Today, the EURUSD could be decided by an interesting currency exchange due to the announcements of only the Fed and the ECB, the most important of which will be Jerome Powell’s speech at 14:15. It seems that the Fed will want to slightly modify the message from the last conference, which the markets took as firmly as doves – the dream of the Fed’s rates has increased, and today the markets are secretly dreaming of 100 bb in the fifth year and I will be released in June. In the wake of several banks including Kashkari, Logan and Bowman from the public, Powell can confirm their narrative and emphasize that if the US economy remains strong, the Fed will likely be forced to tighten policy and is prepared to continue raising rates. ADP data recently and NFP data recently showed that the labor market in the United States is stabilizing and mainly oil prices are falling, but still policymakers cannot allow market speculation to lead to an increase in inflation even if the Fed is perceived as soft.
Volatility on the EURUSD is likely to increase today around 11:00, when data on retail sales in the eurozone will be published, and around 16:00, when data on wholesale sales in the US will be released. These data could tell more about the organic demand in the American economy and shed more light on the current condition of the consumer. According to a survey by the ECB, consumers in the euro area see inflation at 4% compared to 3.5%, but policy makers are in a difficult situation. The Eurozone economy is not as resilient as the US economy, and a long-term downturn could end in a painful recession or other systemic problems. With that in mind, I don’t necessarily see the markets as a good coin for the European currency at first.
EURUSD is now located between two exponential averages EMA100 (black line) and EMA200 (red line). Above the SMA100, buyers encountered strong resistance in the area of 1.075 and now, after two days of decline, EURUSD quotes are testing the 200 exponential average at 1.067. A drop below this level could potentially signal a correction to the EURUSD and a break through the bottom of the flag formation, which could signal a potential reversal of the trend. At this moment, however, the basic trend is rising (the trend line is preserved), and as long as the EURUSD trades above 1.05 – the trend could heat up the Eurodollar bkm.
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