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EUR/USD - Euro gains ground as investor confidence improvesThe Eurozone economy continues to recover, but there is plenty of work ahead. The Sentix Investor Confidence index improved to -8.7 in April, above the March read of -11.1 and better than the estimate of -11.7 points. The concerns over an energy crisis in Europe this winter failed to materialize and Germany and the rest of the eurozone came out of the winter better than many had expected, given the weak global economy and the Russia-Ukraine war. Still, the economic outlook remains pessimistic, as Sentix Investor Expectations remain negative in both Germany and the eurozone, at -13 and -11.5, respectively. Still, the markets were pleased with the slight improvement in investor confidence and the euro has responded with gains of around 0.60%. Eurozone retail sales slipped to -0.8% in February, matching the forecast but contracting after an upwardly revised 0.8% gain in January. Consumers are struggling with high inflation, rising interest rates and uncertain economic conditions and are keeping a tight grip on their wallets and purses. The ECB meets next on May 4th and all indications are that it will deliver another oversize rate hike. The central bank has been aggressive, raising rates by 50 and 75 basis points in recent months. The ECB was very slow to join the rate-hiking party and the benchmark rate is only 3.50%, compared to 4.25% for the Bank of England and 5.00% for the Federal Reserve. Inflation in the eurozone has proven to be a tougher foe than expected, and core inflation surprised by accelerating in February. The US releases the March inflation report on Wednesday. Inflation has been falling, albeit at a slower pace than the Fed had expected. This has necessitated additional rate hikes, with a 25-bp increase expected at the May meeting. Headline inflation is expected to fall to 5.4% in March, down from 6% in February. The core rate is projected to inch higher to 5.6%, up from 5.5%. EUR/USD is testing support at 1.0889. Below, there is support at 1.0804 There is resistance at 1.0989 and 1.1074
by OANDA
EUR/USD edges lower as eurozone inflation slidesEUR/USD is slightly lower on Friday. In the European session, EUR/USD is trading at 1.0883, down 0.21%. The euro continues to look sharp and is poised to record its fifth winning week in a row. Eurozone headline inflation fell sharply, but the core rate ticked higher. In the US, the Core PCE Price Index was within expectations. ECB policy makers must be pinching themselves today, after eurozone headline inflation tumbled to 6.9% in March, down from 8.5% in February and below the 7.1% estimate. The massive drop was driven by the sharp decline in energy prices. Inflation hasn't been below 7% since February 2022, but the news was not all good, as March core inflation accelerated to a record 7.5%, up from 7.4% in February. Core inflation is seen as a more accurate gauge of inflation trends, which could spell trouble for the ECB in its battle to contain inflation. The ECB didn't flinch from hiking rates by 50 basis points earlier in the month, even though it was in the midst of the banking crisis. With core inflation remaining stubbornly high, the central bank will have to remain aggressive with its rate path. ECB President Lagarde has suggested that the banking crisis, which shook the financial markets, could dampen demand and lower inflation, but so far, that hasn't been the case with core inflation. What can we expect from the Federal Reserve? Market pricing has been on a roller-coaster. It was only a few weeks ago that Jerome Powell's hawkish testimony on the Hill had the markets expecting a 50-basis point hike, but the banking crisis squelched any thoughts of an oversize hike. The likelihood of a 25-bp hike is currently at 57% and a pause at 43%, according to the CME Group. The core PCE price index dropped to 0.3% m/m in February, vs. 0.5% in January and the estimate of 0.4%. On an annualized basis, the index ticked lower to 4.6%, in February, vs. 4.7% in January, which was also the estimate. This is within expectations and thus unlikely to have any impact on the Fed rate decision. EUR/USD showed little reaction to the release. EUR/USD faces resistance at 1.0916, followed by 1.1072 There is support at 1.0774 and 1.0618
by OANDA
EUR/USD - euro extends rally, market turmoil easesThe euro has put together a 3-day rally and is up again on Tuesday. In the European session, EUR/USD is trading quietly at 1.0756, up 0.30%. Let's start with some good news. European stock markets have settled down and are in positive territory. The euro took a bath last Wednesday and plunged 1.47% as Credit Suisse shares tumbled, but the currency has battled back and recovered these losses. The emergency takeover of Credit Suisse by UBS and the joint announcement by six major central banks to boost liquidity have provided some reassurance to the markets that the banking system is not in danger of collapse. That's not to say that this nasty bank crisis is behind us. Investors are still trying to come to terms with the lightning collapse of three US banks and Credit Suisse, the second-largest bank in Switzerland, all in just 11 days. Another US bank, First Republic, received an emergency injection of $30 billion from some major US banks, but this may not prove to be enough, as depositors are estimated to have removed $89 billion and the bank's shares are in freefall. In light of the bank crisis, central banks will have to weigh their moves carefully and re-evaluate rate policy. The ECB didn't flinch and delivered a 50-basis point move as promised. Had the ECB decided not to go ahead with the 50-bp hike, it risked losing credibility. As well, the ECB's primary focus remains containing inflation. With eurozone inflation running at an 8.5% clip, the ECB needed another oversize rate hike. Could the financial crisis turn out to be a blessing in disguise? Perhaps, according to ECB President Lagarde. On Monday, Lagarde told European lawmakers that market turmoil could dampen demand and "might actually do part of the work that would otherwise be done by monetary policy and interest rate hikes". Lagarde reiterated that more rate hikes were needed to curb inflation, but didn't make any commitments as to the pace of rate hikes, which makes sense, given that the current crisis is not over. EUR/USD is putting pressure on resistance at 1.0778. Next is 1.0890 There is support at 1.0647 and 1.0535
by OANDA
EURUSD Outlook 20th March 2023The EURUSD spiked significantly lower from 1.0760 down to the key support level of 1.0525 due to the Credit Suisse issue. Markets were anticipating that the European Central Bank could scale back on its rate increases from 50bps to 35bps, a contributing factor to the drop in the Euro. However, the ECB maintained its decision to hike rates by 50bps and reiterated that it intends to bring inflation down to its 2% target level and that future decisions would be data dependent. This saw the EURUSD climb steadily higher to approach the 1.07 round number resistance level again. Since the EURUSD broke above the 61.8% fib level, the price could consolidate along this level between 1.0650 and 1.07 for the interim. A break of the consolidation to the downside could see the EURUSD retest the near term support of 1.0625 which is the 38.2% fib retracement level. However, I'd still be looking for a rebound to the upside, with the immediate key resistance level at 1.0760.
Long
by JinDao_Tai
4
EUR/USD - Euro heads higher as ECB delivers 50-bp hikeIt has been a busy week for the euro, reflective of the gyrations we're seeing in the financial markets. EUR/USD has bounced back from a mid-week slide and is trading at 1.0661, up 0.46% on the day. In the midst of market turmoil and fears of a full-blown financial crisis, the ECB held its rate meeting on Thursday and had everyone guessing about its intentions. The central bank had strongly signalled it would raise rates by 50 basis points but the bank crisis certainly complicated matters. Credit Suisse shares tumbled by as much as 30% a day before the meeting, weighing on the euro and eurozone bonds. It would have been understandable if the ECB had opted for a 25-bp move due to the market mayhem, but the central bank kept its word and delivered a 50-bp hike, bringing the main rate to 3.0%. Was the 50-bp hike risky in these volatile conditions? Yes, but policy makers may have been encouraged by the Swiss National Bank stepping up and lending Credit Suisse $53 billion, and there was the issue of the ECB's credibility, after President Lagarde had essentially pledged a 50-bp increase. Also, a 50-bp was the strongest medicine the central bank could deliver in the fight against sticky inflation. Inflation may have been knocked out of the headlines this week, but it hasn't gone anywhere and remains the ECB's number one priority. There was good news as the ECB's inflation projections were revised downwards from December. Currently, inflation is expected to average 5.3% in 2023 and 2.9% in 2024, compared to the December estimate of 6.3% in 2023 and 3.4% in 2024. In her press conference after the meeting, President Lagarde was careful not to commit to further rate hikes, saying that rate decisions will be "entirely data dependent.” Still, with inflation well above the 2% target, it's a safe bet that the ECB is not done with the current rate-tightening cycle. 1.0622 has been a key level throughout the week. EUR/USD is testing resistance at this line. Next is 1.0718 There is support at 1.0542 and 1.0446
by OANDA
EUR/USD -16/03/2023-• Technical picture in favor of the bears • 2 bearish patterns on daily chart • First pattern is the broadening pattern highlighted in yellow • Second pattern is head and shoulders highlighted in green • 1.0500 support is very critical at the moment ( neckline of head and shoulders and previous pivot low ) • Yesterday's drop penetrated the 20 MA which is now acting as resistance • Bulls need to overcome 1.0730 resistance to turn the trend in their favors
by RamziAbouAbdallah-CMT
EUR/USD Holds Onto 1.06, ECB Hikes Rates Despite Banking TurmoilThe EUR/USD pair oscillates around 1.0600 on Thursday following the European Central Bank's (ECB) decision to raise rates by 50 basis points as expected, recovering some of Credit Suisse's driven losses the previous day. At the time of writing, the EUR/USD pair is trading at 1.0605, 0.23% above its opening price, after hitting a daily high of 1.0635 earlier on the day. The euro has recovered nearly a hundred pips after bottoming at a two-month low of 1.0516 on Wednesday. As widely anticipated, the ECB increased three main rates by 50 bps on Thursday, sending the deposit facility rate to 3%. The lack of forward guidance was the only notable change as the ECB highlighted the importance of the data-dependent approach, which "will be determined by the inflation outlook in light of economic and financial data." In a presser following the announcement, ECB President Christine Lagarde stated, "It's impossible to determine what the rate path will be" relating to the banking situation and the economic slowdown in the EU. However, she also said that the banking sector is currently in a much stronger position than in 2008 and that the ECB can exercise creativity in short order if there is a liquidity crisis. "We are monitoring current market tensions closely and stand ready to respond as necessary to preserve price stability and financial stability in the euro area," reads the statement. Meanwhile, U.S. and European yields edged lower, signaling investors seeking refuge in government bonds amid worries regarding the banking sector on both shores of the Atlantic. The U.S. 10-year Treasury yield stands at 3.44%, while the German 10-year Bund yield sits at 2.21%. Data in the U.S. showed unemployment claims dropped to 192,000 in the week ending March 10, while the housing sector reported a 13.8% increase in building permits in February. Investors' attention now turns to the Fed decision next week, pricing a 25 bps hike as the most likely outcome. From a technical perspective, the EUR/USD short-term outlook has turned neutral to slightly bearish, according to indicators on the daily chart. However, the pair still holds above the 100-day Simple Moving Average (SMA), acting as dynamic support at the 1.0560 area. A break below the 100-day SMA will pave the way to a retest of the 1.0500 psychological level and the 2023 low of 1.0483. On the flip side, resistance levels could be found at the 20-day SMA at 1.0623 and 1.0700, ahead of weekly highs at the 1.0750 region.
by Alex_Boltyan_FXAnalyst
EURUSD remains firm with ECB to comeHard to look past the recent banking crisis that has rocked equity markets all week. Credit Suisse was the latest to hit the headlines yesterday, and it certainly hit hard. Risk currencies that have stood up ok felt seller force, and we watched the Japanese Yen cause all types of carnage to the EUR, GBP and AUD. The EUR is our focus today, and so is today's ECB meeting. Some talk emerged that due to the banking crisis, we might see central banks pull back from hikes, but for now, that's yet to be confirmed. Was it really rate hikes that caused this or poor risk management at the banks in focus? Based on what I've read, I'm leaning towards the latter. Yes, there's plenty of pressure on the banking sector right now, but does that warrant a policy change from central banks? Has the underlying issue changed? EU inflation still sits at 8.50%. Last year that number was 5.90%. Yes, it's dropped slightly from last month's 8.60%, but it's still there, and it's going to be very interesting to hear from the ECB later today via the policy statement and press conference. Rates are still expected to be increased to 3.50% today, a 50-point rise. Could we see a 25 hike to help calm nerves? Talk presented around this case, but we feel the ECB may stick with the plan. Let's take a look at the EURUSD. Price continues to hold above 1.0535 support. Yesterday's rejection reconfirmed this level, and so far today, buyers continue to trade above it. A lot comes down to the ECB today. We seriously doubt there will be a larger-than-expected hike, so it's about if we see 50 points or a surprise 25 points. 25 should hit the EURUSD and break support. A hold should continue to support that level, but traders will be looking at the statement for future direction and if the recent issues have impacted the current path. ECB rates decision and policy statement will be released Friday at 12:15 am AEDT. The press conference will follow at 12:45 am.
by Eightcap
Aggressive ECB Rates might push EUR higherConsidering tomorrow´s ECB decison (+50 points agressive hike vs coming +25 FED hike) we might see a change in trend and EUR is likely to move higher. 2023 EURUSD bullish move was driven by ECB hiking rates and they will keep raising them in the next two meetings (16.03 and 02.05) to 4. Hence EUR is likely to keep trending higher intil May 2. After May 2 meeting (it is supposed to be the last hike for 2023) we are likely to see EUR dropping back to 1.0 area as my previous posts suggested. The last ECB 50 points hike did not save EUR from 250 pips fall (after FED hiked rates by 25 points). But we sohould consider cumulutive ECB actions, agressively hiking rates during every meeting. Hence it is unlikely that EUR will drop another 250 pips but contonue back to 1.10 and possible higher. We are likely to see it around 1.10 at the next ECB meeting in May. It is hard to pinpoint the entry, as it well may deep below 1.05 before it goes to 1.10. But we will surely see a trending market for next month. FOR EDUCATIONAL PURPOSES ONLY.
Long
by ICFX
1
How FED / ECB Interest rates set trendsWatch how interest rates decisions set trends in EURUSD and Dollar Index impacting the entire forex market. I marked all the previous interest hike decisions by FED and ECB. 2023 EURUSD bullish reversal was triggerred by ECB starting to raise iterest rates (after EUR hit the alarming 1.00 level). EUR might continue bullish until next tow hikes. From what I read ECB does not plan to hike rates for the rest of the year after May meeting (rates will stay at 4), so it is likely to trigger bearish reversal from May. Likelwise, 2020 EUR bullish ride (and dollar weakness) was triggerred by FED lowering interest rates (in March 2020) after COVID hit. FOR EDUCATIONAL PURPOSES ONLY. Good luck in your trading! God bless!
Education
by ICFX
Credit Suisse Woes Threat to ECB Rate Hike and EUR TradeAfter a brief period of calm following the collapse of Silicon Valley Bank, Credit Suisse disclosed "material weaknesses" in their financial reporting controls and ongoing customer outflows, setting off another bout of instability across global assets. Credit Suisse's biggest investor, Saudi National Bank, also noted that it could not offer more financial support to the troubled Swiss Bank leading to shares in Credit Suisse falling more than 20%. Switzerland’s central bank has come to the rescue though, saying it is ready to provide financial support to Credit Suisse, if necessary, helping the shares to recover about half of its losses on Wednesday, and rising from its record low under $2.00. There is now growing concern over wider instability in the banking sector. This led to expectations that the Federal Reserve might slow down or pause hiking rates. Although, on Wednesday, the dollar rose due to safe haven buying, while European currencies sharply declined. The Euro, which had seen a 0.02% gain over a month, fell 1.4%, and the market is pricing in a 60% chance of a 25-basis-point hike in euro zone rates on Thursday, compared to a previous 90% chance of a 50-bps hike. The ECB’s interest rate decision is due on Thursday at 9:15am EDT. Elsewhere, the dollar rose 1.8% against the Swiss franc, while sterling traded down 0.8%. The Japanese yen strengthened 0.58%. As investors sought safe havens, gold prices continued their recent rally, with gold up 0.8% and silver up 0.3%. Conversely, oil prices fell by more than $5 a barrel.
by BlackBull_Markets
XAUEUR breaking the up trend channel for more upside push!At the beginning of the year OANDA:XAUEUR broke the down side channel. While banks are bankrupting, we see once again gold is the safe heaven for many people. Most importantly for the central banks which have been accumulating physical gold. FED and ECB will struggle to further increase the interest rates. We may see new ATH within a couple of months! Crazy times again. Disclaimer – WhaleGambit. Please be reminded – you alone are responsible for your trading – both gains and losses. There is a very high degree of risk involved in trading. The technical analysis , like all indicators, strategies, columns, articles and other features accessible on/though this site is for informational purposes only and should not be construed as investment advice by you. Your use of the technical analysis , as would also your use of all mentioned indicators, strategies, columns, articles and all other features, is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness (including suitability) of the information. You should assess the risk of any trade with your financial adviser and make your own independent decision(s) regarding any tradable products which may be the subject matter of the technical analysis or any of the said indicators, strategies, columns, articles and all other features.
OANDA:XAUEURLong
by WhaleGambit
EUR/USD Takes a Breather After U.S. CPI Data, ECB EyedThe U.S. dollar took a breather on Tuesday following the previous day’s sell-off as markets’ jitters surrounding the Silicon Valley Bank (SVB) collapse quieted, while U.S. consumer inflation data showed a slight deceleration in February. At the time of writing, the EUR/USD pair is trading at the 1.0730 zone, virtually unchanged on the day, with the upside still capped by the 1.0750 zone. Meanwhile, the DXY index trimmed daily gains and stabilized around 103.60 after hitting a daily high of 104.05. The U.S. Bureau of Labor Statistics reported that the Consumer Price Index came in line with expectations in February, with annualized inflation hitting 6%, down from its previous reading of 6.4%. On the other hand, the core CPI inflation rate was reported at 5.5% YoY, in line with analysts’ consensus. Following the data, U.S. bond yields recovered across the curve, helping the dollar. The 10-year bond yield is trading at 3.69%, while the 2-year rate recovered nearly 7% and stands at 4.25%. Amid the banking crisis triggered by the SVB collapse on Friday, investors seem to have taken out of the table a 50 bps rate hike by the Federal Reserve at the March 21, 22 meeting. The bets on a 25 bps increased to 73%, while on Monday, the case of a no-change decision was stronger. Wall Street indexes welcomed CPI data and the improvement in sentiment. The S&P 500 gained 1.65%, the Dow Jones Industrial Average advanced 1.06%, and the Nasdaq Composite posted a 2.14% daily advance. On Thursday, the European Central Bank (ECB) will decide on monetary policy, with analysts expecting a 50 basis point rate hike despite the recent developments. Technically speaking, the EUR/USD pair maintains a slightly bullish short-term outlook, according to indicators on the daily chart. The pair is trading above its key moving averages, and the RSI and MACD have moved into the green. On the upside, the following resistance levels are seen near this week’s highs at the 1.0750 zone and 1.0800 ahead of the more significant 1.0900 region. On the other hand, supports could be faced at the 20-day SMA at 1.0630 and the 1.0600 psychological level, followed by the 100-day SMA at 1.0545.
by Alex_Boltyan_FXAnalyst