EUR/USD inflation and monetary policy detailed analysis
Updated
1- U.S. inflation updates >>
- INFLATION STAYED HIGH IN JULY, WITH U.S. CONSUMER PRICES RISING 5.4% FROM A YEAR EARLIER -
- HIGH ANNUAL U.S. CPI DATA -
2- EU inflation updates >>
- GERMAN CONSUMER PRICE INDEX CPI (MoM) (Jul) REPORTED A MONTHLY RISE OF 0.9% -
- GERMAN INFLATION JUMPED TO THE HIGHEST LEVEL SINCE 2008 -
- EU CPI (YoY) SIGNALLED A RISE TO 2.2% FROM 1.9% PREVIOUSLY -
3- Fed monetary policy updates >>
- Fed's Bostic said the central bank could taper between October and December -
- Last week's jobs reports including today's U.S. JOLTs job openings (Jun) report happened to be upbeat to add to the progress of reaching the fed's employment goal -
4- ECB monetary policy updates >>
- There is no rush to signal the future of its pandemic bond buying according to Governing Council member Martins Kazaks. With almost 600 billion euros left to spend and the program running at least through the end of March, he says it would be much too early for a decision on whether to extend or phase out purchases -
ANALYSIS CONCLUSION
>>>> Generally the rise in the U.S. inflation should be negative for USD and fundamentally price range should break above 1.1750 to 1.1800 maximum, but as long as the Fed is shifting its tone to Hawkish and signaling that taper announcement date could be announced officially in next FOMC + Rising inflation in EU, ECB approving to be longer dovish = monetary sentiment on USD side, rejections above 1.1750 however it is still within the price range <<<<
- ACCORDINGLY AHEAD OF U.S. INITIAL JOBLESS CLAIMS REPORT = PRICE RANGE = 1.1750-1.1700 -
- ANY BREAK ABOVE 1.1750 AHEAD OF DATA TO BE CAPPED BY 1.1800 AND IS LOW EXPECTED TO HAPPEN -
- PRICE TO BREAK ABOVE 1.1750 AND HOLD ONLY IF THE REPORT HAPPENS TO BE DOWNBEAT -
- PRICE TO BREAK BELOW 1.1700 TO MAXIMUM TARGET OF 1.1650 IF REPORT HAPPENS TO BE UPBEAT -
- THIS OUTLOOK REMAINS ONLY TILL UPCOMING NEWS AND DATA THAT MAY CHANGE THE PRICE RANGE, SO I WILL UPDATE ACCORDINGLY -
- INFLATION STAYED HIGH IN JULY, WITH U.S. CONSUMER PRICES RISING 5.4% FROM A YEAR EARLIER -
- HIGH ANNUAL U.S. CPI DATA -
2- EU inflation updates >>
- GERMAN CONSUMER PRICE INDEX CPI (MoM) (Jul) REPORTED A MONTHLY RISE OF 0.9% -
- GERMAN INFLATION JUMPED TO THE HIGHEST LEVEL SINCE 2008 -
- EU CPI (YoY) SIGNALLED A RISE TO 2.2% FROM 1.9% PREVIOUSLY -
3- Fed monetary policy updates >>
- Fed's Bostic said the central bank could taper between October and December -
- Last week's jobs reports including today's U.S. JOLTs job openings (Jun) report happened to be upbeat to add to the progress of reaching the fed's employment goal -
4- ECB monetary policy updates >>
- There is no rush to signal the future of its pandemic bond buying according to Governing Council member Martins Kazaks. With almost 600 billion euros left to spend and the program running at least through the end of March, he says it would be much too early for a decision on whether to extend or phase out purchases -
ANALYSIS CONCLUSION
>>>> Generally the rise in the U.S. inflation should be negative for USD and fundamentally price range should break above 1.1750 to 1.1800 maximum, but as long as the Fed is shifting its tone to Hawkish and signaling that taper announcement date could be announced officially in next FOMC + Rising inflation in EU, ECB approving to be longer dovish = monetary sentiment on USD side, rejections above 1.1750 however it is still within the price range <<<<
- ACCORDINGLY AHEAD OF U.S. INITIAL JOBLESS CLAIMS REPORT = PRICE RANGE = 1.1750-1.1700 -
- ANY BREAK ABOVE 1.1750 AHEAD OF DATA TO BE CAPPED BY 1.1800 AND IS LOW EXPECTED TO HAPPEN -
- PRICE TO BREAK ABOVE 1.1750 AND HOLD ONLY IF THE REPORT HAPPENS TO BE DOWNBEAT -
- PRICE TO BREAK BELOW 1.1700 TO MAXIMUM TARGET OF 1.1650 IF REPORT HAPPENS TO BE UPBEAT -
- THIS OUTLOOK REMAINS ONLY TILL UPCOMING NEWS AND DATA THAT MAY CHANGE THE PRICE RANGE, SO I WILL UPDATE ACCORDINGLY -
Note
MODEST DROP IN INITITAL JOBLESS CLAIMSHIGH ANNUAL PPI, RISES TO 7.8% IN JULY VS. 7.3% EXPECTED
- PRICE IS MOSY LIKELY TO CONSOLIDATE 1.1750-1.1700 -
- FUNDAMENTALLY PRICE RANGE IS 1.1750-1.1650 -
ONLY BECAUSE OF HIGH PPI AND CPI READINGS THIS WEEK, PRICE MAY BE ABLE TO BRAK ABOVE 1.1750 TO 1.1780 BUT TO BR REJECTED BACK DOWN TO BELOW 1.1750
ALSO ANY BREAK BELOW 1.1700 WOULD BE BECAUSE OF INVESTORS OPTIMISM ON SOONER FED ANNOUNCING TAPER BUT IF IT HAPPENS ALSO WOULD BE SHORT LIVED BACK TO ABOVE 1.1700
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