EURUSD 13-17 May 2024 W20 - Weekly Analysis - EU & US CPI Week!
This is my Weekly analysis on EURUSD for 13-17 May 2024 W20 based on Smart Money Concept (SMC) which includes the following:
Market Sentiment
The narrative surrounding the monetary policy divergence between the Fed and the rest of its G10 peers continues to dominate the macro scenario in the market. On this, the FedWatch Tool tracked by CME Group sees the probability of a Fed’s rate reduction in September nearly 70%.
With the inflation reports expected this week (CPI), If inflation stays high but doesn't speed up much more, the Federal Reserve might keep interest rates higher for a longer time. This is because the market is worried about inflation staying high, and if there's a surprise where inflation doesn't increase as much as feared, the reaction will likely be smaller. Powell, said they would only raise rates if they had convincing proof that their current policies are too tight.
Right now, the market expects interest rates to be cut twice by the end of the year. However, if we see another report showing high inflation, those expectations might change. A weaker report might lead to just one rate cut being expected instead of two, but not much more than that. The Federal Reserve might wait until their meeting in September at the earliest to make any major decisions, unless there's a sudden worsening in the job market.
Weekly Chart Analysis
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Daily Chart Analysis
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4H Chart Analysis
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Economic Events for the Week
- Market Sentiment
- Weekly Chart Analysis
- Daily Chart Analysis
- 4H Chart Analysis
- Economic Events for the Week
Market Sentiment
The narrative surrounding the monetary policy divergence between the Fed and the rest of its G10 peers continues to dominate the macro scenario in the market. On this, the FedWatch Tool tracked by CME Group sees the probability of a Fed’s rate reduction in September nearly 70%.
With the inflation reports expected this week (CPI), If inflation stays high but doesn't speed up much more, the Federal Reserve might keep interest rates higher for a longer time. This is because the market is worried about inflation staying high, and if there's a surprise where inflation doesn't increase as much as feared, the reaction will likely be smaller. Powell, said they would only raise rates if they had convincing proof that their current policies are too tight.
Right now, the market expects interest rates to be cut twice by the end of the year. However, if we see another report showing high inflation, those expectations might change. A weaker report might lead to just one rate cut being expected instead of two, but not much more than that. The Federal Reserve might wait until their meeting in September at the earliest to make any major decisions, unless there's a sudden worsening in the job market.
Weekly Chart Analysis
1.
- Swing Bearish
- Internal Bearish
- Reached Swing EQ
- Swing Continuation Phase (Pro Swing + Pro Internal)
2.
- After the Bearish iBOS we confirmed that the Swing Pullback is over and we will target the Weak INT Low and the Weak Swing Low.
3.
- Price had reached the Bearish INT Structure extreme and initiated the Bearish Internal Structure Continuation.
- Expectation is to continue bearish and target he Weak INT Low.
4.
- Price tapped into a Weekly demand zone that is currently providing Pullback for the continuation down to the Weak INT Low.
Daily Chart Analysis
1.
- Swing Bearish
- INT Bearish
- Swing Continuation Phase (Pro Swing + Pro Internal)
2.
- Internal Structure continuing bearish following the Bearish Swing.
3.
- After the Bearish iBOS we expect a Pullback.
- Price in a clear corrective move to the upside after tapping the Weekly Demand Zone which initiated the Bearish iBOS Pullback Phase.
- As expected last week with the probability of a deep pullback, price reached the Daily Supply. With that deep Pullback, there is a HP that we can continue the Bearish INT Structure with expectation to target the Weak INT Low and possibly the Weak Swing Low.
- More development required on LTF to show signs of Bearish Structure to validate the expectations.
4.
- Daily and Weekly demand zones for reactions to fulfill the INT Pullback Phase.
4H Chart Analysis
1.
- Swing Bearish
- Internal Bullish
- Reached Swing EQ
- INT Structure Pullback Phase
2.
- Swing continuing bearish following the HTF Bearish Trend. Expectations is set for the Swing to stay bearish to fulfill the HTF targets.
3.
- With the 4H INT is Bullish, it's for me not much aligning with the Daily TF which makes the view unclear from a trend prospective.
- Are we going to hold Bullish Internal to maybe have a more deeper PB on Daily, or we are going to turn bearish on the 4H Internal to continue the Daily Swing/INT Structure trend.
- With the current week inflationary reports coming out from EU and US, most probably we will have more price development that can facilitate a HP setups.
Economic Events for the Week
