EUR/USD: Dollar steadied after comments from Fed
Macroeconomic overview: Dallas Federal Reserve Bank President Robert Kaplan said on Monday that he would support further interest rate hikes if the U.S. economy takes more steps toward reaching the Fed's goals of full employment and 2% inflation. Kaplan, who votes this year on Fed policy, repeated his view that the economy will likely grow about 2.25% this year, but could grow faster, or more slowly, depending in part on the policies the new administration implements. With government debt rising, reform of entitlement programs such as Medicare and Social Security must be on the table, he said.
Chicago Fed President Charles Evans said that the case for four interest rate hikes in the United States this year is not yet solid and would require a stronger lift in inflation. Evans said he saw three rate hikes in 2017 as "plausible", but added that two or four increases were also a possibility. In his opinion long-term inflation expectations may still be running below the U.S. Federal Reserve's target of 2%, though in the shorter term prices are rising towards that figure. Evans said he did not expect core inflation, which strips out volatile elements like energy prices, would reach the 2% target until 2019.
The dollar steadied on Tuesday after its worst week since U.S. President Donald Trump’s election in November, promises of more rises in Federal Reserve interest rates this year helping it recover from multi-month lows in still shaky global markets.
Technical analysis: The EUR/USD managed to close above 1.0825 (38.2% retrace of May-January fall), which means that 1.0976 (50%) is unmasked. Tenkan line is pointing north, indicative of positive momentum. The 7-day exponential moving average is positively aligned.
Short-term signal: We are looking to buy EUR at 1.0780. Our next short-term target will be 1.0960, just below 50% fibo of May-January drop.
Long-term outlook: Long-term target is 1.1125.
Source: GrowthAces.com - daily forex trading strategies
Macroeconomic overview: Dallas Federal Reserve Bank President Robert Kaplan said on Monday that he would support further interest rate hikes if the U.S. economy takes more steps toward reaching the Fed's goals of full employment and 2% inflation. Kaplan, who votes this year on Fed policy, repeated his view that the economy will likely grow about 2.25% this year, but could grow faster, or more slowly, depending in part on the policies the new administration implements. With government debt rising, reform of entitlement programs such as Medicare and Social Security must be on the table, he said.
Chicago Fed President Charles Evans said that the case for four interest rate hikes in the United States this year is not yet solid and would require a stronger lift in inflation. Evans said he saw three rate hikes in 2017 as "plausible", but added that two or four increases were also a possibility. In his opinion long-term inflation expectations may still be running below the U.S. Federal Reserve's target of 2%, though in the shorter term prices are rising towards that figure. Evans said he did not expect core inflation, which strips out volatile elements like energy prices, would reach the 2% target until 2019.
The dollar steadied on Tuesday after its worst week since U.S. President Donald Trump’s election in November, promises of more rises in Federal Reserve interest rates this year helping it recover from multi-month lows in still shaky global markets.
Technical analysis: The EUR/USD managed to close above 1.0825 (38.2% retrace of May-January fall), which means that 1.0976 (50%) is unmasked. Tenkan line is pointing north, indicative of positive momentum. The 7-day exponential moving average is positively aligned.
Short-term signal: We are looking to buy EUR at 1.0780. Our next short-term target will be 1.0960, just below 50% fibo of May-January drop.
Long-term outlook: Long-term target is 1.1125.
Source: GrowthAces.com - daily forex trading strategies