How long will EURUSD stay in the daily downside channel?
The E/U daily level downside channel is still intact.
The E/U briefly fell below the 1.0000 handle in the US market on July 14, reaching a low of 0.9950, before starting a short rally, now at 1.0015, back above parity.
Next week's focus will be on the ECB interest rate resolution on the 21st and whether the Nord Stream 1 gas pipeline resumes gas supply and the volume of gas supply on the 22nd.
If both of these messages are positive for the euro next week, E/U is expected to rally to the 1.0150-1.0175 line, or even expect to see a brief pullback to the 1.02 line.
Focus on the mid-line resistance of the lower channel at 1.02.
We may be faced with two combinations of data and the different market expectations and market performance they bring.
1. If the Fed hike on the 28th is less than expected and the ECB hike on the 21st is more than expected (ECB: 50bps, FED: 75bps), E/U is expected to rally to key resistance at 1.035 in the week of the 28th.
2. If the ECB rate hike is less than expected and the Fed again significantly exceeds market expectations for a rate hike (ECB: 25bps, FED: ≥100bps), then E/U may test a new low at 0.9700 in the week of the 28th.
The E/U briefly fell below the 1.0000 handle in the US market on July 14, reaching a low of 0.9950, before starting a short rally, now at 1.0015, back above parity.
Next week's focus will be on the ECB interest rate resolution on the 21st and whether the Nord Stream 1 gas pipeline resumes gas supply and the volume of gas supply on the 22nd.
If both of these messages are positive for the euro next week, E/U is expected to rally to the 1.0150-1.0175 line, or even expect to see a brief pullback to the 1.02 line.
Focus on the mid-line resistance of the lower channel at 1.02.
We may be faced with two combinations of data and the different market expectations and market performance they bring.
1. If the Fed hike on the 28th is less than expected and the ECB hike on the 21st is more than expected (ECB: 50bps, FED: 75bps), E/U is expected to rally to key resistance at 1.035 in the week of the 28th.
2. If the ECB rate hike is less than expected and the Fed again significantly exceeds market expectations for a rate hike (ECB: 25bps, FED: ≥100bps), then E/U may test a new low at 0.9700 in the week of the 28th.
Comment:
Update
2022.07.27: FED = 75 bps
2022.07.28: EUR/USD = ?
2022.07.27: FED = 75 bps
2022.07.28: EUR/USD = ?
2022.07.21: ECB = 50 bps
2022.07.22: EUR/USD = L 1.0150, H 1.0250