(News Bulletin 247) – After the Euro’s violent bearish outburst last week, catalyzed by the tone of the Fed and the global drying up of risk appetite on the financial markets, the time has come for consolidation on the EURUSD currency pair. It will be interesting to assess its shape, to best anticipate the formation of a new bearish entry point. The week will be rich, with the backdrop of the evolution of exacerbated geopolitical tensions between Moscow and Kiev, and the potential consequences of Western sanctions on energy prices.
The past week, at high risk, will have been marked by the FOMC of the Fed. If, as widely expected, no hike in federal rates was on the agenda – the tap will start to be tight in March -, Mr J. Powell remained evasive in distilling the calendar indices on the rate of rise of the Fed Funds in 2022. In the end, it was impossible for the operators to refine the number of increases (3? 4? 5?).
In the end, a scenario, which seemed “extreme” even a few weeks ago, of five Fed Funds hikes over the year, with a “double blow” why not as early as March, does not is not totally excluded from the universe of possibilities.
Statistically, the week will be marked by a battery of PMI activity indicators in the Euro Zone tomorrow in final data for January, inflation figures in the Euro Zone on Wednesday and the ADP survey on American employment, the of the Governing Council of the ECB on Thursday and the monthly federal employment report on Friday.
For the time being, forex traders were able to take note of the preliminary data for the Euro Zone, for the fourth quarter as a first estimate, at +0.3%, slightly below expectations on a quarterly basis. To follow the Chicago PMI at 3:45 p.m.
On Friday, the main “macro” meeting was the PCE (Personal Consumption Expenditures) prices, the Fed’s favorite barometer for taking the temperature of prices, even before the CPIs. They rose in December at a monthly rate of 0.5%, in line with expectations, according to the Bureau of Economic Analysis, on a basis excluding energy and food (the most volatile elements of the basket).
At midday on the foreign exchange market, the Euro was trading against 1,1160$ about.
KEY GRAPHIC ELEMENTS
The breakout of $1.1260 rhymed with a powerful increase in volatility. the spot is now visiting levels not seen since the end of May 2020. As seen in the preamble, the exercise now consists of assessing what the shape of the consolidation to come may be in order to optimize a new bearish entry point. We prefer to stay, during this wait, out of the spot.
MEDIUM TERM FORECAST
In view of the key graphic factors that we have mentioned, our opinion is neutral in the medium term on the Euro Dollar (EURUSD).
We will keep this neutral opinion as long as the Euro Dollar (EURUSD) parity prices are positioned between the support at 1.1116 USD and the resistance at 1.1183 USD.
CHART IN DAILY DATA
©2022 News Bulletin 247
Source: Tradingsat
I am currently a news writer for News Bulletin247 where I mostly cover sports news. I have always been interested in writing and it is something I am very passionate about. In my spare time, I enjoy reading and spending time with my family and friends.
