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.
EUR/USD: forecast for Dec. 18-22
During the past week, EUR/USD tested levels above 1.1850, but then returned to 1.1800.
The main event of the week was the meeting of the European Central Bank. The regulator raised growth and inflation forecasts for the euro area, but signaled it would maintain stimulus for as long as needed. ECB President Mario Draghi sounded cautious about the prospect of inflation picking up, so clear message is that even though the economy is improving, the ECB has no plans to raise interest rates anytime soon. It discouraged buyers of the euro. At the same time, the USD hasn’t been particularly strong as well. That’s why the pair still has support and resists major declines.
European economic calendar is light: final CPI is due on Monday and German business climate will be released on Tuesday. The main market moves will be the figures from the US.
If EUR/USD manages to rise to resistance at 1.1850 and 1.1915, sellers will likely appear and a decline will follow. A break of support at 1.1700 will bring the pair to 1.1605 and 1.1580.
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.