EUR/USD reasons why downtrend shall stop at the 1.1760-1.1720
In this post I will mention the reasons why the downtrend shall be capped soon and why to expect a bottom range consolidation after all (at risk of becoming a reversal)?
FUNDAMENTAL KEY QUOTES
1- FED's policy analysis ( according to Powell's speech in his testimony, "economic recovery still hasn't progressed enough to begin scaling back asset purchases, as the labor market still has a "long way to go", inflation is likely to remain high in coming months before moderating" and with that said means the FED will continue to be dovish for longer time, also the rising infections that surged 60% last week, topping a 16% global increase will add fuel to the FED's hurdle and may cause increase in future jobless claims, drop in employment and NFP data ) ( THE INVESTORS OPTIMISM ON TAPERING IS STILL NOT CONFIRMED BY POWELL'S SPEECH OR FUTURE EXPECTATIONS ).
2- CDC raised their U.K. travel alert to " very high " and banning EUROPEAN tourism which will decrease the dollar demand and also signs for rising fears to virus updates.
3- German economy is on the verge of returning to its pre-pandemic size with a pickup in growth this quarter according to Bundesbank.
4- ECB policy analysis ( will decide how to adapt its language on interest rates, bond-buying and other tools to a new inflation strategy, policy makers are split over changes to their wording on monetary stimulus in drafts being circulated before Thursday's meeting ) ( EXPECTED TO MAINTAIN THE DOVISH STANCE AND NOT TO CONSIDER TAPERING, THE REASON WHY INVESTORS ARE HOLDING THE PRICE BOTTOM RANGE, HOWEVER THE INFLATION SITUATION IS MUCH BETTER IN EU, ANY CHANGES MAY CAUSE A PRICE UPTREND ).
What price action to expect ahead ?
- ACCORDING TO RECENT FUNDAMENTALS I WOULD SAY THAT THE DOWNTREND SHALL BE CAPPED AT THE (1.1760-1.1720) ZONE -
- ACCORDING TO EXCHANGE RATE MARKET THE GENERAL PRICE RANGE IS (1.1950-1.1720) -
- BOTTOM PRICE RANGE IS LIKELY EXPECTED IN THE NEAR TERM -
- THIS OUTLOOK REMAINS ONLY TILL UPCOMING NEWS AND DATA THAT MAY CHANGE THE PRICE RANGE, SO I WILL UPDATE ACCORDINGLY -
FUNDAMENTAL KEY QUOTES
1- FED's policy analysis ( according to Powell's speech in his testimony, "economic recovery still hasn't progressed enough to begin scaling back asset purchases, as the labor market still has a "long way to go", inflation is likely to remain high in coming months before moderating" and with that said means the FED will continue to be dovish for longer time, also the rising infections that surged 60% last week, topping a 16% global increase will add fuel to the FED's hurdle and may cause increase in future jobless claims, drop in employment and NFP data ) ( THE INVESTORS OPTIMISM ON TAPERING IS STILL NOT CONFIRMED BY POWELL'S SPEECH OR FUTURE EXPECTATIONS ).
2- CDC raised their U.K. travel alert to " very high " and banning EUROPEAN tourism which will decrease the dollar demand and also signs for rising fears to virus updates.
3- German economy is on the verge of returning to its pre-pandemic size with a pickup in growth this quarter according to Bundesbank.
4- ECB policy analysis ( will decide how to adapt its language on interest rates, bond-buying and other tools to a new inflation strategy, policy makers are split over changes to their wording on monetary stimulus in drafts being circulated before Thursday's meeting ) ( EXPECTED TO MAINTAIN THE DOVISH STANCE AND NOT TO CONSIDER TAPERING, THE REASON WHY INVESTORS ARE HOLDING THE PRICE BOTTOM RANGE, HOWEVER THE INFLATION SITUATION IS MUCH BETTER IN EU, ANY CHANGES MAY CAUSE A PRICE UPTREND ).
What price action to expect ahead ?
- ACCORDING TO RECENT FUNDAMENTALS I WOULD SAY THAT THE DOWNTREND SHALL BE CAPPED AT THE (1.1760-1.1720) ZONE -
- ACCORDING TO EXCHANGE RATE MARKET THE GENERAL PRICE RANGE IS (1.1950-1.1720) -
- BOTTOM PRICE RANGE IS LIKELY EXPECTED IN THE NEAR TERM -
- THIS OUTLOOK REMAINS ONLY TILL UPCOMING NEWS AND DATA THAT MAY CHANGE THE PRICE RANGE, SO I WILL UPDATE ACCORDINGLY -