06, the pair was increasing its level day by day. The highest level was recorded by the EUR/USD pair on the last day of trading and it managed to exceed the level of 1.07 (1.0701). The trading session closed at 1.0643 . Moreover, the hawkish tone of Powell's comments also seems to have an impact on expectations of interest rate hikes by the European Central Bank (ECB). The ECB is scheduled to meet on Thursday, March 16 ahead of the Fed, which begins its meeting next week on March 22. GBP/USD The cable pair started trading at 1.2033. For the first two days of trading, GBP/USD traded in the 1.2000-1.2050 range, but failed to maintain momentum and plummeted below 1.19. After this decline, the pound pair remained in the range of 1.1810-1.1850 for the next trading days, and the lowest level was recorded in the range at 1.1812. The GBP/USD pair broke the high end of the range in the second half of Thursday and has been on the rise since then, crossing the 1.19 level. The highest level of the week was reached by the pair on the last day of trading at 1.21107. The closing of the trading session was at 1.2032. AUD/USD The Australian pair started the week trading at 0.6755. The AUD/USD pair was falling, but remained above 0.67 for the first few days. Already on Tuesday in the American session, the AUD/USD pair recorded a significant drop to levels below 0.66. Over the next few days, AUD/USD traded in the 0.6575-0.6625 range. The lowest level was also recorded by the Aussie pair in this range, at 0.6572. The highest level of the week was in the first trading days on Monday at 0.6771. The AUD/USD pair ended the week at 0.6584 . Weak economic data from Australia in the form of building permits and private home permits for January arrived this week. Both sets of data printed in line with estimates but reached levels last seen in January 2022. This deterioration in the housing and construction sectors is a reflection of the high interest rate environment created by the Reserve Bank of Australia (RBA). The Reserve Bank of Australia raised its cash rate by a quarter of a percentage point to 3.60% and said further monetary policy tightening would be needed. Source: finance.yahoo.com, investing.com
Rates Spark: Crunch time

Analysis Of The EUR/USD Pair Over This Week

Paolo Greco Paolo Greco 12.03.2023 10:22
Long-term outlook. Over this week, the EUR/USD currency pair was able to trade both ways. The start of the week was very dull, but by Tuesday, the market was aggressively working through Jerome Powell's speech to the US Congress. We think the head of the Fed did not report anything spectacular or unexpected because all of the ideas he expressed could have been predicted. The only unexpected thing was that nobody knew when they would be announced. The US dollar rose after this speech, as it turned out that Mr. Powell plans to express them in front of senators. But as it increased, it also decreased. If we assumed the euro's decline would continue on Wednesday, it became evident on Friday that we should not jump to conclusions. After all, Friday's statistics proved to be unclear while yet being extremely significant. Going ahead a little, it should be noted that Nonfarm once more came in over expectations, and the unemployment rate increased from 3.4% to 3.6%. Yet, given that the unemployment rate is still very close to its lowest level in 50 years, we think that even with these statistics, the dollar should have grown. The indicator's growth of 0.1-0.2% is not particularly significant. For instance, each consecutive increase would be significant if the unemployment rate had been growing for several months in a row. The outcome was that the pair spent the entire week in "swing" mode, as is evident on the 4-hour TF. The pair was fixed below the Ichimoku cloud on the 24-hour chart, not because it was aggressively decreasing but rather because the Ichimoku cloud rose. Moreover, the price was unable to establish a solid base below the 38.2% Fibonacci level. It is therefore impossible to conclude that the decreasing trend is still present now. To put it more precisely, it is conceivable to come to a resolution regarding saving but not to move further. We believe that the US dollar should already be continuing to strengthen based on the Fed's highly likely increase in aggressiveness, but the ECB has just started to convey clear signs of a higher rate hike. COT evaluation. A new COT report for February 21 was made public on Friday. It was about a month ago, around the time that the report for February 14 disappeared. It appears that the Commodities Futures Trading Commission will continue to provide reports from a month ago even if they are no longer very important. Note that the CFTC's efforts were unsuccessful, which is why we are currently receiving irrelevant information. Thus far, we can claim that the picture accurately reflects what has been happening in the market during the past few months. The aforementioned image unequivocally demonstrates that since the start of September 2022, the net position of significant players (the second indicator) has been increasing. At about the same time, the value of the euro started to increase. Although the net position of non-commercial traders is currently "bullish" and growing virtually weekly, it is the relatively high value of the "net position" that now permits the upward trend's impending end. This is indicated by the first indicator, which frequently occurs before the end of a trend and on which the red and green lines are quite far apart. The euro has already started to decline, although it's unclear if this is just a short pullback or the start of a new downward trend. The number of buy contracts from the "Non-commercial" group fell by 0.1 thousand during the most recent reporting week, while the number of shorts increased by 1.3 thousand. Therefore, the net position has grown again by 1.2 thousand contracts. For non-commercial traders, there are 165 thousand more buy contracts than sell contracts or three times more buy contracts than sell contracts. Nonetheless, the correction has been building for a while, so it is evident even without news that the pair should keep falling. Analysis of important events. This week's major event was scheduled to be the US Nonfarm Report, but it ended up being Jerome Powell's speech and the unemployment data. Powell's statement was what ultimately caused the pair to fall, as the news provoked an increase in quotes and prevented the market from correctly and logically calculating non-farm payrolls. We consider the NonFarm Payrolls report to be more significant than the unemployment rate, as it shows a considerable excess over the predicted values for the second consecutive month. Thus, it makes no difference that the value for January was reduced. An adjustment of 20–30 thousand jobs does not matter when 0.5 million new employees are created versus a prediction of 200 thousand. As a result, on Friday, the US dollar should have risen against the euro, but this is not what happened. In the future, this situation will need to be leveled. In other words, the dollar may increase the following week during times when there are no clear-cut grounds or reasons for doing so. We are still anticipating a decline in the euro/dollar pair. Trading strategy for the week of March 13–17: 1) The pair is in a downward trend and is still situated below the Kijun-sen on the 24-hour period. As a result, the fall might continue with targets around 1.0200–1.0300. Although we still think that sales are appropriate, Friday's unemployment report confused the market. 2) The purchases of the euro/dollar pair are no longer significant. You should now wait for the price to return above the critical Ichimoku indicator lines before you start to think about long positions. There are currently no factors that would allow the euro currency to resume growing in the medium term. But, in the present world, anything can happen at any time. Explanations for the illustrations: Fibonacci levels, which serve as targets for the beginning of purchases or sales, and price levels of support and resistance (resistance/support). Take Profit levels may be positioned close by. Bollinger Bands, MACD, and Ichimoku indicators (standard settings) (5, 34, 5). The net position size of each trading category is represented by indicator 1 on the COT charts. The net position size for the "Non-commercial" category is shown by indicator 2 on the COT charts   Relevance up to 14:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337338
Rates Spark: Nothing new on the dovish front

The EUR/USD Price Is Above The Target Level Of 1.0660

InstaForex Analysis InstaForex Analysis 13.03.2023 08:04
Friday's US jobs data, however downplayed by the business media, came out good. Non-farm payrolls data was better than expected: 311,000 vs 205,000. January's index was revised downwards to 504,000 from 517,000, but that's not a significant change. The unemployment rate rose from 3.4% to 3.6%, but the percentage of the economically active population rose from 62.4% to 62.5% and, importantly, average hourly earnings for the month rose 0.2%, indicating a still unsaturated labor market. Investors did lower the probability of a 0.50% rate hike at the next Federal Reserve meeting from 78% to 50% and the yield on 5-year government bonds fell from 4.19% to 3.97%, but in this situation, we consider the stock market as the main indicator of market sentiment and it fell by 1.45% (S&P 500), which means that strategic investors consider Friday's surge a temporary phenomenon and keep withdrawing from risk. In fact, we saw the shift of funds from stocks to bonds on Friday. Finally, the Consumer Price Index for February will be released tomorrow; the forecast suggests a monthly growth of 0.4% and the year-on-year decrease to 6.0% from January's 6.4%, which is still a big number and we will know how the FOMC members will take it very soon. On the daily chart, the price is above the target level of 1.0660, but the closing of the day will likely take place below it, since the day opened with a rising window, and it is not closed. The balance indicator line restrains price growth this morning. On the four-hour chart, the Marlin oscillator turns downwards, this is the first sign that the bulls are exhausted. The first stage of the reversal is when the price falls below 1.0660 and the subsequent consolidation under the lower level of the "window" at 1.0643. Then we are waiting for an attack on the MACD line near 1.0615. This is the main scenario. An alternative is surpassing today's high at 1.0703 and one more attempt to reach the target range at 1.0758/87.   Relevance up to 03:00 2023-03-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337354
Forex: Euro against US dollar - forecast on April 24th, 2023

The Last Situation In EUR/USD Pair Will Continue Today

Jakub Novak Jakub Novak 13.03.2023 08:30
Analysis of transactions and tips for trading EUR/USD The pair tested 1.0604 at a time when the MACD line was just starting to move above zero, which was a good reason to buy. It resulted in a price increase of as much as 100 pips. No other market signal appeared for the rest of the day. Germany's CPI data was ignored by markets, while a sharp rise in US unemployment rate led to a weakening of dollar on Friday afternoon. Most likely, the situation in EUR/USD will continue today as there are no important statistics scheduled to be released today. Market players should stick to trading further along the trend, which is now on the side of buyers. The Eurogroup meeting and speech from Bundesbank representatives will be of little interest. For long positions: Buy euro when the quote reaches 1.0734 (green line on the chart) and take profit at the price of 1.0775. Growth is possible, but it will only be amid disappointing US reports and emerging banking sector problems. Nevertheless, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0702, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0734 and 1.0775. For short positions: Sell euro when the quote reaches 1.0702 (red line on the chart) and take profit at the price of 1.0671. Pressure will return if the attempt to consolidate at the monthly highs fail. However, make sure that when selling, the MACD line is under zero or is starting to move down from it. Euro can also be sold at 1.0734, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0702 and 1.0671. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2023-03-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337374
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

FX Daily: Policymakers move to limit SVB fallout

ING Economics ING Economics 13.03.2023 08:59
Over the weekend US policymakers have taken measures to restore confidence and halt the deposit run in parts of the US banking system. Expect a nervous market to closely track US banking stocks today. The dramatic re-pricing of the Fed curve and the bullish disinversion of the US curve is a dollar negative. Expects the Swiss franc and Japanese yen to stay bid USD: Policymakers move swiftly to restore confidence US policymakers have acted quickly to restore confidence in the US banking system after Friday's second-largest bank failure in history. The Federal Reserve, US Treasury, and Federal Deposit Insurance Corporation have together announced two key measures. The first is that all uninsured depositors of SVB will be made whole.  This addresses the fear that uninsured depositors (in this case in the venture capital/tech sector) would lose deposits and would pull funds from other banks with high ratios of uninsured deposits (reports suggest 96% of SVB's deposits were uninsured). The second key measure has been the Fed announcing a new liquidity programme - the Bank Term Funding Program (BTFP). This will allow eligible financial institutions to access dollar liquidity in return placing US Treasuries, Agencies, or Mortgage-Backed Securities as collateral. Importantly the collateral values will be taken at par, meaning no write-downs. This addresses SVB's problem of the need to meet deposit outflows with sales of securities - a move that forced SVB to realise losses and burn through equity capital. Read our article for more. For today, investors will watch US banking stocks carefully to gauge whether the above measures have been enough to restore confidence. Worryingly over the weekend another bank, Signature Bank in New York, was also taken into administration by US authorities. One clear read for the market is that the Fed is not going to be able to deliver a 50bp hike on 22 March if, at the same time, it is introducing new liquidity measures for the US banking system. The market has now scaled back expectations for this month's FOMC to +25bp, with some high-profile names now calling unchanged rates. Indeed, the pricing of the December 2023 FOMC meeting is now 75bp lower than in the middle of last week. For FX this means the following. The first major US financial crisis since 2008 has seen a significant bullish disinversion of the US yield curve - which is dollar bearish. We have been arguing for some that time that bullish disinversion would be required to send the dollar lower - but had felt that it would be US disinflation or weak activity data - not a financial crisis - which would be the trigger. Expect investors to remain wary this week and continue to prefer the CHF and JPY over the dollar. In a way, we are going back to former periods of risk aversion - when selling the dollar and buying US two-year Treasury notes was the key strategy in a crisis. DXY to probably trade alongside the US KBW banking index - particularly the Regional banking Index - today. Risks lie to the 103.50 area and potentially 102.50 this week. Chris Turner  EUR: Spreads narrow markedly in favour of EUR/USD The dramatic re-pricing of the Fed policy curve has seen two-year EUR:USD swap rate differentials narrow inside 100bp - the narrowest since October 2021. This is EUR/USD positive. Unless there is a massive rally in US banking stocks today which suggested that US authorities had been incredibly successful in putting the genie of US banking sector risk back in the bottle, we would say EUR/USD is biased to the 1.0780/1.0800 area. On Thursday this week, the European Central Bank policy meeting will be challenging. Presumably, it will have to push ahead with a 50bp hike for fear of adding even more volatility to the markets. Chris Turner GBP: Bailouts and budgets Sterling did a lot better than we were thinking on Friday. We very much struggle to buy into sterling as a safe-haven currency, given the UK's large current account deficit and large financial sector exposure. Instead, we suspect deleveraging and the unwinding of short sterling positioning played a role. Today the focus will be on the UK's support of the tech sector in response to SVB's UK arm. As in the US, depositors in the UK are being made whole and the government is looking to address the working capital needs of those exposed. The market still expects the Bank of England to push ahead with a 25bp hike on 23 March. This still may be at risk of being priced out, given the BoE was not far away from a pause anyway. We could easily see EUR/GBP retracing back up to 0.8900, while we would not chase GBP/USD over 1.22. Chris Turner CEE: Forint and koruna should reverse losses The second half of the month in the Central and Eastern Europe (CEE) region traditionally offers a weaker economic calendar and given the global story, we assume that regional factors will not be the driver this week. Romania's inflation for February was released this morning and rose by 15.52% year-on-year, slightly above market expectations. Tomorrow, we will see in Romania, industrial production and on Wednesday we will see labour market data. Also, on Wednesday we will see this week's highlight, Poland's inflation number. We expect an increase from 17.4% to 18.7% YoY, above market expectations, which should be the peak inflation this year in our view. However, the number has a lot of uncertainty due to the consumer basket weight update. Then, on Thursday, we will see the current account results across the region and on Friday, core inflation will be published in Poland.  In FX markets, given the global story, it will be difficult for the CEE region to find its way. However, risk aversion seems to be declining and a higher EUR/USD should help the region correct some of the losses from the end of the last week. Moreover, in the case of the Czech koruna and Hungarian forint, which faced the biggest losses, the biggest jump in gas prices since June last year played a role as well, making room for new gains. In our view, these two currencies should see a positive start to the week. In the case of the koruna, however, the falling interest rate differential will play against it. Thus, we expect the koruna to move lower to 23.60 EUR/CZK and for the forint to 380 EUR/HUF.  Frantisek Taborsky  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Collapse Of The Silicon Valley Bank Weakened The Dollar And USD/JPY But Supported EUR/USD, AUD/USD, And GBP/USD

The Collapse Of The Silicon Valley Bank Weakened The Dollar And USD/JPY But Supported EUR/USD, AUD/USD, And GBP/USD

Kamila Szypuła Kamila Szypuła 13.03.2023 11:40
The dollar fell on Monday on heightened expectations the Federal Reserve will be less aggressive with monetary policy as authorities stepped in to limit the fallout from the sudden collapse of Silicon Valley Bank. The U.S. government announced several measures early in the Asian trading day, saying all SVB customers will have access to their deposits starting on Monday. Tomorrow’s US CPI report will make things interesting should inflation come in higher than expected, making the Fed’s task that much harder. USD/JPY The yen pair started the new week at the level of 134.8590 and in the first trading hours it was in the range of 134.25-134.75. USD/JPY then started a dip towards 133.75 but rebounded back to near 134.75. In the European session, USD/JPY fell again, but this time towards 133.00. At the time of writing, the yen pair is trading around 133.40. Concerns about the imposition of a global economic action continue to weigh on investor sentiment, which in turn favors a safe haven for the Japanese yen (JPY) and puts some downward pressure on the major currency. Both added further fueled by recent Chinese volume data, which appear to have left domestic demand weak and lowered on a strong recovery in the world's second-largest economy. However, any significant pullback in USD/JPY still seems elusive amid expectations that the Bank of Japan (BoJ) will remain dovish to support a fragile domestic economy. In fact, the new BoJ governor, Kazuo Ueda, recently stressed the need to maintain ultra-loose policy settings and said the central bank is not aiming for a quick turnaround from a decade of massive easing. Bets were further raised after the release of the final GDP printout, which showed Japan's economy narrowly avoided a technical recession in the final months of 2022. EUR/USD The euro pair started the day at 1.0686, but started falling. After the decline, the EUR/USD pair gained momentum and exceeded 1.07. In the following hours, the EUR/USD pair traded in the 1.0720-1.0730 range. In the European session, the euro fell again below 1.07 and at the time of writing trades above 1.0670. EURUSD rose overnight to a new monthly high of 1.0737 as the USD sell-off continued. At the European open, EURUSD pulled back slightly, flirting again with 1.0700 as markets scrutinize the SVB news and emergency measures taken by the US authorities to ensure confidence in the banking sector. Regulators have confirmed that the Bank's customers will have access to their deposits on Monday, while launching a new facility to give banks access to emergency funds.  EURUSD continues to look more favorable going forward as market participants dropped expectations for a 50bps hike by the Federal Reserve at its March meeting on Friday. This is in contrast to the European Central Bank (ECB), whose interest rate decision will be taken on Thursday, with consensus and market participants favoring a 50 basis point hike. GBP/USD GBP/USD started the day at 1.2077 and the first moves were similar to the euro. In the Asian session, the pair of the cable crossed the level of 1.2125, but did not maintain momentum and started a downtrend that is still ongoing. At the time of writing, GBP/USD is below 1.2075. AUD/USD The movement of the Australian pair is like the euro. AUD/USD started trading at 0.6633 and then fell towards 0.6600. After the decline, the Aussie pair rose and for the next hours of trading in the Asian session it was in the range of 0.6660-0.6670. In the European session, the AUD/USD pair started a downward move towards 0.6610. At the time of writing, the trading level of the Aussie pair was below 0.6620. The Australian dollar gained support on Monday morning after continued concerns over the collapse of the Silicon Valley Bank. The result was a dovish overestimation of Fed interest rates. Money markets have drastically reduced the potential for a 50bps towards a 25bps increment. Source: finanace.yahoo.com, investing.com
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

The Fed May Likely Take A Pause In March Until U.S. Regulators Provide Significant Liquidity

InstaForex Analysis InstaForex Analysis 13.03.2023 13:16
The EUR/USD pair soared at the start of the new trading week, testing the 7th figure. The dollar was under pressure amid the unfolding crisis in the U.S. banking sector. The collapse of Silicon Valley Bank triggered the price turbulence at the currency market, and this turbulence was not in favor of the U.S. currency. Yesterday it became known that another large bank (Signature Bank) collapsed in the United States, thereby increasing panic moods among investors. Additional pressure on the greenback came from Goldman Sachs, whose currency strategists have radically revised their expectations regarding the prospects for a Fed rate hike in March. As a result, the U.S. dollar index updated almost a month low today, reflecting the general situation in the foreign exchange market. Bank Crash and its Consequences Signature Bank closed this week, which had $110 billion in assets at the end of last year. It had an extensive network of branches (about 40 in most states of the country) and almost 2,000 employees. The regulator decided to close the bank "because of systemic risks." The U.S. Treasury, Federal Reserve and the Federal Deposit Insurance Corporation issued a joint statement saying depositors will receive reimbursements—taxpayers would not suffer any losses. Recall that at the end of last week, another large bank went bankrupt in the United States—Silicon Valley Bank—whose assets were estimated at more than $200 billion. The U.S. authorities are now taking active steps to address the growing concerns of bank customers about the security of their deposits. And not only of a verbal nature. For example, the Federal Reserve announced the creation of a credit fund for the country's banks. A new Bank Term Funding Program will be created, offering loans for up to one year to banks, pension funds, credit unions and other institutions secured by U.S. Treasury obligations, agency debt obligations, etc. Representatives of the Fed did not name a specific figure for the size of the new loan program, but made it clear that it would be very significant. According to the statement of the U.S. Treasury Department, the agency plans to allocate up to $25 billion from the Exchange Stabilization Fund to support financing of the program. At the same time, the Fed, according to the statement, "does not expect that there will be a need to use these additional funds." During Monday's U.S. trading session, U.S. President Joe Biden will issue a special statement on the banking sector to calm the panic that apparently still hovers among investors. SVB, Goldman Sachs, and the Fed The SVB bankruptcy is the largest since the 2008 financial crisis. Overall, the collapse of two large banks is a serious stress test for the U.S. financial system. But still, according to many experts, this situation will not trigger a major financial crisis in the U.S. (with the same analogy in 2008). But how would this affect the resolve of the Fed members, who have been hawkish for the past weeks? Less than a week ago, on Tuesday, the market began discussing the increased probability of a 50-point hike at the Fed's March policy meeting. Whereas today there are already opposite assumptions—that the Fed might not raise rates this month. At least, that was the forecast made today by Goldman Sachs strategists. In their opinion, the regulator will take a short-term pause in the light of the serious stress in the U.S. banking system. As for the further prospects, Goldman Sachs analysts expect three 25-point hikes in May, June and July. Such a sharp reversal in expectations put pressure on the greenback, which sank across the market. Conclusions The Fed may likely take a pause in March until U.S. regulators provide significant liquidity to banks facing deposit outflows and build depositor confidence. According to the CME FedWatch Tool, there is now a 92% chance of a 25-point rate hike at the end of the Fed's March meeting. Meanwhile, at the beginning of last week the market was almost certain (75%) that the regulator would implement a 50-point scenario. As you can see, the hawkish expectations are indeed declining, putting pressure on the dollar. The complexity of the situation is also in the fact that from today the so-called "silence mode" is in effect: within 10 days before the meeting, members of the Fed do not have the right to announce their position in public. This puzzle will get more complicated tomorrow (March 14) when the data on U.S. inflation growth will be released. If the CPI comes out in the green again, the dollar will regain some of its lost ground. If inflation slows down more than expected, the EUR/USD might hit the upper boundary of the Kumo cloud, i.e., 1.0800 resistance level. In conditions of such uncertainty for the pair, it is advisable to maintain a wait-and-see attitude.   Relevance up to 10:00 2023-03-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337404
The EUR/USD Price May Fall Under 1.0660

The EUR/USD Price May Fall Under 1.0660

InstaForex Analysis InstaForex Analysis 14.03.2023 08:03
The euro's growth, as well as other counter-dollar currencies, while the stock market is falling is a delayed response. Of course, this is due to investors' worries about the Federal Reserve's easing of the monetary policy due to the start of the banking crisis - the bankruptcy of Silicon Valley Bank, the 16th largest bank by capitalization in the U.S.. Market participants are now laying odds of an 82% rate hike at the next Fed meeting of 0.25%. If we go back to 2008, then the crisis began with the bankruptcy of the investment bank Bear Stearns (ironically - on March 14, and 2 days later it was bought by JPMorgan Chase for a whopping $236 million). But in the spring of 2008, besides Bear Stearns, about 10-15 banks went bankrupt, and this had almost no effect on the markets, the optimism of unbridled growth was so great, and oil was already approaching $120 per barrel (a record of 147.27 WTI in July 2008). But now the Fed's response to Silicon Valley Bank's bankruptcy was swift, providing credit financing to all needy banks for 1 year. But if the banks "go bust," this is already a crisis, and the dollar will rise on it. In the current situation, the dollar may be helped by today's U.S. inflation data. The core CPI for February is expected to rise by 0.4%, on an annualized basis it may decrease to 5.5% from the previous 5.6%. Overall CPI for the month may also show an increase of 0.4%, and in annual terms may be down to 6.0% from 6.4% y/y in January. Earlier we wrote that CPI at 6.0% is high enough and unlikely to be able to influence a softening of the FOMC stance. Now we can add to that that the Fed does not believe in a crisis either. We think the markets have rushed to the other extreme, forgetting to think about a 0.50% rate hike at the next central bank meeting. So, this morning the EUR/USD pair turned down, without reaching the target range of 1.0758/87. Perhaps this is no longer necessary, since yesterday, according to brokers, the stops above 1.0700 were knocked out of the market. The signal line of the Marlin oscillator is already turning down on the daily-chart. Now, the price may fall under 1.0660 and finally close Monday's gap. The second target is 1.0595. On the four-hour chart, the Marlin oscillator is preparing a relatively strong pivot. But in order to confirm the reversal it is necessary to overcome 1.0660. Let's wait and observe.     Relevance up to 04:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337474
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

Paolo Greco Paolo Greco 14.03.2023 08:05
5M chart of EUR/USD On Monday, EUR/USD continued to trade in "Friday mode". That is, quite volatile and at the same time, with a clear upward bias. In our fundamental article, we have already analyzed the reasons for the euro's growth (or more exactly, the dollar's fall). On the 5-minute chart, you can see that the pair managed to grow considerably as well as fall during the day. And this happened despite the fact that there were no macro data released during the day. However, U.S. President Joe Biden delivered a speech and the FOMC meeting was held, at which the issue of the stability of the banking system after the collapse of two large banks was decided. This news became the drivers on Monday, though it was rather difficult to say which one of them had an effect on the pair and at what time. Speaking of yesterday's trading signals, everything was as simple as possible. The price fell to the area of 1.0658-1.0669 in the middle of the European session, from which it bounced. After a buy signal appeared, the pair went up about 50 pips, which traders could take advantage of by opening a long position and closing it manually in the evening. So, the day was quite good, in terms of trading. Although the movements, of course, were mixed. COT report: A new COT report came out on Friday... for February 21... That was almost a month ago, while the report of February 14 has disappeared... It seems that the Commodity Futures Trading Commission will now publish reports with a month's delay for some time. In the event of this, the reports will hardly be of great importance. Recall that there was a failure in the CFTC, so the data we receive now is considered irrelevant. So far, we can say that in the last few months, the overall picture has been corresponding to the market situation. On the chart above, we see that the net non-commercial position of large traders (second indicator) has risen since September 2022. At about the same time, the euro started to rise. The net non-commercial position is bullish and continues to increase with each new week, allowing us to expect the uptrend to stop shortly. Such a signal comes from the first indicator, with the green line and the red line being far apart, which is usually a sign of the end of a trend. The euro has already begun its bearish move against the greenback. So far, it remains unclear whether it is just a downward correction or a new downward trend? According to the latest report, non-commercial traders closed 100 long positions, and 1,300 short ones. Consequently, the net position rose by 1,200. The number of long positions exceeds that of short ones by 165,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue. 1H chart of EUR/USD On the one-hour chart, EUR/USD surged, but in general, the entire movement still appears more like a "swing" than a trend. I am quite sure that the pair might start to sharply fall this week, since it did not have such strong reasons to grow. The market is still in an impulsive state, but sooner or later it will calm down. During that time, we should expect a resumption of more or less logical and reasonable movements. On Tuesday, important levels are seen at 1.0537, 1.0581, 1.0658-1.0669, 1.0762, 1.0806, 1.0868, 1.0938, and also Senkou Spahn B lines (1.0610) and Kijun Sen (1.0637). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On March 14, the market will be focused on the U.S. inflation report. There are no important reports or events planned for the EU. In addition, the market may continue to be under the impression from the bankruptcy of the two U.S. banks. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.   Relevance up to 01:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337460
Technical look: Euro against US dollar - what can we expect from the pair?

The Pair EUR/USD Has Stabilized Once More

Paolo Greco Paolo Greco 14.03.2023 08:10
The EUR/USD currency pair demonstrated on Monday what to anticipate from it this week. To be more exact, market participants' present sentiments were reflected in the second half of last week. We have already mentioned that the moves on Wednesday, Thursday, and Friday are very difficult to call reasonable and logical. But, although two extremely significant events occurred last week, this is the case. These are the Friday release of labor market data and the Tuesday address by Jerome Powell to Congress. As we can see, these events were sufficient to cause traders' short-term mood to change to "bullish," and both technical pictures were in danger of being canceled. Recall that we have been anticipating a decline in the euro and the pound for a while, but something stands in the way of this possibility every time. In addition to the ECB meeting, other macroeconomic indicators will be released in the upcoming week. Even though we do not anticipate any surprises from the European Regulator, it is important to keep in mind that market reactions can occasionally be abrupt and forceful. And once again, everything will depend on how the market perceives the facts. And it is free to be interpreted (in its present form) as you like. It should be highlighted that the technical picture has not yet been broken and may continue in its current form before moving on to the analysis of forthcoming events. To be more exact, everything now rests on overcoming the key line on the 24-hour TF. The departure of the pair from the Ichimoku cloud increased predictions of a further drop. Yet, as we can see, things are shifting far too quickly. Currently, a new fall of the pair, which objectively should be stronger than the level of 1.0515, can easily be triggered by Kijun-sen's rebound. Yet, growth may continue for a while if it consolidates above the crucial line, and the last local maximum is not too far away. The market is currently in an exciting mood, so we can anticipate any developments, but we see no reason to resume the upward trend. It's going to be a great week. The first European Union data will only start to come in on Wednesday. The release of the January industrial production report will be the catalyst for everything. This report is very difficult to categorize as "important" at the moment, but it has the potential to generate a 20–30 point response. The ECB will then hold a meeting on March 16, during which time the key rate may increase by an additional 0.5% to 3.5%. We continue to believe that the market has already factored in this increase and that a total rate of 3.5% or even 3.75% (if we include the next increase in May) will be insufficient to appreciably slow inflation. So the euro shouldn't increase, on the one hand, and Christine Lagarde's rhetoric might take on new "hawkish" overtones, on the other. She earlier stated that rates will likely need to be raised more than initially anticipated, along with nearly all other members of the ECB monetary committee. Nevertheless, who believed that a 3.5% interest rate would be sufficient to reduce inflation from "over 10%" to "2%"? The need to increase the rate to a minimum of 5–6% was clear from the start. Another question is whether the ECB can afford to tighten monetary policy so drastically. We have our doubts about this, and Ms. Lagarde can respond to them. The February inflation report will be released on Friday. Forecasts predict a "mind-boggling" slowdown from 8.6% to 8.5%, which supports the necessity of tightening monetary policy even more. And, once again, everything will be determined by Lagarde's rhetoric on Thursday, her pronouncements and speeches, and her colleagues in the next few weeks and months. If concurrently similar signals from the Fed are not given, the tightening of rhetoric will help the euro. A slight decrease in the consumer price index at this time is by no means a guarantee that the rate will increase in strength and duration. The capabilities of the ECB and the condition of the European economy will be crucial factors in everything. And the only sources from which we can learn about this are the pertinent reports and the members of the monetary committee. As of March 14, the euro/dollar currency pair's average volatility over the previous five trading days was 96 points, which is considered "high." Hence, on Tuesday, we anticipate the pair to move between 1.0646 and 1.0838. The Heiken Ashi indicator's downward turn will signal a potential continuation of the downward movement. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trade Suggestions: The pair EUR/USD has stabilized once more above the moving average line. Until the Heiken Ashi indicator turns down, you can continue holding long positions with targets of 1.0838 and 1.0864. After the price is fixed below the moving average line, short positions can be opened with a target of 1.0498. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 01:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337464
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

Oscar Ton Oscar Ton 14.03.2023 08:14
Technical outlook: EURUSD rallied past 1.0740 on Monday before hitting resistance and pulling back. The single currency pair slipped below 1.0700 in the early hours on Tuesday and is seen to be trading close to 1.0705 at the time of writing. If prices break above 1.0740 from here, the bulls will attempt to push through the 1.0800-50 zone before giving up. On the flip side, a drop below 1.0650 will indicate that the bears are poised to drag towards 1.0600 at least before EURUSD could find the next support. The near-term wave structure indicates a slight corrective drop towards 1.0600 before resuming higher again. The key level to watch out for is 1.0524, which should hold for the bulls to remain in control. EURUSD is structurally working on a larger-degree upswing between 0.9535 and 1.1030. The single currency is unfolding a corrective wave, which has the potential to terminate towards 1.0100 going forward. A high probability remains for prices to test the 1.0800 zone before the bears are back in control. Ideally, prices should stay below 1.1030. Trading idea: A potential drop will resume towards 1.0100 soon. Good luck!     Relevance up to 08:00 UTC+2 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315941
EUR/USD Pair Has Potential For The Downside Movement Today

EUR/USD Pair Has Potential For The Downside Movement Today

Peter Jacimovic Peter Jacimovic 14.03.2023 08:22
Technical analysis: EUR/USD has been trading upside in the background but I found rejection of the key resistance Fibonacci zone at 1.0720 Due to the rejection of the key resistance zone and overbought reading, I see potential for the downside movement today. Downside objective is set at the price of 1.0580 Stochastic oscillator is showing fresh downside cross, which is another good sign for the further downside movement. Key resistance is set at the price of 1.0720/40   Relevance up to 08:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315963
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

ECB Expectations Soften Sharply, No Consensus About What The Fed Will Do Next

Swissquote Bank Swissquote Bank 14.03.2023 10:22
Monday was yet another ugly day for bank stocks around the world, as the selling pressure continued following the SVB debacle in the US last week. The money flew into the safe havens. Yields Treasury yields around the world tumbled sharply. The S&P500 was flat, while technology stocks and gold rallied. Fed For now, the pricing on Fed funds futures suggests that there is slightly more than 70% chance of a 25bp hike next month, and slightly less than 30% chance for no rate hike. US CPI But the expectations could easily change after US CPI data due later today. Both headline and core inflation are expected to have eased in February, but investors are cautious given that last month’s disappointment could be repeated this month. Eurozone In the Eurozone, traders now see less than a 50% chance for another 50bp hike from the European Central Bank (ECB) this Thursday, and the expectation of the peak ECB rate fell below 3.5%, from around 4% last week. But despite the softening ECB expectations, the EURUSD flirted with 1.0750 yesterday, as the US dollar sank deeper across the board. Watch the full episode to find out more! 0:00 Intro 0:42 Banks down, treasuries up 3:35 No consensus about what the Fed will do next 4:14 How could US CPI shape Fed expectations? 7:06 Tech, gold rally on tumbling yields 8:42 ECB expectations soften sharply, as well. Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #inflation #CPI #data #bank #crisis #Fed #rate #expectations #USD #ECB #EUR #XAU #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Gold Trading Analysis: Technical Signals and Price Movements

EUR/USD, GBP/USD And AUD/USD Is Trading In Red, Only USD/JPY Is Positive

Kamila Szypuła Kamila Szypuła 14.03.2023 11:34
The dollar rose in somewhat calmer trading on Tuesday after collapsing on Monday following the collapse of Silicon Valley Bank (SVB) as investors waited for the release of US consumer inflation data later in the day. Tuesday's data on the Consumer Price Index (CPI) could potentially fuel further volatility in global markets, coming a day after fears of a potential banking crisis caused traders to quickly lower their expectations of a Federal Reserve rate hike. Over the weekend, US authorities took emergency action in response to the collapse of the SVB, promising depositor protection to bolster bank confidence. US President Joe Biden on Monday announced measures to ensure the security of the banking system. USD/JPY The yen pair started the day at 133.0870. The USD/JPY pair rose towards 134.00 in the first hours of trading, but failed to maintain momentum and fell towards 133.25. From then on, USD/JPY traded around 133.50 until the end of the Asian session. In the European session there was an upward impulse and the yen pair breaks through 134.00. At the time of writing, USD/JPY is above 134.10. EUR/USD The Asian session for the euro pair, which started Tuesday's session at 1.0727, was bearish. At the end of the Asian session, EUR/USD fell below 1.07. The European session brought an upward impulse to the EUR/USD pair and the trade rebounds above 1.07 again. The euro is trading cautiously this morning which is to be expected as markets prepare for the upcoming US CPI report. Meanwhile, markets are also trying to figure out whether SVB collapse will influence the European Central Bank's (ECB) rate decision later this week. ECB policymaker Yannis Stournaras said on Tuesday that he does not see any impact from the collapse of Silicon Valley Bank (SVB) on Eurozone banks. Although the ECB is in quiet period, the Euro could stay resilient against its rivals in case other ECB policymakers deliver similar comments. GBP/USD The cable pair started Tuesday's session at the level of 1.2168 and, just like the euro pair, was in a downward move in the Asian session. Towards the end of the Asian session, the GBP/USD pair got a strong upward impulse towards 1.2180. In the European session, the pound pair again started to fall towards 1.2150. At the time of writing, GBP/USD is trading above 1.2160. Early Tuesday, the data published by the UK's Office for National Statistics showed that the Unemployment Rate remained unchanged at 3.7% in three months to January. More importantly, annual wage inflation in the three months to January, as measured by Average Earnings Including Bonus, declined to 5.7% from 6% in December. Similarly, Average Earnings Excluding Bonus retreated to 6.5% in the same period from 6.7%. AUD/USD The Aussie pair started trading at 0.6656 and like the European pairs the first move was down. Still in the Asian session, the AUD/USD pair rebounded and grew towards 0.6672. The upward momentum was not maintained in the European session and the pair of the Australian pair started a downward move towards 0.6645. At the time of writing, AUD/USD is trading at 0.6651. Most Asian currencies weaken against the USD in the morning session amid higher Treasury yields. Source: investing.com, finance.yahoo.com
USD Stable as Oil Prices Rebound Ahead of US CPI Report Release

EUR/USD Pair And GBP/USD Pair May Back To Their Bearish Moods

Jakub Novak Jakub Novak 14.03.2023 12:33
The unexpected crisis in the US banking sector has crushed all hopes for a new acceleration in the pace of interest rate hikes. Goldman Sachs economists said they no longer see the Fed raising rates next week, even after US authorities took steps to contain the crisis caused by the collapse of Silicon Valley Bank and Signature Bank. This caused two-year Treasury bond yields to fall by 18 basis points to 4.34%, reaching its sharpest three-day drop since October 1987. Expectations of a less aggressive policy stance and sharp demand for German bonds also affected the euro. Interest rate Most likely, Fed officials will announce a pause in interest rate hikes this week ahead of their meeting on March 21-22. Economists were expecting to see around 0.25% to 0.5% increase earlier, but everything changed since last Sunday, when US authorities had to act very quickly in order to contain the spreading of SVB's problem to other US banks. The Fed had to open an emergency line of credit, allowing banks to pledge a range of high-quality assets to obtain cash for a period of one year. They also pledged to fully protect uninsured depositors in SVBs, as well as relax lending conditions through the Fed's discount window. These measures should provide liquidity shortages to banks. Now, the Fed is expected to raise the rate by a quarter point next week, which means that the peak will be around 5.1% in six months, slightly lower than the previously projected 5.74%. USD The current situation is quite negative for dollar as it most certainly raises risk appetite. However, market players should keep in mind that if the crisis in the US banking sector is not solved quickly, it will spread to other regions, which will result in a collapse in other currencies such as euro and pound. US economy Ahead is an important US report, that is, the inflation data for February this year. Economists are predicting that the index will show a 0.4% increase, slightly lower than the previous month's 0.5%. Yearly data should be 5.5%, which is also lower than the 5.6% earlier. Euro Demand for euro has intensified after all the news, so buyers have a chance to continue building the new upward trend. However, the quote needs to stay above 1.0700 as only by that will euro go beyond 1.0730 and head towards 1.0770 and 1.0800. Should the quote decline below 1.0700, EUR/USD will slip to 1.0666. Pound In GBP/USD, bulls also control the market, but the quote needs to stay above 1.2130 so that pound could have the chance to break through 1.2170 and head towards 1.2215 and 1.2265. If bears manage to gain control, the pair may dip to 1.2080 and 1.2050.a     Relevance up to 08:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337507

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