The EURUSD pair traded higher on Monday, November 8, up 0.17% to 1.1587. Buying picked up during the European session as the dollar started losing ground across the board. Market participants pushed ahead with a 5-day rally, brushing aside a slight recovery in the UST10 yield and speeches by Fed members.
Image Source: Pixabay
US Federal Reserve Deputy Head Clarida said the necessary conditions for raising the target range for the federal funds rate will likely be met by year-end 2022.
St. Louis Fed President Bullard sees two rate hikes in 2022.
ECB chief economist Philip Lane said supply bottlnecks and rising energy prices are the main risks to the economic recovery and the inflation outlook.
Today’s macro agenda (GMT +3)
- 10:00 Germany: trade balance (September)
- 13:00 Germany: ZEW economic sentiment index (November) and current conditions (November)
- 16:00 EU: ECB President Lagarde speech
- 16:30 US: PPI (October)
- 17:00 US: Fed Chair Powell speech
- 19:00 UK: BoE Governor Andrew Bailey speech
- 19:35 US: FOMC member Mary Daly speech
Current outlook
On Tuesday morning, major currencies have been trending higher against the dollar except for the aussie. EURUSD has recovered to $1.1607 and by the time of writing was trading at $1.1599.
The focus of traders' attention has shifted to the upcoming speeches by Fed Chair Jerome Powell, BoE Governor Andrew Bailey, and ECB President Christine Lagarde for some fresh clues about monetary policy.
Investor attention is also riveted on who will be named as Chairman of the Federal Reserve in 2022. Biden is expected to make a decision on this issue by Thanksgiving. The top contenders are Leil Brainard and Jerome Powell. Experts believe that the dollar will take a hit if Lael Brainard gets the nod.
Consumer inflation data will be released stateside on Thursday. This report should shed light on the Fed’s future monetary policy settings.
Technical analysis
The DXY index broke through the 94.15 and 94.03 levels. Amid a rising euro, there is a risk of a decline to 93.82. EURUSD recovered to 1.1606. Growth has slowed down near the resistance, which is the upper line of the channel, which consists of three points: 1.1535-1.1513 and 1.1616).
From a low of 1.1513 to 1.1606, the rally has a five-wave structure in the form of a leading diagonal triangle. If there is no sharp decline before the close of the European session, we could see a leg up to 1.1650. There are two support levels at 1.1590 and 1.1575.
Comments
Log in or sign up to join the conversation.