EUR/USD fell last week to 3-week low of 1.1730, although the European economic data were generally good. This decline may be partly explained by the US dollar’s increase and partly by political problems in Germany and the ECB’s policy.
The meeting of the European Central Bank on Thursday is expected to be relatively quiet as policy changes are unlikely. Still, the ECB will release updated estimates for economic growth and inflation. These figures will include the first projections for 2020 – this should give the market long-term perspective. In addition, traders should listen carefully to what language the ECB president Mario Draghi uses during the press conference. Dovish comments will weight on the euro, while any less dovish statements will lift the single currency. The first scenario looks more likely. Other data releases from the euro area this week include German ZEW economic sentiment in Tuesday and the regions flash manufacturing & services PMIs on Thursday.
Decline below 1.1700 will bring EUR/USD to the big support at 1.1615 (200-day MA) and 1.1580. Here sellers will likely close positions and the decline will stop. On the upside resistance is at 1.1815 and 1.1860 ahead of 1.1930. If the euro somehow manages to go this far, we expect sellers to appear and make the advance halt.
The Federal Reserve speeds up its quantitative tightening, and this is certainly bullish news for the USD. At the same time, this is a negative factor for the American stocks, which have entered their seasonally worst month.
Last week the speech of the Fed's Chair Jerome Powell led to big swings in the market. The USD jumped, while EURUSD and GBPUSD revisited lows. Gold and US500 also got under pressure.
The gold has made a perfect retest, but will it hold against the rising dollar? Also, the Jackson Hole Symposium and Jerome Powell's speech may become critical for most assets, and finally, more economic releases and earnings reports await you.
Although the last week was intense, this one may be more dynamic and volatile. After the FOMC meeting and controversial decisions from the Bank of England, we saw a historical pound decrease, and the gold plunge. And there’s even more for you.
After the US CPI last week came out above the forecast, traders started expecting a 75-basis point rate hike…
In this video, we will talk about the potential change of a trend in the euro, another stock rally amid a global downtrend, gold prospects, and news that shakes the world right now. It’ll be a helpful video you don’t want to miss.
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