EUR/USD ECB policy, data analysis, what to expect ahead?
In this post I will mention what price action to expect ahead according to recent fundamental updates?
FUNDAMENTAL KEY QUOTES
1- ECB policy updates ( will persist with ultra loose stimulus until it has solid evidence it can sustainably hit its new inflation goal of 2% ) ( THIS MEANS POLICY MAKERS CAN KEEP RATES AT A RECORD LOW FOR LONGER AND EXTEND ITS BOND BUYING, WON'T NECESSARILY REACT IMMEDIATELY IF INFLATION OVERSHOOTS THEIR TARGET FOR A PERIOD )
2- EU virus update ( ECB mentioned the pandemic "continues to cast a shadow" and there is a long way to go on the record to recovery ) ( HOWEVER STILL NEW CASES ARE MUCH LESS THAN IN U.S. AND ALSO THE INOCULATION PACE IS FASTER SPECIALLY IN ITALY AND FRANCE AFTER RESTRICTING MANY LEISURE ACTIVITIES FOR CITIZENS WHO ARE NOT VACCINATED OR WHO HAVE RECENTLY TESTED NEGATIVE ).
3- FED policy update ( 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" ) ( THE RISE IN INITIAL JOBLESS CLAIMS AND THE MIXED U.S. DATA, IN ADDITION TO THE CLEAR RISE IN NEW POSITIVE COVID-19 CASES WILL MAKE IT HARDER ON THE FED TO ANNOUNCE AN EARLY TAPER OR RATE HIKES ).
4- U.S. virus update ( the rise in covid-19 cases is showing no signs of abating, particularly in U.S. states where low vaccination rates fueled up an uptick as the delta variant proliferates and hospital beds resume filling up, the U.S. 7 day average topped 40,000 for the first time since early May, and cases have more than tripled since the beginning of the month ).
What price action to expect ahead?
- ACCORDING TO RECENT FUNDAMENTALS I WOULD SAY THAT THE SHORT TERM PRICE RANGE IS (1.1750-1.1950), LOSSES TO 1.1720 IS NOT RULED OUT BUT TO BE FOLLOWED BY A RETREAT ABOVE 1.1750 UNTIL THE FED INTEREST RATE AND FOMC STATEMENT ON NEXT WEDNESDAY JULY 28 -
- THE LONG TERM PRICE RANGE IS TO BE 1.1700-1.1950, FOR PRICE TO HOLD THE UPPER RANGE NEEDS A DOVISH CONFIRMATION FROM THE FED -
- PRICE IS HOLDING THE LOWER RANGE, PUSHING FOR LOWER LOWS, HOWEVER A REVERSAL IS EXPECTED TO HAPPEN DUE TO FEARS OF COVID-19 CASES IN U.S., RISING INFLATION, UNCERTAIN FED REACTION -
SPOT LIGHT
- DOVISH ECB GENERALLY SHALL CAUSE A DEPRECIATION IN PRICE BUT IN SUCH CASES IT CAN BE ON THE CONTRARY POSITIVE FOR THE EUR AS THE INFLATION HISTORY IN EU WAS SHOWING BELOW TARGET READINGS, DOVISH ECB CURRENTLY WOULD HELP BUSINESS AND INDUSTRY IMPROVEMENT -
- 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 policy updates ( will persist with ultra loose stimulus until it has solid evidence it can sustainably hit its new inflation goal of 2% ) ( THIS MEANS POLICY MAKERS CAN KEEP RATES AT A RECORD LOW FOR LONGER AND EXTEND ITS BOND BUYING, WON'T NECESSARILY REACT IMMEDIATELY IF INFLATION OVERSHOOTS THEIR TARGET FOR A PERIOD )
2- EU virus update ( ECB mentioned the pandemic "continues to cast a shadow" and there is a long way to go on the record to recovery ) ( HOWEVER STILL NEW CASES ARE MUCH LESS THAN IN U.S. AND ALSO THE INOCULATION PACE IS FASTER SPECIALLY IN ITALY AND FRANCE AFTER RESTRICTING MANY LEISURE ACTIVITIES FOR CITIZENS WHO ARE NOT VACCINATED OR WHO HAVE RECENTLY TESTED NEGATIVE ).
3- FED policy update ( 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" ) ( THE RISE IN INITIAL JOBLESS CLAIMS AND THE MIXED U.S. DATA, IN ADDITION TO THE CLEAR RISE IN NEW POSITIVE COVID-19 CASES WILL MAKE IT HARDER ON THE FED TO ANNOUNCE AN EARLY TAPER OR RATE HIKES ).
4- U.S. virus update ( the rise in covid-19 cases is showing no signs of abating, particularly in U.S. states where low vaccination rates fueled up an uptick as the delta variant proliferates and hospital beds resume filling up, the U.S. 7 day average topped 40,000 for the first time since early May, and cases have more than tripled since the beginning of the month ).
What price action to expect ahead?
- ACCORDING TO RECENT FUNDAMENTALS I WOULD SAY THAT THE SHORT TERM PRICE RANGE IS (1.1750-1.1950), LOSSES TO 1.1720 IS NOT RULED OUT BUT TO BE FOLLOWED BY A RETREAT ABOVE 1.1750 UNTIL THE FED INTEREST RATE AND FOMC STATEMENT ON NEXT WEDNESDAY JULY 28 -
- THE LONG TERM PRICE RANGE IS TO BE 1.1700-1.1950, FOR PRICE TO HOLD THE UPPER RANGE NEEDS A DOVISH CONFIRMATION FROM THE FED -
- PRICE IS HOLDING THE LOWER RANGE, PUSHING FOR LOWER LOWS, HOWEVER A REVERSAL IS EXPECTED TO HAPPEN DUE TO FEARS OF COVID-19 CASES IN U.S., RISING INFLATION, UNCERTAIN FED REACTION -
SPOT LIGHT
- DOVISH ECB GENERALLY SHALL CAUSE A DEPRECIATION IN PRICE BUT IN SUCH CASES IT CAN BE ON THE CONTRARY POSITIVE FOR THE EUR AS THE INFLATION HISTORY IN EU WAS SHOWING BELOW TARGET READINGS, DOVISH ECB CURRENTLY WOULD HELP BUSINESS AND INDUSTRY IMPROVEMENT -
- THIS OUTLOOK REMAINS ONLY TILL UPCOMING NEWS AND DATA THAT MAY CHANGE THE PRICE RANGE, SO I WILL UPDATE ACCORDINGLY -