2020-09-30 • Updated
ECB’s President Christine Lagarde is planning to follow the Fed’s approach and allow inflation to overheat. The Federal Reserve earlier targeted the 2% inflation, letting it to overshoot.
Lagarde claimed: “If credible, such a strategy can strengthen the capacity of monetary policy to stabilize the economy when faced with the lower bound. This is because the promise of inflation overshooting raises inflation expectations and therefore lowers real interest rates.”
Although she hasn’t imposed this approach yet, the signal was quite strong. As a result, possibly lower rates reduced the demand for the euro. Elsewhere, the German Consumer Price Index came out worse than analysts expected yesterday, marking the sharpest slump in almost five years. As you know, Germany is Europe’s largest economy, that’s why this report worried investors and weighed so much on the euro. At the same time, intense debates between Trump and Biden deteriorated the market sentiment and underpinned the USD, especially after Trump refused to approve election results in case of Biden’s victory.
The risk-off sentiment pushed EUR/USD to the downside. It has shown the worst performance in six months last week. That’s why traders have doubts that the pair will stick to its long-term uptrend. The MACD indicator has crossed the zero line to turn negative, confirming a downtrend.
On the 4-hour chart we can notice that the pair has failed to break through the 50-period moving average at 1.1710. If it manages to drop below it, the way to yesterday’s low of 1.1675 and then to the next support of 1.1615 will be open. In the opposite scenario, if it rises above the key resistance of 1.1750, it will jump to a 100-period moving average of 1.1770.
Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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