EUR/USD what price action to expect ahead Powell's testimony?
In this post I will mention the current fundamentals and mention what price action to expect ahead accordingly?
FUNDAMENTAL KEY QUOTES
1- ECB monetary policy update ( ECB has agreed to raise inflation goal to 2% and allow room to overshoot it when needed, the revamped strategy could give officials the justification for sustaining ultra-lose monetary policy for longer as they strive to reverse years of below target inflation which have weighed on the euro area economic potential ). (THAT SIGNS FOR EXPECTED LONGER TERM DOVISHNESS).
2- ECB fiscal policy update ( ECB gears up to spend billions of euros on stimulus, EU finance ministers met on Tuesday to discuss the bloc's stimulus effort and to adopt the first batch of member states' recovery plan, ECB signaled additional measures may be brought in next year to support the economy after the current QE ends ). (ACCORDING TO FISCAL POLICY THAT IS NEGATIVE FOR THE EUR CURRENCY).
3- FED monetary, fiscal policies update ( U.S. interest-rate-setters have begun a discussion about scaling back bond purchases, kind of. “You can think of this meeting as the talking-about-talking-about meeting, if you like,” Federal Reserve Chair Jerome Powell said at a press conference after the central bank released forecasts that show it anticipates two rate increases by the end of 2023, projecting a faster-than-anticipated pace of tightening, rising inflation has made the investors optimistic that in today's Powell's testimony will be announce on tapering by the end of this year ). ( ACCORDING TO MONETARY POLICY AMID RUNNING HOT INFLATION THAT SHALL BE VERY POSITIVE FOR THE DOLLAR AND THE MAIN REASON FOR THE CURRENT DOWNTREND).
4- EU's hurdle with Delta variant infections ( Rates are on the rise, France attributed more than 60% of new infections to the variant on Tuesday, there are signs that the German inoculation campaign is slowing down, with some wary of potential side effects ).
5- U.S. hurdle with Delta variant infections ( Cases soared 47% in one week, the largest such rise since April 2020 ).
What price action to expect ahead?
- ACCORDING TO FUNDAMENTALS I WOULD SAY THAT BREAKING ABOVE 1.1850, BREAKING BELOW 1.1750 DEPENDS ON POWELL'S TESTIMONY TODAY -
- IF POWELL TO ANNOUNCE TAPERING BY THE END OF THE YEAR WHICH IS USUALLY FOLLOWED BY RATE HIKES, PRICE RANGE WOULD BE 1.1850 - 1.1650 AND THAT IS SO EXPECTED DUE TO INFLATION RISE THAT WOULD HARM THE ECONOMY IF NOT RESOLVED, IF TO CONSIDER FAKE OUTS THEN PRICE RANGE WOULD BE 1.1870 - 1.1630 -
- IF POWELL STICK TO THE EMPLOYMENT PLAN AND DELAY TAPERING OR MENTION THAT INFLATION IS TRANSITORY THEN PRICE RANGE WOULD BE 1.1950 - 1.1750, CONSIDERING FAKE OUTS THEN PRICE RANGE WOULD BE 1.1975 - 1.1730 -
- AHEAD OF POWELL'S TESTIMONY BREAKING ABOVE 1.1850 IS NOT EXPECTED, BREAKING BELOW 1.1750 IS NOT EXPECTED -
- THIS OUTLOOK REMAINS ONLY TILL UPCOMING NEWS AND DATA THAT MAY CHANGE THE PRICE RANGE, SO I WILL UPDATE ACCORDINGLY -
FUNDAMENTAL KEY QUOTES
1- ECB monetary policy update ( ECB has agreed to raise inflation goal to 2% and allow room to overshoot it when needed, the revamped strategy could give officials the justification for sustaining ultra-lose monetary policy for longer as they strive to reverse years of below target inflation which have weighed on the euro area economic potential ). (THAT SIGNS FOR EXPECTED LONGER TERM DOVISHNESS).
2- ECB fiscal policy update ( ECB gears up to spend billions of euros on stimulus, EU finance ministers met on Tuesday to discuss the bloc's stimulus effort and to adopt the first batch of member states' recovery plan, ECB signaled additional measures may be brought in next year to support the economy after the current QE ends ). (ACCORDING TO FISCAL POLICY THAT IS NEGATIVE FOR THE EUR CURRENCY).
3- FED monetary, fiscal policies update ( U.S. interest-rate-setters have begun a discussion about scaling back bond purchases, kind of. “You can think of this meeting as the talking-about-talking-about meeting, if you like,” Federal Reserve Chair Jerome Powell said at a press conference after the central bank released forecasts that show it anticipates two rate increases by the end of 2023, projecting a faster-than-anticipated pace of tightening, rising inflation has made the investors optimistic that in today's Powell's testimony will be announce on tapering by the end of this year ). ( ACCORDING TO MONETARY POLICY AMID RUNNING HOT INFLATION THAT SHALL BE VERY POSITIVE FOR THE DOLLAR AND THE MAIN REASON FOR THE CURRENT DOWNTREND).
4- EU's hurdle with Delta variant infections ( Rates are on the rise, France attributed more than 60% of new infections to the variant on Tuesday, there are signs that the German inoculation campaign is slowing down, with some wary of potential side effects ).
5- U.S. hurdle with Delta variant infections ( Cases soared 47% in one week, the largest such rise since April 2020 ).
What price action to expect ahead?
- ACCORDING TO FUNDAMENTALS I WOULD SAY THAT BREAKING ABOVE 1.1850, BREAKING BELOW 1.1750 DEPENDS ON POWELL'S TESTIMONY TODAY -
- IF POWELL TO ANNOUNCE TAPERING BY THE END OF THE YEAR WHICH IS USUALLY FOLLOWED BY RATE HIKES, PRICE RANGE WOULD BE 1.1850 - 1.1650 AND THAT IS SO EXPECTED DUE TO INFLATION RISE THAT WOULD HARM THE ECONOMY IF NOT RESOLVED, IF TO CONSIDER FAKE OUTS THEN PRICE RANGE WOULD BE 1.1870 - 1.1630 -
- IF POWELL STICK TO THE EMPLOYMENT PLAN AND DELAY TAPERING OR MENTION THAT INFLATION IS TRANSITORY THEN PRICE RANGE WOULD BE 1.1950 - 1.1750, CONSIDERING FAKE OUTS THEN PRICE RANGE WOULD BE 1.1975 - 1.1730 -
- AHEAD OF POWELL'S TESTIMONY BREAKING ABOVE 1.1850 IS NOT EXPECTED, BREAKING BELOW 1.1750 IS NOT EXPECTED -
- THIS OUTLOOK REMAINS ONLY TILL UPCOMING NEWS AND DATA THAT MAY CHANGE THE PRICE RANGE, SO I WILL UPDATE ACCORDINGLY -