Home Forex EURUSD – uses FED notes and data

EURUSD – uses FED notes and data

by SuperiorInvest

EURUSD, daily

Most Fed members favored slowing the pace of interest rate hikes “soon” in order to assess the lagged impact of monetary policy on the economy and inflation. The Fed minutes note that “a substantial majority of participants felt that a slower pace of rate hikes would likely be appropriate soon”; continuing “that the uncertain lags and amplitudes associated with the effects of monetary policy measures on economic activity and inflation were among the reasons for the importance of such an assessment”.

EURUSD is up for the third day in a row and is currently at 1.0404 level. This is after he reached the top 1.0447as yesterday’s Fed report benefited the euro against the dollar, p USDIndex it loses its safe harbor status (see below).

Recent data confirmed that inflation is slowing but still well above the 2% target, and several members have persistently pushed the idea of ​​a less hawkish rate hike, a possibility that market participants have been anticipating. However, some members of the US central bank preferred to wait until “the policy stance is more clearly in restrictive territory and there are no more concrete signs of a significant reduction in inflationary pressures.”

According to CMEGROUP, 75.8% Investors expect the Federal Reserve to slow the pace of rate hikes 0.5% in December. With this slowdown in the pace of rate hikes, largely appreciated by market participants, attention turns to the final Fed Funds rate, i.e. the maximum level. Fed members have been broadly scrutinizing this factor, although they acknowledged there is still uncertainty as to whether they will go higher to meet the original target. “Participants noted that there is considerable uncertainty about the final level of the federal funds rate needed to meet the committee’s objectives,” the minutes said.

It is important to note that the EURUSD pair benefited yesterday morning from a series of mostly better-than-expected European PMIs.

Technical analysis

EURUSD he is currently above his cloud, his Kijun (Lv) and his Tenkan (Lj) level 1.0433; Lagging Span (Lb) is above the cloud and clearly means upward momentum. The price could reach 1.0485 then 1.0571; on the other hand, if the price starts to decline again, it could reach 1.0162 and then head towards parity (1.0000).

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Kader Djellouli

Market analyst

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