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EUR/USD rebounds after sharp lossesThe euro has bounced back on Friday after sliding 0.99% a day earlier. In the European session, EUR/USD is trading at 1.1018, up 0.38%. On the economic calendar, the US PCE Price index, the Fed's preferred inflation gauge, fell to 3.0% in June, down from 3.8% in May. The European Central Bank raised interest rates by 0.25% on Thursday, bringing the main rate to 3.75%. The ECB statement warned that inflation, although on the decline, "is expected to remain too high for too long". The ECB did not provide any forward guidance, as the statement said the Governing Council would base its decisions on the data. ECB President Lagarde didn't add much to this stance, saying that ECB members were "open-minded" about rate decisions at upcoming meetings and wouldn't commit to whether the ECB would raise or pause in September. The rate increase can be described as a 'hawkish hike', as the statement kept the door open for further hikes. Nevertheless, the euro lost ground following the decision, which could reflect expectations that the ECB is close to its peak rate, despite the hawkish rhetoric. The eurozone economy is struggling, and this week's Services PMIs pointed to weakness in Germany and France, the biggest economies in the bloc. The eurozone could slip into recession this year, which means that the ECB will have to think carefully before its raises rates. On the other side of the coin, inflation, which is the ECB's number one priority, is at 5.5%, well above the target of 2%. The eurozone releases the July inflation report on Monday and the reading could be a key factor in the ECB's rate decision at the September meeting. The euro lost further ground on Thursday after better-than-expected US data. In the second quarter, GDP rose 2.4% q/q, above the Q1 reading of 2.0% and the consensus estimate of 1.8%. US Durable Goods Orders and unemployment claims were better than expected, a further indication that the Fed may be able to guide the economy to a soft landing even with interest rates at their highest levels in 22 years. EUR/USD is testing resistance at 1.1002. The next resistance line is 1.1063 There is support at 1.0895 and close by at 1.0861
by OANDA
BluetonaFX - EURUSD All Eyes Now On Euro With ECB PendingHi Traders! All eyes are now on the Euro, and traders are eagerly anticipating the European Central Bank's (ECB) interest rate decision and their press conference later today. Looking at the price action on the EURUSD 1D chart, the Euro has found support near the previous cup resistance at the 1.10120 level. Depending on the outcome we get later from the ECB, the Euro may possibly continue its bullish momentum and target the 1.12757 resistance level for a potential breakout. On the other side, if we get any possible signs of Euro weakness from the ECB, then 1.10120 is the target support level, with a possible opportunity for a break and continuation below. Please do not forget to like, comment, and follow, as your support greatly helps. Thank you for your support. BluetonaFX  
by BluetonaFX
2
EUR/USD quiet ahead of Fed decisionThe euro is showing limited movement for a second consecutive day. In Wednesday's European session, EUR/USD is trading at 1.1063, up 0.07%. The Federal Reserve meets later today, and it's close to a certainty that the Fed will raise rates by 0.25%, which would bring the Fed Funds rate to a range of 5.25% to 5.50%. The FOMC will not be releasing any economic forecasts, which means investors will have to comb the rate statement and Jerome Powell's follow-up press conference for clues about future rate policy. The money markets remain confident that today's rate hike will be the last in the current tightening cycle, which is a more dovish stance than what we've been hearing from Powell & Co. The Fed has reiterated that although inflation is heading in the right direction, it remains too high and more work needs to be done to bring inflation back to the 2% target. Powell does not want the markets to become complacent about inflation, and for this reason, he is unlikely to close the door on future rate hikes, even if he hints at a pause after today's expected increase. We can expect Powell to stick to the well-worn mantra of basing future rate decisions on economic data, in particular inflation and the strength of the labour market. The ECB will announce its rate decision on Thursday, and like the Fed later today, it's a virtual certainty that the ECB will raise rates by 0.25%. What happens after that? The minutes of the June meeting, released earlier this month, signalled that a September hike is a strong possibility. Members noted that "monetary policy had still more ground to cover" and "the Governing Council could consider increasing interest rates beyond July, if necessary." ECB policy makers will make their rate determinations based on economic data, but that doesn't mean the decision will be clear-cut. The eurozone economy is struggling, which would support a pause. At the same time, inflation dropped to 5.5% in June, which is almost triple the ECB's target of 2%. Inflation remains the ECB's number one priority, which could mean another rate hike in September unless there is a sharp drop in inflation or a serious deterioration in economic growth. EUR/USD is testing resistance at 1.1063. The next resistance line is 1.1170 There is support at 1.1002 and 1.0895
by OANDA
EUR/USD under pressure after soft PMIsThe euro has started the week in negative territory. In the North American session, EUR/USD is trading at 1.1083, down 0.38%. The euro has lost ground for three straight days and has fallen as much as 170 pips since hitting a 2023-high on July 18th. The eurozone recovery is likely to be lengthy, and Monday's PMIs pointed to a deceleration in the manufacturing and services sectors in July. The eurozone Manufacturing PMI dipped to 42.7, down from 43.4 in June and below the consensus estimate of 43.5 points. The eurozone Services PMI slowed to 51.1, down from 52 and shy of the consensus of 51.5 points. Germany, the largest economy in the eurozone, posted even worse manufacturing numbers, as the PMI fell to 38.3, down from 40.6 and below the consensus of 41.0 points. The June release is worrying, as manufacturing has decelerated for eight successive months and the reading was the lowest since May 2020. German Services PMI dropped to 51.1, below the May reading of 52.0 and the consensus of 51.5 points. The 50.0 line separates expansion from expansion. The European Central Bank meets on Thursday, with the deterioration of the eurozone economy in the background. The fears of a winter recession failed to materialize, but economic activity has been dampened by low demand and persistently high inflation. The ECB is widely expected to raise interest rates by 0.25% at the meeting, which would raise the main interest rate to 3.50%. What happens after that is less clear, although the ECB has been focused on high core inflation and could continue to tighten after the July meeting. In the US, PMI releases for July were mixed. Manufacturing surprised to the upside with a reading of 49.0, beating the June reading of 46.3 and the consensus of 46.2 points. Services decelerated for a second straight month, falling from 54.4 to 52.4 points and missing the consensus of 54.0 points. EUR/USD is putting pressure on support at 1.1063. The next support level is 1.1002 1.1170 and 1.1231 are the next resistance lines
by OANDA
Euro trading quietly around 1.09, FOMC minutes nextEUR/USD is showing limited movement on Wednesday. In the European session, the euro is almost unchanged at 1.0882. The eurozone services sector continues to show growth, but the June numbers showed a deceleration. Eurozone PMI slowed to 52.0, shy of the consensus of 52.4 and down from 55.1 in May. This marked a five-month low. Germany's services sector stalled, dropping from 53.9 to 50.6 and missing the consensus of 50.8 points. The 50.0 level separates contraction from expansion. The eurozone economy has been recovering slowly, with services driving economic activity as manufacturing continues to decline. The ECB, which showed up late to the rate-hiking party but has been quite hawkish, will need to tread carefully in order to guide the economy to a soft landing. The central bank meets next on July 27th and is expected to raise rates. Inflation has been falling but core CPI remains persistently high. The ECB has signalled more rate hikes are coming and Joachim Nagel, head of the German central bank, reiterated the ECB's stance, saying this week that inflation risks are tilted to the upside and the ECB's rate-hike cycle has "some way to go". Wednesday's highlight is the FOMC minutes of the June meeting, when the Fed raised rates by 0.25%, bringing the benchmark cash rate to a range of 5.00%-5.25%. The markets are widely expecting the Fed to hike at the July meeting but aren't sure about another rate hike this year. Fed Chair Powell has signalled that the Fed plans two hikes in the second half of the year and the minutes could change the market's tune if the Fed's tone is hawkish. EUR/USD is testing resistance at 1.0908. The next resistance line is 110.50 1.0838 and 1.0766 are providing support
by OANDA
EUR/USD climbs as key US inflation gauge ticks lowerEUR/USD is trading at 1.0872 in the European session, up 0.07%. The euro is under pressure and is down close to 100 pips since Tuesday. Inflation in the eurozone continues to fall. Eurozone CPI is expected to fall to 5.5% in June, down from 6.1% in May and a notch below the consensus of 5.6%. Headline inflation has fallen to its lowest level since January 2022. The problem for the ECB is that Core CPI, which is a more reliable gauge of inflation trends, moved the wrong way. Core CPI ticked higher to 5.4%, up from 5.3% and below the consensus of 5.5%. These levels of core inflation are incompatible with a 2% inflation target and today's inflation report won't prevent the ECB from delivering a rate hike in July. The ECB may be forced to increase rates beyond the July meeting until there is evidence that core inflation has turned the corner and shows clear signs of deceleration in the second half of the year. Germany's inflation report was worse, as both headline and core inflation moved higher, as expected. Headline inflation rose to 6.4% in June, up from 6.1% in May, while the core rate climbed from 5.4% to 5.8%. Inflation had fallen over six straight months and the June numbers could be an anomaly, but as ECB President Lagarde stated earlier this week, the battle against inflation isn't over yet. US Core PCE Price Index, the Fed's favourite inflation gauge, eased lower in May. The index dipped to 4.6% y/y, down from 4.7% in April, which was also the consensus. On a monthly basis, the index fell to 0.1%, down from 0.4%. The decline in inflation hasn't had much effect on market rate pricing, with an 86% probability of a 25-bp rate hike, according to the CME FedWatch tool. The week wraps up with UoM Consumer Sentiment, which is expected to rise to 63.9 in June, up from 59.2 in May. EUR/USD continues to put pressure on resistance at 1.0916. This is followed by resistance at 1.0988 1.0822 and 1.0750 are providing support
by OANDA
Time To Drop After Tuesday's Nice Pop?Assuming we are early into the long trip downward would put us somewhere in the early stages of Cycle wave C down, Primary wave 1 down, Intermediate wave 2 up. This would have made Intermediate wave 1 down 5 trading days long with a 120.39 point drop. Based on waves ending in C12, Intermediate wave 2 will last 1 day. There are zero other possible lengths. The quartile movements (blue levels on left) are 27.99%, 50.12%, and 56.51%. Based on waves ending in 12, strongest model agreement for length remains at 1 trading day and second strongest by a lot is 2 trading days. Quartile retracement levels (yellow lines) are at 27.99%, 42.03%, and 66.20%. Tuesday was the first official trading day of Intermediate wave 2. This is quite possibly the only trading day of wave 2. IF wave 2 achieves a new high tomorrow, Thursday would likely not see a new high for a very long time until we drop well below 4328 again. IF a new high is achieved tomorrow it may remain at or under 4400. IF we break above 4400 tomorrow, we may still be BACK in Cycle wave B as was identified in my most recent Devil’s Advocate Analysis. IF back in, well still in B, the market is either in the final Intermediate wave 4 Minor wave B up or the early stages of Intermediate wave 5 which would likely lead to a final market top within 2 weeks. If no new high is achieved and the market falls (likely based on all the Bank of England/Central Bank/Federal Reserve panels in Portugal) the market is in the early stages of Intermediate wave 3 down. This scenario would have seen Intermediate wave 2 last a single day and retrace 46.8% of Intermediate wave 1’s movement. Based on waves ending in C13, the quartile movement extensions of wave 1’s movement (blue levels farther on right) are 135.64%, 140.60%, and 165.83%. Most model agree on a length of 4-6 days, with secondary agreement at 7, 8, or 10 trading days long. Based on waves ending in 13, the quartile movement extensions (yellow) are 137.30%, 162.265%, and 198.02%. Models have strongest agreement on length at 5 days long, second is 1 or 4 days, third most agreement is 3 days, fourth is 7 days, fifth is 6 days, sixth is 2 or 10 days. Based on these models, the initial forecast is a possible market low late next week after the American holiday possibly below 4279 and probably not below 4240. This would equate to a drop of around 120 points in about 6 trading days. This is pretty much the same thing accomplished by Intermediate wave 1. Let us see how this plays out beginning with movement tomorrow.
SP:SPXShort
by StockSignaler
Euro skids after soft PMI data, markets eye ISM Mfg. PMIEUR/USD has taken a tumble on Friday. In the European session, the euro is trading at 1.0885, down 0.64%. The euro fell as low as 1.0844 earlier in the day. Later today, the US releases ISM Services PMI. The consensus stands at 54.0 for June, following 54.9 in May. The services sector is in solid shape and the ISM Services PMI has posted four straight readings over the 50 level, which separates expansion from contraction. Eurozone PMIs for June pointed to weaker activity in the services and manufacturing sectors. The Services PMI eased to 52.4, down from 55.1 in May and below the consensus of 54.5 points. The Manufacturing PMI fell to 43.6, down from the May reading of 44.8 which was also the consensus. Germany, the largest economy in the eurozone, showed a similar trend, with Services PMI falling from 54.7 to 54.1 and Manufacturing PMI dropping from 43.5 to 41.0 points. The 50 line separates contraction from expansion. The takeaway from these numbers is that the eurozone economy is cooling down. Business activity is still growing but at a weaker pace, while the manufacturing recession has deepened. The eurozone economy is yet to recover after negative growth in the past two quarters, as the ECB's aggressive tightening makes its way through the economy. At first glance, the weak PMI readings should be good news for the ECB, which is trying to dampen economic growth in order to wrestle inflation back down to the 2% target. However, inflation remains very high at 6% and further tightening could tip the weak eurozone economy into a recession. The ECB's efforts to push inflation lower have been made more difficult, as unemployment is at historic lows and wage growth is high. Germany, the bloc's largest economy, isn't the power locomotive that it once was and is still in recovery mode. The ECB has signalled that it will hike rates in July and another increase could be coming in September unless inflation decelerates more quickly. EUR/USD is testing support at 1.0882. The next support level is 1.0793 1.0976 and 1.1031 are the next resistance lines
by OANDA
Daily Market Analysis - TUESDAY JUNE 20, 2023Investors Await Central Bank Actions Amid Global Economic Concerns and Uncertainties Prevail Today events: USA - Building Permits (May) USA - FOMC Member Bullard Speaks USA - Housing Starts (MoM) (May) USA - FOMC Member Williams Speaks Eurozone - ECB McCaul Speaks Eurozone - ECB's De Guindos Speaks On the evening of Monday, following a public holiday, there was a slight decline in stock futures as investors braced themselves for significant speeches expected from officials of the Federal Reserve (Fed) and members of the Federal Open Market Committee (FOMC) throughout the week. This anticipation added to the prevailing uncertainties and lack of clarity that characterized the previous week. In the United States, the inflation data was considered acceptable but not extraordinary, prompting the Fed to temporarily halt its actions while projecting multiple interest rate hikes in the future. In contrast, the European Central Bank (ECB) raised interest rates and emphasized the potential for further increases. Now, all eyes are on the Bank of England (BoE) as it confronts the formidable task of managing the current situation. Despite the efforts of the Monetary Policy Committee (MPC) to maintain control, there exists a looming risk of inflation spiraling out of hand. Among the major economies grappling with the dual objectives of taming inflation and ensuring a smooth economic transition, the United Kingdom appears to be encountering the greatest challenges in effectively attaining these goals. GBP/USD daily chart An intriguing observation can be made regarding the GBP/USD currency pair. Despite retracing from its recent peak around $1.28, the pair has still managed to register a notable 3% gain over the past month. Notably, the British pound has also exhibited strength against the euro, appreciating by more than 1.6% during the same period. This is particularly noteworthy when considering the past situation in September, where the pound was nearing parity with the dollar as UK Gilt yields surged. Presently, it is trading close to the $1.30 mark. This suggests that the foreign exchange market does not currently reflect a prevailing perception of an imminent economic disaster for the UK. In the realm of EUR/USD, Tuesday presents challenges for the currency pair to gain significant momentum. It remains confined within a narrow trading range, with the pair hovering just above the 1.0900 level during the Asian session. US Dollar Currency Index daily chart Following its recent decline, the US Dollar (USD) is currently in a phase of recovery. Last Friday, it reached a low that had not been witnessed in over a month. However, the USD has been displaying a gradual strengthening trend for the past three consecutive days. This resurgence of the USD poses a challenge for the EUR/USD currency pair, causing it to retreat to the latest level of 102.55. EUR/USD daily chart However, despite the prevailing challenges, the downside for the EUR/USD pair seems to find some support, at least temporarily, thanks to the hawkish stance adopted by the European Central Bank (ECB). The ECB's optimistic outlook serves as a factor that mitigates the potential decline of the pair. Furthermore, the current subdued sentiment in equity markets works in favor of the US Dollar's role as a safe-haven currency. This situation, in turn, limits the upside potential for the EUR/USD pair. Concerns regarding a potential global economic slowdown, particularly in China, cast a shadow over reports of China contemplating a comprehensive stimulus package to bolster its economy. These worries continue to dampen investor sentiment. Even the recent decision by the People's Bank of China to lower the one-year and five-year Loan Prime Rates (LPRs) on Tuesday fails to alleviate anxieties or provide significant momentum to the major currency pair. It is noteworthy that the ECB has recently raised interest rates for the eighth consecutive time, propelling them to the highest level witnessed in 22 years. The central bank has also emphasized the necessity of further rate hikes to attain the Eurozone's medium-term inflation target of 2%. XAU/USD daily chart In contrast, gold has undergone substantial volatility in the preceding month. Despite the dissemination of recent data and central bank determinations, this precious metal has remained confined within a narrow price range of $1,940 to $1,980, demonstrating minimal signs of breaking out in either direction in the immediate future. Nevertheless, it is important to recognize that market conditions can swiftly shift. The current week is particularly eventful, as it is characterized by a flurry of central bank interest rate decisions and a multitude of speeches by Federal Reserve officials. These upcoming events have the potential to introduce new dynamics and variables into the financial markets.
by FOREXN1
11
EUR/USD flirts with 1.08 leading into FOMC and ECB meetingsEUR/USD broke above the 1.0800 handle yesterday thanks to a weak US inflation report, yet price action now finds itself back beneath that key level leading into today's FOMC meeting (and tomorrow's ECB meeting). But as the pair has risen over the past two weeks, it may take a particularly dovish meeting from the Fed to drive it materially higher. Therefore, we're looking for evidence of a swing high and for a move back towards the 1.0700 handle. A bearish divergence is forming on the RSI 4-hour chart and we've identified two resistance zone around the 1.0800 and 1.0860 area we'd consider fading into, or seeking evidence of a swing high. Otherwise, a stop above 1.0800 could suffice should momentum turn lower without breaking back above 1.0800.
Short
by CityIndex