Euro / U.S. DollarShort
EUR/USD why investors stop the fall? 1.2300 round level?
As was mentioned in previous ideas this week, despite the upbeat economic recovery in the U.S. the price is raising, in this post I will remind for what reason this is happening, and I will mention the new fundamentals and how they can affect the direction.
FUNDAMENTAL KEY QUOTES
- EU will raise some 80 billion euros in bonds and billions more in bills to finance the EU's jointly backed stimulus, but it is not certain that each member will get the money they expect ( this is a totally opposite sign of tapering, also means that the next ECB interest rate is almost sure to be 0, raising bonds at a time of no inflation is good for the currency but as EU is facing a high inflation, this idea would be negative for the EUR ).
- EU states agreed to let the European Commission raise up to 800 billion euros in debt by 2026.
- EU faces costly summer as prices test central banker's resolve on stimulus as the region's delayed economic recovery unleashes surging demand (HIGH INFLATION).
- U.S. took another step toward starting economic and trade talk with China.
- Drop in German retail sales (Calendar).
Why the price is raising following all these fundamentals supporting USD appreciation?
- I would say the market is taking an excuse of the U.S. high inflation and the easy monetary policy to create a something called a take profit move (consolidating above 1.2250, before the big drop to 1.2050 happens, and in my previous posts I mentioned that in such situations usually the price rises to the max (near round level) before the big drop happens. The investors target is to consolidate few hours or maybe a day above the 1.2250.
- Accordingly it is wise to sell at 1.2250 (lowest risk and give a room to hold more positions at 1.2280-1.2300 if happens to be tested), also was mentioned in my previous post it is wise to take into account that the fake out of 1.2280 - 1.2300 is highly expected before the drop (not 100% shall be but highly expected).
-- THIS PICTURE REMAINS ONLY TILL ANY UPCOMING NEWS AND DATA, SO I WILL UPDATE ACCORDINGLY --
FUNDAMENTAL KEY QUOTES
- EU will raise some 80 billion euros in bonds and billions more in bills to finance the EU's jointly backed stimulus, but it is not certain that each member will get the money they expect ( this is a totally opposite sign of tapering, also means that the next ECB interest rate is almost sure to be 0, raising bonds at a time of no inflation is good for the currency but as EU is facing a high inflation, this idea would be negative for the EUR ).
- EU states agreed to let the European Commission raise up to 800 billion euros in debt by 2026.
- EU faces costly summer as prices test central banker's resolve on stimulus as the region's delayed economic recovery unleashes surging demand (HIGH INFLATION).
- U.S. took another step toward starting economic and trade talk with China.
- Drop in German retail sales (Calendar).
Why the price is raising following all these fundamentals supporting USD appreciation?
- I would say the market is taking an excuse of the U.S. high inflation and the easy monetary policy to create a something called a take profit move (consolidating above 1.2250, before the big drop to 1.2050 happens, and in my previous posts I mentioned that in such situations usually the price rises to the max (near round level) before the big drop happens. The investors target is to consolidate few hours or maybe a day above the 1.2250.
- Accordingly it is wise to sell at 1.2250 (lowest risk and give a room to hold more positions at 1.2280-1.2300 if happens to be tested), also was mentioned in my previous post it is wise to take into account that the fake out of 1.2280 - 1.2300 is highly expected before the drop (not 100% shall be but highly expected).
-- THIS PICTURE REMAINS ONLY TILL ANY UPCOMING NEWS AND DATA, SO I WILL UPDATE ACCORDINGLY --
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.