EUR/USD FED-ECB policies analysis, what to expect ahead?
In this post I will mention the recent fundamentals and what price action to expect ahead accordingly?
FUNDAMENTAL KEY QUOTES
1- FED'S monetary and fiscal policies update ( Powell told Congress that the U.S. 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, deeply committed to the transitory narrative, also Powell also assured the FED would take action if it saw prices accelerating too much, and it would react if inflation expectations were to persist above 2%, " a highly accommodative policy is still the right path " ).
2- ECB monetary and fiscal policies update ( a survey predict the bank will spend the entirety of its 1.85 trillion euros pandemic program up from 40% in June, expected to extend its ultra-easy monetary policy ).
3- U.S. virus update ( there were more than 33,000 new infections reported in the U.S. July 14, a month ago that number was 8,000, but most inoculated people won't need a booster for at least several months ).
4- EU virus update ( rates are on the rise, France attributed more than 60% of new infections to the variant last Tuesday, Netherlands logged a six fold increase in cases during last week ).
5- EU-U.S. calendar update ( decline in U.S. jobless claims, signs of a slower recovery in U.S. , EU data signs for modest progress ).
What price action to expect ahead?
- ACCORDING TO MONETARY AND FISCAL POLICIES THAT PLAY THE HIGHEST ROLE IN FOREX MARKET I WOULD SAY THAT THE PRICE RANGE IS 1.1750-1.1950 -
- INVESTORS HAVE BEEN SEEN HOLDING THE BOTTOM RANGE DURING LAST FEW WEEKS DUE TO THE OPTIMISM THAT THE FED WOULD HAVE NO CHANCE BUT TAPERING ASSET PURCHASES TO CONTROL INFLATION AS IT SHOWS INCREASES AS LONG AS THE FED REMAINS SILENT, ALSO BECAUSE AT LEAST THERE IS A DEBATE A TAPER CAN TAKE PLACE BY THE END OF THE YEAR UNLIKE THE ECB SHOWS NO CONSIDERATION TO TAPER ASSET PURCHASES OR TO HIKE RATES IN NEXT YEARS -
- IN MY OPINION THIS OPTIMISM HAS NO REASON AS IT IS NOT EASY FOR THE FED TO CHANGE DECISION OF SUPPORTING THE ECONOMY SPECIALLY AT THE TIME OF RISING INFECTIONS THAT THREATEN THE LABOR MARKET MORE THAN IT IS NOW ( LONG WAY TO GO ACCORDING TO POWELL AND FAR FROM UNEMPLOYMENT GOALS ) BREAKING BELOW 1.1770 IS NOT EXPECTED, AND THE A PRICE RAISE SHALL TAKE PLACE, THOUGH IT IS STILL WITHIN THE RANGE 1.1750-1.1950 -
- IF TO CONSIDER FAKEOUTS THEN ANY BREAK BELOW 1.1750 WOULD BE CAPPED BY 1.1720 AND SHALL BE SHORT LIVED, TO BE FOLLOWED BY A RETREAT ABOVE 1.1750 -
- 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 monetary and fiscal policies update ( Powell told Congress that the U.S. 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, deeply committed to the transitory narrative, also Powell also assured the FED would take action if it saw prices accelerating too much, and it would react if inflation expectations were to persist above 2%, " a highly accommodative policy is still the right path " ).
2- ECB monetary and fiscal policies update ( a survey predict the bank will spend the entirety of its 1.85 trillion euros pandemic program up from 40% in June, expected to extend its ultra-easy monetary policy ).
3- U.S. virus update ( there were more than 33,000 new infections reported in the U.S. July 14, a month ago that number was 8,000, but most inoculated people won't need a booster for at least several months ).
4- EU virus update ( rates are on the rise, France attributed more than 60% of new infections to the variant last Tuesday, Netherlands logged a six fold increase in cases during last week ).
5- EU-U.S. calendar update ( decline in U.S. jobless claims, signs of a slower recovery in U.S. , EU data signs for modest progress ).
What price action to expect ahead?
- ACCORDING TO MONETARY AND FISCAL POLICIES THAT PLAY THE HIGHEST ROLE IN FOREX MARKET I WOULD SAY THAT THE PRICE RANGE IS 1.1750-1.1950 -
- INVESTORS HAVE BEEN SEEN HOLDING THE BOTTOM RANGE DURING LAST FEW WEEKS DUE TO THE OPTIMISM THAT THE FED WOULD HAVE NO CHANCE BUT TAPERING ASSET PURCHASES TO CONTROL INFLATION AS IT SHOWS INCREASES AS LONG AS THE FED REMAINS SILENT, ALSO BECAUSE AT LEAST THERE IS A DEBATE A TAPER CAN TAKE PLACE BY THE END OF THE YEAR UNLIKE THE ECB SHOWS NO CONSIDERATION TO TAPER ASSET PURCHASES OR TO HIKE RATES IN NEXT YEARS -
- IN MY OPINION THIS OPTIMISM HAS NO REASON AS IT IS NOT EASY FOR THE FED TO CHANGE DECISION OF SUPPORTING THE ECONOMY SPECIALLY AT THE TIME OF RISING INFECTIONS THAT THREATEN THE LABOR MARKET MORE THAN IT IS NOW ( LONG WAY TO GO ACCORDING TO POWELL AND FAR FROM UNEMPLOYMENT GOALS ) BREAKING BELOW 1.1770 IS NOT EXPECTED, AND THE A PRICE RAISE SHALL TAKE PLACE, THOUGH IT IS STILL WITHIN THE RANGE 1.1750-1.1950 -
- IF TO CONSIDER FAKEOUTS THEN ANY BREAK BELOW 1.1750 WOULD BE CAPPED BY 1.1720 AND SHALL BE SHORT LIVED, TO BE FOLLOWED BY A RETREAT ABOVE 1.1750 -
- THIS OUTLOOK REMAINS ONLY TILL UPCOMING NEWS AND DATA THAT MAY CHANGE THE PRICE RANGE, SO I WILL UPDATE ACCORDINGLY -