2023-09-15 • Updated
The European Central Bank (ECB) has raised interest rates by 25 basis points, marking its tenth consecutive rate hike since July 2022 and bringing the total increase to 450 basis points. The ECB is primarily concerned about high inflation levels, both current and projected, with concerns extending into the future. GDP growth projections for the eurozone have been revised downward for 2023, but the ECB views this as a temporary slowdown rather than a long-term issue. The rate hike represents a compromise to address both inflation worries and a weakening growth outlook. While future rate hikes are not completely ruled out, economic uncertainties make them unlikely, and the ECB will assess the impact of recent rate increases before considering further action.
EURUSD - D1 Timeframe
As seen from the chart, EURUSD on the daily timeframe dropped further into the pivot zone following the release of the ECB rates decision, creating the third consecutive low of a double divergence. Considering this, in conjunction with the bullish array of the moving averages and the presence of the pivot zone, it seems safe to expect a bullish price action going forward.
Analyst’s Expectations:
Direction: Bullish
Target: 1.08401
Invalidation: 1.06039
EURNZD - D1 Timeframe
The attached chart reveals that EURNZD has been trading inside a rising channel for some time now, with its most recent move being a touch of the support trendline. Considering how the trendline and the 50-day moving average align perfectly on top of each other, I hope to see the bullish pressure resume in the market successively.
Analyst’s Expectations:
Direction: Bullish
Target: 1.82887
Invalidation: 1.79437
EURCHF - D1 Timeframe
EURCHF, at the moment, is completing a retest of the demand zone yet again following the release of the ECB rates decision. This, for me, is often an indication of a reluctance of price to ‘move on’ from the demand zone, implying a likelihood of a breakout. In this case, however, I will follow the price action closely on the lower timeframe in search of clues as to the direction price intends to go.
Analyst’s Expectations:
Direction: Bullish
Target: 0.96384
Invalidation: 0.94550
CONCLUSION
The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.
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The upcoming August inflation data may send mixed signals. The 12-month headline inflation rate is expected to rise to 3.6%, causing concerns for the Biden administration. However, core inflation, which excludes food and energy prices, is projected to decrease to 4.3%, aligning with the Federal Reserve's goals. Past price trends influence both figures, so looking at recent data for a more accurate picture is crucial.
The odds of a final interest rate hike by the US Federal Reserve (Fed) this year have dropped after US job openings hit their lowest levels since early 2021. This has led to a correction in the US Dollar as traders reduced their bets on further rate hikes.
Here we go again, my friends. It’s time to look critically into the future of what trading opportunities September might have in store for us. As always, it is essential to note that the views expressed here are mine and should not be considered financial advice without proper examination.
The past several weeks have been a real triumph for the bulls in the oil market. The Brent spot price grew by 8.5% during the last month.
Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.
Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.
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