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Alexboltyan

GBP/USD tumbles toward the 20-day SMA after Fed, BoE The GBP/USD dropped sharply on Thursday, mainly due to a stronger U.S. Dollar at critical times for currency markets, following decisions from the Federal Reserve, the European Central Bank and the Bank of England. As expected, the Fed, the ECB and the BoE raised key interest rates by 50 basis points, amid high inflation. There were no surprises there. At the Fed, Chair Powell maintained a somewhat hawkish tone, which, together with the macroeconomic projections, seem to forecast higher interest rates for a longer time than previously anticipated. The dollar fell initially but then reversed and strengthened during Powell's comments. On Thursday the appreciation took another magnitude, with the added bonus of risk aversion across financial markets. Main Wall Street's indexes fell by more than 2% on worries about the global growth outlook at times of monetary tightening. Those fears about growth are more significant in the United Kingdom. The outlook led two Bank of England's Monetary Policy Committee members to vote against raising interest rates. The other seven members voted for a hike. Two votes for "no change" were the surprise, that weighed on GBP. The pound weakened further following the European Central Bank meeting. U.S. economic data released on Thursday was mixed. Friday will be the turn of the PMIs across the world, the first numbers of activity during December. Poor readings may fuel risk aversion, which would favor the dollar against the pound. The GBP/USD uptrend is still on, but it has lost momentum. Thursday's reversal is a first sign of a potential top around 1.2450. The mentioned area capped the upside during the last three trading days. The decline extended to 1.2156, slightly above the 20 and 200-day Simple Moving Average. A consolidation below 1.2100 should point to more losses in the short term. In order to recover bullish strength, GBP/USD needs to break above the 1.2320 area. Such a scenario would again expose the critical resistance at 1.2450. A daily close above this last level could anticipate the resumption of the rally.
by Alex_Boltyan_FXAnalyst
EUR/USD keeps rising after FOMC, looks at the ECB near 1.0700The EUR/USD rose again on Wednesday amid a lower US Dollar across the board, weakened after the FOMC meeting. The euro climbed to a fresh multi-month high near 1.0700. The Federal Reserve raised the key interest rate as expected by 50 basis points to 4.25 to 4.5%. The move represents a slowdown compared to the previous meetings, when it hike rates by 75 basis points. The US Consumer Price Index fell in November to 7.1% (annual), the lowest in 11 months. The decline in the annual inflation rate helped the Fed at a slower pace. Fed Chair Powell did not surprise market participants. He kept the tone of his latest comments, saying the Fed needs to continue to tighten its policy. Regarding potential rate cuts in the future, Powell said they won’t be cutting until they are confident inflation is moving toward 2%. On Thursday, the European Central Bank will have its monetary policy meeting. A rate hike of 50 basis points is expected. Also, the Bank of England and the Swiss National Bank will meet. From a technical perspective, the EUR/USD remains bullish although indicators show not much strength on the current move. A break above 1.0700 could give more momentum to the European currency. The next target is seen at June highs around 1.0780. A correction might find support near the 1.0595 area. Below the next critical area is seen around the 1.0450 area that contains the 20-day simple moving average. A break under that level could point to a change in the short-term bias from bullish to neutral/bearish.
by Alex_Boltyan_FXAnalyst
1
GBP/USD Extends Gains To Start The Week Amid Upbeat U.K. DataThe GBP/USD advances for the fourth day in a row on Monday, with the sterling gaining upward traction at the start of the week after UK GDP data while the dollar continues to face selling pressure. At the time of writing, the GBP/USD trades at the 1.2275 area, posting a 0.16% daily gain after reaching a daily high of 1.2298. Meanwhile, the U.S. Dollar Index posts a modest daily loss at 104.85. The pound was supported by better-than-expected U.K. growth data. The U.K. Office for National Statistics (ONS) revealed that the British economy, measured by the Gross Domestic Product, expanded by 0.5% in October following the 0.6% contraction recorded in September and above the 0.1% decline expected. Other data suggested that industrial production stagnated during the same period, beating the consensus of a 0.1% fall and posting a yearly contraction of 2.4%, while manufacturing production expanded by 0.7%. With no first-tier data scheduled in the U.S., investors focus on Tuesday's inflation data and the FOMC's interest rate decision on Wednesday. The Consumer Price Index is expected to grow by 7.3% in the twelve months to November, while the core CPI rate is expected to print 6.1% in the same period. Regarding the Federal Reserve announcement, investors continue to bet in favor of a 50 bps rate hike, but the case for a 75 bps increase may get stronger if CPI data comes in above expectations. From a technical perspective, the GBP/USD pair holds a positive bias according to indicators on the daily chart as the Cable trades above its main moving averages. On the upside, the 1.2320 area is immediate resistance to overcome, followed by early December highs at 1.2345 and then the 1.2400 mark. On the other hand, support levels are seen at 1.2115 and 1.2065, the 200- and 20-day SMAs, respectively, followed by the 1.2000 psychological mark.
by Alex_Boltyan_FXAnalyst
1
EUR/USD Remains Capped By 1.0600, Fed, ECB Decisions Eyed The EUR/USD pair consolidates above the 1.0500 area on Friday, still unable to advance beyond the 1.0600 mark, with the pair edging lower after the release of U.S. Producer Price Index data.   At the time of writing, the EUR/USD pair is trading at the 1.0540 area, posting a 0.16% daily loss, having retreated from a high of 1.0588 earlier in the session. The pair is virtually unchanged in the week, trading just a few pips above last Friday’s closing price, following two consecutive weekly gains.   The 10-year U.S. bond yield bounced off a daily low of 3.45% and rose above 3.50%, fueling the greenback’s recovery. The DXY index is currently trading around 104.90, having recovered from a low of 104.48.   Data from the U.S. showed producer prices grew at a 7.4% annual rate in November, matching the market’s expectations and slower than the 8.1% rate reported in October. The core PPI rose by 6.2% YoY, above the expectations of 6% but below the 6.7% rate printed in October.   On Tuesday, U.S. Consumer Price Index data could offer a better picture of the inflation situation and finish shaping the investors' expectations about Fed’s decision, which will be announced on Wednesday. According to the WIRP tool, a 50 bps rate hike is fully priced in, and investors are only betting around 10% odds of a larger 75 bps move. In addition, the swaps market is pricing in a peak policy rate of 5.0%.   The European Central Bank will announce its decision on Thursday, and expectations also point to a 50 bps increase in its main rates, although Lagarde & Co. could "surprise" with a 75 bps move. From a technical perspective, the EUR/USD pair retains the short-term bullish bias despite indicators on the daily chart losing some traction. The RSI remains in positive territory with a slightly negative slope, while the MACD stands right above its midline.   On the upside, the immediate resistance level is given by the 1.0600, where the psychological level is reinforced by a descending trend line drawn from May 2021 high, followed by the 1.0700 area. On the other hand, the following support levels are seen at the 20- and 200-day SMAs at 1.0410 and 1.0350.
by Alex_Boltyan_FXAnalyst
EURUSD Struggles With Critical Resistance Ahead Of Central BanksThe EUR/USD pair continues to gravitate around the 1.0500 area on Thursday as investors take the back seat ahead of the Federal Reserve and the European Central Bank policy decisions next week. At the time of writing, the EUR/USD pair is trading at 1.0520, up 0.1% on the day, extending its recovery from weekly lows around 1.0440. Growth data from the Eurozone showed resilience in the region on Wednesday, but the euro failed to capitalize on it amid renewed energy concerns as the Russian President said the possibility of a nuclear war was increasing. At the same time, the market focus remains on next week's Fed and ECB decisions. The Federal Reserve will announce its policy rate on Wednesday, and market participants continue to lean toward a less aggressive hike of 50 basis points. The ECB will do the same on Thursday, and expectations also point to a 50 bps increase in its main rates, although Lagarde & Co. could "surprise" with a 75 bps move. From a technical perspective, the EUR/USD short-term bias remains bullish as the price stands above its main moving averages on the daily chart, although indicators show dwindling momentum. Despite this week's correction, the RSI stands near overbought territory, while the MACD sits barely above its mid-line. The EUR/USD pair needs to reclaim the 1.0600 area – where a 1 ½-year-old descending trend line stands – to pick up the pace and move towards 1.0700. On the flip side, short-term supports line up at 1.0400, 20-day SMA, and 1.0350, 200-day SMA.
by Alex_Boltyan_FXAnalyst
EUR/USD Rebound From Three-Day Lows Despite Market WorriesAfter two consecutive daily falls, the EUR/USD pair advanced on Wednesday, regaining the 1.0500 mark following supportive Eurozone data. However, the pair pulled back during the New York session as market sentiment deteriorated after Russian President Vladimir Putin said the threat of nuclear war is on the rise. At the time of writing, the EUR/USD pair is trading at the 1.0520 area, 0.54% above its opening price, while the dollar, measured by the DXY index, posts a 0.50% daily loss at around 105.05.   The Euro Area Gross Domestic Product came in better than anticipated in the third quarter, rising 0.3% QoQ, above the market consensus of a 0.2% increase. The annualized GDP growth was 2.3%, above the 2.1% expected.   Investors' focus remains on next week's FOMC interest rate decision. The WIRP tool suggests that investors favor a 50 bps hike as they are betting on 77% probabilities versus 23% chances of a 75 bps increase. However, the November CPI report could affect expectations when it is released next week. From a technical perspective, the EUR/USD maintains a short-term bullish bias, according to indicators on the weekly and daily charts. At the same time, the EUR/USD pair trades above its main daily moving averages as the 20- and 200-day SMAs completed a bullish crossover.   On the upside, the EUR/USD's next resistance level could be found at 1.0600, followed by the 1.0700 mark. On the flip side, short-term supports are seen at the 1.0400 level, and the mentioned SMAs crossover at the 1.0380-60 zone. A break below this level could add bearish pressure, exposing the 1.0300 area.
by Alex_Boltyan_FXAnalyst
EUR/USD Retreats On Upbeat U.S. Data But Holds Positive BiasThe EUR/USD pair snapped a three-day winning streak on Monday and turned lower after hitting fresh five-month highs in the vicinity of 1.0600 as the greenback gained momentum following the release of upbeat PMI data.   At the time of writing, the EUR/USD pair is trading at the 1.0490 area, 0.47% below its opening price, having retreated from a high of 1.0594.   U.S. services sector data came in stronger than expected in both ISM and S&P Global gauges. The ISM services PMI jumped to 56.5 in November, surpassing the market's expectations of 53.1, while the S&P Global services PMI beat consensus, printing at 46.2, although still below the 50.0 threshold, pointing to contraction. The S&P Global Composite PMI was revised from the 46.3 preliminary reading to 46.4 in November. Factory Orders rose 1% in October, above expectations of a 0.7% increase.   Across the pond, euro data pointed to the deepening downturn in economic activity. The EU Retail Sales decreased by 1.8% in October versus the expected 1.7%, falling 2.7% from a year earlier. Other data showed S&P composite PMI from the euro area remained stagnant in November, coming in at 47.8, just as the market expected.   Meanwhile, the greenback, measured by the DXY index, managed to reverse daily losses and advanced to the 105.30 zone, bouncing from a five-month low. From a technical standpoint and according to the daily chart, the EUR/USD pair holds a short-term bullish perspective. The price remains trading above its main moving averages, while its indicators have turned lower but remain in positive territory.   On the upside, the EUR/USD's next resistance levels could be found at 1.0600, followed by the 1.0640 zone and then the 1.0700 mark. On the other hand, short-term supports are seen at the 1.0400 level, followed by the 1.0360-40 area, where the 20- and the 200-day SMAs are poised to complete a bullish crossover. The bias would remain tilted to the upside as long as the EUR/USD remains above the latter.
by Alex_Boltyan_FXAnalyst
EUR/USD Closes Week Above 1.0500 For First Time In Five MonthsThe EUR/USD pair managed to close Friday on a positive note despite a sharp pullback seen on the back of stronger-than-expected U.S. nonfarm payrolls data. By the close, the EUR/USD pair was trading at 1.0540, with a 0.13% daily gain and a 1.5% weekly advance, the second in a row. The greenback enjoyed a short-lived spike, alongside U.S. bond yields, following the release of the government jobs report. The nonfarm payrolls report showed the economy created 263,000 jobs in November, above the 200,000 expected, while October’s reading was upwardly revised. The unemployment rate remained unchanged at 3.7% Solid jobs data spread doubts about the Fed slowing down the pace of rate increases in December. Investors are now pricing a 10% higher probability of a 75 bps hike for the next FOMC meeting. However, according to the WIRP tool, a 50 bps hike continues to be the strongest case. From a technical perspective, the EUR/USD short-term bias remains bullish as the shared currency continues to trade above its main moving averages while indicators stand in positive territory. However, the RSI is already pointing at overbought conditions, which could give way to a phase of consolidation before another leg higher. On the upside, the next resistance levels are seen at the five-month highs scored this week at the 1.0545 zone, ahead of late-June highs around 1.0600-15. On the downside, the next support levels are seen at the 1.0420 area, followed by the 200- and 20-day SMAs at 1.0365 and 1.0315, respectively.
by Alex_Boltyan_FXAnalyst
2
EUR/USD Advances Beyond 1.0500 Ahead of Nonfarm Payrolls DataThe EUR/USD pair advanced sharply on Thursday as U.S. data added further pressure on an already-beaten greenback. Having hit a fresh five-month peak of 1.0539, the EUR/USD pair closed the day at 1.0526, posting a 1.16% daily gain. On Wednesday, Federal Reserve Chairman Jerome Powell's comments reinforced the idea that the Fed could slow the pace of rate increases in the next meeting, whereas Thursday's data fueled the fire of a monetary policy pivot. U.S. Personal Consumption Expenditures Price annual inflation rate – a gauge closely followed by the Fed – eased to 6% in October from 6.3% in September and below the market consensus of 6.2%. The core PCE inflation also decelerated to 5% in the same period, in line with expectations. Adding to the dollar weakness, insufficient economic activity data was released as the ISM manufacturing PMI fell to 49 in November, being the first contraction in over two years. Investors' attention turns to Friday's nonfarm payrolls report, which is expected to show that the U.S. economy added 200,000 jobs in November. From a technical perspective, the EUR/USD short-term bias remains bullish, as indicators gained additional traction on the daily chart. The RSI remains above its midline and points towards the overbought area, while the MACD printed a somewhat higher green bar. On the upside, the EUR/USD's next resistance levels could be found at the recent high of 1.0539 and the 1.0600 area ahead of the 1.0640 zone. On the other hand, short-term supports are seen at the 200-day SMA, currently at 1.0365, followed by the 1.0300 mark and last week's lows at around 1.0220.
by Alex_Boltyan_FXAnalyst
1
Dollar Index Edges Lower As Investors Await Powell's Speech The U.S. dollar, measured by the DXY index snapped a 3-day winning streak and faced some selling pressure on Wednesday against the backdrop of the resumption of risk appetite across financial markets.   At the time of writing, the DXY trades at the 106.35 area, recording a 0.47% loss after falling to a daily low of 106.29.   The dollar failed to capitalize on the upbeat revision of the Q3 GDP figures. Data showed the revision of the U.S. Gross Domestic Product grew by 2.9% in the third quarter, beating the initial estimate and consensus of 2.6%.   On the other hand, Automatic Data Processing Inc. released the November’s jobs report, which showed that the private sector created 127,000 jobs, missing the market expectations of 200,000.   On Friday, the U.S. will publish the nonfarm payrolls report, which is expected to show the economy added 200.000 jobs in November. Investors will also follow closely U.S. manufacturing and services PMIs by ISM and the PCE price index, which is the Fed’s preferred gauge of inflation.   During the New York afternoon, the Fed will publish the Beige Book while Chairman Jerome Powell will speak on monetary policy, for the first time since the last decision’s press conference on November 2.   From a technical standpoint, the DXY short-term technical outlook remains neutral to slightly bearish according to indicators on the daily chart.   On the downside, the 106.00 level offers immediate support, followed by the 200-day SMA at the 105.45 area. A break below this level could increase the bearish pressure and expose the 105.00 zone. On the other hand, short-term resistance is seen at the 106.90-107.00 zone, while a break above the 20-day SMA at 107.30 could ease the short-term pressure.
TVC:DXY
by Alex_Boltyan_FXAnalyst
EUR/USD Extends Correction From 1.0500 As Dollar Recovers GroundThe shared currency is edging lower on Tuesday despite Germany reporting soft inflation figures from November while the greenback stages a broad-based recovery, dragging the EUR/USD pair to a six-day low of 1.0319. At the time of writing, the EUR/USD pair is trading at the 1.0330 area, 0.10% below its opening price, extending its pullback from a five-month peak of 1.0498 struck on Monday. On the data front, the German Consumer Price Index, harmonized to compare with other European countries, increased by 11.3% in the twelve months to November, below the previous reading of 11.6% and matching the market’s expectations. On Monday, European Central Bank president Christine Lagarde noted that she does not see evidence of inflation reaching its peak in the euro area, so these figures could play a significant role in the Governing Council’s economic assessment and interest rate decision at their December meeting. Other data showed Business Climate for November came in at 0.54, while the Consumer Confidence indicator printed -23.9, in line with consensus. From a technical perspective, the EUR/USD maintains its short-term bullish outlook according to indicators on the daily chart, although they lost momentum after the last session’s pullback. On the upside, the EUR/USD needs to secure the 200-day SMA currently at 1.0370, looking for an extension to the 1.0500 area en route to 1.0600. On the other hand, short-term supports are seen at the 1.0300 level, followed by 1.0240, 20-day SMA and last week’s lows at around 1.0220.
by Alex_Boltyan_FXAnalyst
EUR/USD Rejected By 1.0500, Erases Daily GainsThe EUR/USD pair pulled back on Monday after being rejected from a five-month high of 1.0496 scored during the European session. The greenback is staging a comeback across the board as U.S. traders rejoin the market and amid worries China's record-high Covid infections will prompt stricter restrictions, risking supply chain disruptions. At the time of writing, the EUR/USD pair is trading at the 1.0370 area, just a few pips below its opening price. Comments from European Central Bank members boosted the euro earlier in the session, but the shared currency failed to sustain altitude. ECB's Klaas Knot stated Europe needs to prepare for a "protracted" period in which policymakers and central bankers will have to be on it and focus on restoring price stability. Meanwhile, President Christine Lagarde said she doesn't see the components or the direction that would lead to believe that inflation has reached a peak. Lagarde reiterated interest rates will remain the main tool to fight inflation and that further hikes will depend on the Government Council's outlook on the persistence of the shocks, the reaction of wages and inflation expectations, and their assessment of the transmission of the policy stance. Meanwhile, investors continue to speculate on whether the ECB will hike by 50 o 75 bps at the December meeting, so Wednesday's Eurozone inflation readings will play a big role in those bets. From a technical standpoint, the EUR/USD short-term bias remains bullish despite indicators turning flat on the daily chart, while the price struggles around the 200-day SMA after being rejected from the 1.0500 area. On the upside, EUR/USD immediate resistance levels could be found at the recent high at 1.0496, followed by the 1.0600 zone. On the other hand, short-term supports are seen at the 1.0300 level and last week's lows at around 1.0220.
by Alex_Boltyan_FXAnalyst
1
EUR/USD Holds Above Key Level Heading Into An Eventful WeekThe EUR/USD pair retreated slightly on Friday but remained within a narrow range near recent highs as U.S. trading was shortened due to Black Friday. The greenback gained some traction across the board, fueled by a recovery of the U.S. bond yields, but moves were limited.   At the time of writing, the EUR/USD pair is trading at the 1.0405 area, virtually unchanged on the day but still on track to post a 0.8% weekly gain.   The U.S. dollar has been on the back foot this week amid expectations of a monetary policy pivot from the Fed starting in December. After U.S. October CPI data showed easing price pressures, the Fed's last meeting minutes revealed most FOMC members are expecting to switch to smaller rate hikes "soon".   The WIRP tool suggests a 50 bp hike is fully priced in for December 14 meeting, but the swaps are starting to price in around 30% odds of a terminal rate near 5.25%.   Next week, Eurostat will release November's HICP from the euro area while the U.S. will publish the nonfarm payrolls report and the PCE price index, which will be crucial for the next Fed decision.   From a technical perspective, the EUR/USD short-term bias remains bullish, although indicators have lost some momentum and turned flat on the daily chart. The RSI remains above its midline with a slightly positive slope, while the MACD keeps printing steady green bars.   On the upside, the immediate resistance level is seen at the 1.0480-85 zone, followed by the 1.0500 and 1.0600 areas. On the other hand, the following support levels are seen at the 200-day SMA at the 1.0385 area, followed by 1.0300 and the weekly low of 1.0220.
by Alex_Boltyan_FXAnalyst
EUR/USD Climbs Above 200-day SMA, Holds Positive BiasThe EUR/USD pair advanced slightly on Thursday, printing its third consecutive green candle, following the release of optimistic data from Germany and the European Central Bank Monetary Policy Accounts from the October 27 meeting. At the time of writing, the EUR/USD pair is trading 1.0410 area after peaking at a nine-day high of 1.0448 earlier on the day. The German IFO indexes showed a mixed economic outlook. The Business Climate Index came in at 86.3, above the market consensus of 85, while the Current Assessment indicator failed to live up to expectations, coming in at 93.1 versus 93.8 expected. The Expectations index rose to 80 and beat the consensus of 77. The ECB's October Meeting Accounts showed that Governing Council members fear that inflation is getting entrenched and considered the bank needs to continue raising rates. However, the report stated that some members preferred a smaller hike last month, while the decision was to raise the rates by 75 bps. Meanwhile, markets expect a modest 50 bps hike for the next meeting in December, which will take the overall hikes to 250 bps and the deposit facility rate to 2%. Across the pond, the U.S. celebrated the Thanksgiving holiday, so markets remained closed for the day. No relevant macroeconomic data will be released on Friday either, as most investors will be out for the long weekend. From a technical perspective, the EUR/USD short-term bias remains positive according to indicators on the daily chart, while the price managed to close the day above the 200-day SMA. Still, indicators have lost bullish momentum but remain in positive territory. On the upside, the following resistance levels could be found at 1.0485, July monthly high, followed by the 1.0500 mark and 1.0600. On the other hand, immediate support levels are seen at the 200-day SMA at 1.0390 and the 1.0300 area, ahead of the weekly lows at 1.0220.
by Alex_Boltyan_FXAnalyst
1
DXY Approaches Critical Support After U.S. Data and FOMC MinutesThe U.S. dollar, measured by the DXY index, trades lower for a second straight day as the greenback faced severe selling pressure after weak U.S. PMIs and “dovish” FOMC minutes from the last November 2 meeting. At the time of writing, the DXY index trades at the 106.10 area, recording a 1% loss on the day. S&P Global reported the U.S. composite and services PMI preliminary indexes fell to 3-month lows of 46.3 and 46.1, respectively in November, while the manufacturing PMI plunged to a 30-month low of 47.6, from its October reading of 50.4. Other data showed Durable Goods orders increased at a faster pace in October, coming in at 1% versus the 0.4% expected. Later during the New York session, the minutes of the Federal Reserve's latest meeting revealed most participants agreed in favor of a slower pace of rate hikes for the following gatherings in order to allow the FOMC to better assess progress toward its goals. In that sense, as the case of a monetary policy pivot is getting stronger, the greenback weakened across the board. From a technical perspective, the DXY holds a bearish short-term bias, according to indicators on the daily chart as the 20-day SMA crossed below the 100-day SMA. The RSI holds a negative slope below its midline, while the MACD remains in negative territory. The immediate support level is seen at 106.00, followed by the 200-day SMA at 105.23 and then the 104.00 zone. On the upside, the bulls need to regain the 108.00 area to ease the selling pressure and advance to the mentioned moving averages crossover at the 109.00-20 zone.
TVC:DXY
by Alex_Boltyan_FXAnalyst
EUR/USD Clings To 1.0300 On ECB Mixed Rhetoric, FOMC Minutes EyeThe EUR/USD pair struggled to make a decisive move on Tuesday and ended the day slightly above the 1.0300 mark as a cautious market mood and mixed signals from ECB members kept the euro’s upside limited. At the time of writing, the EUR/USD pair is trading at the 1.0303 zone, 0.6% above its opening price. The euro managed to advance to a daily high of 1.0308 during the New York session. On Monday, Philip Lane, ECB Executive Board member, argued in favor of a smaller interest hike in the following December meeting of the Governing Council, claiming “One platform for considering a very large hike, such as 75 basis points, is no longer there.” However, he didn’t signal a stop of the hiking cycle but rather a contraction at a slower pace and at the appropriate time. On the other hand, Austria’s central bank governor Robert Holzmann claimed that there is no evidence of price pressures easing and that inflation expectations need to be well anchored. In that sense, he called for another big rate rise in December in order to send a strong message and to prove the bank’s determination to fight inflation. Meanwhile, the U.S. dollar, measured by the DXY index, snapped a three-day winning strike and fell back to the 107.15 area. On Wednesday, the FOMC’s latest meeting minutes will be released, which could shed some light on whether or not the Federal Reserve braces for a policy pivot in December. From a technical perspective, the EUR/USD short-term bias remains tilted to the upside as indicators remain in positive ground on the daily chart while the price consolidates at the top of its recent range and above the 20- and 100-day SMAs. On the upside, the immediate resistance level is seen at the weekly highs at around 1.0330, followed by the 200-day SMA at 1.0400. A break above the latter could improve the euro’s short-term perspective and pave the way to the 1.0500 area. On the other hand, the next support level could be faced at the 1.0220-00 area, followed by the November 11 low of 1.0163 and the 20-day SMA, currently at 1.0110.
by Alex_Boltyan_FXAnalyst
EUR/USD Starts The Week On A Soft Note Amid Dollar StrengthThe EUR/USD pair fell for a third straight day on Monday as the U.S. dollar strengthened on the back of safe-haven flows fueled by Covid outbreaks in China. New lockdowns were announced in several Chinese cities, triggering concerns about possible supply chain disruptions among investors. At the time of writing, the EUR/USD pair is trading at the 1.0250 area, 0.73% below its opening price, having retreated from a daily high of 1.0333 earlier in the session to a 10-day low of 1.0223. On the data front, Germany published lower-than-expected producer inflation data, while the U.S released the Chicago Fed National Activity Index, which dipped into negative territory in October. However, data had little impact on the EUR/USD pair as risk aversion remained the main driver during the New York session, benefitting the greenback. The DXY index is up for the third straight day, trading at the 107.80 area, 0.8% higher on the day. Meanwhile, U.S. bond yields advanced across the curve, further fueling the dollar's advance. Despite the recent downward correction, the EUR/USD pair's short-term outlook remains positive according to indicators on the daily chart. The RSI points lower after being rejected from the overbought area, while the MACD printed a lower green bar, signaling the loss of upward momentum. The following support levels are seen at the 1.0200 level, followed by the 1.0160 zone, November 11 lows, and the 20-day SMA, currently at 1.0108. On the other hand, resistance levels could be faced at the 1.0300 level, followed by the more critical 200-day SMA at 1.0408 and the 1.0500 psychological level.
by Alex_Boltyan_FXAnalyst
GBP/USD Slides Below 1.1900 But Holds On To Weekly GainsThe GBP/USD pair closes the week with gains amid upbeat Retail Sales data from the U.K. and as traders digest fiscal announcement from Chancellor of the Exchequer Jeremy Hunt. The British government announced on Thursday a succession of tax rises and spending cuts to close the fiscal gap and help to tame inflation as households’ real wages are being eroded, and interest rates are pushing the U.K. into a recession. The Cable dropped to 1.1762 as a knee-jerk reaction, but the negative impact was short-lived, as investors are still assessing the announcement. At the time of writing, the GBP/USD pair is trading at the 1.1880 zone, up 0.2% on the day and posting a 0.5% weekly advance. Cable retreated from an intraday high of 1.1950 earlier in the session. On the data front, U.K. Retail Sales released by the Office of National Statistics, which measures the total receipts of retail stores, advanced by 0.6% in October, beating the consensus. Retail Sales, excluding fuel, increased by 0.3% on a monthly basis but came in below the consensus of 0.6%. From a technical standpoint, the GBP/USD pair maintains a bullish bias, according to indicators on the weekly chart. However, the pair has lost upward momentum on the daily chart as the pair is posting lower highs, and indicators are turning flat. On the downside, the short-term support level could be found at weekly lows at the 1.1760 area, followed by the 100-day SMA at 1.1640 and the 20-day SMA around 1.1580. On the other hand, a decisive break above this week’s high at 1.2028 could pave the way toward 1.2140 en route to the 200-day SMA, currently at the 1.2220 zone.
by Alex_Boltyan_FXAnalyst
EUR/USD Loses Steam Amid Risk-Off Flows The EUR/USD pair retreated modestly on Thursday as the U.S. dollar recovered some ground amid risk aversion triggered by geopolitical tensions between Russia and NATO after missiles landed on Poland on Tuesday.   At the time of writing, the EUR/USD pair is trading at the 1.0360 area, 0.25% below its opening price. The pair hit an intraday low of 1.0305 but bounced alongside a late recovery in Wall Street.   In the U.S., housing data was overall positive despite the fact that mortgage rates are edging higher due to tighter financial conditions. Building Permits decelerated at a slower pace than expected in October, while Housing Starts came in at 1.425M, in line with expectations but 4.23% lower than the previous month.   Separated data showed that the number of people filing first-time claims for state unemployment insurance increased below expectations in the week that ended on November 11. Initial claims came in at 222K versus the 225K expected.   Earlier in the session, the Eurozone's inflation rate, measured by the Consumer Price Index, was revised to 10.6% YoY in October, slightly below the preliminary estimate of 10.7%, but had little impact on the shared currency. From a technical perspective, the EUR/USD pair's short-term bias remains positive, with the 20-day SMA crossing above the 100-day SMA. Still, indicators have lost upward momentum on the daily chart as the pair seems to have entered a consolidation phase.   Immediate support levels could be found at the 1.0300 and 1.0200 areas, ahead of the mentioned SMAs cross at around 1.0030. On the other hand, resistances could be found at the 1.0400 zone, followed by the 200-day SMA at 1.0410. A break above the latter could trigger a rally targeting 1.0500.
by Alex_Boltyan_FXAnalyst
GBP/USD Hovers Above 1.19, U.K. Inflation Hits 4-Decade HighThe GBP/USD pair advanced modestly on Wednesday and climbed above the 1.1900 level as investors assessed macroeconomic data coming from both shores of the Atlantic. At the time of writing, the GBP/USD pair is trading at 1.1923, 0.5% above its opening price, having set an intraday high of 1.1941 amid persistent USD weakness. During European trade, the U.K. reported that annual inflation, measured by the CPI, jumped to 11.1% in October, the highest rate since 1981. The reading came above expectations of 10.7%. Meanwhile, the core inflation rate remained unchanged at 6.5% in the same period but also came above expectations of 6.4%.   Bank of England Governor, Andrew Bailey, commented after the data that the U.K. inflation reflects a series of supply shocks that “couldn’t have been predicted” but that those shocks are finally starting to fade and inflation in the U.K. could peak around 11%. Across the pond, the U.S. Retail Sales came in better than expected as in October the total receipts of retail stores increased by 1.3% above the consensus of 1%. The retail sales control group was also up 0.7% in the same period. Despite a short-lived intraday recovery, the greenback remains on the back foot, as market participants continue to discount a less aggressive Fed in December. From a technical perspective, the GBP/USD pair holds positive bias but indicators are starting to lose traction on the daily chart. The RSI trades flat above its midline, while the MACD printed a lower green bar, indicating decreasing bullish momentum. On the upside, the GBP/USD pair could face resistance at the weekly highs around 1.2030 and the 200-day SMA at 1.2237. On the downside, the 1.1750 zone and the 100-day SMA at 1.1650 stand as next support levels in case of a technical correction. If lost, the Cable could extend its decline to the 20-day SMA at the 1.1520 area.
by Alex_Boltyan_FXAnalyst
EUR/USD Rally Pauses Ahead of 1.0500, Maintains Positive BiasThe EUR/USD pair had a volatile session on Tuesday, rallying to fresh five-month highs to settle around its opening level by the end of the New York session. The U.S. dollar weakened across the board following the release of lower-than-expected Producer Price Index data, which continued to fuel expectations of a pivot in Federal Reserve monetary policy. The EUR/USD soared to a high of 1.0481 as the knee-jerk reaction to data but lost ground during the second half of the American session amid reports that stray Russian missiles had crossed Poland’s border and killed at least two people. At the time of writing, the euro-dollar is trading at 1.0330, virtually unchanged on the day. U.S. Producer Price Index grew at an annualized pace of 8% in October, below expectations of 8.3%, showing further signs that Fed’s policy has started to work out cooling down prices. Across the pond, ZEW survey data showed improvements in German and Eurozone sentiment indexes. From a technical perspective, the EUR/USD maintains a bullish outlook, with indicators holding in positive ground on the daily chart while the price briefly surpassed the 200-day SMA, although it failed to consolidate above it. The 200-day SMA at 1.0429 is the short-term critical resistance to overcome. A break above this level could pave the way to the 1.0500 area. On the other hand, immediate support levels could be found at the weekly lows around 1.0280, followed by the 1.0160 zone and the 100-day SMA, currently around 1.0020.
by Alex_Boltyan_FXAnalyst
EUR/USD Holds On To Gains Above 1.0300 In A Quiet Weekly StartThe EUR/USD pair retreated slightly to start the week after hitting three-month highs on Friday on lower-than-expected U.S. inflation data. The greenback managed to recoup some ground on Monday as the market mood turned cautious. Still, the euro is holding above the 1.0300 mark, supported by upbeat Eurozone industrial production data. At the time of writing, the EUR/USD pair is trading at 1.0323, down 0.29% on the daily loss after bottoming at a daily low of 1.0271 earlier in the session. Eurostat reported the seasonally adjusted industrial production rose by 0.9% in both the euro area and the EU in September, above the consensus of 0.3%. It's worth noting that both the ECB and the European Commission already signaled that they are expecting the euro area to tip into a recession in the last quarter of the year. In that sense, upbeat economic activity data gives some relief to the euro. On the other hand, the greenback is gaining some traction after last week's 4% decline triggered by the investors scaling back bets for one more 75 bps for the Fed meeting in December after the softer-than-expected October Consumer Price Index (CPI) data. From a technical perspective, the EUR/USD pair holds a positive short-term bias according to indicators on the daily chart, while the price consolidates after last week's steep gains. The RSI has corrected overbought readings, while the MACD prints higher green bars. On the upside, the 1.0365-70 area, which capped the rally last Friday and back in August, is the critical short-term resistance level to overcome. If the euro accomplishes such a task, the following upside targets are seen at the 200-day SMA at 1.0432, followed by the 1.0500 psychological level. On the downside, support levels are seen at 1.0200, followed by the 1.0030 zone, where the 20- and 100-day SMAs are close to making a bullish cross.
by Alex_Boltyan_FXAnalyst
EUR/USD Posts Highest Weekly Close In Over Four MonthsThe EUR/USD pair extended gains on Friday and reached fresh three-month highs as the U.S. dollar continued to underperform its main rivals. The EUR/USD reached its highest intraday level since August 10 at 1.0364 and is on track to post its highest daily close since July. At the time of writing, the pair is trading at 1.0360, up 1.5% on the day and posting an over 4% gain this week. The EUR/USD is also poised to record its fourth weekly gain in a row, staging a considerable bounce from below 0.9600. Following October's nonfarm payrolls and consumer price index data, investors are now expecting the Federal Reserve to slow down the pace of future rate increases. On Thursday, data showed U.S. consumer inflation finally started to cool down in October, printing an annual rate of 7.7%, below the 8% expected. The core rate also eased to 6.3% versus the 6.5% expected. The shared currency managed to shrug off some gloomy economic projections from the European Commission. The Autumn 2022 Economic Forecast released on Friday pointed out that the E.U., the euro area and most of its members are expected to tip into recession in the last quarter of the year amid elevated uncertainty, high energy price pressures, the erosion of the households' purchasing power, a weaker external environment and tighter financing conditions. The European Commission expects inflation to peak by the year-end at 9.3% for the E.U. and 8.5% in the euro area before gradually easing to the ECB long-run inflation target in 2024. From a technical perspective, the EUR/USD pair holds a short-term positive bias, with the price printing higher highs above the 20- and the 100-day SMAs. However, the RSI is close to overbought territory, which could signal a phase of consolidation before another leg higher. On the upside, the immediate resistance level is seen at the 200-day SMA at 1.0440, followed by the 1.0500 psychological level. On the other hand, the 1.0200 area is the first support in line, ahead of the 100-day SMA at around 1.0030.
by Alex_Boltyan_FXAnalyst